Popular Investment Bankers and Their Career Paths

Investment banking is a highly competitive field that requires a strong work ethic and a keen mind for numbers. Many successful investment bankers have risen through the ranks to become leaders in their field.

One notable example is Jamie Dimon, who started his career at American Express in 1976 and worked his way up to become the CEO of JPMorgan Chase. Dimon's career path is a testament to the importance of hard work and perseverance.

Another example is Lloyd Blankfein, who joined Goldman Sachs in 1982 and eventually became the CEO. Blankfein's success can be attributed to his ability to navigate complex financial markets and make savvy investment decisions.

Investment bankers often have to work long hours and make quick decisions under pressure, but the rewards can be substantial.

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Investment banking careers are among the most coveted jobs, with leading investment banks receiving hundreds of applications for each job opening. This means investment bankers often face long working hours, with an average of over 60 hours per week.

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The job requires strong organizational, analytical, and mathematical skills, as well as robust social skills. Analysts assist senior-level bankers with assignments such as creating pitches, models, and valuations, and negotiating deal terms for the buy-side and the sell-side.

A typical career progression at a bulge-bracket investment bank in New York City includes the following positions:

Working at a top investment bank can be a game-changer for your career. If you're just starting out, you may not have a chance at bulge brackets or elite boutiques with a 3.2 GPA or lower, but you can still target regional boutiques or small PE firms.

Regional boutiques can offer valuable deal experience and exit opportunities, even if it's not at the top-tier banks. Independent valuation firms, Big 4 firms, and related roles can also be viable alternatives.

If you're at a top university like Princeton with a 4.0 GPA, you'll have a good chance at working at an elite boutique or bulge bracket. These firms offer the best deal experience and exit opportunities.

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Bulge bracket investment banks are the largest global banks, offering a wide range of services to clients. They tend to work on the largest deals, often above $1 billion USD in size, and have strong industry groups, M&A, or Leveraged Finance teams.

Analysts at bulge bracket banks can get into private equity firms and hedge funds, especially if they're in non-ECM/DCM teams. However, they may be less likely to get into the largest buy-side funds and more likely to move to other banks or smaller funds.

Investment banking careers are some of the most coveted jobs, with leading investment banks receiving hundreds of applications for each job opening. This means investment bankers often face long working hours, with an average of over 60 hours per week.

To succeed in this field, you'll need strong organizational, analytical, and mathematical skills, as well as robust social skills. Analysts assist senior-level bankers with various tasks, including creating pitches, models, and valuations.

A typical career progression at a bulge-bracket investment bank in New York City looks like this:

Total compensation is highly dependent on personal and team performance, as well as overall market conditions.

To break into investment banking, you'll need to choose one of four main pathways: as an undergraduate at a top university, as a recent graduate, at the MBA level, or beyond the MBA level. The most viable pathways are the first three.

If you're aiming for investment banking, you'll need a sequence of academic, work, and leadership experience that demonstrates your interest and commitment. This sequence is crucial for winning interviews and breaking in.

To create this sequence, you'll need to win "Steppingstone" internships or jobs, which can be found in the first few years of university. These internships or jobs are a great way to get your foot in the door.

Crafting your story is also essential, as it will help you stand out from the competition. This involves highlighting your relevant skills and experiences in a clear and concise manner.

Here are the six steps to follow for investment banking recruitment:

If you follow these steps, you'll be better-equipped for investment banking recruitment than ~95% of candidates.

Investment banks can be categorized into several types, each with its own unique characteristics.

There are four main types of investment banks: Sell-Side Deal Types, Elite Boutique Investment Banks, Industry-Specific Boutique Banks, and Largest full-service investment banks.

Sell-Side Deal Types include Initial Public Offerings (IPOs), Secondary Offerings, Divestitures, and Private Placements. These deals are often handled by investment banks working on the sell-side.

Elite Boutique Investment Banks (EBs) focus on M&A Advisory and Restructuring, and often work on the same deals as the bulge brackets. They are much smaller than the bulge brackets, with a few dozen new Analysts hired each year.

Industry-Specific Boutique Banks (ISBs) focus on one specific industry, such as healthcare or FIG, and often work on smaller deals than the others. Deals are often comparable in size to the ones that MM banks work on.

