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Frequently Asked Questions For many, the questions they have surrounding the world of investment banking is not necessarily to do with the technical aspects or different department descriptions but rather general questions about it as a career choice and how it weighs up against other potential jobs. This page seeks to answer some of these often asked questions. Is it possible to have a good work-life balance? Having a solid work-life balance is a challenge when working in investment banking. However, it does vary by firm and by role. Senior roles may have a little more flexibility. What do they do day-to-tday? Depending on the division you operate in, an investment banker may be working on financial analysis, preparing presentations, meeting clients or negotiating deals. What is the social culture like in the office? It can be both competitive, when it comes to career advancement, but also team-oriented, as bankers work close together on deals. How many hours of work does the job involve? It is notorious for its relatively long working hours, ranging from 50-80 hours a week. What makes it different from other finance jobs like accounting or consulting? Investment banking focuses on major deals and raising capital while the other two look at financial records and strategic advice, respectively. If you want a more in-depth breakdown of the different banking services, read through our page on investment banks. Can investment banking lead to burnout, and how do people deal with that? Yes, the long hours and intense pressure can lead to burnout. To best prevent this from occurring, bankers prioritise rest, exercise and setting boundaries where possible. Is it all numbers? Whilst many jobs in the industry involve working with numbers, it also requires communication and developing strategies as well, especially if you work in sales. If I don't go into investment banking right away, is it hard to break into later? It can be harder to enter the industry at a later point in life as the majority of banks tend to recruit fresh graduates. However, lateral moves are possible when you have garnered enough financial experience. What are other alternatives in finance if I don't want to experience long hours> Careers like corporate finance, financial planning, and asset management offer finance roles with a more balanced schedule. What do most bankers do if they decide to leave the industry? Many transition into roles like private equity, corporate finance, consulting, or startups, leveraging their finance experience and connections. What skills can I gain that might help in other careers? You can develop strong analytical, financial and interpersonal skills, as well as experience with high-pressure projects, all of which are valued in many fields. Is it hard to switch companies, and how often does it occur? Transferring between companies is quite commonplace and usually encouraged, as new opportunities arise. It is a relatively easy process when you have had enough experience in the industry. How much job security is there, especially during economic downturns? Job security may fluctuate with the economy, as banks may downsize during downturns. However, skilled bankers are always in demand. Do you have to work on Wall Street? No, not at all! Many cities across the globe have investment banking firms ranging from boutique banks to Tier 1 firms. However, the biggest opportunities are usually found in the major financial hubs. What type of people usually succeed in investment banking? There is no right or wrong answer here but if you are detail-oriented, adaptable, driven and can handle stress well, you will have high chances of success. Is it all finance or are there creative parts to the job? It depends on the division you are working in, but finance will remain a core part of the job. However, creativity will be needed for solving problems, pitching ideas and also coming up with tailored solutions for clients. Is it a good career for someone who likes maths and economics? The majority of investment bankers tend to have some form of experience with either of these two subjects so having a strong background and interest in them would be very helpful. Do I need to be good with people to be successful in the industry? Strong interpersonal skills will help you in whichever job you choose. They will be particularly useful for building client relationships and working well in a team, which is important in all divisions. Are there women and other minorities represented in investment banking? Yes, though it’s been a male-dominated field historically, diversity efforts are increasing, and firms actively recruit diverse talent. Am I the right fit? We recommend you contact us if you would like some advice on this topic. As a general rule, if you enjoy challenges, can work long hours, thrive under pressure and have either strong analytical or communication skills, then a career in investment banking is worth consideratoin. What qualifications do you need to become an investment banker? A bachelor’s degree is essential, typically in finance, economics, or business, along with internships for hands-on experience. An MBA or CFA certification also helps boost your career prospects. What is the difference between an analyst, associate, and a vice president? Analyst: Handles technical tasks like financial modeling and research. Associate: Manages analysts and works on deal execution. Vice President: Focuses on deal