Investment banking is one of the most lucrative professions. It’s a high stakes game, involving selling securities to investors and the public. It’s a small part of commercial banking. It involves high stakes decision, which requires strong decision-making skills, knowledge of finance, communication skills, and more.
An investment banker is primarily involved in selling securities and bonds to the public and investors. They do this on behalf of the security issuer and get a commission on the sale of securities. An investment banker is involved in several activities. The following are a few activities that an investment banker undertakes –
1. Offer proprietary trading or securities for their clients
2. Facilitate mergers and acquisitions
3. Facilitate IPO (Initial Public Offering) for companies and take them public
4. Help companies raise capital for expansion and/or growth
5. Help companies restructure to maximize profit
The investment banking industry
Investment banking is a small yet significant part of the banking and financial services industry. Large financial services firms often have dedicated investment banking divisions. Other firms are completely dedicated to investment banking. JP Morgan Chase, Goldman Sachs, and Barclays are a few top investment banks.
Investment banks are categorized as:
1. Bulge bracket
2. Middle market
3. Boutique firms (specialized firms)
Further, all investment banking activities can be broadly divided into the sell-side or buy-side.
Sell-side – As part of the sell-side investment banking, the banker can sell securities, participate in mergers & acquisitions (as part of the selling team), facilitate transactions, underwriting, and more.
Buy-side – The investment banker offers advisory services to businesses that buy investment services. Private equity funds, mutual funds, hedge funds, insurance companies, and more.
A career in investment banking
An investment banking career is challenging at best. Long working hours, revenue targets, and minimal work-life balance can be unnerving. A typical investment banker is a strong communicator and possesses good mathematical skills, coupled with strong proficiency in financial modeling, valuation, and other finance skills.
Investment banking professionals come from diverse backgrounds. But the most successful ones come from economics, finance, accounting, and mathematics. An MBA in finance is a major requirement to become an investment banker. Above all, an investment banking certification further aids more credibility to investment bankers, by validating skills and competency required to successfully work in investment banking.
Investment banking certification
In addition to finance-related education, an investment banking certification is recommended for starting a career in investment banking.
The certification demonstrates proven skills and validates competency. An investment banking certification imparts knowledge related to asset class valuations, corporate finance, financial statement analysis, etc.
Taking a certification will improve your skills in financial modeling, business valuation, presentations, pitch books, relationship management, transaction documents, sales, business development, and negotiation.
Value of certification
An investment banking certification increases a candidate’s value in the market. It proves the candidate has proven skills to deliver desired results in investment banking. It validates competency in various investment-related tasks and gives holders a competitive edge over peers.
Overall, a certification equips candidates with a systemic approach to find solutions that help make investment-related decisions. Certification will prove that you are well –versed in all investment-related activities including initial public offering (IPO), mergers & acquisitions, leveraged buyouts, and others.
Any certification is a way to establish credibility for skills and show proficiency in getting things done. If you’re looking to start a career in investment banking, taking a certification might just propel your career.