Understanding the Investment Banking industry

Hi All!

I've been on the forum for a while, haven't contirbuted much and have more-often-than-knot been latently absorbing the knowledge from others. All of this great info has nevertheless left me a bit confused about the industry and the associate level recruiting into it. I am going to be recruiting for summer associate position in the coming fall for Summer'17 and would like to get myself in a better understood spot than I am in now. Please forgive me if any part or all (hopefully not!) of this has been asked before (spare the monkey s#@t ;-) ).

I am envisioning an all-encompassing overview of the recruiting, work, internal movement and exits thread on IBD, so would really appreciate all you fellow primates (and "humans") help to get to this stage.

The way I understand the IBD industry overall is split between few different areas:

  1. Sales & Trading: Helps institutional buyers buy/sell securities/rates/derviatives (very generic info).
  2. Equity Research: Research equities, provide ratings and support S&T with getting sales/flow revenues for the bank.
  3. Industry/Coverage groups: Mainly source deals within that industry and will work across the spectrum including M&A, ECM, DCM, etc.
  4. Product Groups: Mainly M&A, but I've read a few times on this site that Financial Sponsors/Leveraged Finance/LBO would also be "considered" a product group. Possibly specalized capital markets product groups ECM/DCM outside of coverage.
  5. Private Banking/Wealth Management
  6. Prop. Trading (yes, I know going down)
  7. Private Equity groups (Only know of a couple of bulge brackets with this group..such as GS PEG)
  8. Asset Management

Question: Are the groups similarly structured in Middle-Market IBs as well? I know not all of the MM will have asset management, private wealth, equity research, S&T etc or even ECM due to size of companies; but what about M&A, coverage, DCM, etc? Are the MM more "generalized" or do they tend to be similarly structured by industry/product?

The title and grouping notwithstanding, the work within these areas can surely be looked at distinctively, with some overlap between Coverage groups and pertinent transactions to M&A/ECM/DCM product groups.

I think most on this forum understand the basic tenets of the work involved within these groups, so we needn't go in detail on what's done within these groups, but I am sure if someone does have a question, people here will be happy to jump in.

So, to understand how recruiting works at the MBA level:

  1. Do you apply for Summer Associate roles into specific groups or is it a more generalized process and you later "opt-into" one of the groups such as M&A, Coverage, Capital Markets, S&T, ER, etc.?

  2. Do Summer Associates typically rotate between groups, or do they dedicate themselves for that summer just to the group which they get hired into?

  3. When does the recruiting actually take place? I hear from most people, its in Fall itself, but I know quite a few people who didn't have interviews from GS/MS/JPM/BoA until Jan. If someone could help scetch out a recruiting timeframe (or edit/add to mine) that'd be super awesome of them!

(Oct-Nov) : Banks visit campus for recruiting events, you get a beer with them and engage with them
(Nov-Dec): Set up as many informationals with bankers as possible
(Dec) : Apply online or through school website etc.

But I am not sure when the actual interviews take place. Round 1s, phone screening, in-person, super-days, etc. When are these usually held? I am assuming that super-days are usually in Jan, but would really appreciate advise.
Also, is there any flexibility on these interview times? If someone (me) is not in the country for a period of 10-ish days in early December (5th-15th, say) due to a wedding/etc (wedding), would the recruiters be open to working around these dates? If interviews aren't conducted during this timeframe or if only phone-screeners are conducted, then I guess there's nothing to worry about, but would in-person interviews ever be held during this time?

  1. When recruiting and specifically when "networking" and/or during "informationals" do you talk about wanting to get into certain groups or just the "love for capital markets" or love for transactions/deals that help transform industry landscape, etc (in other words, keep it broad)? Moreover, do the bankers (for informationals/recruiting events usually we'll have associates/VPs) expect you to be broad or very targetted?

  2. Is there possibility of lateral-hiring from one IB to another? Specifically, if one were to start in MM banking and then wish to move into a BB role. Are there areas where this is more probable than others? Or would the type and size of deals just out-right exclude you from consideration? As an example: If someone were to start out at Baird or Lincoln in Chicago in MM, but after 1 or 2 years want to jump to GS/MS/JPM/CS/etc would that be possible?

