Investment Banking Jobs: Meaning of Investment Banking
Investment Banking Jobs: A career in investment banking may sound attractive to those interested in working for financial institutions, but there is a lot more to it than that. Investment Banking jobs cover a wide range of fields and the opportunities are plentiful for those who may not even have a strong background in finance fields. In order to get good investment banking jobs, one is strongly recommended to go through the CFA Program.
It’s best to get a basic understanding of what investment banking is and what it covers.
Put simply, an investment bank is a financial institution that helps individuals, corporations and governments to raise capital by underwriting securities issuance. Investment banks can also assist companies that are either merging with or acquiring other companies. They too can help with the trading of derivatives, foreign exchange, commodities and other equity services.
Investment banks should not be confused with normal commercial banks or retail banks. This is because unlike them, investment banks do not take deposits. In fact, for almost 70 years, investment banks were, by law, separated from the other aforementioned banking institutions until the year 1999.
There are two main functions that occur in investment banks; which are 1) trading securities for other securities or cash and 2) promoting certain types of securities such as pension funds, mutual funds and hedge funds.
Different Types of Investment Banking Jobs
There are several types of investment banking jobs. Here are some of the divisions within a typical investment bank.
Corporate Finance: This is where the traditional services of raising funds and advisory services on mergers and acquisitions occur. These services are further divided into specializations; each of which serves a particular brand of clientele. Popular fields include healthcare, industrial businesses, and technology.
Trading and Sales: In this division, the investment bank carries out the act of buying, selling and trading of financial products in order to generate great profit.
Research: This particular division reviews the financial history of various companies. The representative needs to write reports which emphases the value of a particular company’s assets accurately. This resource is generally used by those interested in either purchasing or selling assets and is strictly regulated so that there is no conflict of interest within the bank itself.
Investment Management: Here, the securities of individuals, companies, or even governments are managed by professionals within the investment bank.
Risk Management: As the title implies, these people need to analyze the market and credit risk on behalf of their investors. They need to set strong limits on capital to circumvent the pitfalls of a bad purchase or trade.
Other Investment Banking Jobs
Other types of services found within an investment bank include global transaction banking, merchant and commercial banking, corporate strategy and treasury, financial control, and compliance.
There are also investment bank jobs to be found within the vast support system which runs the operation on a day to day basis. Such jobs include the standard accounting and clerical jobs as well as information technology fields, which provide technical support in terms of creating in-house software to keep up with the highly technical fields of electronic trading. There are also jobs that provides complex algorithms and calculations. These are but a few investment banking jobs that exist in the large, exciting financial industry.