What are the skillsets required to be an Investment Banker?
In recent years, investment banks have started recruiting graduates who did not study business in university. But what actually contributes to their qualifications of being an investment banker and makes them comparable with those who majored in business?
💡Financial modeling and valuation are what investment banking work pivots on. No matter if they are responsible for underwriting or M&A advisory services, analysts and associates have to spend an enormous amount of time using Excel to make advice to clients and complete deals.
The primary skills required include:
1⃣Financial modeling: Perform various financial modeling activities, for example, 3-statement models, discounted cash flow (DCF) models, and LBO models, to name but a few.
2⃣Business valuation: Adopt various valuation methods, including comparable company analysis, precedent transactions, and DCF analysis.
3⃣Pitchbooks and presentations: Build pitchbooks and PPT presentations to pitch ideas to potential clients and grow customer base.
4⃣Transaction documents: Prepare documents such as a confidential information memorandum (CIM), investment teaser, term sheet, confidentiality agreement and construct a data room.
5⃣Relationship management: Manage to help clients complete deals and assure service quality to satisfy clients.
6⃣Sales and business development: Meet with prospective clients on a regular basis to pitch them ideas, support their work, and offer value-added advice, in order to grow customer base.
7⃣Negotiation: Be a major factor in the negotiation tactics between buyers and sellers in a transaction and maximize clients’ benefits.
If you want to break into investment banks or finance roles but don’t know how to do it or do not have relevant experience, check out our Virtual Hedge Fund Analyst Program where you gain both hands-on work experience and training by our partner LBN Advisers, a long/short equity hedge fund. Past students have ended up at Morgan Stanley, Citi and Point72.
