Investment Banking Exit Opportunities

Updated on April 30, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Investment Banking Exit Opportunities – Investment banking is not for the faint-hearted. You need to work 100+ hours every week, you will always be on your toes to get things done, and you will always feel the urgency of losing out on important deals.

However, everyone seems to go for investment banking because of the compensation and doesn’t think about the working hours and the mental attitude required to succeed. The idea is to go through 2-3 years of rigorous work and switch careers.

Investment bankers who have a degree from top-notch universities can have a great chance at cracking into other fields. But people who have worked their way up may seem difficult for them to switch when they feel necessary.

In this article, we will look at many different options for exit opportunities for investment bankers. Some of them are pretty common, few of them are rare, and others are the result of learning so many skills within a short amount of time.

Let’s have a look at them one by one.

Investment Banking Exit Opportunities

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Investment Banking Exit Opportunities

#1 – Private Equity

Private equity may be your next big thing if you want to switch from investment banking. But there are a few conditions which you need to fulfill –

  • First, you need to top in performance and results among your peer group for at least two years.
  • Secondly, you should’ve passed out from a top-notch university, and you need to be one of the top students there.
  • Thirdly, you should’ve spent a reasonable time in a big bank for at least 2-3 years.

If you fulfill all these conditions and are ready to work hard almost equal (80-90 hours), but in a completely different role (more of a researcher), then private equity is the right thing for you.

To know more about Private Equity, you may refer to the following articles –

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#2 – Hedge Funds:

The hedge fund would be a tough nut to crack, and it’s not easy to get into a hedge fund if you don’t have thick skin. However, if you have experience auditing trading and have some experience setting trading strategies, you are all set to go. The only thing that can backfire is if you are losing out even once, chances are you will be thrown out of the funds. So be patient and think twice about your choice of joining hedge funds because the risk is way too much than any other career option.

To know more about Hedge Funds, you may refer to the following articles –

#3 – Strategy Consulting (Investment Banking Exit Opportunities)

If you are a banker with experience in consulting before banking, you’re good to go in strategy consulting. Many investment bankers join strategy consulting for the sheer love of strategy. But remember, once you choose this option, you wouldn’t be called a banker; rather, you will be named “strategist.” And soon enough, you will be able to understand how powerful power-point presentations and matrix diagrams are (yes, even more than excel)!

To know more about Consulting, please refer to the following articles –

#4 – Fin-tech: (Investment Banking Exit Opportunities)

If you have been in investment banks for a long time and are a part of sales, plus if you have a technology background, you are a perfect match for fin-tech opportunities. Not all are cut from the same cloth, and thus, not everyone who is in sales in investment banking can be part of fin-tech industries. You must have a strong past in handling different technical kinds of stuff and should have done some serious computer programming and software development work.

#5 – Advisory for large corporates: (Investment Banking Exit Opportunities)

Two types of people can choose advisory for large corporations. First of all, you need to be among people who are not bothered about earning less and at the same time want an easy work-life so they can join large corporations. And the second type of people is those in the senior position in investment banks, and they have already made their money; so they don’t get much bothered about less money, all they want is an easy life. So these two types of people should get into advisory for large corporations. Before choosing the corporates, there are two things you need to remember. Firstly, you will not get great deals to handle as you did during your M&A banking. Secondly, you will be working in a small team. So choose well, and you can have a highly satisfactory career if you are particularly looking for a work-life balance.

#6 – Regulatory consulting:

If you have worked in investment banking as risk and compliance professionals, regulatory consulting may be the best option for you. This is important as companies undergoing Mergers, buyouts or going through the process of fundraising will require expert advice on regulatory aspects.

#7 – Law: (Investment Banking Exit Opportunities)

Have you ever considered that? If you have joined investment banking right after your law school or just after working as a legal professional, you can go back to the law again. The only downside is you may need to work harder than ever, and you will not be paid as much as you get paid like an investment banker. So why should you go for a law career? If you love law and are passionate about making your mark in a legal career.

#8 – Venture capitalist:

This is a great option for you if you want to start your own and have a passion for backing up start-ups. The best part of this is you will choose your hours – how much you work, which projects you will invest, and how much you will invest; but the downside is the risk is much more in the beginning. Once you invest in a start-up, you don’t know whether the start-up will yield more money in your pocket or go belly up within a year. So play your cards well and go to the venture capital market once you have saved enough money during your investment banking career.

