Investment banking is a highly competitive industry that requires technical skills and practical knowledge. Many students and young professionals aspire to break into investment banking but lack guidance on where to start. Reading practical investment banking books is one of the best ways to build a strong knowledge foundation. This article introduces must-read investment banking books that teach real-world practices, step-by-step modeling, deal execution, and career advice. The key books cover valuation, financial modeling, mergers and acquisitions, leveraged buyouts, debt capital markets, equity capital markets, sales and trading, and more. By reading the top books listed here, aspiring investment bankers can familiarize themselves with the business, master technical skills, and stand out in interviews.
Core valuation and financial modeling books provide the fundamentals
Two of the most essential technical skills in investment banking are valuation and financial modeling. The books Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions by Joshua Rosenbaum and Joshua Pearl and Financial Modeling and Valuation: A Practical Guide by Paul Pignataro are considered bibles for learning these core competencies. They teach step-by-step modeling in Excel and the theory and practice behind DCF valuation, comparable companies analysis, precedent transactions analysis, LBO modeling, M&A analysis and more. These books take you through real case studies and provide practice exercises to help master the skills.
Specialized books delve into specific product and industry knowledge
Once an investment banker has a good handle on foundational technical skills, they need to build up product and sector expertise. Books like Asset Securitization: Practices and Techniques, Guide to Financial Instruments: Equity & Debt, and Guide to Financial Markets & Institutions provide in-depth knowledge of key financial products like asset-backed securities, bonds, loans, derivatives, and more. Industry-specific books like Damodaran on Valuation: Security Analysis for Investment and Corporate Finance drill down into specialized valuation and modeling for industries like oil and gas, banking, insurance, and more.
Practical career books offer insider perspectives and advice
In addition to technical skills, succeeding in an investment banking career requires understanding the business and unwritten rules. Books written by investment banking insiders provide this insider perspective. Some top career-oriented reads include Monkey Business: Swinging Through the Wall Street Jungle, Investment Banking: Institutions, Politics, and Law, and Vault Guide to the Top 50 Banking Employers. These books give candid perspectives on investment banking culture, politics, key players, career timelines, and offer practical advice for aspiring bankers.
Reading a combination of technical and practical books is essential
The most successful investment banking candidates and young professionals develop both the hardcore technical chops as well as the soft business knowledge required. The books above represent a sampling of the best investment banking books for gaining these well-rounded capabilities. Reading the fundamental valuation, modeling, and deal execution books develops the quantitative skills. Complementing with insider career books, product guides, and specialized industry knowledge builds out a full perspective. Aspiring investment bankers should read a combination of these genres to fully prepare.
In conclusion, practical investment banking books teaching real-world modeling, deals, products, industries and insider perspectives are indispensable knowledge sources for those looking to break into the field. Core valuation and modeling books provide fundamentals while specialized and career-oriented reads build out a well-rounded expertise. Reading a mix of technical and practical investment banking books enables aspiring bankers to stand out.