January 21st, 2020 | Updated on April 20th, 2021
Investment banking analyst is the entry-level role at an investment bank. For those who aspire to become an investment banker, it is a crucial position upon which they can build their career. So what does an analysts do throughout a working day?
1. What Do Investment Analysts Do?
For starters, an investment banking analyst does a lot of things throughout a day – from crunching numbers, documenting financial details of transactions, to research investment activities. They assist investment bankers in their daily work.
Before an investment banking analyst goes on to work, they are required to undergo an intensive training. This involves learning financial modeling, corporate finance, ins and out of accounting, valuation, and more.
Even though, they are the most junior at any investment banking, they are required to work as many hours as an investment banker or senior investment banker.
The Major Work Of An Investment Banking Analyst Includes :
- Prepare pitch decks and presentations:
Mostly Investment banking analysts assist investment bankers and prepare pitch decks and presentations which are used for meetings. These are used by investment bankers to show to their clients. Decks and presentations can contain sales figures, investments, and client figures.
- Analytical tasks:
Typical Investment banking analysts are engaged in analytical work. They prepare Discounted Cash Flows (DCF), Comparable companies and transactions, M&A, and LBO (leveraged buyout) analysis. Hence, knowledge of these is mandatory.
- Running financial alternatives :
Analysts spend several hours in running different financial alternatives to check the impact of financial transactions. For instance, an analyst can spend his time running M& A models showing accretion and dilution under debt and equity options.
2. What Skills Do Investment Banking Analysts Require?
Bulge bracket firms generally hire investment banking analysts on the basis of their strong analytical skills. Selected candidates are further trained on finance and other skills. This is a reason, most bulge bracket banks are open to hiring analysts from all backgrounds and are not limited to finance undergraduates.
This has opened up opportunities for investment banking aspirants who can take investment banking certifications to pursue their aim of working in investment banking.
Boutique investment firms, however, may look for strong finance knowledge. These firms typically hire, candidates with prior experience in investment banking or finance graduates.
3. What Does The Lifestyle Of An Investment Analyst Like?
Investment banking analyst always have a hectic day. They are not required to on phone 24/7 like investment bankers, but their day is just as much packed.
Most of their time is spent in the office and hardly go out of office. Most investment banks provide food and travel for them, which takes a lot of pain away. This way investment banking analysts or bankers save a lot during their junior years. This on top getting hefty pay checks every month.
For most finance graduates, working in an investment bank is a stepping stone for future career. It opens up opportunities in private equity, hedge fund, and venture capital.