strategy and client relationships. What is the typical career progression for an investment banker? Investment bankers typically progress from Analyst (entry-level) to Associate, Vice President (VP), Director, and then Managing Director (MD), with increasing responsibilities in deal-making and client management. How competitive is it to get a job in investment banking? It is a highly competitive process, with top firms prioritising academic performances, strong technical skills and knowledge, and relevant internships. What are common exit opportunities after investment banking? Common paths include private equity, hedge funds, venture capital, corporate finance, or consulting roles. What does “success” in investment banking look like? Is it all about making money? Success often involves building strong client relationships, closing deals, and advancing within the firm. While financial rewards are significant, many also value prestige and professional growth. How much free time do you get? Free time is limited, especially at junior levels, with workweeks often exceeding 80 hours. However, free time tends to increase at senior levels. What are the best parts about being an investment banker that make people stick with it? The job offers high earnings, exciting deal-making experiences, and global networking opportunities that open many different doors for their future. What types of compensation and bonuses do you receive? Compensation includes a base salary and performance-based bonuses, which can be substantial. Senior roles also often receive equity or profit-sharing options. What’s the most challenging part that people don’t usually talk about? The emotional toll from constant pressure, uncertainty, and balancing client expectations is often overlooked. How does the culture vary between different investment banks? Some banks have a formal, hierarchical culture, while others are more collaborative and relaxed. A bank's culture will depend on its size, leadership and client focus. Choosing a bank whose work culture aligns with yours is important for job satisfaction. What is “deal fatigue” and how do investment bankers manage it? Deal fatigue is burnout from working on prolonged or intense deals. To deal with it, many bankers start by prioritising certain tasks, leaning on team support, and occasionally stepping back to recharge. How do investment bankers manage stress from the high-pressure environment? It often involves exercise, mindfulness practices, and learning to compartmentalise work and personal life, as is the same for many other careers. However, it varies on an individual level, so it is important to learn what works for you. What are the biggest challenges investment bankers face? Long hours, tight deadlines, and high-pressure deal-making are the biggest challenges. Do investment bankers get opportunities to work on causes they care about, like climate change? Yes, bankers involved in ESG (Environmental, Social, Governance) investing or sustainable finance can work on projects addressing climate change and social issues. Are there areas of investment banking focused on positive social or environmental impact? Yes, areas like sustainable finance and green bonds focus on funding projects with environmental or social benefits.

ESG Investing ESG stands for Environmental, Social and Governance. This method of investing also factors in a company's environmental practices, social impacts and governance policies in order to develop sustainable and ethical business practices whilst also aiming for high financial returns. Key Aspects Environmental Factors Assessing a company’s greenhouse gas emissions, carbon footprint and their efforts to reduce them Evaluating their use of natural resources, waste management, and water usage Considering their impact on ecosystems and biodiversity preservation efforts Social Factors Ensuring that working conditions are up to standard, the rights of the employees are upheld and there are adequate health and safety practices Looking at the company's contributions to the development of the local and wider community and how strong their relations are with stakeholders Evaluating their diversity and equality policies and practices Governance Factors Judging the diversity, independence, and structure of the governing board Assessing their policies on corruption, executive compensation, and ethical business practices Examining the clarity and honesty of corporate reporting and stakeholder communications Benefits of ESG Investing Risk Management Those companies that display strong ESG practices are often better equipped at managing the environmental, social and governance risks. This tends to allow the company to have more stable and sustainable returns. Long-term performance ESG-focused companies usually show promise of future success due to their sustainable practices and strategies. Investor Demand More investors are seeking companies that align with their personal values as well as global movements. There is an ever-growing movement towards environmentally-friendly practices as well as a push for more diversity and equality within companies. This has led to more demand for ESG-compliant companies. Measurements Currently, there is a lack of standard metrics and methodologies for measuring ESG performance which makes it difficult to compare companies. Data Quality The accuracy and reliability of ESG data can vary as there are no set ways to measure all the various factors. Trade-offs Some argue that focusing on ESG factors may lead to trade-offs in financial performance. However, the evidence on this is mixed. Challenges of ESG Investing ESG Strategies 01 Positive Screening This involves actively selecting to invest in companies who show strong ESG performances. 