What is the difference between Capital Markets, Equity Research, Corporate Bonds, & corporate finance


I ‘m new to these forums and I have been researching the finance industry in general. I was wondering about the Capital Markets, Equity Research, Corporate Bonds, and Corporate departments? What can you tell me about these departments?

What division does Capital Markets, Equity Research, Corporate Bonds, & corporate finance falls into? Or do they belong to their own respective division/ departments? Do all these fit under the I-banking umbrella?

Here is a pretty general question: I was wondering about Capital Markets, Equity Research, Corporate Bonds, & Corporate finance. What is the difference between the them all in terms of hours? Pay? Working environment? Duties? Opportunities? Typical Day? Required/ expected education and/or background?

Do you think I left out any important questions that would help me learn more about each respective departments that I just mentioned? (Capital Markets, Equity Research, Corporate Bonds & Corporate Finance)

Does working in the above departments Capital Markets, Equity Research, Corporate Bonds & Corporate Finance considered prestigious? Is it frown upon to work in these departments?

Do you think I left out any important questions that would help me learn more about these departments?

Okay, I’ll stop here for now.

Comments (5)

Best Response
Dec 12, 2006 - 1:44pm

Capital Markets, is just the equity capital markets (stocks on the NASDAQ, NYSE, FTSE, CAC, etc ). Analysts in the equity capital markets are middle men between core invetment banking and the market itself. They coordinate with deal teams in structuting IPO's or follow-on offerings and typically work on specific products. Sales and trading is just purchasing stocks or bonds for institutional or retail clients. Some firms have traders make the market using the firm's own capital. Hours aren't that bad except when you're working on a deal.

Equity research is just the researching of companies in a specific industry or geography. You look for certain companies in your selection criteria and determine which are undervalued or overvalued and you make recommendations based on your findings. But you will work with senior portfolio managers. Hours aren't that bad ~80hrs.

Debt Markets which also includes investment grade and sub-par junk bonds is just the buying and selling and securitization of all bonds. Corporations come to investment banks to raise $$ via the equity markets (by issuing stock via IPO's or follow-on offerings) or from the debt markets (by issuing bonds), or a mixture of both via convertible bonds. You can either be on the buy side, making or selecting good assets, or on the sell side, structuring these securities for the public to buy into.

corporate finance in M&A IMO are just functions pertaining to restructuring the balance sheets of various corporations in a variety of different means through M&A, LBO, Mezzanine financing, private placements, etc. CF in M&A is different from CF in corporate development in a corporation. So it's a very broad subject, that you should read up on your own.

Investment Banking, whether in an industry coverage group or product group (Lev. Fin, FSG,FIG, etc) is very demanding, quantitative, and you work until the deal gets done. Involves a good deal of valuations, pitch book preparation, memorandum preparation, and due diligence. Strong accounting, quantitative, and people skills will certainly help for your interviews and on the job.

Why don't you read the vault guide to Investment Banking & Investment Management. Everything is well spelt out in those guides.

Dec 12, 2006 - 1:44pm

i dont want to be rude to someone that is new here, most of my questions are probably easy to those in the know, but i think that those of us trying to get information from this site should start off reading vault guides and such out of respect to those who are here to help....
theres a thread here onwhere to get those

Dec 12, 2006 - 4:20pm

Agree. Another reason to read the "official" guide such as the vault is that they are, supposely, unbiased. What you're reading here are blogs and they can be more realistic, but at the same time, biased opinions. So my suggestion is to read the published guides and then read the blogs as reference.

Just my opinion. I know many people think otherwise.

Dec 12, 2006 - 7:48pm

Just to confuse the issue, a lot of fixed income product groups (including lev fin, but also such groups as structured finance and pvt placements, etc.) fall into debt capital markets, not IBD. It really depends on the bank. When I was recruiting I had to go through a different channel at nearly every bank and really go after the group that I wanted, b/c the org structure is different everywhere. It can be a little frustrated when you're trying to find the right connection.

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