How does an MBA prepare you for a career in investment banking?

By Expartus - Jan 6, 05:00 AM Comments [0]

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Are you interested in switching to a career in the field of investment banking?
If youve read our earlier articles in the How to Switch Careers to Investment Banking with an
MBA series, you know that investment banking can be a very lucrative and intellectually
challenging field but it is also very difficult field to break into, and requires extremely hard
work to do well in.
If you plan your educational path carefully, getting an MBA can be a very smart way to switch
careers to investment banking. It shows banks that you are smart and a hard worker, and gives
you a chance to learn about the world of finance.
In this weeks article, well take a look at how an MBA prepares you for a career in investment
banking. Lets get started.

Investment Banking Opportunities for MBAs

The Investment Banking industry has been hit by reputation crisis in the last few years, as
traditional corporate finance and Mergers and Acquisitions (M&A) jobs have been seen as less
attractive than Private Equity or Asset Management.
However, the demand for MBAs within investment banks is still strong, which means that there
are more opportunities and less competition. Candidates with MBAs enter an investment bank at
the Associate level, rather than the entry-level Analyst positions.

Many of the big investment banks run specific Associate-level internships or full-time tracks for
MBA recruits, and they often have specific in-house development programs.
Some banks, like JP Morgan, actively look to recruit candidates for their early advantage
program as students embark on their MBA. They also run a summer Associates program
specifically for MBA students.
How MBAs Can Get Hired Over Their Competition
Many investment banks prefer to hire MBAs over other masters-level degrees like a Masters in
Finance. Candidates who have earned an MBA are likely to have a broader background in
financial and business topics.
If you know that you want to use an MBA to switch careers to investment banking, you need to
be methodical about your preparation.
You should be trying to get in to the best business school you can, of course but you should
also make sure that your target schools offer programs and connections that can get you into the
kinds of companies you want to work for.
Recruiters today are often looking at a candidates soft skills, in addition to their academic
experience and work history.
For example, all Blackstone candidates have to pass the nice test. The firm looks specifically
for people who will fit their corporate culture in addition to being a high-performing employee.
Do your research about the types of firms you want to join after graduation, and look for
opportunities during your business school career to gain the skills and experience your target
firms recruit for.
Using Your MBA Alumni Network to Switch to a Career in Investment Banking
When you are considering which business schools to apply to, look for schools with a strong
network of alumni working in finance. One of the most effective tools available to an MBA
student is the strength of their schools alumni network.
Try to find out as much as possible about the recruiting process at your target schools. Which
investment banks or private equity firms are recruiting there? What kinds of positions are they
recruiting for? Where do alumni end up?
For example, London Business School reports that 28% of their 2014 graduating class went into
finance, with 12% specifically going into investment banking. Meanwhile, nearly 40% of the
Wharton 2015 graduating class went into finance, and 14% went into investment banking
specifically.

Take every opportunity to develop your network during your time in business school, whether
through attending alumni mixers, asking for informational interviews, or getting connected with
alumni mentoring programs.
Your Turn
The best way to get into your top choice business school is to show that youve done your
research, and you know exactly why you belong there. Your personal brand should reflect your
journey toward earning an MBA.
If you need help developing or honing your personal brand, a free MBA application assessment
from Expartus is the perfect first step. Well help you identify the strengths and weaknesses in
your app, so you can make the right first impression on the admissions committee.
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What Kinds of Careers in Investment Banking Can You Get With an MBA?
Posted by Chioma Isiadinso

Investment Banking is an extremely challenging field. It is hard to get in to, and requires an
incredible amount of work. Careers in investment banking are typically highly demanding with
long hours, but they are also intellectually stimulating and very lucrative.
If youve been working in another field for a while, but are considering making a switch to
investment banking, getting an MBA may be your best bet.
In the first article in our How to Switch Careers to Investment Banking with an MBA series, we
looked at the basics of investment banking.

This week, well look at the roles and career paths that are generally available within investment
banks.
Lets get started.

Typical Roles and Departments in Investment Banks

Roles at most large investment banks are divided into three main areas: front office, middle
office, and back office. Front office is the term for all the revenue-generating departments, with
front office jobs typically falling into advisory roles or capital market roles.
With advisory roles, the bank acts as an adviser to clients who need to raise capital. This is often
done by issuing debt, selling equities, or doing an IPO (initial public offering). Corporate finance
and the mergers and acquisitions departments fall under this area.
If you have prior work experience in another industry, this may give you an advantage when you
apply for a position at an investment bank. Large banks like employees who can add some reallife experience and a different perspective to their deals.
Capital market roles form the second portion of front office jobs. This encompasses sales,
trading, and research for Foreign Exchange, equities, debt, commodities, and their derivatives.
With specialist industry experience, you might be well suited to a job as a research analyst.
Some banks have their own proprietary trading desks, where they trade for their own book only
and not for clients. Today, these teams are usually filled with employees who hold mathematics
PhDs (called Quants) who are very talented in using algorithms to build quantitative trading
models according to the banks trading philosophy.
These proprietary trading teams are like an internal hedge fund. They are usually standalone
groups that are run as an autonomous department within the investment bank. Their activities are
guided by strict risk management principles and pre-set trading limits.

