Investment Banking in London (UK)
The UK and Europe have been the financial capital cities of the world for a long time. Since investment banking is a huge part of the financial institutions and business deals, it’s quite clear that London (UK) is one of the best places to be an investment banker.
But how it would be to be an investment banker in London, United Kingdom? In this article, we will look at all the aspects to understand how well-off you would be if you find yourself in the “investment banking” in London.
Let’s look at the sequence of the article –
- Overview of Investment Banking Market in London
- Investment Banking in London – Services Offered
- Top Investment Banks in London
- Recruitment process of Investment Banks in London
- Investment Banking Culture in London
- Investment Banking Salaries in London
- Investment Banking Exit Opportunities in London
Overview of Investment Banking in London
If we look at the map of the world, we would see that London is in the center of the map. On the left, there is America, and on the right, there is Asia. In the middle, there is Europe. Moreover, London being a financial capital of Europe has always become reliant on immigration and trade.
After 11th September 2011, when the USA needed visas for everything, for business trips to employment visits; visas in the UK for business deals and other employment opportunities were still easily available.
As a result, many immigrants from India, France, Spain, Italy, and Germany have entered the workforce of the UK and made it the best financial market in the world.
During that time, many investment banks had gone belly up in the USA (for example WorldCom, Enron, Lehman Brothers, etc.). And the UK had still been maintaining authority in financial marketsFinancial MarketsThe term "financial market" refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces..
The above has had a great impact on the world’s financial market. London was considered the best environment to do business and to create value for people involved. As a result, Investment banks in London are the best place to work.
So roll up your sleeves and do all you can to for investment banking in London, UK (if you want to be an investment banker at all).
Investment Banking Services in London
There is an entire gamut of services investment banking in London, UK offer.
Let’s have a snapshot of them in brief –
- Research: Research is one of the basic things to do if any investment bank wants to add value to their customers. The investment bankers in London, UK proudly offer this service to their clientele to substantiate their recommendations about the market. Also, have a look at Equity ResearchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports.
- Corporate Advisory & Broking: Two things matter in investment banking more than anything. First is the relationship with the clients and second is the frequency of recommendations. In the UK, these two things are given maximum priority and based on these two fundamentals, investment banks’ corporate advisory & broking team are built. Corporate broking team constantly updates customers about what’s going on in the market plus they also provide regular market intelligence reports, capital marketCapital MarketA capital market is a place where buyers and sellers interact and trade financial securities such as debentures, stocks, debt instruments, bonds, and derivative instruments such as futures, options, swaps, and exchange-traded funds (ETFs). There are two kinds of markets: primary markets and secondary markets. views, and investor relations services.
- Investment funds: This is one of the best services offered by Investment Banking in London. Every team is close-ended and every member of the team is a specialist of some sort in sales, market research, corporate finance, etc. They provide customized services on various investment funds to their great & high net-worth clientele.
- Mergers & Acquisitions (M&A): Market leverage is the most important thing in investment banking. And that’s exactly what’s offered by the investment banks of the UK. Continuous monitoring of the market, providing leverage to the clients, offering bespoke solutions to them as per their needs are the three pillars in M&A services offered by investment banks in the UK.
- IPOs: From small-cap to mid to large, every company when they decide to go public, UK investment banks help them take the leap with as little hassle as possible. From enhancing the profile of the firm, releasing new funds for product development to helping them grow their companies, all are duly facilitated by investment banks in London.
- Institutional Equities: The Market position of an investment bank plays a big role in offering institutional equities. Almost all of the investment banks (even the small ones) offer services to 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., long-only funds, investment boutiques, retail brokers, family businesses, and also wealth managers. There are basically two parts in institutional equities – helps clients build a stronger foot in market share and sales trading.
Top Investment banks in London (UK)
According to the Guardian UK 300 (i.e. the largest student survey in the UK on students’ opinions), these are the investment banks that topped the list.
But before that, let’s look at the source of the survey.
In 2016, total of 52,000 students took part in this survey. They have the following characteristics –
- They expected an average salary of 32,462 UK Pounds per annum.
- Out of all the students, 52% of them have experience in the related work field.
- These students most commonly studied economics, business or management, statistics or mathematical science.
Now, let’s look at the ten glorious, top-notch investment banks of the UK according to the above survey –
- JP. Morgan: According to the survey, J.P. Morgan topped the list in investment banks in London. They have headquarters in London and other offices in Bournemouth, Glasgow & Edinburgh. J.P. Morgan is also one of the largest technology employers in Scotland.
- Goldman Sachs International: Goldman Sachs International in the UK has taken the second spot in the list of Investment Banks in London. It has multiple offices in London. According to glassdoor.co.uk, most of the employees make more money than the students expected in the survey.
- Barclays: Barclays is not exactly an investment bank, but it provides services in financial services and in insurance.
- Morgan Stanley: Morgan Stanley in the UK has taken the 4th spot in the list of top investment banks in London. In 1977, Morgan Stanley started its European headquarters in London. It has more than 8000 employees in all of the offices in London.
- Deutsche Bank: Deutsche Bank took the 5th position in the list of top investment banks in London. The London branch office of Deutsche Bank offers investment banking & underwriting services. This branch office acts as a subsidiary of Deutsche Bank AG.
- Bank of America, Merrill Lynch: Bank of America, Merrill Lynch was on the 6th in the list of top investment banks in London. It has the capabilities, resources, and strengths to carve out a glorious future for their employees as well as investors.
- BlackRock: BlackRock is one of the biggest in the UK and they took the 7th spot in the list of top investment banks in London. According to their website, BlackRock had assets under management (AUM) of US$4.59 trillion as of June 30, 2014.
