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Take a closer look at investment banking - Abraham Valera Roble's experience

Take a closer look at investment banking - Abraham Valera Roble's experience



Investment banking is undoubtedly one of the most attractive career paths for students studying economics or finance, and this is not surprising given the high starting salaries and benefits for recent graduate students. However, before you can participate in a recruitment process one must understand the differences between investment banking firms and the advantages and disadvantages of joining a boutique as opposed to a large company. I am Abraham Valera, 3rd year student of International Business Economics and I am doing my internship at CREA INVERSIÓN, an investment banking boutique. CREA INVERSIÓN specifically focuses on technology and healthcare M&A; and equity capital raising.

There are three main type of players in the investment banking industry: Bulge brackets, boutiques and regional banks. The difference between these are the range of services offered and the revenues generated. Bulge bracket banks are the biggest and the most important ones and can have turnovers above the $80 billion mark.

The services offered by large investment banks are very varied and the tasks performed by each of the departments are completely different. Some of this departments are Equity and Debt Capital Markets (where banks help companies generate money from investors by selling shares, stock or debt), Financial Advisory (mergers and acquisitions advisory), Corporate Lending (banks extend loans to their customers called bridge loans), Sales and Trading (constructing financial instruments to be bought or sold besides trading stocks), and finally Research (banks advise investors whether to buy a particular investment). Therefore, prospective applicants must be aware of the differences between these and decide where they could fit best. It is worth noting that while large banks offer most, if not all, of the above- mentioned services most boutiques focus on one or two of these departments being financial advisory the most common.

With regards to M&A, besides the services offered, investment banks also differ in the sectors and countries they specialize in. The main sectors are healthcare, energy, natural resources, industrials, technology media & telecom, consumer products and food & beverage. The way it usually goes is that boutiques differ by focusing on specific sectors and bulge bracket banks by specializing in specific countries. As an example, CREA INVERSIÓN is a boutique that specializes in financial advisory and equity capital markets while Moelis & Company, another boutique, specializes in debt capital markets. Similarly, Barclays specializes in serving the United Kingdom while Nomura specializes in Asian countries.

The recruitment process to enter investment banking is standardized and can be quite challenging so those students interested must be prepared to excel in a variety of tasks. The first step is sending your CV and cover letter which is known as screening and consist of filling in information about yourself. Then, applicants are given numerical, logical and critical reasoning tests to understand how they think. Personality tests are also quite common. Those successful are then invited to a video interview where they will be asked competency and technical questions to test how well they are prepared to work within investment banking and understand their motivations for doing so. Finally, those who make it past this phase are invited to the head offices for what is known as a ‘super day’, a day where candidates spend around 6 hours having back-to-back interviews and working in teams.

Finally, for those interested joining an investment bank I would definitely recommend looking at Goldman Sachs, Morgan Stanley, JP Morgan, Citibank, Nomura, Barclays, Mitsubishi UFG, Deutsche Bank, Credit Suisse, UBS and Bank of America Merril Lynch as these are the biggest international players.

Would you like to know more about investment banking and related sectors?

You can learn about different selection processess in Investment Bankingrecommendations for the world of Finance or the experience of a fellow student in the Corporate Risk Department of a Bank