Investment banking is a complex and competitive industry that requires expertise across a wide range of financial concepts and skills. When looking to break into investment banking or advance your career, it’s important to understand and demonstrate capabilities across key investment banking concepts. This article provides an investment banking keywords list covering major topics including financial modeling, valuation, mergers and acquisitions (M&A), capital markets, asset management, and more. Proper utilization of these investment banking keywords can showcase your knowledge during networking, resumes, interviews and workplace competency. The higher_word industry relies on technical proficiency as well as soft skills like communication, leadership and problem solving.
Core financial modeling keywords in investment banking
Financial modeling is a critical skillset in investment banking, enabling analysis and valuation of companies, transactions, and investment decisions. Key modeling keywords include comparable company analysis, precedent transactions analysis, DCF modeling, LBO modeling, M&A models, sensitivity analysis, football field analysis, accretion/dilution analysis and outputs like NPV, IRR and total shareholder return. Investment bankers construct models using Excel and VBA and interpret the outputs to advise clients and execute deals. Advanced modeling capabilities like complex integrated financial statement modeling, forecasting, scenario analysis and optimization are differentiators.
Key valuation methods and analysis in investment banking
Valuation is the core skill of estimating what an asset or company is worth, underpinning all key investment banking workflows like M&A and capital raising. Investment bankers use valuation methods including DCF, multiples, precedent transactions, LBO analysis and others to value companies. Keywords here include WACC, terminal value, EV/EBITDA, P/E, transaction comps, trading comps and valution outputs like equity value, enterprise value and per share value. Bankers apply various valuation methodologies, run sensitivities, assess ranges, and determine appropriate valuation multiples in deals.
Critical mergers, acquisitions and restructuring keywords
Mergers and acquisitions (M&A) and broader restructuring activities are a major component of investment banking, involving buying, selling, dividing and combining companies. Key M&A keywords include takeovers, mergers, acquisitions, divestitures, spin-offs, carve-outs, split-offs, hostile vs. friendly deals, synergies, types of M&A advisory and M&A defenses. Restructuring also covers concepts like Chapter 11, pre-packaged bankruptcies, debtor-in-possession (DIP) financing and distressed M&A. M&A modelling skills, deal process expertise and advising clients on deal strategy are central for investment bankers in M&A.
Capital markets concepts in investment banking
Raising capital via equity and debt markets is a key part of investment banking, bringing in funds for corporate clients. This covers IPOs, follow-on offerings, rights issues, private placements, PIPEs, convertible bonds, high yield debt, leveraged loans, credit ratings and more. Key capital markets keywords also include bookbuilding, roadshows, syndicates, underwriting, fees, discounts, commissions, drafting prospectus documents and more. Investment bankers pitch and execute deals and also provide aftermarket support using their expertise in capital markets.
Other essential investment banking skills and knowledge
In addition to the above, investment banking requires a diverse skillset and knowledge: Financial statement analysis using key ratios and metrics, building integrated financial models, comparable and precedent transaction analysis for valuation, establishing client relationships, drafting investment memoranda and marketing documents, conducting due diligence, structuring innovative deals, managing complex projects, leading teams and interfacing with various stakeholders are some examples. Domain expertise in industry verticals, asset classes, geographies and products is valued greatly in investment banking.
The investment banking keywords list provided here covers major concepts and skills like financial modeling, valuation techniques, M&A, restructuring, capital markets, financial analysis and more. Expertise in these areas is essential for successful investment banking careers. However, technical skills must be complemented by leadership abilities, problem solving skills, communication and interpersonal skills to excel.