Overview of Investment Banking in Chicago
If we are talking about investment banks, Chicago has got a number of investment banks. These banks help different businesses by providing various finance related services as well as other services like raising financial capital or by acting as the client’s agent for the issue of securities. They help companies in mergers and acquisitions (M&A) along with providing services like market makingMarket MakingMarket makers are the financial institution and investment banks which ensures enough amount of liquidity in the market by maintaining enough trading volume in the market so that trading can be done without any problem., trading of the derivatives and equities and services like Fixed Income instruments, currencies, and commodities.
What does Investment Banks in Chicago Do?
Investment banks like the commercial or retail banks do not take deposits. They participate in other activities like cash managementCash ManagementCash Management refers to the appropriate collection, handling, & disbursement of cash for ensuring financial stability & avoiding insolvency risk. , professional management services for securities, capital exchange for equities share etc. Mainly investment banks deal with two categories- the sell category and the buy category. For sell type, the investment banks do trading in derivatives, securities, currencies, and actively does research and underwritings. The buy type of investment banks helps in advising the government or institutions for buying investments, mutual funds, hedge fundsHedge FundsA hedge fund is an aggressively invested portfolio made through pooling of various investors and institutional investor’s fund. It supports various assets providing high returns in exchange for higher risk through multiple risk management and hedging techniques., equities, life insurance etc.
Services Offered by Investment Banks in Chicago
Services offered by the investment banks in Chicago are-
- Buy Side
- Sell Side
- Private market financing
#1. Buy Side
Investment Banks workInvestment Banks WorkInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, etc. closely with the client to understand their financial position, financing needs, and overall corporate objectives. Post that they start exploring acquisition ideas and start contacting targets on client’s behalf. Once the list of target companies are finalized, the expert in the bank gets into the task of valuing the companies using analytics and proprietary models in order to finalize the value of the deal. The senior management will track every step of the execution process of the deal which also includes cost-effective and efficient channels of financing. In short the steps in which the buy-side Buy-side The term "buy-side" refers to entities that advise their clients like individual investors and institutional buyers on investments and securities purchases. Private equity firms, mutual fund companies, life insurance companies, unit trusts, hedge fund companies, and pension fund entities are examples of buy-side firms.research team help the client are –
- Idea generation for searching the target companies
- Valuing the target companies and decide on the deal size
- Aid the process of execution and financing the deals
#2. Sell Side
The professionals in the bank are experts in searching for buyers and develops specific strategic and marketing plan for the process of selling a company. In the process of selling negotiation plays a very important role as both the buyer and the seller is looking to maximize its benefit out of it. The bank plays a very important role in order to minimize this gap in expectation between the two sides. Another important aspect is to maintain complete confidentiality about the deal till the time the deal is closed so that there is minimum disruption in the process and the process can be exercised faster.
#3. Private Marketing Finance
The bank provides service of raising capital for the deal in an efficient and cost-effective way. On top of that, they also provide expertise to crunch numbers in order to provide an optimal capital structureCapital StructureCapital Structure is the composition of company’s sources of funds, which is a mix of owner’s capital (equity) and loan (debt) from outsiders and is used to finance its overall operations and investment activities. for the deal and offer adequate solution accordingly for raising capital.
Top Investment Banks in Chicago
Here are some of the bulge bracket investment banksBulge Bracket Investment BanksTop 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS. in Chicago –
- JP Morgan
- Goldman Sachs
- Bank of America – ML
- Deutsche Bank
- Morgan Stanley
- Credit Suisse
- Wells Fargo
Below is the list of middle market and boutique investment banks in Chicago –
- Madison Street Capital
- Peakstone Group
- XLS Partners
- Concord Financial Advisors
- Houlihan Capital
- Dresner Partners
- MDI Investments
- Cornhusker Capital
- J.H. Chapman Group, LLC
- Sikich Investment Banking
- The Chicago Corporation
- Wolf Capital
- Stout Risius Ross Advisors, LLC
- Stonegate Group Ltd.
- Lincoln International, LLC
- Westbrook Capital
- Kuhn Capital
- Baker Tilly Capital
- XMS Capital Partners
- Navigant Capital Advisors
- William Blair & Company
- Livingstone Partners
- MB Financial Bank
- LIFT Aviation
- Dark Horse Advisors LLC
- UBS Private Wealth Management- Chicago
- Building Industry Advisors
- Cook M&A Advisory Services
- Stang Capital Advisory LLC
- Ravinia Capital
- InterOcean Advisors
- Auctus Group, Inc
- Floyd & Co., Inc.
- Gar Wood Securities, LLC
- Metropolitan Capital Investment Banc
- MarX Financial, Inc.
- KeyBridge Partners, Inc
Investment Banks in Chicago – Recruitment Process
It is extremely difficult to crack a job in top investment banks in Chicago. The rate of accepting a candidate in a top investment bank is much lesser than the rate of getting even into an Ivy League college. The rate of acceptance is low because of the rigorous recruitment process these banks follow. The process starts with filling the application, the chances of getting the application selected depends on a lot of things like very good academic records, the summer internship is done in of the investment banks, relevant work experience etc. If the application gets selected then the steps which follow are psychometric tests, the first round of interview and second round of interview. If a candidate clears all these steps then they are generally offered 10 to 12 weeks summer internship analysts job, completing which the candidate is eligible to apply for a full-time job.
Investment Banks in Chicago – Culture, and Salaries
Working at an investment banking presents an extreme culture. The craze for working in an investment bank is mainly due to its high pay and fat bonuses. The remuneration provided is as competitive as any other industry. Though with this high price tag comes a lot of hard work and uncertainty that goes into it.
In general, a banker in Chicago works for 80-120 hours per week and literally drinks unlimited cups of coffee to remain alert. During the recession, if a bank wanted to fire an employee then they were generally asked to come for a sudden meeting, where they will be handed the pink slip and from there they will leave the bank not even returning to their desk for one last time. The culture is very unique and people who are able to sustain this pressure are the ones who make fortune for themselves.
The starting salary of most of the investment bankers in Chicago ranges from $70,000 to $120,000 which goes up to as high as million dollars per year including the bonus for a managing director and above. Below is a chart which depicts the average salary of few investment banks in Chicago.
Investment Banks in Chicago – Exit Opportunities
A lot of people bear the grind of working for over 100 hours a week on an investment in Chicago, is because of the exit opportunities they get. Generally, investment banks act as a stair-step for jobs in Hedge Funds, top Private equity firms, and venture capitals.
This has been a guide to Investment Banking in Chicago, their services offered, recruitment process, their culture, list of top investment banks in Chicago, investment banking salaries in Chicago, investment banking jobs in Ireland and exit opportunities. You may also have a look at the following article for learning more about Investment Banking –