Investment Banker

Investment Banker Career Overview: Investment bankers raise funds for corporations by structuring the issuance of securities such as stocks and bonds. They also advise corporations that are contemplating mergers and acquisitions. Careers in investment banking require strong quantitative abilities combined with excellent sales skills, not to mention a large measure of self-confidence.

This is a fast-paced, pressure-packed field noted for long hours and extensive travel requirements. In particular, junior associates should expect to be on call virtually 24/7 for their first few years. The payoff for those who survive this grind is that compensation packages can be extremely generous, allowing a successful person to build a fortune within a relatively short period of time.

Investment Banking Industry Trends: Data from the Boston Consulting Group (BCG) and Thomson Reuters indicate that industry-wide investment banking revenues were down by over 75% in the third quarter of 2008 from the same period in 2007, while the dollar volume of activity (securities issues, loans and mergers & acquisitions) in the first nine months of 2008 was down by around 50% from 2007. 

Investment Banker Career Outlook: The view of senior investment bankers participating in the annual Wharton Finance Conference on November 7, 2008 was:

• Merger & acquisition work should be in demand, especially as corporate restructurings increase in number.
• Capital markets work (such as securities underwriting), by contrast, generally should be weak over the next few years.
• Distressed debt, however, will be one capital markets area with growth prospects.
• Emerging markets will be the other capital markets area worth looking into.
• Boutique firms report booming M&A business, and generally are much stronger than their larger rivals.

In sum, there is still hiring by investment banking firms, though not in the same numbers or at the same pay levels as in recent years. Especially for ambitious new MBAs seeking entry-level positions, it is a challenging environment, but with some opportunities still available.