To know more about Venture capital, do refer to the following articles –

#9 – An MBA from a top-notch institute: (Investment Banking Exit Opportunities)

Most investment bankers are MBAs from top-notch universities. But what if you have joined investment banking and you know that you will never make it to the associate level until you go to a top-notch MBA institute and complete a hard-core MBA! Then what? You should go for an MBA and once you are done, do some internship (if necessary) and then join a top-most investment bank as an associate. The only downside is the opportunity cost (two years of not working plus the cost of an MBA) that you need to bear.

Related Articles –

#10 – Writing tell-all guides about your industry:

This is a very unusual career and of course, it’s not for most people. But if you are someone who loves to share his/her experience and know-how to market the book, you can open up a career in writing tell-all guides about your industry. As an example, we can pick Greg Smith’s book – Why I Left Goldman Sachs. Of course, there are many rumors about the book of Greg, but still, it’s a decent career if you know how to play the game. But the word of caution is your books may not sell that well. And you can only consider this a career if you have had enough money saved up and you’re tired of investment banking.

#11- Trading with your own money:

When working in investment banking, it’s the client’s money that is at stake. But once you get into trading your own money, remember it’s your own money, and if you don’t know how to play it safer, you will lose all your money. So, investment bankers who are not interested in hedge funds usually go for this option.

Related Articles –

#12 – Entrepreneurship: (Investment Banking Exit Opportunities)

If you have always reared up this dream of becoming an entrepreneur, this is your option. After working 10+ years in banking, you can take a bit of risk and go for your dreams once you have enough money saved up. This option is especially useful for people in MD ranks who don’t have many options to switch from investment banking to something else. You can start a consulting firm, an advisory firm, or whatever you please. Many ex-investment bankers start their restaurants. If that is what you want to do, you can do that as well.

#13 – Equity research: (Investment Banking Exit Opportunities)

If you love finance, data, research, reporting but don’t like running after deals, equity research is a great option for you. And you don’t need to go anywhere else. Just switch the place. You can ask the management of your bank if you want to make a switch in ECM/DCM. The best part of equity research is that you have fewer working hours than investment banking, and the pay is almost similar. If you like continuous analyses of data, stock, reports, and financial statements, this is the perfect option.

To know more about Equity Research, please refer to the following articles –

#14 – Boutique banks:

If you are a junior M&A professional and looking for a better opportunity (senior positions), a boutique bank may attract you. Even senior M&A professionals can choose this for better work-life balance. However, if you are a junior M&A professional, you may need to work harder than you did in your previous bank.

How to take the leap from investment banking to other career options?

So you can see that there are many options you can choose if you no longer want to continue as an investment banker. But how would you leap? How would you know what the right option for you is?

Here’s how.

You need to find your “why”.

Before you ever decide to quit investment banking, you need to ask yourself – “why has it become unbearable to me?” and ask yourself “why?” until you get the right reason.

Your reason may be very hectic work hours for which you’re not able to spend time with your near and dear ones.

Or maybe you are not enjoying running after every deal that you can get.

Or just maybe you know that something else (let’s say research) is more important to you than being on the business side.

The reason can be anything, but make sure that the reason is yours to begin with. For example, you may get inspired by your peer group to leave the job (if a few people are leaving investment banking for some reason), but ask yourself – “Is that your reason?” If not, then don’t quit. Instead, ponder. Justify leaving investment banking and doing something else first. And then you can do what seems justified.

Once you know your “why”, it’s time to decide how would take that leap? The best way is to continue as an investment banker and find out a few hours a week to learn about your new career choice.

Let’s say you want to go into equity research because you find you’re the perfect match for the “research” profile. But do you know exactly what’s going on in “research”? The easiest way to find out is to ask someone in the “research” profile which has always worked in your bank.

Ask about the hours, the work, the pressure, the work-life balance and if possible spend some time a few days a week watch how s/he has been doing work.

Once you get an idea, you will know whether that is a better option for you than investment banking or not.

The next thing you must do is see how much the next career move would help you in your career. Would it add value to your profile? Would it be progressive for your career shortly? For example, let’s say you decide to do an MBA from a top-notch institute. Ask the pass-outs about the opportunities after the MBA. Ask them whether the MBA from this institute will add value? If not, find something else or continue doing what you’re doing till you get a better opportunity.

To take the leap you need to make sure that the move is well-thought after and won’t put you in a complete disaster.

In the final analysis

Investment banking has many roles, and many people work in investment banking. Depending on the role you’re currently in and the years of experience you have, you need to decide the right option.

If you are an MD of the investment bank, consider starting your own business or fund because moving into a different industry may be pretty hard. But if you are a mid-level banker, you may join a corporation where you can act as an advisor.

Choose wisely because the Investment Banking exit should always be a new beginning!