Intro to Investment Banking

If you're worth it.

Hello

I am looking into the world of investment banking as a career. I am currently a mathematics fresher at Oxbridge. In the near future, I am attending an investment banking network event. I hope to secure an internship in the Easter vacation.

I am after a position in investment banking which is more quantitative than most, perhaps relying on financial modelling. My research lead me to believe that Research analyst and trading are two area which might be of interest. Are they general enough to say 'I would like the possiblity to experience work in the trading sector'? Am I right in thinking these are both front office? Are there any non-front office roles like these?

edit: I have come across risk management (middle office?) which I think might suit me more. Do you ask for internships in this sector?


I would appreciate people correcting anything that I have written that is wrong/ discussing my situation.

Hey everyone Alot of people on these forums, including myself, are pretty new to Investment Banking and other areas of finance, and would like to learn more about it. So everyone who wants information can get some from the websites outlined below, and if anyone else has other useful sites please add them to this thread. I hope these become of use to people and help them get the information they require

Does anyone know about PWM (private wealth management)? Is this area also very competitive?

Hey I'm going to start my degree in chemistry at UCL this septemeber and hopefully I would like to go into trading.what do I need to do to improve my chances of making it ?

Extra curricular activities with responsibility, learn about the industry (doesn't have to be technical), get experience (summer internship and spring week if you can). The rest is up to you and personality and individual qualities.

Also you should learn about what different traders actually do before diving head long in it. This website has some extensive interviews with 3. http://www.careerplayer.com/careers/banking-and-investment.aspx

hi.
i am from india. i am going to do msc in accounting and finance from birmingham city university. what are the job prospects for freshers in the field what scale can i get. what are the placement opportunities from this university..
thnks..

Extra curricular activities with responsibility, learn about the industry (doesn't have to be technical), get experience (summer internship and spring week if you can). The rest is up to you and personality and individual qualities.

Also you should learn about what different traders actually do before diving head long in it. This website has some extensive interviews with 3. http://www.careerplayer.com/careers/banking-and-investment.aspx

Hey everyone Alot of people on these forums, including myself, are pretty new to Investment Banking and other areas of finance, and would like to learn more about it. So everyone who wants information can get some from the websites outlined below, and if anyone else has other useful sites please add them to this thread. I hope these become of use to people and help them get the information they require

A very good place to start:
http://en.wikipedia.org/wiki/Investment_bank

Progressing Further:
http://www.efinancialcareers.co.uk/
http://www.careers-in-finance.com/ib.htm
http://www.ca.courses-careers.com/banking.htm
http://www.prospects.ac.uk/cms/ShowPage/Home_page/Explore_types_of_jobs/Types_of_Job/p!eipaL?state=showgrp&grpno=J7 (Corp. Finance and Operations)
www.bankonacareer.com (Relatively new site)
http://www.wetfeet.com
http://www.vault.com
http://news.hereisthecity.com/

Hope this helps guys ..

Warning: The sites posted contain content which I am not responsible for. If any false information is provided, then I am sorry. Please also note some sites have different perspectives.

CityTrader's 'The Top 20 UK Unis for doing an Undergrad degree to get a Front Office job at a Top 7 IB' : http://thestudentroom.co.uk/showpost.php?p=7795578&postcount=1



Types Of Roles Within An Investment Bank

All roles fit into three categories; front office, middle office, back office.

Front office is generally described as a revenue generating role. There are two main areas within front office: Investment Banking and Markets. Investment Banking is basically advisory on mergers, acquisitions and fund raising. Markets is then split into further divisions; sales, trading, some research and also structuring.
Middle office roles generally comprise of risk management positions. This can be seen as more cost cutting roles, as middle office positions involve analysing and evaluating the risk taken by front office employees. This can be done by setting limits on the amount of money available to trade with, for example.
Back office roles are mainly operation roles and include the technology division. Operations employees are used to make any transfers, and generally ensuring there are no errors in hat is being performed.

What is the Bulge Bracket?

Bulge Bracket is the term used to describe banks who the largest in terms of size and in terms of profitability. These are generally known as Goldman Sachs, Morgan Stanley, J.P. Morgan, Merrill Lynch and Lehman Brothers. However, there are other banks which are bigger in certain locations such as UBS and Deutsche Bank in Europe and Citigroup in the U.S.

What A-levels Do I Need?

Specific A-Level subjects are generally not that important as long as you do well in them. Maths should almost definitely be taken. Alongside Maths, good choices would be Economics, Physics, Further Maths. An essay-based subject and/or a language would also compliment these choices. Minimum grades required to enter Banking are on the up, and as it stands ABB/AAB is the minimum required.


Which Degree Do I Need To Study?

Investment Banking, as it is known in everyday language today, comprises of many different roles and positions. Some require a great amount of technical knowledge, where as some might require a great ability to work under extreme pressure. Due to different natures of the business, it is possible to enter Banking with a variety of degrees. Examples from this very forum include Economics, Politics and even Geography. Corporate Finance and Sales roles tend to be filled by graduates from all kinds of degrees including Arts, where as the majority of Trading and Quant positions are taken by people who have completed degrees with a substantial Mathematical element in them. These degrees usually include Economics, Mathematics, Physics, Chemistry, Engineering, and Accounting & Finance.

