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The Life of an Investment Banking Analyst

June 26th, 2009

There’s a lot of poor information out there about what you actually do in investment banking, especially at the junior levels - as an Analyst or Associate.

Investment banking itself is a sales industry - bankers don’t create anything, they just sell things that others have created (companies, in this case) to the highest bidder.

The duties of winning clients, maintaining relationships, and negotiating actual prices and purchase terms fall to the Managing Directors - the highest-level investment bankers.

Investment banking analysts, however, are not responsible for this - instead, they simply support senior bankers and do all the grunt work necessary to keep things running. They have 3 broad categories of work: deal work, pitches, and administrative tasks.

Deals are the best type of work, for 2 reasons: 1) That’s where you learn the most, especially with unusual deals (Restructuring or Distressed M&A, for example). 2) Private equity firms and hedge funds care mostly about your deal experience.

You’ll always have to do pitches as an investment banking analyst, but you don’t want to be pitching all the time. The work involved usually consists of making your own bank look better than others, valuing a company, and researching an industry.

Of course, you’ll encounter administrative work on actual deals as well - you need to keep everyone on your team in the loop, track your discussions with different buyers, and circulate Word documents internally.

But with deals, you are also exposed to financial modeling and purchase negotiation - both of which can teach you a lot.

You’ll also get a lot of pure “random” assignments as an investment banking analyst - like finding information on companies, printing it out and making it look pretty, doing research, and emailing people. Avoid this category at all costs because it doesn’t teach you anything.

To succeed as an investment banking analyst, maximize your exposure to deals and minimize pitching and administrative tasks.

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