02 Negative Screening This is where you choose to exclude a company from your investing strategy because they show poor signs of ESG performance. 03 Thematic Investing This type of ESG investing involves focussing on specific themes such as renewable energy and searching for companies that employ that strategy. 04 Engagement This involves taking action to help improve a company's ESG practices. Future of ESG Investing With regulatory pressures increasing and investor awareness rising, ESG investing is expected to continue to progress. The link between sustainability and long-term financial performance is also accelerating this growth. The movement represents a significant shift in investing with emphasis being placed on having a positive impact within the company and the wider community alongside financial gains. Back to Learn Next Page

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Future of Finance This page will discuss some of the hot topics in the world of finance right now that many people predict will takeover. Cryptocurrency It is a digital currency that operates on decentralised technology, a blockchain, and uses cryptography for its security. Cryptography is advanced code that is practically impossible to hack, counterfeit or double-spend. All the cryptocurrencies in the world exist on computers from all over the world, which means that they are not controlled by one single authority. The main cryptocurrency currently dominating the market is Bitcoin (BTC) and it was also the first created. Blockchain technology is instrumental to the functioning of cryptocurrencies and has been adopted by many major companies including JPMorgan Chase. It is essentially a set of blocks connected together with each block holding data on transactions of the cryptocurrency. Each transaction is verified by a number of members that depend on the network used and also every member of the block before the check is finalised. This long check makes the system very secure. Currently, many investors are wary of cryptocurrencies due to their high volatility. They also get a lot of stick for having high energy consumption rates in the mining process as well as being involved in criminal activities. The future for cryptocurrencies is globally disagreed upon. In El Salvador, it is an official currency whilst in China, all transactions relating to cryptocurrencies are banned. However, those in favour want a global framework that establishes regulations for the use of crypto similar to the work being done under the Biden administration. Algorithmic Trading Algorithmic Trading is the process by which you use computer to trade. You define a set of parameters that the computer will act upon automatically when they are met and either buy or sell in the market. It requires no human input for the computer to do this, making the system faster, more efficient and gets rid of human error. The future for algorithmic trading holds potential growth into new markets such as cryptocurrencies. Machine learning and AI integration will also play a bigger role as it would allow for the analysis of vast amounts of data and from that adapt new trading strategies that go with the evolving nature of the markets. They can reveal more complex patterns that would no be as apparent to human traders. High Frequency Trading (HFT) will continue to be prevalent. HFT strategies involve extremely rapid trade execution, especially in highly liquid markets. Growth in the sector as well as competition is expected to drive innovation and technology in order to reduce latency and improve execution speeds. Another possible outcome is that it makes its way into retail trading and is utilised by independent investors. However, all of this growth would come with increased regulations and more required security. This is to ensure market stability, transparency, and fair competition. Firms that engage in algorithmic trading will also need to employ more robust digital security measures to protect themselves against cyber threats and system failures. Back to Learn Next Page

Career Path In investment banking there is a clear-cut hierarchy in roles. Many people are attracted to this industry for the money, others live for the excitement and thrill, and some prefer the exit opportunities in varying industries. Same old... The investment banking career path and corporate hierarchy is well-defined and hasn’t changed much over time: Intern You can become an intern at an investment bank through summer work experiences. You learn about the inner working of the bank and mainly help out the analysts. Analyst As an analyst you mainly write out Excel spreadsheets and compile Powerpoint presentations, as well as carrying out other administrative tasks such as tracking buyers and sellers, managing the data room and deal documents, and responding to requests from clients and potential clients. Associate Associates will assign most of the work to their analyst, check it, and occasionally carry out the "menial" tasks such as preparing presentations and spreadsheets, especially for more complex presentations and meetings Associates are also given more responsibility through attending more meetings and interacting with more clients. Vice President (VP) Many people that you will come across at an investment bank are Vice Presidents. It is arguably one of the toughest jobs in this hierarchy as you have the most to juggle. They take on more of a management role over the associates and analysts so their working hours are slightly lower. They take requests from more senior partners and then relay the information to the analysts and associates, working with them to complete the task. Obviously, there is more responsibility and with that comes much more client interaction such as calling potential buyers to sell a product the bank is selling. Director As a Director you will still maintain some of the responsibilities that a VP has however, your main aim is to win more clients for the bank. Ultimately, that is what is required to make it as a MD. Managing Director (MD) As a Managing Director, you are expected to bring in clients for the bank, arrange meetings with companies and improve relations with your clients and potential big clients. Back to Learn Next Page

FinTech The use of technology and innovation to provide and improve financial services What is it? The word itself is a mash-up of the words, "financial" and "technology". The term encompasses a wide range of activities focussed on improving financial services for companies and consumers. Some of these activities are listed below. Payments Some FinTech companies offer solutions for online payments, money transfers, and digital wallets. Some examples are PayPal, Square, and Venmo. Lending Some platforms allow borrowing and lending between individuals and companies without traditional financial intermediaries, such as LendingClub and Prosper. Online Banking A major market that has taken over is online banking which includes checking and savings accounts, loans, and investment options. Banks like Ally Bank and FinTech companies like Chime offer such services. Digital Currencies It has also played a major role in the rise of digital currencies and blockchain technology. Advising Investing is made more accessible with the development of AI and data analysis which can provide automated investing advice. This is a small industry with large potential growth, companies that offer these robo-advisory services include Betterment and Wealthfront. Crowdfunding It has led to the development of crowdfunding platforms that raise capital, such as Kickstarter. Data analysis Fintech firms use data analytics to provide insights into personal finance, investment, and budgeting. Examples include Mint and Personal Capital. Future of FinTech Most analysts in the industry predict FinTech to be key to the future of finance and expect it to transform the industry. This would include expansion of the fields it currently operates as mentioned above. Additionally, many companies are adopting digital services such as Goldman Sachs who aim to make around $750 million from its FinTech department by 2024. Through this progression to a more digitalised world of banking it also brings side benefits to the technological industry. For example, with an increasing number of online transactions taking place, FinTech companies have had to develop digital verification systems to improve their security. This technology can be easily adapted into other industries as well, making it multi-faceted. This brings about an overall improvement in the digital space. A big player in the future of FinTech is machine learning and AI. With its ability to analyse vast amounts of data and observe complex patterns that humans would struggle to notice, machine learning enables more accurate credit scoring, risk assessment, and fraud detection. As well as this it can use predictive analysis to improve investment strategies with more accurate and data-driven advice for investors. Chatbots and virtual assistants powered by machine learning can improve customer service and streamline inquiries whilst also cutting costs for firms. Additionally, machine learning can optimise financial operations, from automating routine tasks to predicting market trends. Since the very nature of AI is to evolve and adapt, it will prove to be very useful in the financial technology realm which is very fast-paced. Back to Learn Next Page

Mergers & Acquisitions Mergers & Acquisitions, commonly abbreviated to M&A, refers to the consolidation of companies or assets through financial transactions including merging companies, acquiring a company, taking over companies, consolidations or making tender offers. Subtle differences... Whilst the two terms are commonly used together to describe the same transaction, they do in fact have slightly different meanings Merger A merger occurs when two companies combine their assets to form a new entity, which typically comes with a new name and alteration of the ownership. It is a process founded on mutual agreement and the aim of it all is to create synergies and increase the new company's competitiveness by utilising the existing strengths of both prior companies. Acquisitions An acquisition occurs when one company purchases the assets or stocks of another company and gains control of that company. This can either be undertaken in a friendly or hostile manner. This depends on whether the target company has consented to the acquisition or not, in which case it is a takeover. The overarching aim being for the acquiring company to gain an advantage in the market through increasing market share or acquiring new resources and technologies. Types of M&As As mentioned above, there