Investment Banking Jobs
Investment banking jobs still matter despite the drunk-and-disorderly global economy. You don’t believe me? Look at the line-up of investment banks in Face book’s May 18, 2012 IPO: JP Morgan Chase, Barclays Capital, Goldman Sachs (the world’s umber investment bank that didn’t need a bailout from the American taxpayer at the height of the sub prime mortgage tsunami a few years ago), Etc.
Yes. ‘Green’ industry is being touted as the next employment creator. But it won’t gain traction as long as developed and developing economies disagree about who is to blame for emitting the most green house gases, who should be the first to cut their emissions, when they should do it. Who shouldn’t, and why etc. But guess what, as long as companies need capital to go public, capital to expand overseas, capital to develop new products and services, capital to buy that irritating start-up competitor. Then there will be need for investment banking and investment banking jobs. And by the way, even governments, particularly developing world governments, are nowadays looking to raise capital to fund huge infrastructural projects. They too need a guiding hand from investment banks.
How investment banks earn their bread
Investment banks primarily assist companies and governments raise capital on the debt markets by both advising their clients regarding the financial regulations governing the different debt instruments (IPO, sovereign bond, rights issue.etc) and marketing the capital raising initiatives to ensure the client’s efforts succeed. Investment banks then either get paid a commission from the capital raised or a flat fee, depending on the contract between them and their clients. Secondarily, investment banks make money by buying and trading shares, analyzing public companies and issuing reports (you must have heard of the analysts that public companies, especially on Wall Street, have to please. Yes, it’s investment banking analysts), researching about various commodities (such as oil), asset classes (such as property) and selling this information, etc.
How do I get in?
Good question. Competition to enter the investment banking galaxy is ruthless because there’s only a fistful of companies to go around (the sub-prime mortgage tsunami drowned former powerhouses such a Lehman Brothers and err ill Lynch) and worse, almost all of them are headquartered in America. So, the first unfair advantage is that you need to live in America. Second, you need to have a head for numbers from your infancy (your academic records from primary school have to be excellent) to your MBA. Third, and related to the first requirement, you have to be a My League graduate: Harvard, Yale, Princeton, etc. It doesn’t mean that your application will be rejected if you are University of Southern California alum, but the thing is that the investment banking family is like OPEC, it doesn’t easily admit outsiders unless you bring rare skills to the blood line. Fifth, have a well-pressed suit to impress the talent scouts when their recruitment rocket lands on your campus, regardless of whether you are male or female. You are on your way to joining the hallowed club and who knows, in future you may become a US Treasury Secretary just like Robert Rubin. Yep, he once worked at Goldman Sachs. If you don’t land investment banking job don’t fret, there’s always the ‘green’ jobs.
The pay, your job description Despite the unstable global economy and the resulting unemployment/ cross-industry layoffs, investment banking jobs still pay handsomely. Average 2011 starting salaries for bachelor’s degree recruits ranged between $100.000 and $130.000 annually. MBA recruits’ annual salaries ranged between $90,000 and $180,000. Please note that these figures include your industry ‘birthright.’ that is, your annual bonus.
Bachelors degree recruits usually begin as analysts and you will be required to analyze everything from oil to the Mexican peso to the effect of a Jay-Z/Cold play joint summer tour on Ticket master’s stock price (syke, but you get the picture). Remember that head-for-numbers ability mentioned earlier? Now, add the patience to sift through a shipload of information and sex it up for your bank’s clients, and you will do well in your 2-year analyst incubator. From there you can decide whether you are cut out for the industry or not. If the answer is the former, it’s strongly recommended you go back to your alma mater and study for an MBA and then rejoin the galaxy as an associate. Otherwise, your career movement may move sideways instead of upwards. If not, once again. Check out the ‘green’ jobs on Craig list. Associates, i.e. MBA recruits, have a slightly better experience (and also make more money) than analysts since they can rotate between different desks from corporate finance to mergers and acquisitions to equity markets to trading. Your responsibilisets, to advising your employer on the best social media strategy, etc. Survive in this microwave for 3 years and presto, here comes the promotion, a license to recruit your own clients for the firm’s services and earn a share of the profits too (similar to Bernie far-off, but legally), a seat on the board, membership to the C-suite, an invitation by Richard Branson to visit Necked Island. Yes, you can.
The burglar On the B-side, investment banking can ‘burglaries’ your family and hobby time because of its demanding nature, especially when it’s time to launch a new IPO, for instance. So you will need a very understanding spouse and children. You can always ‘buy’ their silence with an annual trip to Barbados on a private jet, but it won’t matter much when you regularly miss Jnr’s portrayal of Romeo in his school’s play. Better yet, don’t get married, well, at least not while you’re a prominent player.
And worse, aim Street blames investment bankers for all manner of ills infecting the economy from packaging ‘toxic’ products and presenting them as candy to causing high unemployment rates by pressuring companies to focus on short-term profits to causing the depreciation of vulnerable currencies such as the Zimbabwean dollar. You will need a substantial budget to hire silver-tongued lobbyists to represent your interests next time Congress threatens to tax 50% of your bonus that can run a developing-country’s government ministry.
Investment banking jobs, anyone?