Jobs In Investment Banking Entry Level

Jobs In Investment Banking Entry Level – High-paying positions in the finance industry can be very lucrative, but the truth is that not all positions in the finance industry are created equal. Some people naturally pay more than others.

In this article, we will explain 7 different areas of finance that deal with completely different things. We’ll discuss what you do in each field, the skills you need to be successful, and the potential earnings. All earnings data in section titles are for entry-level opportunities. You can earn much more by gaining experience and moving up the career ladder, which we’ll cover below for some of the more structured finance areas.

Jobs In Investment Banking Entry Level

Investment banking is one of the highest paying financial professions. They recruit directly from college where a 21-22 year old graduate can make ~$160,000 in their first year. So what do investment bankers do?

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For example, when Amazon bought Whole Foods in 2017, investment bankers at Goldman Sachs advised Amazon in the purchase and investment bankers at Evercore advised Whole Foods in the sale. This is called mergers and acquisitions (“M&A”). The process by which a company buys another business or sells itself is very complicated and companies have to hire investment bankers to advise them in the process. Investment bankers help them structure the transaction, negotiate terms, fix valuation (price), etc. In this sense, they can be considered real estate brokers, except instead of brokering real estate between buyers and sellers, they broker actual assets. real estate companies.

To finance their expansion, large companies often need more money than they have in their bank accounts. Let’s take Tesla for example. Despite being a public company, Tesla uses a lot of cash and needs more cash than it has in the bank to finance its expansion plans. So they have to raise money. But where will they get the money? This is where investment bankers come into play. Investment bankers help companies raise the money they need from investors.

Because large investment banks help large companies with transactions often amounting to billions of dollars, a small transaction fee of just 0.5% of the transaction value can be worth tens of millions of dollars. Of course, because investment bankers make ridiculous amounts of money for their work, they also pay their investment bankers ridiculous amounts of money. This is one of the most lucrative careers you can have in finance.

Here’s what you can expect at each level assuming you work at a major investment bank (e.g. Goldman Sachs, Morgan Stanley, J.P. Morgan):

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Not everyone who works at an investment bank will make that much. Only real investment bankers in investment banking will make money at this salary level. Other employees, such as administrators and support staff, will earn much less.

Private equity is probably one of the best paying jobs in the finance industry that anyone can hold. The starting salary of a private equity specialist (called an “Associate”) is often between $200,000 and $300,000 for a 23-25 ​​year old guy!

Each year, only a few hundred people worldwide will be admitted to major private equity firms. But once you are there, you can make a lot of money. So what exactly do private equity firms do?

Private equity firms are investors. They invest in companies. This is very similar to what you do when buying shares in the stock market. Only instead of just buying part of the company with shares, they buy the whole company. Correct. They buy the entire company, which often costs billions of dollars. They make money when their investments do well.

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Most large private equity firms follow an investment strategy called a “leveraged buyout” (“LBO”). They use leverage (financial jargon for debt) to buy out the original owners of the business. Hence the name – leveraged buyout. We explain this investment strategy in more detail here.

An investment role in a hedge fund is one of the best paying jobs one can have in the finance industry. In a year, you can earn even more than private equity investment professionals. This is because 1) hedge funds have lower spending than private equity firms and 2) hedge funds receive performance fees (HF equivalent to PE shares) earlier than private equity firms. The best hedge fund managers pocket tens of millions or billions of dollars in just one year. In fact, many of Forbes’ billionaires are hedge fund managers: Ray Dalio, Ken Griffin, Steven Cohen, Bill Ackman, David Einhorn, Larry Robbins, etc. The list goes on.

Simply put, hedge funds are investors. They invest in publicly traded securities or assets that are traded on the market and available for purchase by any general public. Equity hedge funds invest in stocks. Credit hedge funds invest in debt. Other hedge funds invest in things like commodities or currencies. Regardless, they usually invest in things they can easily buy and sell in the market.

If you’re a hedge fund investing specialist, you’re essentially researching investment opportunities for whatever your hedge fund focuses on. So if you work in a hedge fund, your job is to invest in stocks. It’s like buying stocks for your portfolio, only you do it for billions of dollars and you get a hefty salary for it.

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The word “equity” is just a fancy word for “equity,” so collectively equity research simply means “equity research.” The job is exactly what it sounds like. You are researching stocks. Entry-level analysts make around $130,000 in their first year on the job, making them one of the highest-paying entry-level finance jobs. But wait a minute. Isn’t that similar to the job you do at an equity hedge fund?

You mostly do the same things as hedge fund investment professionals: check stocks, read company reports, analyze financials, talk to management teams and industry experts, etc. While the work is very similar, you do it in a different capacity.

With stock research, you publish your research in a report that your company sells to clients. You do the work for your clients and educate them on various actions. You are selling your homework. For this reason, stock research is also called “seller-side research”.

Unfortunately, selling research reports to clients is not as profitable a business model as investment management. A business just doesn’t make as much money as one that manages and invests other people’s money. That’s why stock research analysts tend to make much less than hedge fund investment professionals because their companies make much less than hedge funds. It has less to do with their skills and much more to do with the profit their employers make.

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The good thing about the equity research analyst program is that it often complements hedge fund investment analyst roles. An entry-level job in capital market research will provide you with a fantastic learning experience and create a solid foundation on which to launch a career in hedge fund investing.

Fundraising is an extremely important function in investment management companies. Simply put, investment management firms (eg hedge funds, private equity firms) manage other people’s money. The more money they manage, the more money they make. Fundraising is the process they go through to raise the money they manage. See the logic here? No fundraising, no money to manage, no investment, no business.

For this reason, fundraising plays an extremely important role in hedge funds and private equity firms. This is a job that requires a combination of sales skills and financial analysis skills. Beginning fundraising analysts make around $100,000-120,000 a year.

You are something of a salesman because you are looking to sell your company’s services to potential investors. You try to convince them that your company is an excellent investment company that can make much more money. You have to convince them to give you millions of dollars for investment. This requires strong interpersonal skills and the ability to think big and tell big stories.

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But you will also need basic financial analysis skills as you will be talking to investors about investment opportunities, companies your company has invested in, investment performance, etc. Just like insurance salespeople know all about insurance, you need to know all about finance. For this reason, many major hedge funds and private equity firms employ investment banking or private equity professionals for their fundraising activities.

To be fair, the salaries are not as high as those of the investment professionals at these companies. However, compared to other careers, it is still very lucrative and only increases as you get older.

Private Wealth Management (“PWM”) generally provides wealth advisory services to high net worth clients. Your customers are individuals or families with lots of money. And advice on how to manage their wealth. all with

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