  3. I know we all like to talk about exits to the PE/HF promise-land but what about internal mobility? Those of you who've been in the industry for a while and have on good authority, knowledge of this, could you please share. What are the possibilities for moving within the bank after a few years? Lets say, someone did Coverage or M&A or DCM/ECM for a few years, could you say in 3rd year move to S&T or Equity Research or even Private Wealth, especially without having to lose seniority (read: pay at 3rd year level)?

  4. Are certain skills more helpful in move across groups/departments? Say from Coverage to M&A or M&A to Coverage, ECM to Coverage or M&A to DCM etc? In hopes of finding better work-life balance once you've paid your 100-hr work week dues for first couple of years (if of course, PE/VC/HF don't come lining up to sweep you off your feet)

Again, as I said before, I'm a bit new in my understanding of the recruiting/structure/movement within the industry and I'm sure it shows from my questions above, but I'll sure be thankful for the help!

Comments (21)

Mar 29, 2016 - 10:41am
EBITduhhh, what's your opinion? Comment below:

@Teller, no I'm not a Certified User. I read through the requirements and looks like a certain ratio of SB to MS is needed. Honestly not sure how I get hit by MS twice on this post (and get the canned message from staff about being "respectful" etc), but I guess everyone has their own opinion of what "respect" constitutes.

Anyways, I don't see me being a Certified User likely at this time, as I'm fairly new in discussions here, so not many SBs and some MS thanks to the two fellow monkeys.

Thanks though.

Best Response
Mar 23, 2016 - 8:24pm
M_As_In_Mancy, what's your opinion? Comment below:

In short, the answer for most MM is going to be "it depends on the bank." -

1&2. The bank i work at (Upper middle market) doesn't have a summer associate program; but for full-time hires its for industry / product specific verticals

  1. Always a possibility to lateral - i would guess that the longer you spend in a specific industry / product - you will pretty much be getting serious looks for opportunities within that vertical

  2. ER & IB internal laterals are possible (especially at the more senior levels); we have a few MDs who started in ER before moving to IB - not sure if lateraling in S&T is realistic; not a ton in common unless you are an ECM / DCM banker

  3. As for work / life balance ECM / DCM probably consistently have the best hours - loosely tied to the markets - although you'll probably be traveling a lot more - Again, it'll vary by bank but I'd say M&A probably has the "worst" hours and still travels quite a bit

Mar 29, 2016 - 10:56am
EBITduhhh, what's your opinion? Comment below:

@M_As_In_Mancy : Thanks for the reply. For some reason I didn't get a response notification so didn't realize someone commented. Appreciate the reply.

This is interesting, because my understanding was that almost all investment banks hire full timers through their summer associate and summer analyst programs, especially given that so many MBAs don't have IB experience before starting as AOs. Would you mind if I PM you to ask more about the bank you work at and where they're at? Also, do you also see that a significant proportion of your associates come with prior IB experience, given that there's no "on the job interviewing" during the summer?

Interesting to know about the transition from ER to IB. I'm assuming when you say IB you're referring to M&A (correct me if I'm wrong). Would you know what stage did they transition over to IB from ER? Based on your response to (5) I'd think they'd have moved fairly sooner in their career or super late in their career, when as an MD in ER they still have big enough of a rolodex to be able to call on people and help source deals for the bank.

I've often heard that the margins/fees on ECM/DCM are super thin, and therefore teams tend to be fairly lean. Is this what you see at your bank as well? I can see how S&T transitioning might be easier from ECM/DCM due to the market proximity and buy side interaction. Do you also see that the ECM/DCM bankers work on a ton more deals, given the smaller fees? and if so, how do they maintain the work hours to be lower than those of M&A. I can probably see "pitching" time to be quite a bit lower in DCM, but maybe not in ECM, relative to M&A (arguably the highest pitching time %age).

Mar 29, 2016 - 10:57am
rkasar, what's your opinion? Comment below:

Learning about Investment Banking (Originally Posted: 05/05/2016)

Hi friends! I am a complete newbie to this industry. I am a first year economics and accounting major, and I have been recently learning about the many verticals of finance. I was especially interested in investment banking and I want to learn more about it. I want to know exactly what I need to do to make myself a good internship/job candidate to an investment bank in a couple of years.