Which University Do I Need To Go To?

This is up to much debate, but to be fair, there is a general trend followed by all Investment Banks. Oxbridge students are very much sought after by Banks, regardless of which subject you are studying; Maths, English, French & Philosophy or Land Economy. On par with Oxbridge are students from the London School of Economics and Political Science (LSE). LSE offers much less choice in terms of degrees available, and they are pretty much all related to Banking. LSE is considered to be a breeding ground for bankers, and coupled with the fact it is in London, it is perfect for Banking. After Oxbridge and LSE;

Imperial College
Warwick/UCL
Nottingham/Bristol/CASS/ICMA
King’s College
Durham/York/Bath

However, after Oxbridge/LSE, the degree you do does start to become more relevant. For example, theoretically, it will ‘easier’ for someone with a Geography degree from Oxford to get into Banking than someone with a Geography degree from York.

Please note that this doesn’t mean that if you do Mathematics at Oxford you are certain to get a position in Banking. 90% of positions tend to be filled across banks by people with a certain degree from a certain university, and these are these the ones I have listed, but this is not to say a Economics degree from Queen Mary is not going to get you in if you are ‘up to it.’

What Opportunities Are There?

Opportunities can begin from your GCSE days if you know the right people. For example, if you do have an uncle who is a MD at Barclays Capital, try and get him to get you any experience he can. Anything that shows initiative from a young age will only work in your favour. Not only this, but you can begin to start building up your ‘network’.
Formal opportunities begin for A-Level students where a number of banks run programmes in partnership with the Windsor Fellowship. This can range from the ‘I have a dream…’ programme at Deutsche Bank which is four weeks long, to the Merril Lynch Atlantic Fellowship programme which is two weeks long, but has activities in both London and New York.
First year spring/easter programmes have also become popular. These are usually ranging from a week to two weeks long and can be done in a number of divisions. Big name banks such as Goldman Sachs and Morgan Stanley take part in these schemes. Some programmes also let you bypass the application stage for penultimate year internships, which is always a bonus!
Second year (or penultimate year) summer internships are the most popular and most competitive pre-graduate programmes. They let you gain some ‘hands-on’ experience in the realm of finance, and allow you to find out if banking is for you or not. Internships can be done in most divisions in an Investment Bank. This allows you to apply to as many Investment Banks as you like, and even allows you to apply for perhaps, equities trading at one and fixed income derivatives at another.
Graduate Programmes are, in a sense, perhaps the most important programmes. These are again highly competitive but allow you to put your foot in the door in terms of your career. It is important that you research Banks and the divisions you apply to, as a wrong choice here, though might not be the end of the world, would be pretty dreadful. Graduate positions are often part filled up by the previous internship take, which again underlines the importance of internships.

How Much Can I Earn?

I guess this is probably the most important question for a lot of you reading this, which is fair play. All front office, middle office and back office positions start at around £32k to £40k. On top of this, some people are given a ‘golden handshake’ which is a one off payment to ‘welcome’ you into the firm; this is usually in the region of £4k to £8k. Now the juicy bit; bonuses. Investment Banks are quite famous for their bonuses, and so they should be if they are hitting the £50 million figure. However, this is not for a few good years!!! Bonuses are usually calculated algorithmically based on your P&L. If a traders makes X amount of money, then he will get a X*Y/100 bonus, i.e. a percentage. Corporate Financiers bonuses are based on the deals they have been working on and these is usually a small piece of a very large pie. Post starting on the graduate programme, front Office pay will supersede middle Office pay, which will supersede back Office pay. This is also true for bonuses; front office percentage is a lot higher than the middle office percentage bonus, which is higher than back office percentage which is usually low double digit figures.
As a general rule of thumb, your average banker is going to earn more than your average trader. However, your best trader is going to earn a fair chunk more than your best banker.

What are the hours like?

I’ll start off with; the hours in banking aren’t great. Apparently, a bank once started their graduate programme with, ‘You have sold your soul to the devil.’ Still want to be in banking?
Corporate Financiers have the worst luck in the sense that they literally have to be working an incredible amount of hours, anything up to 100+ hours a week. Sales and trading roles have more sociable hours. They tend to work during market opening hours and plus a couple more to catch up on what’s happening across the world in markets and prepare for the next day; this is usually in the 12 hours mark.

What Else Can I Do To Enhance My Application?

Extra-curricular activities are often used to distinguish the ‘better’ candidates as they have demonstrated initiative and motivation to take part in activities other than just studies. Young Enterprise is always a good one to have to portray your ‘entrepreneurial’ skills which enable the employer to see you can make key decisions, have the ability to think on your feet and most importantly, can make money. A step further is starting your own business which shows tremendous character and also ticks boxes to some key skills which are common to both starting and running a business and investment banking.
Any clubs/societies that you feel should be mentioned (not drinking ones, for example ) should also be included in your application. They can represent a different variety of things, and if you were the founder/president/chairman of a society then this definitely should be mentioned.

