INVESTMENT

BANKING PLAYBOOK
2022
EDITION
TABLE OF CONTENTS

1 Investment Banking Overview

1 Banking: Three Tiers Of Prestige

2 School Recruiting For Banking

3 Standing Apart From Competition

4 Networking Route Into Banking

5 Skillsets Among Top Bankers

6 The Concept Of Banking Fit

7 Position Hierarchy & Tasks

7 Working Hours, Salaries, & Lifestyle

IB OVERVIEW

Investment banking (IB) is a segment of the financial services

industry that assists companies, institutions, and governments
with raising capital (underwriting) via initial public offerings (IPO)
and executing mergers and acquisitions (M&A). IPOs are
essentially the process of offering shares of a private corporation
or firm to the public in a new stock issuance. M&As are
transactions in which the ownership of companies or their
operating units are consolidated with other entities.

BANKING PRESTIGE TIERS

In today’s ultra-competitive finance field, individual banks are

becoming increasingly dependent on factors such as salary,
location, and competitiveness to distinguish themselves among
other banks. These factors alongside other recruiting factors are
ultimately what split the banking division into three levels: Bulge
Bracket banks (1), Elite Boutiques (2), and Middle Market banks (3).

In the marketplace, bulge-bracket (BB) banks possess the most

numbers of offices and employees. Furthermore, BB banks handle
the largest deals alongside the largest corporate clients across a
wide variety of industries. As a matter of fact, nearly all of their
clients are from Fortune 500 firms, if not from Fortune 50 firms.
Not only do these banks garner deals worth billions of dollars, but
they build a robust network that furthers their reach. Examples of
BB banks: Goldman Sachs, Deutsche Bank, and Bank of America.

Similar to BB banks, elite boutique (EB) banks work with deals that
exceed nine figures with some of the industry-leading firms. Elite
boutiques also replicate the sizable nationwide and international
presence of BB banks, operating numerous offices in countless
countries. However, they often lack the global presence of BB
banks and also work with smaller deals. Examples of EB banks:
Evercore, Lazard, and Qatalyst Partners.

Middle-market banks are typically between smaller regional

investment banking firms and the massive bulge bracket
investment banks. They work with regional deals specific to the
geographic presence and indulge in national deals too. Deals can
range from about $50-$500 million.
Understanding these factors and elements that distinguish banks
is greatly beneficial for aspiring bankers as it provides them a
sense of direction for future steps, in regards to their preferences.

SCHOOL RECRUITING

Every year, thousands of highly-motivated and intellectual

professionals compete against one another to land an internship in
their dream investment bank. Competition is fierce among such
banks, so they look for students from the top schools around the
world who are highly regarded. There are three different categories
of schools that vary in prestige and placement in these banks:
target schools, semi-target schools, and non-target schools.

Target schools are prioritized by the larger firms. Referring back to

the banking prestige, we know that these firms include the bulge-
bracket banks and elite-boutique banks. These banks are
constantly seeking talent by maintaining a presence on college
campuses and maintaining relations which faculty. Target schools
not only dominate infirm presence, but their graduates typically
have the highest chances of breaking into investment banking.
Examples of target schools: the University of Pennsylvania, Harvard
University, and New York University.

Although attending a target school is the best case scenario, semi-

target schools are not far behind. In fact, semi-target schools also
are monitored by large firms as they contain internship
opportunities and niche programs tailored towards banking.
However, compared to target schools, they have less prevalence in
bigger banks and a narrower alumni network. Typically, semi-target
school graduates need to work extra hard to compete against
students from schools with a bigger brand name. Examples of
semi-target schools: Northwestern University and the University of
Southern California.

