Investment bankers are, essentially, middlemen. Bankers connect the sellers of a company with a buyer and advise them through the deal process. Your responsibilities as a junior member of the deal team will mainly revolve around creating pitch books and. You will occasionally have the opportunity to interact with clients, but this is often limited at the analyst and associate levels. As you progress in your career, your responsibilities will change in this respect. As a more senior member of a deal team you will find yourself interacting with clients more often. Investment banking, at the highest levels, often revolves around the relationships between senior bankers and the management teams of corporations.
Here are some quotes taken from WSO’s guide, "A Look Behind the Wall":
Each deal team has an MD, Director/Senior VP (different terms at different banks), VP, Associate and Analyst; sometimes it's just an MD, VP, Associate and Analyst and on small deals it might just be a MD, VP and Analyst or MD, Associate and Analyst.
The MD doesn't do much beyond the initial deal sourcing. The most senior person on the team "runs" the deal, reviews all materials, speaks with the client and contacts the buyers if it's a sellside M&A deal.
Standard work style: Analyst creates first draft of presentation or analysis and shows it to Associate. Associate comes back with changes. Analyst makes changes and shows it to Associate again. Associate comes back with more changes, Analyst makes them and then VP sees it and makes changes. Associate/Analyst make changes, VP reviews again and makes more changes, Associate/Analyst make changes, then MD reviews and suggests changes and Associate/Analyst make changes. Rinse and repeat.
And here is an example of a day as an analyst:
- 9:00– No fire drills today, so I get to the office at a normal time. The morning is fairly slow; I'm mostly just making further revisions to the presentation and Offering Memorandum for Client A from yesterday.
A fire drill is an emergency where the Analyst has to produce something under a very tight deadline (30 minutes to an hour). It's usually client-related and often turns out to be pointless after the fact.
- 12:00 PM – Multiple requests from different MDs at the same time. One of them wants to see an analysis of some deal-related documents that Client B and the buyer are exchanging.
- 3:00 PM – Have to run a Premiums Analysis for another potential client, which I'll refer to as Company ARGH because dealing with them is so painful.
A Premiums Analysis lists all public deals in a certain market (for example, mid-stream oil companies) in a certain deal size range (over $5 billion) in a given time period (since 2006) and establishes the median 1-day, 20-day, 30-day, 60-day (and sometimes even more) premium paid to each seller's share price so that the company in question knows what to expect. The average is usually in the 15-35% range; a company will rarely sell for only 5-10% above its current share price.
- 6:00 PM – Analysis takes much longer than expected. Onto making revisions to Client C's model since they have once again sent over a flood of additional information throughout the day.
- 10:00 PM – Finish up work there and discuss ongoing efforts on presentation for Client A with
Associate. It's only Tuesday and I'm already tired of this week, so I finish up quickly.
- 1:00– Go home. Changes took longer than expected. That happens a lot in banking.
- 2:00– Foolishly decide to go work out despite being extremely tired. Thank goodness for 24/7 gyms.
- 3:00– Get back, even more tired. Write a quick post on Mergers & Inquisitions.
- 5:00– Pass out and sleep for a few hours.
WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, , , private wealth management, hedge funds, and . While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.
Related Discussions on Wall Street Oasis:
- Search WSO for: "a day in the life of a banker"
- Relevant WSO Forums: I-Banking Bullpen
- Relevant WSO Guides: A Look Behind the Wall: An Overview of Six Wall Street Career Paths
- Relevant WSO Services: Wall Street Mentors' Career Coaching and Mock Interviews