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Some of the largest full-service global investment banks include JPMorgan Chase, Goldman Sachs, BofA Securities, and Morgan Stanley. These banks provide both advisory and financing banking services, as well as sales, market making, and research on a broad array of financial products.

Here's a list of the types of investment banks:

Up-and-Coming Elite Boutiques (UCEBs) are often founded by high-profile rainmakers at BBs or EBs, and they frequently work with their previous clients.

They're even smaller than elite boutiques, with a presence in fewer regions, and are more dependent on a key individual(s).

Sometimes these firms fizzle out, but they can also keep growing and eventually become true elite boutiques.

UCEBs have much less of a track record compared to elite boutiques, making it difficult to determine their long-term success.

Exit opportunities from UCEBs are unclear due to the lack of data, but it's possible to win traditional PE/HF roles, although the probability is lower.

It's essential to research and understand the reputation and growth potential of a UCEB before considering a role there.

Middle Market banks, also known as MMs, offer a wide range of services and have a significant presence globally, but they typically focus on smaller deals.

Most deals done by MMs are below $1 billion, although this can vary from bank to bank.

Jefferies stands out as the strongest MM bank, earning annual investment banking revenue comparable to some bulge bracket banks and far exceeding other MM banks.

Analysts from top banks tend to get priority when it comes to exit opportunities, making it more challenging for those from smaller banks to break in.

Exit opportunities from MMs are often limited to smaller private equity funds or hedge funds that use off-cycle recruiting, corporate development or corporate finance roles at normal companies, or other banks, usually larger ones.

Here are some potential exit opportunities from MMs:

Investment bankers work with both buy-side and sell-side transactions, managing a diverse deal portfolio. Their role slightly diverges depending on whether they're working on the buy-side or sell-side.

On the sell-side, investment bankers want to sell all or a part of their business. This is in contrast to the buy-side, where they're looking to acquire another company.

Investment bankers simultaneously facilitate buy-side and sell-side transactions.

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Investment banks working on the sell-side can help companies go public by issuing shares on the stock market through Initial Public Offerings (IPOs). This is a way for companies to raise capital by selling shares to the public for the first time.

Sell-side banks also aid companies in issuing additional shares after an IPO, known as Secondary Offerings. This can be a way for companies to raise more capital or to give existing shareholders the opportunity to sell their shares.

Divestitures are another type of deal that sell-side banks can help with, where they consult clients on selling a portion of their business or specific assets. This can be a strategic move for companies looking to focus on their core business.

Private Placements are a type of deal where sell-side banks oversee the sale of securities to a select group of institutional investors. This can be a way for companies to raise capital without going through a full IPO process.

Here are some examples of sell-side deal types:

Largest Full-Service Investment Banks are typically considered "bulge bracket banks" and underwrite the majority of financial transactions in the world.

These banks usually provide a wide range of services, including advisory and financing banking, sales, market making, and research on various financial products.

The largest investment banks are led by JPMorgan Chase, Goldman Sachs, and BofA Securities, which are often at the forefront of major financial deals.

They are followed by other notable banks such as Morgan Stanley, Citigroup, UBS, and Deutsche Bank, among others.

Here's a list of the top 15 largest full-service global investment banks:

These banks have a significant presence in the global financial market and are often sought after for their expertise and resources.

In addition to the major investment banks, there are several other notable advisory and capital markets firms that are worth mentioning. These firms often specialize in specific areas, such as mergers and acquisitions or corporate finance.

BDO International, for example, operates under the name BDO Capital Advisors, offering a range of advisory services to clients.

Berkery, Noyes & Co is another boutique advisory firm that has gained notability in the industry.

Brewin Dolphin is a UK-based firm that provides corporate finance and investment banking services to its clients.

Capital One's securities arm, Capital One Securities, offers investment banking services to clients.

Deloitte's corporate finance arm, Deloitte Corporate Finance, provides M&A advisory services to clients.

Duff & Phelps is a global financial advisory firm that offers a range of services, including corporate finance and valuation.

Ernst & Young's capital advisors arm, Ernst & Young Capital Advisors, provides investment banking services to clients.

KPMG's corporate finance arm, KPMG Corporate Finance, offers M&A advisory services to clients.

PwC's corporate finance arm, PwC Corporate Finance, provides a range of advisory services to clients.

Roth MKM is a boutique investment bank that offers corporate finance and M&A advisory services.

