Investment Banking Analyst

An Investment Analyst is an entry-level position in investment banking – the first rung up from summer intern (or another undergraduate programme).

Analysts advise companies on large-scale corporate transactions like mergers and acquisitions, and issuances (debt and equity).

Essentially, an analyst does everything senior bankers require to either win a deal or close a deal.

The role demands a combination of sales, marketing, negotiation and deal-making skills. Analysts typically develop these skills via a structured two-year training programme.

What Work Does an Investment Analyst Do?

Analysts work to provide sufficient information for key decisions to be made. They also scrutinise the information they have gathered and make recommendations. 

Analysts help clients establish and nurture successful investments. As an analyst, you must fully understand what the client’s goals are.

This will inform the investment opportunities that you find through your research, as well as help you decide whether the client’s existing investments are effective or if they should be replaced.

You might be tasked with assessing investment potential on behalf of your company.

This requires analysing companies in the chosen industry to ascertain whether or not they offer good investment potential. You would then present your findings to professionals within the bank.

Often, analysts specialise in one area (like healthcare, manufacturing or emerging markets) and only analyse companies in that domain.

Alongside general administrative tasks, there are three types of work you will be involved in as an analyst: deals, pitches and the research for both of these.

• Deals –  Working on actual transactions such as a company being sold, getting bought or raising money for these or similar transactions. Analysts will do a lot of scheduling, note-taking and formatting of Excel files and PowerPoint presentations to prepare for a deal. Although the work involves a lot of administration, the subject matter is the core of investment banking.
  
  
• Pitches – Many pitches will take a few days and involve administrative tasks such as researching companies and collecting reports for senior bankers. Often, analysts will be required to create a PowerPoint presentation or a printed ‘pitch book’ ready for the bankers to present to their client. Analysts will write slides on industry trends, executive summaries and explanations of their analysis.
  
  
• Research – An analyst has to track financial trends, find specific financial or economic information, and undertake industry research. Analysts will be asked to do thorough research on whether a certain investment is viable. They will be tasked with giving recommendations via a presentation or written report.

The Work Environment

Investment banking is known for its unsociable hours.

The higher up the career ladder you go, the fewer hours you will need to spend in the office – which means that, as an analyst, you won’t really have any kind of work/life balance. 

Most analysts are expected to work around 100 hours per week, and this includes weekends. A normal day for an analyst might be 10 a.m. to 2 a.m., and all-nighters are not uncommon.

Analysts also tend to be on call 24/7, which makes it difficult to plan any kind of social event.

The unsociable hours mean that investment banks often look after their staff while they are at work. Most companies allocate a budget for those working past 7 p.m., which allows them to buy dinner. The same goes for lunch (and dinner) at the weekends.

Often, banks will pay for your transport home at night if you work late, and for the journey both to and from work on a weekend.

This is an industry that sees some of the highest graduate salaries, and the role itself is likely to lead to a very lucrative career. As an analyst, you can expect to have a plethora of well-paid opportunities in the future.

Those wanting a social life in their twenties should not attempt to become an analyst. It's for those who are comfortable with going through some short-term pain for a longer-term gain.

Key Skills

To be a successful analyst you should:

• Be a good communicator
• Possess great analytical skills
• Be able to work to and meet strict deadlines
• Have great investigative skills
• Be a good decision-maker
• Have good quantitative skills and an aptitude for numbers
• Be able to research and evaluate
• Be able to solve problems
• Have excellent computer skills
• Be able to examine and interpret data
• Be effective when working under pressure
• Be committed to long-term career goals and willing to work hard
• Have an interest in current affairs, and an excellent understanding of investment
• Be a good team player
• Have self-confidence and the drive to succeed

It pays to remember that investment firms like candidates who speak other languages. They are also keen to recruit those who are tech-savvy and have a good grasp of social media.

How to Become an Investment Banking Analyst

Investment banking is a difficult industry to break into.

You should aim high and ideally achieve a high grade (2:1 or above) in a finance or business degree (accounting, statistics, economics, mathematics, etc.) at a high-ranking university.

You would then go on to complete internships at top firms. 

Some investment banks may be more flexible than investment management firms when it comes to the degree grade you have achieved.

A master’s qualification is often helpful when it comes to securing your first job as an analyst, but it is not essential.

A summer internship could turn into a full-time analyst position; finance companies often use them to pre-select their next intake of graduate analysts.

You won’t be doing exactly the same work as a full-time analyst but you will be doing many of the same things; you will spend most of your time supporting full-time analysts.

Competition for these internships is extremely high, which is why any prior work experience (preferably in the form of other internships) is beneficial.

Investment analysts aren’t just recruited by investment banks. You might want to consider working for investment management companies, large charities or other institutional investors, hedge funds, and stockbrokers.

Networking is important and you should do everything you can to make connections within the industry.

Salary and Typical Career Development

Despite being renowned for its intense workload, investment banking is also known for being one of the most highly compensated careers.

A typical starting salary for an analyst working in London is between £30,000 and £40,000; these figures are likely to be less outside of London but possibly more in other financial hubs like New York, Tokyo or Hong Kong.

A key aspect of remuneration in this industry is bonuses; an annual bonus will often match or exceed an individual’s basic salary. Possible bonuses for an analyst in the first three years range from 10% to 100% of salary.

After five or more years in the industry, salaries jump to over £70,000, with bonuses of up to 150%. Senior-level positions see salaries of over £110,000, with bonuses often reaching 200% of the salary.

The position of Analyst is renowned for being short-term, and used as a stepping stone to other positions which offer higher rewards for fewer hours and less admin-style work.

You could aim for a more senior position in investment banking or a job in a different financial sphere, like hedge funds, corporate development, venture capital or private equity.

Opportunities for career development in the form of qualifications are plentiful.

Your company will likely want you to achieve financial certification in the form of the Investment Management Certificate (IMC) if you are working for an investment management company, or the Chartered Financial Analyst programme (CFA) if you are working for an investment bank.

The latter takes four years but is considered to be comparable to a Master’s degree.

Final Thoughts

The role of Analyst is not to be taken on half-heartedly; breaking into the industry is difficult and requires considerable dedication. Once working as an analyst, you will find yourself with very little free time.

Graduates are often disappointed when they start working as an analyst and realise how mundane their day-to-day responsibilities are.

The role of the analyst is to support senior bankers with anything they need, and this can often be things which don’t seem in any way related to finance or investment banking.

If you are focused on your long-term goals and want to be successful in finance, this could be the role for you.

If you question tasks given to you, enjoy being in the spotlight rather than doing the grunt work for someone else (who is going to take the credit), and value your free time, then look elsewhere.