Mar 29, 2016 - 10:59am
etx, what's your opinion? Comment below:

Make great use of WSO. A lot of users and posts here are in depth and very informative. Mergers and Inquisitions is also a solid site. Dealbreaker and Dealbook (NY Times) are good sources for news in different parts of the financial services industry.

Mar 29, 2016 - 11:00am
ChBlue97, what's your opinion? Comment below:

What are some of the best books to learn about different types of product groups and industry groups in Investment Banking (Originally Posted: 11/15/2017)

I just recently landed an internship in investment banking and I was wondering if there are any books/articles/guides I can read to learn more about each industry and product groups in investment banks in order to be able to best choose which group fits my interests.

Mar 29, 2016 - 11:01am
WSO Monkey Bot, what's your opinion? Comment below:

FVVC531, hey, look at the bright side, at least you didn't get a ton of monkey shit thrown at you...here is my best guess on threads that might be helpful:

  • Investment Banking Hours- What to Expect? hear about it. Banking Lifestyle: What Are the Hours Really Like? @Marcus_Halberstram In light of the ... are inflated. @mtnmmnn: "People in Investment Banking tend to inflate their hours a bit, and no ... for M&A groups, are
  • Investment Banking Analyst: A True Day in the Life a question of what you value most in your work. Tips for Investment Banking Analysts Think about the long ... in addition to everything you need to know about the investment banking interview, so here's ... Investment Banking
  • IBD vs. Capital Markets- How different are they? industry group), etc. It is "investment banking," but not in the sense that most people ... product in order to assist the investment banker/relationship manager with execution. At other banks, the ... hand. Each plays a role in the
  • Some Observations from an MD really like to run the investment bank. Guess what, there are probably about 20 people equally qualified ... this. 6. Be amongst the best in your profession at something If you are an investment banker, know one ... drinks Get to know people out of th
  • Confessions of a former second year IB Analyst each bank, I have had the benefit of being in a group that is a close community. For instance, in my ... something else that I learned a great amount of while an analyst. When I think about what I have had to ... happy right now with the new job. Investment Banking
  • Working in FIG (Financial Institutions Group)- An Overview. securities, etc.) are what generates revenue for them, in the form of interest and investment income. ... Valuation As opposed to industrial companies and due to the nature of their business, banks are valued based ... with- likely the best k
  • Six things I have learned after joining a top business school- Part One also learn some of your best lessons from what you read in the library before going to an interview, or ... doubt that joining the program was one of the best decisions I have made. All in all, what you learn ... a couple of
  • More suggestions...

If we're lucky, maybe these professional users will respond: Bram415 above_and_beyond oldrow

Fingers crossed that one of those helps you.

Mar 29, 2016 - 11:03am
690029, what's your opinion? Comment below:

I recommend you check out the website Mergers and Inquisitions; it has more basic info like this in an easily-searchable article format. Then come back here if you have more specific questions, and use the search bar first.

Mar 29, 2016 - 11:04am
Prescott Moncrief lll, what's your opinion? Comment below:

Nobody knows. We're just out here collecting fees until they realize we have no idea what's going on.

Thanks, let me know if you ever need an introduction in the industry.
  • 1
Mar 29, 2016 - 11:07am
random241804, what's your opinion? Comment below:

haha same, I expected some senior banker talking about their life in banking and the truth behind it, and in fact it is the complete opposite

Mar 29, 2016 - 11:08am
Chuck Rhoades, what's your opinion? Comment below:

Talk about a misleading title..

'I'm jacked... JACKED TO THE TITS!!'
Mar 29, 2016 - 11:09am
[email protected], what's your opinion? Comment below:

new to investment banking (Originally Posted: 01/10/2014)

hello, I see myself a novice to when it comes to investment banking but I found this site out as a result of my uncompromising zest for knowledge and seeking the land unknown. I would like to know what investment banking is all about and the knowledge areas, prospect and how to go about seeking a career in investment banking. Thanks

Mar 29, 2016 - 11:11am
RepThyBananas, what's your opinion? Comment below:

Uncompromising zest overcome by debilitating laziness leading to this post.

Rarely will any of my posts have enough forethought/structure to be taken seriously.
Mar 29, 2016 - 11:12am
Cizzle, what's your opinion? Comment below:

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Mar 29, 2016 - 11:13am
hankyfootball, what's your opinion? Comment below:

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