Middle and Back Office Roles in Investment Banks

While many people think of the more flashy front-office jobs like stock trading and mergers and
acquisitions when they think of careers in investment banking, there are actually many very
interesting roles behind the scenes.
Middle office roles serve as support for the front office. They work closely with the front office
team, often sitting on the trading floor alongside their front office colleagues.
Roles in the middle office include risk management, performance analyst, portfolio control, and
trade support. These roles are often the liaison with the back office too.
Back office roles are mainly in operations, which includes regulatory compliance, trade
settlement, and accounting. Some of the larger investment banks offer other fee-generating
services, like wealth management, prime brokerage for the hedge fund industry, and tax
arbitrage.
Your Turn
Using an MBA to switch careers to investment banking requires a lot of hard work and careful
planning. In order to succeed, youll need to use all the resources you have at your disposal.
A free MBA application assessment from Expartus can give you a much stronger shot at getting
into a top business school.
Well give you an honest, unbiased assessment of your application as it stands, as well as an
analysis of your strengths and weaknesses. Youll also learn what to highlight in order to develop
your personal brand and telling a compelling story is the key to getting admission committees
to invest in you.

Can an MBA Help You Get a Career in Investment Banking?

Posted by Chioma Isiadinso

Have you been thinking about making a change in your career field? Getting an MBA can be an
excellent way to make the switch, but it requires a lot of planning to make sure that you get the
most you can out of the time and effort you put in.
This first article in our new series, How to Switch Careers with an MBA, takes a look at the
world of investment banking. Many MBA students wind up in a financial field after graduation.
Could investment banking be the right fit for you?

What is Investment Banking?

Investment banks are financial intermediaries who facilitate the raising and investing of capital.
They act as middle men between corporations and investors. The corporations may be looking to
raise capital in order to buy equipment, expand their service area, or grow their business.
Investors, of course, are always looking for assets that will give them a healthy rate of return.

Investment banks act as go-betweens for this process. They can do this through organizing a
public offering of debt and equity, privately placing those assets, or asset securitization.
Investment Banks are also market makers for debt and equity in that they trade equity, debt, and
derivative instruments.
Investment banks work with a variety of financial instruments, from common ones like equities,
debt, and commodities to more exotic instruments like vanilla fixed rate interest rate swaps.
These banks are also responsible for designing new financial instruments like asset- or mortgagebacked securities, credit default swaps, and carbon emission trading.
One example of these asset securitization instruments that got a lot of press was the
securitization of David Bowies royalties. He received an upfront payment of $55 million, and in
return the investors who bought the bonds will receive the periodic income from his royalty
payments for the next 10 years.
Investment Banking Goes International

Investment banking firms are usually divided into Tier 1 and Tier 2. Tier 1 banks, the largest and
most profitable investment banks, are often referred to as the bulge bracket. This includes wellknown names like Goldman Sachs, Merrill Lynch, JP Morgan, Citi, UBS Morgan Stanley and
Credit Suisse.
In the UK, Merchant Banks were the institutions that raised capital for the corporations. They
began in the late 18th Century as intermediaries for traders. Over time, they added more services,
including private banking and asset management.

Following the 1986 Big Bang, when UK financial markets were deregulated, many of these
Merchant Banks were allowed to diversify their business and add or merge with stock
brokerages.
In the last two decades, many of the smaller Merchant Banks, unable to compete or keep up with
technological change, have merged with larger international Investment Banks. As a result, the
top investment banks in the US and the top investment banks in the UK share many of the same
names:
Top Investment Banks in the US
Goldman Sachs
JP Morgan
Bank of America Merrill Lynch
Citi
Deutsche Bank
Barclays Bank
Credit Suisse
Wells Fargo & Co
RBC Capital Markets
Top Investment Banks in the UK

 JP Morgan
Goldman Sachs
HSBC Bank
Barclays Bank
Morgan Stanley
Deutsche Bank
Citi
Bank of America Merrill Lynch
Credit Suisse
Black Rock
Your Turn

Does a career in investment banking sound interesting? Our next article in this series will look at
how an MBA can prepare you for the field.
Top investment banks love to recruit talent from top business schools. But if youve been out of
school for a while, it can be hard to know where you stand with the b-school applications
process.

A free MBA application assessment from Expartus offers valuable insight into the strengths and
weaknesses of your application. Theres no obligation, so sign up today to learn how best to
leverage your personal brand.

How to Switch Careers With an MBA

Posted by Chioma Isiadinso

Have you been thinking about changing careers, or maybe even switching industries entirely?
Are you wondering whether business school is the right choice to get you where you want to go?
Earning an MBA requires a significant investment in money and time.
In addition to the two years of full-time schooling required for most MBA programs, youll need
to allow for plenty of time to study for the GMAT or GRE, write your business school
application essays, and prepare the rest of your application materials.

The cost of an MBA ranges from around $32,500 per year for mid-tier schools like the
University of Connecticut, to well over $60,000 a year for top-ranked business schools like
Wharton, Columbia, and Stanford.
If youre planning to put in all the time and effort required to earn an MBA, the end goal had
better be worth it.
What Jobs Can You Get After You Earn An MBA?

For some students, the post-MBA path is clear: they are looking to advance within their own
industry or company, and they use an MBA program to develop management skills and
credibility. This is especially true for students who planned their path to business school while
getting their undergraduate degree.
But for other students, getting an MBA is a perfect opportunity to change careers. These students
may enroll in dual-degree programs, or look for a business school that offers majors or a strong
slate of industry-specific electives.
With the right planning, earning an MBA can be an excellent way to break into a new industry
without starting at the bottom of the ladder.
Our upcoming series, How to Switch Careers With an MBA, will offer insight and advice for
students considering their path after business school.
If youve been wondering about how to use an MBA to switch careers to investment banking,
asset management, management consulting, or many other highly sought-after positions, youll
find valuable information in these articles.
Your Turn
The Expartus blog is packed with everything you need to know about b-school: choosing the
right MBA program, getting in to business school, planning your educational experience, and
landing a career you love.
Have questions about the process? Want to know what the really experts think about your MBA
application? Were here to help. You can get in touch with us via Twitter or Facebook, email us
at info@expartus.com, or get started with a free MBA application assessment.