are various types of transactions that fall under the term M&A. Below are a few examples Merger Two companies coming together and agreeing to combine assets. Usually agreed upon by the companies' boards of directors and the approval of shareholders Acquisitions Acquiring company controls most of the assets of the target company Consolidation Combination of two or more companies, (usually of equal size), to become a new single entity. A new single entity created through transformative process with different corporate structure. Different to merger, as a new company is created rather than one surviving company. Tender offer Acquiring company makes offer to shareholders of company to purchase outstanding stock at a given price Relationship There are more specific types of M&A based upon the relationship between the buyer and seller Horizontal Involves two companies working in the same market and business Vertical Target company is in a different position in the supply chain Conglomerate Involves two companies that are in unrelated industries Congeneric Involves two companies that have the same customers but sell different products or services What does an M&A professional do? 01 Finding a deal M&A professionals often begin by identifying potential deal opportunities. This involves researching industry trends, monitoring news and building relationships with potential target companies. 03 Valuation They use financial modelling and valuation metrics to calculate the market value of the target company. The methods they use are discussed on the Valuation page. 05 Structure the deal M&A bankers assist in structuring the deal, which involves determining the buy price, payment terms, and negotiating the legal and contractual aspects of the transaction. 07 Documentation They also have to work with the legal teams to ensure all agreements are in compliance with relevant regulations. The work would involve legal documents, such as letters of intent, acquisition agreements, and disclosure schedules. 02 Working with clients They have to work closely with their clients seeking to engage in M&A transactions and have to understand their situation and goals. 04 Financial Analysis Conducting detailed financial analysis, including pro forma financial statements, to understand how the combined entity would perform post-transaction. This is important as it aids in the decision-making process. 06 Negotiation Negotiating the terms of the transaction with the target company, including the price, financing, and any post-transaction arrangements. 08 Post-deal integration After the deal is completed, M&A professionals can also assist in the post-merger integration process, ensuring that the two companies combine their operations efficiently and effectively. Back to Learn Next Page

Equity Capital Markets Equity Capital Markets (ECM) helps companies raise capital through facilitating the issuance and trading of company shares in public markets, including activities like IPOs, follow-on offerings, and block trades. Functions This specialised division of the Investment Banking Division (IBD) assists companies in raising capital by issuing and trading equity securities. Equity securities represent ownership in a company, typically in the form of common stock or shares. The primary functions are listed below: Initial Public Offerings (IPOs) They help private companies go public by conducting IPOs. The structure of preparing an IPO involves determining the offering price, writing the prospectus and coordinating with underwriters to bring shares to the market. Follow-on Offerings Public companies that have gone through an IPO may need to raise additional capital for expansion, debt reduction, acquisitions, or other corporate purposes. ECM teams help with these follow-on offerings, where a company issues additional shares to raise the required funds. Secondary Offerings In secondary offerings, existing shareholders, such as company founders, insiders, or early investors, sell some of their shares to the public. ECM teams facilitate these transactions, ensuring compliance with regulations and assisting with the execution of the sale. Block Trades This involves the sale of vast numbers of shares to institutional investors in a single transaction. People working in the ECM department find buyers for the sellers and work out a deal that can be executed efficiently. Private Placements They also can help with facilitating private placements of equity, where companies raise capital by selling shares to a select group of institutional investors instead of the general public. Equity-Linked Securities They may also assist in the issuance of equity-linked securities, such as convertible bonds or warrants, which have characteristics of both debt and equity. Bookbuilding and Pricing For IPOs and other equity offerings, the teams have to go through bookbuilding which involves determining the offering price and allocating shares to investors. They work with the underwriters to gauge investor interest and demand for the offering. Primary Equity Market Secondary Equity Market The primary market is where new securities are created. Companies and other entities can sell new shares and bonds in order to facilitate their growth or development The secondary market is where already existing securities are traded. No new securities or capital is created and it is referred to as the traditional stock market which is comprised of stock exchanges and over-the-counter markets. Back to Learn Next Page