Reviewed by Sep 30, 2020| Updated on
An investment banker is a person who often operates as part of a financial institution and who is concerned primarily with raising capital for companies, governments, or other organisations. Investment bankers also work at investment banks, including Goldman Sachs (GS), Morgan Stanley (MS), JPMorgan Chase (JPM), and Deutsche Bank (DB).
Whether an investment banker is associated with such business or not, he or she will be assisting with big, complex financial transactions. These could involve structuring an acquisition, merger, or sale to a company or client party.
The issuance of shares as a means of raising capital is also a key activity. It includes the development of comprehensive Securities and Exchange Commission (SEC) documents, which is required for a business to go public.
Before a company moves forward, an investment banker can save a client time and money by recognising risks associated with a given project. The investment banker is, in principle, an expert in his field who has a finger on the pulse of the current climate of investment.
Often, companies and non-profit institutions turn to investment bankers for advice on how best to finance their growth.
An investment banker also helps with pricing financial instruments and regulatory requirements to meet. Sometimes, when a company holds its Initial Public Offering (IPO), an investment bank may directly buy all or much of the stock in that company, serving as an intermediary.
In this situation, the investment bank will then sell the company's shares to the public market, acting on behalf of the company going public, generating instant liquidity.
Investment bankers need to have outstanding mathematical crunching skills, good verbal and written communication skills, and the ability to work extremely long and gruelling hours. Typically, the education requirements include an MBA from a top-notch college.