- Credit Suisse: Credit Suisse has stood out at 8th At the end of 2016, it was mentioned that there are more than 3000 employees working fulltime in the investment banking team (globally) and they expect to grow their investment banking capability by 60%.
- Citibank: Citibank has dropped from position 8th in 2015 to position 9th in 2016. They have headquarters in Canary Wharf, London.
- UBS: UBS is in the tenth position according to the survey. They have a head office in London. As per the website, in the UK, they have assets under management (AUM) 31.7 billion UK pounds as of December 2015.
Investment banking Recruitment Process in London (UK)
As expected, in the UK, the recruitment process for investment banking in London is quite different than in the USA and other countries.
There are two to four stages of the recruitment process you need to go through to be able to get the offer letter in your hands. Have a glance at them and prepare accordingly –
- The first round of interview: This is in most cases would be the telephonic round. Investment banks in the UK use this as a screening method to select the best lot from all of the people who have applied. As self-motivation is one of the keys to investment banking success, the telephonic round heavily focuses on the same. In the telephonic rounds, investment banks also try to understand your competency level.
- The second round of interview: At this stage, the interns and the graduates are assessed to be eligible for the assessment center. In investment banks, UK, having assessment centers for running two to four rounds of interviews is common practice. For internships, the second round of interviews may be the last round, but in some of the cases, it may be the next to last. For example, Nomura takes four rounds of interviews each of 30 minutes to select their new interns. Following resources, you will find useful
- Investment Banking Interview Question and AnswersInvestment Banking Interview Question And AnswersThe purpose of this Investment Banking Interview Questions and Answers is simply to help you learn about the investment banking interview topics.
- What is Investment Banking?What Is Investment Banking?Investment 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.
- How to get into Investment Banking?
- The third round of interviews: For selecting graduates, the third round of interviews is often taken. For example, Citi and Deutsche Bank take three rounds of interviews. The third round of interview is usually a combination of a panel interview and one to one with the HR or respective managers of the departments.
- The fourth round of interview: This is usually rare, but it happens when there is confusion among a few strong candidates. The idea is to pare down the number of candidates from few to one or two.
In this case, you need to remember two things. First, there is a graduate scheme of the recruitment process where you are expected to complete a banking internship before applying for the Graduate job in investment banks. Second, there is an internship scheme of the recruitment process where you need to answer two specific questions – “why do you want this internship?” and “why you want to join this bank?”
Investment banking Culture in London
Culture is often shaped by the country, Government, regulations & compliances and most importantly ethics in the organization.
Let’s have a look at few investment banks in the UK (London) and their organizational culture –
- Goldman Sachs: You need to work extremely long hours. You either like the culture or you don’t like it at all – truly there’s no in-between. The best part is the pay if you make it to the top positions.
- J P Morgan: This bank operates in the most European way possible. The worst part is it pays below the market. The best thing is the internships where the juniors are trained incredibly well.
- UBS: The place was incredible. People were happy and the work environment was cool until the arrival of Ozzie Grubel and the ramping up process in fixed income. The worst thing is the pay and the best part is getting hired in FICC.
- Morgan Stanley: People here are not very contented and they are usually busy in remembering the past golden days.
- Credit Suisse: It is one of the happiest places to work in. If you join Credit Suisse, UK, you will find that the pay is the highest and the way the bank deals with the downturn is incredible.
- Deutsche Bank: It has a bad name of being overly political, but it has been changing over the years. This bank is worst for putting people in comparative roles which only increases hostility. The best part is, of course, the pay structure.
Investment banking salaries in the UK (London)
According to the data collected at Emolument.com, the salaries of front office jobs in investment banking (M&A, ECM, Sales, Trading, etc.) increase drastically if one can stick to the jobs beyond the age of 25.
- Between 21 years of age to 25 years, you will become an Investment Banking Associate from Analyst and your pay would increase to 80,000 UK pounds from 45,000 UK pounds per annum.
- From 25 years of age, if you stick till 30, you will become Vice President from Associate and your pay would become 156,000 UK pounds per annum.
- If you still stick to the job and can continue till 35, you will become Director from VP and will receive 231,000 UK pounds per annum.
- If you still have the guts to stay, at 40 you will become Managing Director and will receive around 315,000 UK pounds per annum.
- After that, you will become a Senior MD and will receive around 475,000 UK pounds per annum.
Investment Banking Exit Opportunities in London (UK)
- As an investment banking careerInvestment Banking CareerAn investment banking personnel is a motivated professional who aims to help their clients reach their financial goals and objectives. The top four investment banking careers are - Analyst, Associate, Vice president, Managing director. is not for the faint-hearted, people often look for exit opportunities. If you want to go for the exit, there are many options available.
- For example, you can go into private equity; you can become an entrepreneur or a trader; or in-house advisory for any corporates; or maybe in consulting or hedge funds.
- The options are many, but you need to make sure that your reason for leaving investment banking is concrete.
Also, further details, please have a look at Investment Banking Exit OpportunitiesInvestment Banking Exit OpportunitiesAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates.
In the final analysis
London (UK) is one of the best markets for investment bankers. So, if you would like to go into investment banking, London (UK) would be your best bet. Sure, there are issues within the cultures of investment banks in London (UK); but where wouldn’t it be?
Do your due diligence and you would know that a great career is awaiting you all along.
This has been a guide to Investment Banking in London, services offered, culture, Investment Banking salaries offered in the UK, recruitment process, and exit opportunities. You may also have a look at the below article for more details on Investment Banking.