Sheshunoff Management Services is a firm that provides corporate finance and investment banking services to clients.

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The investment banking process is a crucial step in the M&A journey. Investment bankers facilitate this process, which involves identifying suitable companies to merge or acquire.

Bankers create a list of potential targets, narrowing it down to the most attractive options. This list is the result of thorough research and analysis.

The process starts with deal origination, where bankers identify companies that could be good merger or acquisition targets.

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The IB Interview Guide is a must-have resource for anyone looking to break into the investment banking world. It offers 578+ pages of detailed tutorials, templates, and sample answers, quizzes, and 17 Excel-based case studies.

Working at an Investment Banking Advisory Bank (IBAB) is a solid option, and even major mergers banks are fine if you win offers there.

You have to be careful with Up-and-Coming Elite Boutiques (UCEBs), I wouldn’t recommend them over the others for entry-level roles. Similarly, you have to be careful with Industry-Specific Boutiques (ISBs) and Regional Boutiques (RBs) if your main motivation is the exit opportunity.

Here are some key considerations to keep in mind when deciding between a bulge bracket and an elite boutique:

The M&A process is a complex series of steps that investment bankers guide clients through to facilitate mergers and acquisitions. Investment bankers create a list of suitable companies to target for a merger or acquisition, eventually narrowing it down to the best options.

Deal origination is a crucial step in the M&A process, where bankers identify potential targets and create a list of attractive companies. This process involves researching and analyzing companies to determine their viability as a merger or acquisition target.

Mergers and acquisitions have distinct strategic goals and require tailored advisory services. Mergers involve two companies combining to form a new entity, often to create synergies, expand market reach, or achieve strategic goals.

Investment bankers help identify targets, value the acquisition, structure the deal, and facilitate the purchase in an acquisition. This process typically includes valuation, negotiation, and integration planning to ensure a successful merger or acquisition.

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Here are the key steps in the M&A process:

Investment bankers play a crucial role in guiding clients through the M&A process, providing expertise and advice to ensure a successful transaction.

Investment banking roles can be broadly categorized into two main areas: front office and back office.

Front office roles are typically involved in client-facing activities, such as advisory, trading, and sales.

A career in advisory involves working on high-profile deals, like advising companies on mergers and acquisitions, or helping them raise capital through initial public offerings.

In contrast, back office roles are more focused on supporting the front office, often handling tasks like risk management, compliance, and operations.

Some common front office roles include investment banking analysts, associates, and vice presidents, while back office roles might include operations analysts, risk managers, and compliance officers.

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Investment banking compensation can be a major draw for those in the field. High paychecks are an expectation, with entry-level M&A investment bankers at top firms earning around $100,000.

First-year analysts typically see salaries ranging from $70,000 to $150,000, increasing to $125,000 to $150,000 after a few years. This can vary depending on the firm and individual performance.

Associates earn higher wages, with first-year associates often making nearly $200,000 and potentially reaching $300,000 or $400,000. With more experience, some associates can earn close to $500,000 annually.

Here's a breakdown of typical career progression and compensation at a bulge-bracket investment bank:

Total compensation is highly dependent on personal and team performance and overall market conditions.

Investment banking jobs are known for being high-pressure and high-status, but they also come with high salaries and bonuses.

Entry-level investment bankers can earn around $100,000 per year, while first-year analysts typically see salaries ranging from $70,000 to $150,000.

As you progress in your career, your salary increases significantly. Associates, for example, often make nearly $200,000 in their first year and can potentially reach $500,000 annually with more experience.

Here's a breakdown of the typical career progression at a bulge-bracket investment bank in New York City:

Total compensation is highly dependent on personal and team performance, as well as overall market conditions.

Banker fees are a crucial aspect of investment banking compensation. Investment banks aim to generate significant revenue streams through these fees, which can amount to substantial sums, such as $130 billion.

The fees are determined by various methods, including the Lehman or double Lehman formula, which is used for middle- to lower-market deals and involves paying 10% of the first million. This formula is commonly used for smaller deals.

The Aligned Method is another way fees are determined, which incentivizes bankers to negotiate the best possible deal by earning 1.75% of the first fifty million. This method rewards bankers for their performance in securing favorable deals.

Investment bankers often require a retainer or "engagement fee" from clients, which is in addition to the commission earned on the deal. This fee can be a significant upfront cost for companies considering M&A transactions.

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