Landing a job in an investment firm is a top goal for many MBAs. They want to bring their talents and knowledge to investors, banks, and corporations who can benefit from their expertise. It’s an exciting and very demanding career field, especially in the wake of the Great Recession of 2008 and 2009.
Banks, brokerages, and financial services firms are looking for candidates that have deep and broad insight into the industry and a willingness to learn more. That’s how you get started as an Investment Banking Analyst.
What is an Investment Banking Analyst?
An Investment Banking Analyst is the workhorse of an investment team. They typically join the bank directly after graduation and spend two years in an analyst program undergoing intensive technical job training to prepare for the workload ahead. They’re responsible for a wide range of duties including raising capital, providing advisory services for mergers and acquisitions as well as other corporate transactions, completing valuation work, and more.
Some of the most common tasks for an Investment Banking Analyst include:
- Examining Industry Research: You’ll typically be slotted into an industry-specific category such as finance, healthcare, or emerging markets and be held responsible for building a case for or against investing in a specific firm or industry.
- Building Financial Valuation Models: One of your most vital roles will be to build investment models by tracking financial trends, isolating business and revenue cycles, and gauging performance.
- Producing Investment Presentation Materials: As an excellent communicator, you’ll be expected to research, write, and edit research and status reports, presentation, initial public offerings, and more. You’ll be expected to deliver these materials on tight deadlines.
To be a competent Investment Banking Analyst, you’ll need:
- Close attention to detail
- Strong analytical skills
- Good research skills
- Excellent communication ability
- Problem-solving skills
- Decision-making skills
A Day in the Life
New Investment Banking Analysts can expect long work weeks—80 hours is normal, and 90-110 hours isn’t unexpected. During busy times, analysts can pull “all-nighters”—working straight through the night and continuing on the next day. The good news is that the higher up you go on the ladder, the less time you’ll need to spend in the office.
According to one Investment Banking Analyst on Mergers and Acquisitions, “Doing investment banking is like doing drugs: on your good trips, you dance in clouds of marshmallows surrounded by beautiful women (or men) serving you fruit in canopies. On your bad trips, you scratch your eyes out and jump off buildings.”
Investment Banking Analyst Salary
The good news is that for all this work and expertise, you can earn a pretty impressive salary. According to user registration data on Wall Street Oasis as well as thousands of compensation discussions across the Internet, an Investment Banking Analyst can expect to earn:
- First Year Analyst: $70-$150,000
- Third Year Analyst: $120-$350,000
The critical thing to remember is that different banks and groups pay different amounts. There is no precise compensation range because it can vary so much. With an MBA, you can also expect to receive a sign-on bonus, typically between $10,000 to $30,000, as well as a stub bonus between $20,000 and $30,000. In addition, end of year bonuses can drastically change your salary based on the “performance bucket” you’re in. Full-year bonuses for Analysts tend to be between 70-to-100 percent of base salaries with numbers above 100 percent for top performers.
Beyond a high salary, you can also expect benefits such as health insurance, vacation days, potential profit-sharing or 401(k) retirement plans, and more. There’s also stock and deferred compensation, which can substantially increase your worth.
Getting Started
Viable Investment Banking Analyst candidates at least have a finance or business undergraduate degree and the most sought-after have an MBA if they want to work for a top investment banking firm. Firms will look for substantial coursework in bond valuations, options trading and pricing, tax laws, quantitative analysis, and risk management.
The best candidates tout their experiences, particularly when it comes to their analytical and problem-solving skills. Interviewers will also want you to elaborate on your work ethic (your willingness to work 80-hour weeks), your interpersonal skills, and grasp on technology.
You’ll also want to consider starting your Investment Banking Analyst career as an intern. An internship will provide you with the real-world practical experience you need to stand out in an interview and make you a more attractive employee. In many cases, the internship will turn into a job offer for the same firm.
Schools to Consider
An MBA from a top program will provide you with a good chance of landing an offer from a top Investment Banking firm. However, it’s still going to require a lot of effort and networking in advance. To give yourself the best chance of landing the job whether you’re targeting Goldman Sachs or J.P Morgan Chase & Co., here are the best schools for investment banking.
Few business schools in the U.S. match the number of finance graduates NYU Stern produces, with 26.2 percent of the class joining investment banking/brokerage after earning an MBA.
These five MBA programs send the largest portion of their graduates into finance. They are all known as quant-focused finance powerhouses, located in top financial hubs with established footholds in the investment banking space.
- Columbia Business School—32.2 percent (12.3 percent investment banking/brokerage)
- University of Chicago Booth School of Business—31.6 percent (10.5 percent investment banking/brokerage)
- New York University Stern School of Business—33.8 percent (26.2 percent investment banking/brokerage)
- University of Pennsylvania’s Wharton School—36.9 percent (13 percent investment banking/brokerage)
- Cornell’s Johnson Graduate School of Management—32 percent (19 percent investment banking/brokerage)