The Investment Banking Hierarchy
Investment banking is a very structured industry in terms of position hierarchy. The following is a summary of each of the roles within investment banking and the responsibilities for each.
Investment banking summer analysts are hired in order learn more about the firm, feed the firm’s talent pipeline, and to support the needs of the investment banking analysts. Your goal as an investment banking summer analyst should be to make the life of the analysts that you are working for as easy as possible. By the end of the summer, you should be close to a full functioning analyst yourself. As a summer analyst, you will spend 80+ hours/week on average working on various analyses and pitch books, as well as on producing the necessary transaction documents once the business has been awarded to your bank.
Investment banking analysts are hired to support the firm’s investment banking division. Analysts provide the majority of analytical work on a deal team. Analysts are ultimately responsible for the creation of pitch books, financial models, and all other documents that come up throughout the course of a deal. Typically, work can vary between a lot of different activities including:
- Conducting industry research
- Developing various financial models
- Prepare presentation materials
- Draft transaction documents (e.g. investor presentation, confidential information memorandum, rating agency presentation, etc.)
- Miscellaneous tasks for the deal team
At the end of the day, your job as an analyst is to learn as much as you possibly can and make the deal run as smoothly as you possibly can. Managing Directors, Vice Presidents, and Associates love working with analysts that they can trust do quality work.
Investment banking associates are the communicators between the senior members of the deal team and the analyst. As the most basic level, associates are responsible for working on the analyses and presentation materials, as well as making sure all of the analyst’s work is completed correctly.
Associates mustpossessa variety of skills. They need to be good at managingpeoplethrough actively communicating expectations and timelines to their analysts. Associates must also understand the analytical work of an analyst in order to verify that it is correct. Lastly, associates must have a high-level understanding of the deal from the Vice President, Director, or Managing Director.
Investment banking Vice Presidents are the quarterbacks in the process of the deal. They take the vision of the deal from the MD and develop a plan to produce the necessary results for each client. Most Vice Presidents do not conduct the analyses themselves. It is the Vice President’s job to make sure that the client materials are correct and fit the exact needs of that particular client. Vice Presidents are often in charge of staffing for the firm. They get to decide which analysts and associates will work on what, as well as making sure that the team stays on track.
The Director role varies from bank to bank. In some banks, Directors are focused on winning new clients and business to drive revenues for the firm (similar to a Managing Director). In other firms, Directors are more responsible for internally managing the deal execution while serving as a line of communication to the client if the Managing Director is busy (similar to a Vice President type role). In any case, these are the Managing Directors in the making and are sometimes the most senior person on the deal.
Managing Directors are the big bosses. Their primary responsibility is to develop and maintain client relationships, and most importantly, bring in business. If something goes wrong during the deal process, it is ultimately the Managing Director who is responsible. Given the high stakes of many of the deals that they are leading, this can be an extremely stressful role.