Opting for a career in finance and then aiming for esteemed investment banking courses is itself a thing of great pride. Investment banking is an elite branch of finance. It has always been considered as one of the highly accredited career options. Investment banking professionals themselves carry a status symbol and are deemed as the best educated and prestigious people in the business world.
Still, the careers in this particular field enjoy a cult prestige in society. To further explore what investment banking is all about and what roles & functions it involves, let’s read further.
What Is Investment Banking?
Investment banking is a specialized segment of the banking industry that provides individuals, corporations, and government entities financial advisory services. These services are aimed to enable corporations to raise capital for their expansion and other needs.
The Several roles of an Investment Banker:
An investment bank serves numerous purposes in the investment and financial services sector. The various roles and responsibilities that you may take up as an investment banker include:
1. Underwriting: This is one of the most basic functions of investment banks which involves generating capital for organizations and government setups via disbursal of equity and debt.
2. Mergers & Acquisitions (M&A): Working in this department involves providing strategic guidance to companies that are either planning to merge or acquire another company. This role involves directing the concerned buyers and sellers on various financial aspects such as business valuation, transaction structuring & pricing, contracting, and implementation. The professionals involved in this process have the proficiency to gauge the viability of a deal to ensure that it proves effective for the organization in the long term.
3. Equity Research: This is an important segment of investment banking. The investment banking professionals involved in this process help investors take investment decisions while assisting them in stock trading. They conduct buy and sell oriented research to assist in trading of securities.
4. Venture Capital: As venture capitalists, an investment banker helps startup companies avail finances. Working in this segment requires an individual to identify companies that are nascent stage and have the potential to achieve long term growth.
5. Proprietary trading: Some investment banking firms also provide proprietary trading services. These services provide traders a platform to trade in different securities such as bonds, equity, commodities, or currencies using the firm’s own capital rather than the depositor’s money.
7. Asset management: An investment banking firm is also involved in asset management wherein they are held responsible for managing the client’s investment portfolio for a wide range of investment styles. The professionals involved in this segment help their clients achieve their financial goals by using the right blend of investment options like bonds, equity, or real estate.
All-in-all investment banking is a diverse field. Any graduate from finance, physics, and computer science or mathematics background can opt for a career in this field. It is a prestigious job and can help individuals fetch good payoff with good career growth.