Investment Banking Job Description of Analyst & Associates
Investment Banking job description below provides full and complete details of the roles and responsibilities of an Investment Banker, top skills needed to perform such functions and the primary qualification required to become an Investment banker.
Below is the Investment Banking Job Description and role taken from an actual opening.
Few of the necessary requirements pertaining to this are as follows
- Analyzing financial statements of companies with simultaneous evaluation of its peer companies
- You should be well versed with Financial ModelingFinancial ModelingFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact. and should be able to create financial models of companies
- You should be able to perform valuations for complex transactions and also the role may not be sector specific
- Through an understanding of accounting conventionsAccounting ConventionsAccounting conventions are specific guidelines for complicated and unclear business transactions, not compulsory or legally binding, but these generally accepted principles maintain consistency in financial statements. These conventions help in standardizing the financial reporting process, disclosure of transactions, and relevance. in order to be competent in analyzing companies operating in different parts of the world
- Build and manage Leveraged Buyout Models, M&A Consequence models for live transactions
- They are also required to advise its clients on both, local and global market conditions and predict future performance expectations.
- It is also his duty to present investment options with a healthy rate of return in front of his clients.
Following are skills required in order to become an Investment Banker:
- Excellent proficiency with MS Excel
- Developing financial models to perform forecasts on variables like credit growth, defaults rates
- Conceptually sound knowledge of concepts like Derivatives, Fixed Income Securities, Corporate Finance is necessary.
- One is required to perform Valuations of companies for opportunities of mergers and acquisition. Proficiency in doing Discounted Cash FlowDiscounted Cash FlowDiscounted cash flow analysis is a method of analyzing the present value of a company, investment, or cash flow by adjusting future cash flows to the time value of money. This analysis assesses the present fair value of assets, projects, or companies by taking into account many factors such as inflation, risk, and cost of capital, as well as analyzing the company's future performance. Valuations along with other valuation methods is needed, consequently.
Investment banking deals not only with simple investment instruments like equities and bonds but also with “Derivatives”. Derivatives are financial products which derive their value (market value) from the underlying assetUnderlying AssetUnderlying assets are the actual financial assets on which the financial derivatives rely. Thus, any change in the value of a derivative reflects the price fluctuation of its underlying asset. Such assets comprise stocks, commodities, market indices, bonds, currencies and interest rates..
For example, equity derivativeEquity DerivativeEquity Derivative is a class of derivatives whose value is connected to the price variations of the underlying asset & it is generally used for hedging risk or speculating moves in indexes. It has 4 major types, i.e., Forwards & Futures, Options, Warrants, & Swaps. which sees its market value being decided by how those equities are performing in the stock market. To be able to perform such tasks, typically following qualifications are needed:
Analyst and Associates – Key Qualifications
Below are some of the Qualifications to become an investment banker
- Masters or advanced level qualification in Finance and StatisticsStatisticsStatistics is the science behind identifying, collecting, organizing and summarizing, analyzing, interpreting, and finally, presenting such data, either qualitative or quantitative, which helps make better and effective decisions with relevance.
- Candidates with MBA degree, particularly in Finance, Quantitative Finance have an upper edge in making it to the industry
- Strong hold on EconometricsEconometricsEconometrics refer to applying economic theories, statistical inference and mathematics for the economic policymaking and forecasting the future trends. It analyzes the historical and real-world data to conduct statistical tests and hypothesis. with knowledge of econometric modeling is required
- Candidates with undergraduates in STEM courses in their curriculum or engineering background have an advantage in developing and handling quantitatively heavy valuation models and analysis
As we can see, a career in investment banking requires dealing with data and numbers and one needs computer based softwares to perform such calculations. As a result, having appropriate technical skills is as essential a requirement as any of the above-mentioned points.
This list of technical skills as a part of IB job description has been compiled by studying various openings from top 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. like JPMorgan, UBS, Gold Sachs, Morgan Stanley and others.
- MS Excel – the expert level of proficiency is needed with this tool. This can be treated as the first step if one needed to develop a career in the Investment Banking industry. The industry it as a sin to use the mouse while doing Excel work. Such is the level of efficiency it demands!
- VBA macros: for automating tasks like report generation etc. While Excel being the first step, one should be able to analyze data via various programming languages like Python, R, and SAS
- MATLAB: is another important tool mainly used by the industry. While Python and R are freeware (available to use for free), MATLAB requires the purchase and licensing to use it. A good starting pick for beginners could be Python or R
Since investment banking does a lot of mergers and acquisition, it becomes critical to gauge the level of “risks” involved in the mergers or buyouts. Risk, in Finance, is defined in a very comprehensive mathematical way. There are theories and models to calculate risk and how to incorporate them in decision making.
- Using risk models to identify risk factors like default rates,NPA NPA Non-Performing Assets (NPA) refers to the classification of loans and advances on a lender's records (usually banks) that have not received interest or principal payments and are considered "past due." In the majority of cases, debt has been classified as non-performing assets (NPAs) when loan payments have been outstanding for more than 90 days.shares
- Candidates with internationally recognized certifications like CFA and FRMCFA And FRMCFA (Chartered Financial Analyst) certification exam prepares you well for careers in Investment Banking, Portfolio Management, Financial Research, whereas FRM (Financial risk management) certification exam is suited for those who want to make a career in Risk management in Banks, Treasury Department or in Risk Assessments. are preferred as it trains one in the quantitative aspect of risk calculations
- Tools like stress testing, A/B Testing, Monte Carlo Simulations are few of the methods which are used by the industry in their calculations
As an IB analyst job, one of the tasks is to fulfill clients’ requirements. One of the most important client demand is swift and accurate information availability.
Top things to know
This would require a note of the following things:
- The timely month-end news release and reporting along with other finance projects and duties
- Impeccable command over English language and sharp communication skills
- A proactive approach towards coordinating amongst various departments and teams in order to ensure error-free and timely report reporting to department heads and senior managers
- Soft skills to handle clients intense situations like a market downturn or unforeseen events before closure of a deal
A career in investment banking demands more than the just good combination of various skills. It comes with high-pressure working requirements and expects investment bankers to be on their toes all the time, literally.
As you would expect, the payoffs and rewards are proportionately high and lucrative.
This has been a guide to Investment Banking Job Description for Analysts and associates. Here we discuss the Investment banking analyst roles, skills required, technical skills and key qualifications/requirements for this role. You can also have at these articles below to learn more about Investment Banking –