Contrary to target and semi-target schools, non-target schools are

unprioritized by large firms. This is because they don't have high
placement in banks for graduates to leverage off of, nor do they
have a brand name large enough for top banks to recognize. In
complete honesty, breaking into high-finance is extremely difficult
for non-target graduates, requiring countless hours of their time
on networking and resume tailoring. Examples of non-target
schools: Texas A&M University and the University of Texas - Dallas.
SURPASSING COMPETITION

With the increasing demands and expectations from numerous

colleges, many undergraduates and high school students wonder,
what can I do in order to enhance my application? While there is
no answer fits all approach, extracurriculars activities, such as
passion projects and internships, are where you can outshine your
competition.

A passion project is an activity or enterprise that you decide to

take on—usually in your spare time–in order to gain some benefit
for yourself. Not only does it convey your work ethic to colleges,
but also your love for the specific major. These activities/project
ideas listed below directly correlate with the business field:

Start a newsletter for local small businesses on how to market

better on social media platforms.
Starting your own business and documenting the financials,
marketing strategy, and business plan.
Teach elementary students the foundations of starting a
business and the principles in the field as a whole.

As you are exploring and becoming more heavily invested in this

field, you may need to find even more niche topics to pursue.
Rather than obtaining experience in asset management, maybe you
would like to gain experience with sales. Through the exploring of
numerous genres, you can portray to colleges your drive to gain
experience in the overall field. Down below are some ways you can
build your experience and background in finance:

Manage your college's endowment through their investment

portfolio or investing club.
Practice personal finance in your free time and start a personal
finance club.
Work in back-office jobs (the portion of a company made up of
administration and support personnel who are not client-
facing) to demonstrate interest.

After conferring with multiple bankers to retrieve this information,

the underlying point was apparent. Even though academics lay the
foundation of your profile, extracurriculars and experiences are
what make you different.
NETWORKING ROUTE

Within our modern society, a professional network has been

proven to be crucial in career development and overarching
success regardless of what career path or major one pursues. This
is especially true in hypercompetitive industries such as
investment banking and consulting, in which recruitment depends
heavily on networking. Not only can a professional network serve
as a support system, but it can also provide business
opportunities. However, building a network and maintaining
relationships is not as clear-cut as it may seem without proper
networking strategies. By analyzing strategies that entail relevant
online platforms and old-fashioned emailing, one will be able to
understand what major aspects compose the networking process.

Although there are eight major concepts that often succeed in

expanding networks, there are several strategies that overlap into
three main categories: emailing, online communities, professional
networking sites opportunities. The most old-fashioned and well-
known method is emailing: an efficient and effective way to check
in with contacts and further nurture relationships through
conversations. By writing emails frequently, others will be more
connected and willing to support your endeavors if needed in the
future. A more modern approach to building your network is by
connecting with individuals on relevant online platforms such as
Instagram, Facebook, and LinkedIn. One can venture into the
platform to build essential career knowledge with like-minded
individuals, share information, and hopefully find support within an
overarching industry. However, in remote communities, a key
strategy to ensure network maintenance is being relevant. Whether
that be updating your LinkedIn profile or just posting regularly on
Instagram, it is essential to remain active. The final major method
is through speed networking events and professional networking
websites. By participating in such events on different websites,
one will be able to meet several industry professionals, exchange
business ideas, and make connections efficiently.

Often in today's world, placement into highly sought-after careers

depends on networking. It is no different with investment banking.
Although qualifications are the primary factor to break into the IB
industry, networking is right behind. One way to think about this
concept is "it's not what you know, it's whom you know."
BANKING SKILLS

However, in order to make yourself marketable and gain the trust

of people prior to networking, you must possess certain skills.

It is well-known among the finance world that investment banking

offers high starting salaries and great exit opportunities, making
this field highly attractive to recent undergraduates and graduates.
Due to this prosperity and prestige, investment banking is
naturally hyper-competitive and in some cases, cutthroat. Knowing
this, prospective bankers often seek advice from experienced
bankers and strive to replicate the qualities they possess. Such
qualities include intellectual abilities, an entrepreneurial mindset,
leadership potential, as well as communicating and networking
skills. As breaking into IB becomes more difficult year over year, it
is imperative that aspiring bankers build and practice these skills
early into their financial careers.

