Investment Banking in Chicago

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

Overview of Investment Banking in Chicago

Investment banking in Chicago is well-established and has several investment banks. These banks help different businesses by providing various finance-related services and 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 making, trading of derivatives and equities, and services like Fixed Income instruments, currencies, and commodities.

Investment Banking in Chicago

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Investment banking in Chicago is significant as it fuels the city’s economic
growth. It facilitates capital raising for businesses, M&A deals, and
financial advisory services. Chicago’s strategic location and strong financial
institutions make it a key player in the national and global financial
landscape through their constant advancements and updating with regard to the
finance world.

What Do Investment Banks in Chicago Do?

Investment banks like commercial or retail banks do not take deposits. They participate in other activities like cash management, 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 trade in derivatives, securities, currencies and actively do research and underwritings. The buy type of investment banks helps advise the government or institutions for buying investments, mutual funds, hedge funds, equities, life insurance etc.

Furthermore, Chicago’s strategic location and strong ties to industries such
as manufacturing, technology, and healthcare make it a hub for investment
banking activities. It serves as a bridge between the Midwest and the global
financial centers, fostering economic growth in the region.

Therefore, investment banking in Chicago is integral to the city’s financial
vibrancy, serving as a catalyst for corporate growth, M&A activity, and
strategic financial decision-making in a diverse range of industries.

Services Offered

Services offered by the investment banks in Chicago are-

  • Buy Side
  • Sell Side
  • Private market financing

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#1. Buy Side

Investment Banks work closely with the client to understand their financial position, financing needs, and overall corporate objectives. After that, they start exploring acquisition ideas and contacting targets on the client’s behalf. Once the list of target companies is finalized, the expert in the bank gets into the task of valuing the companies using analytics and proprietary models to finalize the deal’s value. 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 research team help the client are –

  • Idea generation for searching the target companies
  • Valuing the target companies and deciding 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 developing specific strategies and marketing plans for the process of selling a company. In the selling process, negotiation plays a very important role as both the buyer and the seller are looking to maximize their benefit from it. The bank plays a very important role in minimizing this gap in expectation between the two sides. Another important aspect is to maintain complete confidentiality about the deal until the deal is closed. There is minimum disruption, and the process can be exercised faster.

#3. Private Marketing Finance

The bank provides the service of raising capital for the deal efficiently and cost-effectively. On top of that, they also provide expertise to crunch numbers to provide an optimal capital structure for the deal and offer adequate solutions for raising capital.

Top Investment Banks in Chicago

Here are some of the bulge bracket investment banks in Chicago –

  • JP Morgan
  • Goldman Sachs
  • Bank of America – ML
  • HSBC
  • UBS
  • Deutsche Bank
  • Morgan Stanley
  • Citibank
  • Credit Suisse
  • Lazard
  • Wells Fargo

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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
  • ZacksInvest
  • MarX Financial, Inc.
  • KeyBridge Partners, Inc

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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 acceptance rate is low because of the rigorous recruitment process these banks follow. The process starts with filling out the application. The chances of getting the application selected depend on many things, like very good academic records. The summer internship is done in the investment banks, relevant work experience, etc. If the application gets selected, the following steps are psychometric tests, the first round of interviews, and the second round of interviews. If a candidate clears all these steps, they are generally offered a 10 to 12-week summer internship analyst 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 company 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. 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 drinks
endless cups of coffee to remain alert. The culture is unique, and people who
can sustain this pressure are the ones who make a fortune for themselves.
During the recession, if a bank wanted to fire an employee, they were generally
asked to come for a sudden meeting, where they would be handed the pink slip,
and from there, they would leave the bank, not even returning to their desk for
one last time.

The starting salary of most investment bankers in Chicago ranges from $70,000 to $120,000, which goes up to as high as a million dollars per year, including the bonus for a managing director and above. Below is a chart that depicts the average salary of a few investment banks in Chicago.

Investment Banking in Chicago - Graph

Source: indeed.com

Exit Opportunities

Many people bear the grind of working for over 100 hours a week on investment in Chicago 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 –

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Reader Interactions

Comments

  1. Jayaram Tamilselvan says

    Good to understand about Investment banking system

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