A Belated Introduction to Investment Banking

Friday, April 06, 2007

A Belated Introduction to Investment Banking

What is it really that is done in i-banking and what is it really all about? You know that you are in no position to claim to be an authority of any kind on the matter, so you set out answer this very important question by asking seasoned professionals within the firm. You do the rounds, sneaking in the question over a coffee or a Friday 5pm beer, as the you feel is more appropriate. The list of answers you receive in the end looks something like this.

Rupert Blunderford
Managing Director
Advisory Group

“Investment banking is the art of advising clients. It is not so much what we say that differentiates us here, but when and how we say it. It’s the business of sensing when the client wants to hear what and then making sure one is at the right place at the right time to say the very thing the client wants to hear.”

Edward Shitton-Crapford
Executive Director
United Kingdom Investment Banking

“Investment banking is about two things and two things only. The Code and the Panel. An investment banker is not there to add value to the client. A good client will know from the outset that expecting an investment banker to add any value whatsoever is amateurish at best. The investment banker’s duty is twofold: ensuring that the client is in compliance with the takeover code at all times, and in the process, ensuring the takeover panel is aware of everything the client does. In short, we’re here to check code and act as a glorified secretary, faxing various documents to the panel“.

Paramjeet Shah
Median Investment Banking

“Investment banking is the most important job in the transaction process. We are there to hold the client’s hand through every step of the transaction and to make it all happen. We’re there to think of problems they haven’t thought of and before they can think of them themselves, come up with solutions. We’re there to say what they should pay, who they should buy, when they should do it, where they should do it and so much more. We are the ones who run companies. We tell management what to do – they’re simply drones put in place to execute our advice.”

Isabelle de Golas
Senior Analyst
Consumer Investment Banking

“Investment banking is about making sure everything the client gets is perfect. We provide analysis in spreadsheets, valuations in big models and so on, and it is our job to make sure that all the client sees are pretty looking charts in pitch books that have no errors or typos. Mostly we send the clients profiles of potential acquisition targets and it is very important to use colours consistently, to make sure that the numbers match across all pages of the book, that the multiples are close to what the client has seen thusfar and that there are no typos that the client can spot in the meeting.”

Adam Twinklestein
Junior Analyst
Natural Resources Investment Banking

“Investment banking is about delivering 110%, doing all nighters, functioning on full power at no sleep being spot on all the time to make sure your associate is happy. It’s all about making sure there are no fuckups like typos in the book, booking the print room for the presentations to be printed, making sure the cabbie doesn’t ring the MD’s doorbell when you send him books at 4am, keeping a shaving kit in your drawer so you can still look super sharp even if you’ve pulled an all nighter, and eventually making MD and being a master of the universe.”

You realize that a broad generalization on what investment banking is not possible based on these answers. One thing that these answers do indicate is that the force of gravity even applies in a stellar industry like i-banking. How? Simple. It’s like dropping a ball from a window – the higher you drop it from, the more momentum it gains and the harder it hits when it drops all the way down. Banking is just like that, except, instead of a ball, the system drops shit, be it an MD, and ED or associate, all the shit will hit the analyst. The higher the shit comes from, the harder it will hit. And finally, as sure as the ball, will always land on the ground, the shit will always reach the analyst.


Anonymous said...

Human Resources: Barely human and certainly not resourceful

Unknown said...

Huh... So possibly NOT the career option I should consider then...

Anonymous said...

That really depends on what you want out of your career...
Look at the monkey. He's happy, bounce in his step, smile on his face and aleays ready to chug out another pitchbook, right monkey ;)

Anonymous said...

Absolutely fantastic! Keep it up.

S@RZI said...

Better late than never: Investment banking is what investment bankers do, period :)