Investment banks are divided into different groups to serve different industries and provide various financial services. The key groups include investment banking division (IBD), sales & trading (S&T), research, etc. When graduates join investment banks, choosing the right group that matches personal interests and strengths is crucial for career development.
Major groups in investment banks
The major groups in investment banks include:
– Investment Banking Division (IBD): Provides services like M&A, IPO, debt financing. Key teams are corporate finance, M&A, ECM, DCM, leveraged finance etc.
– Sales & Trading (S&T): Focuses on trading activities and building connections with institutional clients. Teams include equities, fixed income, commodities, derivatives etc.
– Research: Analysts conduct research on industries, companies and markets to generate insights for clients. Teams often align with IBD industry groups.
– Private Wealth Management (PWM): Manages assets and investments for high net worth individuals and families.
Other groups like investment management, private equity, operations also exist in large investment banks.
How to choose between the groups
When graduates join investment banks as analysts, choosing the right group involves multiple factors:
– Interests in the business: IBD focuses more on deals and client interactions, while S&T involves daily trading. Research relies on analytical skills. Assess personal interests.
– Future career plan: IBD and S&T offer different exit opps to PE, hedge funds, corp dev. Research has portfolio management, buy-side analyst roles.
– Lifestyle preference: IBD has less regular hours than S&T. Travel requirements also differ. Assess tolerance of workload.
– Industry preference: Most groups align with industry coverage. TMT, healthcare, FIG and consumer groups are common choices.
– Bank strength: Compare bank reputations in the region and business line. Boutiques excel in M&A. Goldman leads in tech deals globally.
How group choice influence career path
The investment bank group analysts start out in influences their career trajectories:
– IBD provides solid financial modeling and client interaction experience, useful for future private equity, corporate development roles.
– S&T builds deep connections in capital markets, preparing for hedge fund, asset management jobs.
– Research analysts leverage stock analysis skills better for portfolio management, buy-side analyst positions.
– Industry specialization also affects exit opps. FIG groups offer advantage for fintech roles. TMT experience helps with tech investing jobs.
Overall the group choice sets early direction. But movement across groups is possible later on. Post MBA or after several years, bankers can still realign based on new interests.
Major investment bank groups include IBD, S&T, research and PWM, serving different client needs. Choice of group provides initial career focus, but movement across groups happens later. Assess personal interests, bank strengths, lifestyle fit and future goals when selecting.