When high-performing individuals typically think of intellectual

vitality and abilities, they often turn to education and academia as
an indicator of intelligence. However, in the finance field,
intellectual abilities include other factors such as emotional and
psychological intelligence. This is demonstrated in a variety of
everyday banking tasks: leading projects, creating models, and
presenting proposals. Additionally, bankers need to possess
nimble intellect. They should be able to recognize and explore
opportunities, trends in the marketplace, and new industry
products in little to no time. This also ties into the entrepreneurial
mindset and visions that are required: the ability to identify growth
potential, sustainability of projects, and long-term feasibility.

Contrary to popular belief, finance also entails a lot of leadership.

Although it isn’t as management-based as consulting or
entrepreneurship, banking candidates are often required to
possess some sort of leadership experience and skill set. This is
because long-term leadership potential is one of the most integral
requirements for IB recruiting. In other words, will a banker be able
to lead large-scale projects when they get promoted into an
associate position or vice president position. While first-year
analysts do lead specific opportunities and deals, they don’t often
have the final say or deal-breaking decision as leadership abilities
are developed after years of experience.
In all positions of the overarching investment banking hierarchy
(analyst, associate, vice president, and managing director),
convincing and presenting is bankers’ primary job. As sales are a
massive part of banking, bankers need to communicate effectively
depending on their target audience and present to achieve their
purpose. This skill can be developed through constant networking
with professionals from all industries and cultures. Not only will
this allow one to encounter different situations and people, but it
will also allow them to build a robust network of contacts.

By practicing these skills early in your financial career, not only will
you have an advantage when it comes to finance-related
academics, but these skills will also become second nature by the
time IB recruiting season comes around.

CONCEPT OF FIT

As we may know by now, investment banking is a lucrative career

comparative to other careers in the financial services industry. But
it simply isn't for everyone. While you may have a dying desire to
earn six-figure salaries straight out of undergraduate studies, one
must keep in mind the high-pressure and high-stakes environment
such careers demand. Not to mention the poor work-life balance
and abnormal working hours.

Therefore, when considering investment banking specifically, be

sure to ask yourself some of these questions:

Am I willing to work 80-100+ hours a week?

Will my personal life visions hinder my performance?
Do I thrive in high-pressure environments?
Am I willing to work in this occupation for 5-10 years?
Do I possess the required skill set to enter banking?
Am I able to maneuver and adapt to any given circumstance?
Can I react to failure well?

After self-assessing, if you believe that you aren't suited for

investment banking, don't panic. There are plenty of careers in the
financial services industry that are just as rewarding. Such careers
include, but aren't limited to financial consulting, corporate
finance, and wealth management. On the flipped side, if you
believe investment banking is truly a good fit for you both short-
term and long-term, then go for it.
HIERARCHY & TASKS

Analyst, Salary (80-150k), Hours (80-100)

04 Analysts spend their time researching
companies, building financial models on Excel,
and creating Powerpoint presentations.

Associate, Salary (200-450K), Hours (65-75)

03 Other than working alongside Analysts on
financial modeling and pitch books, Associates
typically allocate their time to clients.

Vice President, Salary (350-700K), Hours (60-80)

02 Vice Presidents typically deal directly with
clients and serve as bridges between the clients
and the bank teams in the lower ranks.

MD, Salary (600k-2.5m), Hours (50-70)

01 As the name suggests, Managing Directors
oversee operations. They solicit new clients,
meet potential investors, and build relationships.

BANKING LIFESTYLE

After looking at that compensation, you might have been set on

this career. However, if you are trying to maintain a healthy work-
life balance, you may want to rethink your decision. Bankers work
extremely long hours per week. Not to mention the work pressure,
unpredictable nature, and little leniency in everyday tasks. Life as
an investment banker is hectic, but for those who wish to live
through competition, risks, and perform well then investment
banking could be a viable option.