A Day In the Life of an Investment Banker: An Insider Guide
That’s what you will often hear when people are talking about a day in the life of an Investment Banker.
But, had you ever wondered how exactly they spend those hours? I mean, it couldn’t be just random typing on the board or drinking coffee, right?
What exactly do they do?
How does their work look like each day and each week?
If you’re an aspiring investment banker, I’m sure you’re curious to know what they do.
You want to see an insider view of how it really looks like versus what you read in books and blogs.
Well, here it is, a sample workweek of a typical investment banker working the grueling 80 hours.
First, some disclaimers
The daily activities discussed here are not representative of all investment banks.
I chose the scene where the banker is working for a big bulge bracket bank in a big financial city (like New York or London).
What do bankers do? For bankers, some days will be bad and some are not.
Here, we’ll show you Monday and Friday as busy days. Wednesday and Saturdays will be shown as not-so-busy days.
They are shown this way for illustration purposes and do not mean, for example, that Monday will always be busy for junior bankers.
With these disclaimers in effect, we’ll proceed now to the life in a day of our featured investment banker.
6:00 AM: Woke up to the beep of my smartphone. Aside from 15 text messages, there are several missed calls as well!
There’s a presentation for a client I promised I will finish yesterday (yes, I know it’s Sunday). However, I haven’t finished it yet. Can I finish it on the sub?
After a quick shower, I got coffee from a local coffeehouse.
8:00 AM: I almost got late! I still need to finish the presentation. I need to update stock prices based on recent prices. Almost all the figures will change!
9:00 AM: Senior comes to me to hand in additional work. But I told him I have an urgent deadline and I can’t handle his assignment until my deadline at 10 AM.
He agreed. Well, he has no other choice anyway.
9:50 AM: Submitted the report to the team before the client meeting. Hope there are no big mistakes.
10:00 AM: Meeting with the client until 11 AM. Good thing there are no mistakes seen.
However, they changed some assumptions which means I have to redo the presentation again. I need to submit by 3PM. What am I, a superhero?
1 PM: Late lunch. Just a sandwich and after 15 minutes, I went back to the desk.
2:51 PM: Thanks to a lot of help from my senior; I was able to beat my 3 pm deadline. Now, I have to proceed with other pending tasks at hand.
5:00 PM: While other office professionals are looking forward to going home, I don’t. I don’t because I know there’s still a lot of work to be working on. The staffer is looking around, meaning he’s looking to forward some tasks to those available.
I hope he doesn’t spot me.
Even if he spots me anyways I still have lots of work to do.
Better get my Red Bull so that I can stay alert throughout the night.
9:00 PM: I finished all the necessary changes. I already changed it. Now I have to print it on my own since the presentation team is already out.
I hope there’s no jamming that will happen.
9:30 PM: I already finished printing. However, I forgot to change the stock price on page 2! Now it will affect all reports until page 76!
I will need to recheck all printed files
11:00 PM: I finished rechecking all the files. I now am 100% sure that everything is already correct.
11:30 PM: Now I’m rechecking printed files. I’m sending it to the associate’s desk. He’s probably going to stay until 3 AM because it’s due by 8 AM the next day.
7:50 AM: I’m now at the office. Not many urgent tasks, however, I still have lots of things to do.
One, I will be preparing some presentations for an upcoming equity IPO.
Note: Equity IPO is the process of selling initial equity shares of a company. In other words, IPO signals the first time a company is going public in terms of ownership. It is one of the most profitable sources of income for investment banks.
Two, I need to do some due diligence about another prospected IPO.
Note: In investment banking, due diligence is the audit of a company that is subject to potential investment or acquisition. The finance professionals need to ascertain the facts given by the company, which includes accounting records, growth estimates, synergy assumptions, market coverage, and other things.
Three, one of the valuation models I made must be revised and be submitted the next day. They said I need to add Equity Value/Book value among the equity value multiples.
Before we discuss what is equity value multiple, let’s first discuss what an equity value is. Equity value is simply the market capitalization of the company. It can be computed by multiplying the market value per share by the number of shares that is currently in the hands of the investors.
Equity value multiples are actually ratios that use equity value as numerator or denominator. In other words, equity value multiples measure the equity value when measured together with other measures like the market price, cash flows, dividends or book value.
Another connected term with equity value is Enterprise Value. Enterprise value is the supposed value of the company should another company buy it. It is equal to the Equity value fewer company debts plus company cash.
10:00 AM: I received a message from a high school classmate to hang out this evening. I politely declined, you know why.
12:00Noon: Usually my lunch is about 15 minutes, but now, I can take 30 minutes. I’m wishing it will already come to that season when I can take lunch for 1 hour.
3:00 PM: I’m done with the presentation for the equity IPO. I’m now doing the due diligence assignment.
