Investment Banks serve two major constituencies: organizations that need capital in order to operate and institutional investors that have capital to invest. When people refer to investment banking they are typically referring to either the Corporate Finance group or the Mergers & Acquisition group within an investment bank.

The Corporate Finance group helps companies raise capital through debt and equity. Companies usually raise money by either borrowing from banks, institutional investors, private investors or Venture Capital / Private Equity firms. Companies can offer equity through Initial Public Offerings or Secondary Offerings and can offer debt on a variety of assets such as Property, Plant, Equipment or Inventory.

The M&A group advises corporations in the process of merging with, acquiring, or selling a business. Bankers assist in negotiating and structuring a merger/acquisition between two companies, including helping structure the deal, finalize the purchase price, and generally ensure a smooth transaction for all parties involved.

Most investment banks organize themselves on three dimensions: functions, products, and clients.

MBA Entry Level - MBA’s are usually picked up by banks as Associates (just one level up in the food chain than an Analyst). Associates are central to all projects since they have to manage Analysts and ensure that the quality of work done by the team is top notch. Associates are also responsible for reporting up to higher management such as VP’s, Directors and Partners. Associates usually are the main communication channel responsible for tying the management’s goal for a project to actual work needed to be done. Initial responsibilities include putting together pitchbooks, presentations, and financial models. However, Associates can quickly gain additional responsibilities and client exposure.

Requirements - Associates are expected to understand relevant financial, mathematical, and accounting concepts, and should be comfortable in front of a spreadsheet as well as a group presentation. In terms of personality, Associates should be aggressive / confident because it is important to be able to work under pressure and still hold one’s own in a team of highly motivated individuals.

The Major Investment Banks are referred to as the ‘bulge brackets’ and include Goldman Sachs, Morgan Stanley, Citigroup, JP Morgan, Bank of America Securities, UBS, Deutsche Bank and Credit Suisse.

Smaller Middle Market Banks include Jefferies, Piper Jaffray, Houlihan Lokey, CIBC, SG Cowan and others.

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