Investment banking

 

An investment bank is a financial institution that has three main activities:

  • Assisting its clients (which can be anything from individuals, corporations to governments) to raise capital through the issue of securities
  • Providing a range of advisory services to assist clients in mergers and acquisitions
  • Providing liquidity through its market making activities to facilitate its clients’ trading requirements in financial products such as bonds, equities, foreign exchange, commodities and derivatives.

A full service Investment bank that is active in all three of the above can offer career opportunities in a number of different areas such as: investment banking (including mergers and acquisitions and corporate finance ), debt capital markets (DCM), equity capital markets (ECM), private banking / wealth management.

As well as conducting financial analyses, they regularly communicate their findings and recommendations to CEOs, board members, accountants and corporate lawyers.

Job and recruitment market

The financial crisis has had a profound effect on world markets and the financial institutions such as investment banks that facilitate them. The overleveraging of balance sheets and exposure to mortgage securitisation generated great losses in the sector. As a result investment banks have come under much greater scrutiny from regulatory bodies.  

The recruitment scene has recovered but the sector remains very competitive. Students considering a career in an investment bank must be aware of the changes that have occurred and their knowledge of the sector and their target area / role needs to be strong.

Find out more

  • Get more industry insightsfrom downloadable Vault guides to:
    • Investment Banking (Western or Asia Pacific edition)
    • Middle Market Investment Banking
    • Leveraged Finance
  • Download the Vault: Career insider guide to Investment Banking for a careers overview
  • Go to Prospects for information on different job roles
  • See the CFA Society website for qualifications professionals normally have to take while training: the IMC and CFA
  • Keep up-to-date with eFinancialCareers fornews on investment banking

 

Useful Information

Routes in

Graduate training schemes

Most Investment Banking graduate schemes are open for applications from September to November - boutique firms tend to have later deadlines. Some applications open as early as July the year before you would like to start. These schemes tend to be available for analyst and associate positions, and competition is high.

Internships

Gaining experience can help set you apart from other candidates, and internships are one way to get this experience. The competition for obtaining an internship is extremely high. Choose the internships you apply for carefully as around 70%+ of interns are taken on in full time graduate positions within the same investment bank.

Some investment banks encourage early applications from LSE students to give you a head start over other applicants. Expect a numeracy test and possibly a verbal reasoning test as part of the application process.

Numeracy is critical in your future career so prepare for these tests. Visit the LSE Careers website to make use of our free online psychometric tests, advice about how to prepare and a list of further practice tests.

Insight days

Students within their first year (this can vary, check specific employer requirements) can apply to attend an insight day at a number of top banking employers. Insight days range from one day to one week and consist of presentations and workshops for students to find out more about the sector and more about a career with the specific employer. Insight days often lead to automatic interviews or entry onto a summer analyst or associate internship, so are a good way to impress. They are also useful for students to find out if the industry is right for them.

Application advice 

Research the industry

Commercial awareness is given a particularly high rating in the financial markets. Read the financial press to keep up to date with world events that impact on an investment bank.

This general markets research needs to be supported with thorough research into your target banks. There are some common features within investment banks but crucially every bank is different. It is important that you understand what differentiates your target bank from its competitors and indeed how your target area differs from similar areas in another bank.

Attend events

Take full advantage of the variety of activities in our events programme. Forums, careers fairs, employer presentations, and employer skill sessions all provide an unrivalled opportunity to meet recruiters and get a feel for the careers on offer. Attend these events with specific and informed questions for recruiters that demonstrate you are a focused and well researched candidate.

Match your skills

Strong analytical and problem solving skills, attention to detail, excellent communication skills, outstanding team work and interpersonal skills, an understanding of investment banking from the big picture to the ‘granular’, the ability to work under pressure are some of the skills you will need to demonstrate.

Companies will expect you to know the type of job you would like to do, so talk to insiders and match your skills to specific divisions and functions. Are you attracted to the immediacy and pressure provide by a career in trading or are you more interested in longer term projects like mergers and acquisitions.

Useful resources

Job roles

Analyst

An entry level position on the sell-side for undergraduates, which tends to last three years with successful employees staying for longer or being promoted to associate.

You’d be required to analyse and interpret data and create models. As well as presenting this information in reports and as presentations you’ll also be required to give various other presentations within this role. You will also be required to carry out administrative tasks to support associates and other members of the team.

Associate

They will act as a line manger to analysts, overseeing their work, helping with the content for presentations and will construct the majority of models. They will also have interaction with clients.

This position can be entered by candidates with MBA and PhD level study, preferably with over three years’ experience, although this will vary from employer to employer so do check their person specifications. These positions are also held by promoted analysts.