READING TEXT: BANKING

WEEK: 3

STUDENT’S CODE: A34332

STUDENT’S NAME: NGUYEN HAI LINH

1. Text

Investment banking career paths

Investment Banker Positions

The career of an investment banker progresses along a fairly standard path.
Investment banking positions from junior to senior:

 Analyst (grunt)
 Associate (glorified grunt)
 VP (account manager)
 Director (senior account manager, rainmaker in training)
 Managing Director (rainmaker)

Some banks call certain investment banker positions different names or have
added levels of hierarchy. For example, sometimes banks separate Senior Vice
President from Vice President. Other times, Director is split up into Director and
Executive Director (more senior). However, regardless of the names, the general
job functions of each relative position tend to be consistent bank to bank.

If you are an undergraduate, you are applying to banks with the aim of landing an
investment banking analyst position. Assuming you do well, have an interest in
staying, and there is a need, some banks offer direct promotions from analyst to
associate instead of requiring that you go back and get your MBA (typically called
“A to A”). If you are an MBA student, you are applying to banks with the aim of
landing an investment banking associate position and aspire to work up the ranks
to Managing Director one day.

The Investment Banking Analyst

Investment banking analysts are typically men and women directly out of
undergraduate institutions who join an investment bank for a two-year program.

After two years of working for the investment bank, top performing analysts are
often offered the chance to stay for a third year, and the most successful analysts
can be promoted after three years to investment banking associate. Analysts are
the lowest in the hierarchy chain and therefore do the majority of the work. The
work includes three primary tasks:  presentations, analysis, and administrative.

Investment banking analysts spend a lot of time putting together PowerPoint

presentations called pitch books. These pitch books  get printed in color and are
bound with professional looking covers (usually in-house at the bulge brackets)
for meetings with clients and prospective clients. The process is very
formatting intensive, attention to detail is critical, and many analysts find this part
of the job to be the most mundane and frustrating.
The second task of an analyst is analytical work. Pretty much anything done in
Excel is considered “analytical work.”  Examples include entering historic company
data from public documents, financial statement modeling, valuation, credit
analysis, etc.  Interview questions often focus on this part of the job and Wall
Street Prep’s training programs are focused on demystifying the analytical work
that analysts are expected to perform.
The third main task is administrative work. Such a task involves scheduling, setting
up conference calls and meetings, making travel arrangements and keeping an
up-to-date working group list of deal team members. Lastly, if you are the sole
analyst on the deal and it is sell-side (you're advising a client on selling its
business), you may have control of the virtual data room and will need to keep it
organized so all parties have access to the information.  It is an interesting
experience in that there are several data room providers and many times they will
try to win business by offering free sports tickets, etc. It gives you a chance to feel
how your clients feel as you try to win their business.

The Investment Banking Associate

Investment banking associates are usually recruited directly out of MBA programs
or analysts that have been promoted.  Typically, bankers will be at the associate
level for three and a half years before they are promoted to Vice President.
Associates are also categorized into class years (i.e. First Year, Second Year and
Third Year or say, Class of ‘05, ‘06 and ‘07). The number of years it takes for
Associates to get promoted actually depends on the bank. Sometimes it could be
more than three and a half years if there is not a need for another Vice President.

At that point, an associate should evaluate whether it makes sense to stay at the
bank or try to move elsewhere to receive a promotion.

The investment banking associate’s role is similar to the analyst's role, with the
additional responsibility of serving as a liason between junior and senior bankers,
and in some instances, to work directly with clients.

How Analysts and Associates Work Together

Analysts and associates work very closely together.  Associates check the work of
analysts and assign them tasks.  Checks could be in-depth where the Associate
literally looks through models and checks inputs with filings or it could be much
more high level where the Associate looks at an output and determines whether
the numbers make sense.

The Senior Bankers (VPs and MDs)

Senior bankers primarily source deals and maintain relationships. Senior bankers
have a wide variety of past backgrounds ranging from investment banking to
corporate executive management.

Aside from relationships, senior bankers often understand their industry

landscape at a very detailed level and can anticipate deals in the sector. As
economic environments shift, they anticipate when companies will need to raise
capital or when strategic discussions (M&A, LBO) are necessary. By anticipating
such needs, Managing Directors can start crafting appropriate pitches early-on to
clients with the aim of turning these pitches into live deals.

Reference: https://www.wallstreetprep.com/knowledge/investment-banking-
careers/
2. Summary

The essay shows the reader some information about the position in banking
career and their features as well. Firstly, investment banking analysts are typically
men and women directly out of undergraduate institutions who has 3 primary
tasks are presentations, analysis and administrative. The second’s position is the
investment associate which has the role is the additional responsibility of serving
as a liason between junior and senior bankers and in some instances, to work
directly with clients. Last but not least, senior bankers primarily source deals and
maintain relationships. To sum up, to have the career of an investment banker
progresses, people should find out the characteristic, the role and function of
each position.

3. Glossary

Number Word Pronunciation Meaning Example

1. Hierarchy /ˈhaɪərɑːki/ A system, She's quite high

especially in a up in the
society or an management
organization, in hierarchy.
which people
are organized
into different
levels of
importance
from highest to
lowest

2. Rainmaker /ˈreɪnmeɪkər/ A person who He is American

makes a rainmaker.
business grow
and become
successful
3. Glorify /ˈɡlɔːrɪfaɪ/ To make He denies that
something the movie
seem better or glorifies
more important violence.
than it really is

4. Demystify /diːˈmɪstɪfaɪ/ Make This book

something (a attempts to
difficult subject) demystify
clearer and technology.
easier to
understand

5. Mundane /mʌnˈdeɪn/ Not interesting I have done a

or exciting mundane task.

6. Frustrating /frʌˈstreɪtɪŋ/ Causing you to It's frustrating

feel annoyed to have to wait
and impatient so long.
because you
cannot do or
achieve what
you want

7. Administrative /ədˈmɪnɪstrətɪv/ Connected with Her duties are

organizing the purely
work of a administrative.
business or an
institution

8. Pitch /pɪtʃ/  An area of The rugby tour

ground was a disaster
specially both on and off
 prepared and the pitch.
marked for
playing a sports
game

9. Prospective /prəˈspektɪv/ Expected to do I had a phone

something or to call from a
become prospective
something client today.

10. Craft /krɑːft/ An activity Vietnam has

involving a many famous
special skill at silk craft
making things villages.
with your hands