7:00 PM: I’m now done with the due diligence. I also already changed my equity multiple valuations in one valuation I made for an M&A project.
7:30 PM: I’m really trying my best to find time to exercise. In 3 months, I have gained 5 kilos tk already!
So I’m now heading out to a nearby 24-hour fitness center to work out. I guess 30 minutes will do. Besides, I’m too tired already.
5:00 AM: My phone’s ringing constantly. I regret not putting it in silent mode.
One buy-side client M&A Client from Asia needs to get the update we promised by 10 AM! I'm about 80% with the merger model so I know I can submit it to my senior by 9 AM for checking.
Merger model is one of the valuation models specifically used to analyze the merger or acquisition transaction of two companies. The valuation includes analysis of costs to merge and the synergies involved.
I need to sleep for a little bit more. I had been awake since yesterday until today at 1 AM.
6:00 AM: I woke up one hour later. Still more messages, this time from my VP! Got to be fast, shower head out for coffee and go to work.
8:00 AM: I’m at the office, I’ll be on a conference call with my senior and my boss who’s on a hotel soon to meet the client
9:00 AM: We’re on a conference call. I'm feeling anxious since the boss saw a lot of things to revise; he's getting furious now. Uh oh…
We need to make changes in the assumptions, especially on the synergies. We need to add synergy benefits they can get because they will combine their factories.
9:50 AM: Finished redoing the model. I cannot do it on my own, that’s why I’m glad my senior is patient enough to help me.
We submitted it on time. Hoping now that there would be no big mistakes.
I’ll go back to the pitch book about a mining company I was assigned. This is due by 5 PM.
11:00 AM: My VP called and told us all about the revisions to be done on the merger model. Sales figures must be increased by 15%, workforce data is off and should be updated.
The cost of money should also be pegged at 10% due to updated economic forecasts.
The report should be done by 3 PM.
But wait, isn’t it that I still have a report to submit by 5 PM?
1:00 PM: after a very quick lunch, I got back to my merger model and have it checked by my senior. By 2PM we finished checking and submitted the soft file to our VP.
4:00 PM: I finished as well the DCF Model that was requested by one of my senior associates. It is due by 5PM so maybe I deserve some applause?
4:30 PM: While still working on a pitch book, the staffer came and handed me work. This time, I need to create an analysis of the financial statements of a potential buyer on an M&A we're working on.
VP B requested that I do a Board presentation for a client on Monday. He needs to receive it by 10 PM tonight. Well, another impossible request.
Guess what, based on my experience; this VP B wouldn’t check the file until Sunday. And by Sunday, he’ll ask me to revise so that it can be used by Monday!
10:00 PM: Almost there. I just need one more Red Bull. Who says Fridays are for going out?
2:00 AM: I’m done with the urgent deadlines. I said Urgent because there are a lot of other tasks. I define Urgent as something needed for today.
I need to work on Saturday. Where did the protected weekends go?
6:00 AM I’m looking at Instagram photos of my friends hanging out last night. Am I jealous? Of course!
But I don’t have time for that. Better go now to the shower. I’ll get breakfast outside and then head to the office.
I didn’t forget it’s a Saturday.
8:10 AM: I got too lazy and so I was late by 10 minutes. Well, it's a Saturday anyway.
I’m working on the valuation of the next company that we are targeting. Lately, we have a lot of deals and prospecting going on.
I'm expecting this will translate to huge bonuses at the end of the year.
11:05 AM: I was wrong! I thought VP B will read my work on Sunday. But apparently, he did hold on to his word and did the review so fast!
And I only have 4 hours to change the financial assumptions! Oh no. I’m heading out to my senior to tell this.
2:00 PM: I’m printing the files to be submitted to VP B. I’ll be rechecking this before I send out to my senior associate.
2:15 PM: Oops, the formats are off. The report is quite unreadable, better redo and reprint.
2:55 PM: We’re done with checking. Submit now to VP B.
3:00 PM: I need to finish the private company valuation I was working on early this morning. If I finish this early, I can go home early too
7:00 PM: I’m done with the urgent tasks. I’m now heading home. I think I’ll sleep until tomorrow. I guess hibernations are common to senior bankers.
What are really the tasks of an analyst?
The daily accounts mentioned above are just some of the tasks of investment banking analysts.
Here is a more comprehensive list of the tasks you must anticipate when you work as an investment banking analyst:
- Preparation of pitch books
- Creation of valuation models such as Precedent transactions, Discounted Cash Flows, Merger models, Private company valuations, etc.
- Due diligence of financial statements and other items presented in the financial reports submitted by companies in focus
- Attendance at meetings and note-taking
- Evaluate companies through financial analysis
- Advise clients with regards to their financial transactions
- Create recommendations for IPOs, private equity offerings, etc.
