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Investment Banking Courtesy of Career Leader Investment banks provide financial services to large corporations, institutions such as governments, and other entities such as hospitals, universities and non-profits. They offer investment-banking advice on mergers and acquisitions, financial restructurings, and privatizations; underwrite stocks and bonds; and provide research, sales, and trading services in all types of financial instruments, such as stocks, bonds, derivatives, foreign exchange, and commodities. Investment banks also manage private partnerships and invest in venture-capital, real-estate, and other private-equity opportunities. Some banks provide clearance and custody, financing, client technology, and securities lending for hedge funds. To price a securities offering such as an initial public offering (IPO) or any subsequent offering, or to set the value of a merger or acquisition, an investment bank calculates what a business is worth. The bank charges hefty fees for providing this valuation service and other kinds of financial and business advice. Some investment banks also have large asset-management divisions, which manage mutual funds for institutional and individual investors. In recent years, most investment-banking firms have developed a retail-brokerage network to serve individual investors. UBS is a good example of a merger between an investment bank (UBS) and a retail broker (PaineWebber) that enabled the newly merged firm to capture more of the investing market. Bank of America's acquisition of Merrill Lynch is another example. In the United States, the center of the investment-banking industry is Wall Street and Midtown in New York City, though many banks also have major offices in London, San Francisco, Frankfurt, Tokyo, and Hong Kong. The major players in this "bulge bracket" include multinational firms Bank of America, Merrill Lynch, Morgan Stanley, Goldman Sachs, Citigroup, Credit Suisse, and J.P. Morgan Chase. Then there are boutique or regional firms -- fewer in recent years, as many have been acquired by commercial banks seeking to expand. Smaller players include WR Hambrecht + Co, Jefferies, The D.E. Shaw Group, Raymond James and Lazard Ltd. Often these smaller firms specialize. Nearly all investment-bank divisions offer a two-to-three year analyst training program for college graduates. In this program, you may find yourself working more than 80 hours per week in a highly demanding role. That said, the training program is one of the best ways to learn all you can about finance and to ultimately get a shot at an annual bonus that exceeds your base salary. What do investment banks look for in new hires? Definitely evidence of strong quantitative and analytical ability, as well as good communication skills. Expect the interview process to be grueling; these are highly prized positions. A summer analyst position is often a great way to gain experience and lay the groundwork for a full-time career in this industry. Most firms run comprehensive summer analyst programs as part of their overall recruiting efforts. Investment bankers provide financial advice and services to corporate clients. They advise corporate CFOs and CEOs on matters such as whether to: issue or back stock or debt www.cba.pitt.edu/careers acquire other companies (and how much to offer for them) sell part of their current company (and at what price) Investment bankers' client companies may be large and established, or they may be new ventures that are "going public" -- that is, selling stock to the public in an initial public offering (IPO) to acquire the capital they need to grow. Investment banks themselves may be large or small. Moreover, they may be either: "full-service" banks, which offer financial advice and service to a wide variety of industries, or niche ("boutique") firms, which serve only a specialized part of the financial services market (such as the entertainment or high-tech industries) Most investment banks are located in New York, London, or Hong Kong, and are called "money center banks." "Regional investment banks" -- some with excellent reputations in the industry -- are located in other cities throughout the world. In investment banking, many people work a hundred hours or more during an average week, which means working over evenings and weekends. Investment banking consumes their lives. These individuals make a lot of money. And, in return, they become "wholly owned subsidiaries" of the banks where they work. But, most investment bankers love finance and the fast pace that characterizes the industry. Investment bankers typically start their careers with gathering and analyzing data (and proofreading documents to ensure the accuracy of every number). They then move up the following "rungs" of the career ladder: preparing and helping to deliver presentations to clients developing and maintaining client relationships "selling" the bank's services running the bank itself, or parts of it, such as the mergers and acquisitions (M&A) group. As you might imagine, successful investment bankers need a lot of personal polish, confidence, and a great handshake. www.cba.pitt.edu/careers
"Investment Banking Pitt Business"