There are numerous reasons to consider a career in investment banking. It’s one of the jobs that present numerous opportunities to help people. An investment banker takes most of his time helping people to increase their investments and growth in portfolios, which ultimately results in improving their personal and financial lives.
Investment banks provide many finance related services some of which are raising capital for companies, merger and acquisition management, and underwriting. When raising capital for companies, they act as an intermediary between the issuer (company) and investors. These banks also help companies to restructure their equity and debt and ease their financial distress.
But do all young professionals and students remember to ask themselves whether they have what it takes to excel in an investment banking career before making a move? The career opens its doors to anyone with the ability to provide valuation estimates, personal interaction skills, work stamina, and mental and emotional horsepower. An analyst working in the investment banking sector performs valuation calculations on the myriad equity securities or debt being offered making valuation skills indispensable.
Personal interaction skills are also required to excel in this important career. Investment bankers with excellent communication skills know how to avoid disconnects and wasted efforts. They effectively communicate with external parties including lawyers, clients, accountants, and consultants. Work stamina is also required. When deadlines for deals are approaching, analysts have to take their time to ensure nothing goes wrong.
In return for the hard work, they get many opportunities to rise to the top. It’s common to find these finance experts rise throughout their career and become involved in multiple projects. During the first years in the industry, they carry out financial and operational grunt work and then progress to take more senior roles. The career gives them a great level of exposure to corporate strategy. This makes it easy for them to work later on as a CEO on corporate restructuring, strategic acquisitions, IPOs, and the likes.
James Dondero is an example of an investment banker who started as an analyst and has risen to the top. He is the co-founder and President of Highland Capital Management and has over 30 years of experience in investment banking, focused largely on distressed and high-yield investing. Mr. Dondero is also the chairman of Cornerstone Healthcare, Nextbank, and CCS Medical. He also serves on the boards of American Banknote and MGM Studios. Mr. Dondero began his career in 1984 an analyst in the Morgan Guaranty training program. Before founding Highland, from 1989 to 1993 he worked as Chief Investment Officer of Protective Life’s GIC subsidiary. His portfolio management experience includes emerging markets, common stocks, preferred stocks, mortgage-backed securities, derivatives, leveraged bank loans, and investment grade corporates.
Young professionals and students who have a burning passion for organizational analysis, market, or finance should apply for investment banking roles. These are the minimum requirements. Many famous worlds’ most successful investment bankers began by pursuing their dreams. There are opportunities for advancement and the investment field values fresh ideas than anything else as has been illustrated by the life of Dondero.