- Prepare investment memoranda
- Prepare management presentations
- Maintain client portfolios
- Be updated with recent events surrounding industries that cover current and prospective clients
Other boring tasks:
- Printing of reports
- Proofreading reports
- Formatting of reports
- Fixing jammed printers especially if no one’s around
- Deal with clients, seniors, even at mundane times
If you want more about the things are done by investment bankers, here’s a video of a Citi investment banker discussing his day at the office or this BNY Mellon investment banker sharing his daily work.
How do these things affect your job interviews?
Upon knowing these details about the daily work of a wall street banker, how should this affect your interviews?
This must make you anticipate questions about stress and workload. If you were asked a question regarding these topics, how should you answer?
Well, I have a big tip for you, just POSE!
Let’s have some examples:
INTERVIEWER: Investment banking, as you might already know, is quite a stressful job. There’s a lot of requirements that must be finished with utmost urgency. How do you think can you handle the stress and pressure on the job?
ANSWER: First of all, I believe that stress and pressure are important in our work. Without these two things, we will always be at our comfort zone and we’ll not go beyond what we are currently capable of.
With that said, I see stress and pressure as challenges. It will make me grow stronger and better as a finance professional.
To combat the number of tasks that must be done, I have trained myself to be organized with every work I do.
I use tools to organize myself. I will make sure that every file can easily be found, and every deadline is properly logged on my agenda/calendar.
With these, the burden of having to think of so many things will be greatly lessened.
I also maintain a positive attitude about everything in order to combat stress.
Instead of looking at a gloomy ending, I use my energy in order to find a way out or solution to the problem I am facing.
I will use this positive attitude so that I won’t be a burden to the team, but rather, an asset.
INTERVIEWER: Can you describe a time when you had a heavy workload and how did you handle it?
ANSWER: (Suppose you’re just a student yet) Well, I don’t have yet a working experience. With that, I’ll tell you one time in school when I was really doing a lot. It was during the final period of my final year at school. During that time, I was also the VP of our finance organization.
There were a lot of things to do. But despite that, I was able to pull off by doing the following.
- First, I list down all the things I need to do at our organization. I quickly did all the easy tasks. As for the other tasks, I determined which ones I can eliminate but still be an effective officer, and the tasks which can be delegated.
This allowed me to free time much time from my official duties.
- Next, I list down all my school requirements. I ranked them based on which ones needed the most attention. I scheduled more time for those that need more attention. I used alarms in order to keep myself on track. I also attended group studies in order to further my efficiency.
And with these things, I was able to work things out.
I believe being organized is what I can use to carry out a heavy workload whether at school or at the office.
What are the benefits? I mean, all these stress should have benefits, right?
Definitely, all your hard work will be paid off. Here are a few things you will get for working an extraordinary number of investment banking hours.
This is one of the most well-sought benefits of being an investment banker.
An investment banking analyst in a big financial market earns about USD60,000 to USD100,000 annually (about INR4.1-INR 6.9 million).
On top of that, they could earn bonuses of about USD10,000 – USD30,000 (about INR698,000 – INR2 million).
In India, entry-level investment bankers earn about INR800000-INR1.4M per year. But, of course, these are just industry estimates; it can even go higher than this.
Higher positions like Vice President can earn anywhere around USD200,000 –USD400,000 annually (about INR 14 million – 28 million).
Good exit opportunities
If you're an investment banking analyst, you can choose to go up the ladder and earn your additional income and title through the same bank (or perhaps other bankers)
However, there are a lot of reasons senior bankers leave an investment bank:
- Too much stress
- Never racking hours
- Lack of quality life outside work
- To search for greener pastures
- To seek faster professional growth and development
- As a rebellion against a rigid corporate ladder inside the bank
There are a lot of opportunities available for senior bankers.
You can get help with opportunities from your college alumni, from your current and previous colleagues, as well as current and previous clients.
You can work for private equity, venture capital firms, hedge funds, tech start-ups, private companies, boutique firms.
Or if you’re the businessman type, you can even start your own boutique firm!
Usually, the good time to leave your first investment banking job is 3 years.
By that time you will already have enough time and leverage to be accepted at another company.
Investment banking could give a great working experience and work ethics if done right.
A lot of finance professionals go to investment banking because of the kind of work experience they can get.
There’s a lot of good actual training you can have on a firm especially those relating to financial models and the nitty-gritty of finance and financing.
These types of experiences cannot be given to you even by the most prestigious MBA programs in the world.
Do you still want to experience investment banking?
If yes, then, I salute your enthusiasm!
Investment banking is both a stressful and rewarding career. It’s not for everyone.
But for those ready for the challenge, a lot of preparation and training must be done in order to succeed in this field.
FinanceWalk can help you by providing you with the best resources about investment banking.
If you still have more questions, you can send a message. I’ll be glad to hear from you!