Please note this is only an introduction to Banking, and the real work has to be done by yourself. Banking is not for the faint-hearted or for people with a limited amount of enthusiasm and energy; you have to be motivated and committed. I hope this comes to use for some people, as recently the forum is getting too packed with people asking if X degree is suitable, or if Y university is going to get me a trading role at UBS. Also, continue to point people to this thread if they ask questions like this, but by all means use this thread to ask any further questions you have. It is better to have one thread asking the same question, than 50. Any wrong information, then please feel free to correct.

Good Luck All.

Book Recommendations.

CityTrader


- The Vault Guide suitd:
is probably industry standard as where to learn everything you need to know :
http://www.amazon.co.uk/Vault-Career-Guide-Investment-Banking/dp/1581313063/ref=sr_1_2/203-2326548-1148752?ie=UTF8&s=books&qid=1179241673&sr=8-2


- Introduction to Global Financial Markets (Valdez)
is decent if you want to go into sales/trading to learn all the products. Perfect for a generalist Global Markets internship
http://www.amazon.co.uk/Introduction-Global-Financial-Markets/dp/0230006353/ref=pd_bowtega_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179241793&sr=1-1


- Golden Handcuffs
is a complete joke. You can read the first 5 chapters online for free. Polly Courtney epitomises the concept of "dumb bint" and is the exact reason why women are not respected in banking.
http://www.amazon.co.uk/Golden-Handcuffs-Lowly-Life-Flyer/dp/1905886349/ref=pd_bowtega_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179241836&sr=1-1


- Liar's Poker
whilst another industry standard, is crap. The first few chapters are decent in showing the training programme for a markets grad, very similar to as it is 2 decades on, but then Lewis goes on and on about bloody American mortgages, unbelievably dull, God knows how the publisher allowed that.
http://www.amazon.co.uk/Liars-Poker-Playing-Money-Markets/dp/0340767006/ref=pd_bowtega_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179241906&sr=1-1


- Monkey Business
is absolutely fantastic. Even if you're not going into IBD, a humorous read which tells it like it is.
http://www.amazon.co.uk/Monkey-Business-Swinging-Through-Street/dp/0446676950/ref=pd_bowtega_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179241943&sr=1-1


- Tales From The Square Mile
I think is a must buy. Written by an ex Deutsche ECM Director, lots of short stories - very readable. He claims all of the anecdotes are 100% authentic but some are just beyond belief!
http://www.amazon.co.uk/No-Tears-Tales-Square-Mile/dp/1904027040/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242004&sr=1-1


- At Bonus Time, No-one Can Hear You Scream
is a good one to bring you back down to earth and get a sense of perspective. Keep away from socialists or they'll burn down the Square Mile.
http://www.amazon.co.uk/Bonus-Time-No-one-Hear-Scream/dp/1904027318/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242124&sr=1-1


- The Money Machine (Coggan)
is a bit dry and boring.
http://www.amazon.co.uk/Money-Machine-Penguin-Business-Library/dp/0141009306/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242179&sr=1-1


- How To Read The Financial Pages (Brett)
is OK if you have time.
http://www.amazon.co.uk/Read-Financial-Pages-Michael-Brett/dp/0712662596/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242224&sr=1-1


MonteCristo

- Options, futures and other derivatives - John C. Hull.
Great book for going from basics to the full fat meaty stuff. Not recommended for maths under further maths A-level, beyond that it's fine mostly. The new version is somewhat large, so maybe start from the older print versions which are more "accessible" then move up to the new one.
http://www.amazon.co.uk/Options-Futures-Other-Derivatives-John/dp/0131499084/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242644&sr=1-1


Traders, Guns and Money - Satyajit Das.
My personal favourite; read it, love it. It's that simple really, if you don't find yourself laughing at Budi and Adiweko then finance isn't for you. The absolute best book for derivative trader wannabes and an awesome fusion of entertaining read + some technical knowledge.
http://www.amazon.co.uk/Traders-Guns-Money-Unknowns-Derivatives/dp/0273704745/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242601&sr=1-1


Knoogle


Foreign Exchange: A Practical Guide to the FX Markets by T. Weithers, a Managing Director of Financial Markets Education for UBS.
A tad pricey, but well worth it if you want a good overview of what happens on the trading floor. It leaves much to be desired in terms of the actual mechanics of trading though (and also oddly enough misses some rather important money instruments such as FRAs and OIS', but...). With that said, this book was written with complete beginners in mind, and it is perfect for that target audience.
http://www.amazon.co.uk/Foreign-Exchange-Practical-Markets-Finance/dp/0471732036/ref=sr_1_1/203-2326548-1148752?ie=UTF8&s=books&qid=1179242573&sr=1-1

That's a useful website - Thanks!

Pay me your Masters fees and you can get some experience in the industry instead. Masters are useless. Worse than that.

Please note that this doesn’t mean that if you do Mathematics at Oxford you are certain to get a position in Banking. 90% of positions tend to be filled across banks by people with a certain degree from a certain university, and these are these the ones I have listed, but this is not to say a Economics degree from Queen Mary is not going to get you in if you are ‘up to it.’

I love how you said economics at queen mary, because im going there