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Job Description of Investment Bankers

Aparna Iyer
The job of an Investment banker involves big bucks. An investment banker helps companies, and governments raise capital by acting as an intermediary between the issuer of the security and the investing public. Ever wondered how far they stretch themselves to earn the way they do?
A business can expand, only if it raises sufficient capital. This can be done by issuing stock or by assuming debt. Generally, the former is preferred, since stockholders are the owners of the company and are entitled to dividends, while creditors have to be paid interest, and the company has to ensure the eventual repayment of principal.
People who act as representatives for financial institutions and are involved in raising equity and debt for companies, are known as investment bankers.
Investment banks assume the risk and the responsibility of selling the IPO and the bond issue to the investors by underwriting the issue. Besides underwriting, the investment banker also performs a horde of other activities.


✔A lucrative field all by itself, a career as an investment banker is challenging, yet equally interesting. Your aptitude matters, and attitude counts in this career line.
Besides, you sure are stenciled for the job of an investment banker, if you are highly motivated, communicate adroitly, are sharp at analyzing market conditions, have strong mathematical skills, and possess the neat reasonableness to calculate risks.
This is not a job for the fainthearted. Risk is no anomaly to this profession. You have to mold yourself with it. As an investment banker you need to roll your bank into earning rich profits.
✔ The investment banker must be well acquainted with the current trends of the market and how they may affect the investments. This is where the calculative mind comes into play. 
This profession demands knowledge of recent economic trends, and regulations passed by the government. He must be ready to head on risks, and incur the consequences, as well. A tact to handle tough situations and resort to remedial measures to resume control is a requirement.
✔ The nature of the job is dynamic, and more often than not, keeps you at the edge of your seat. Besides, it also has extensive opportunities for travel. Associating with clients on a global rostrum is a proposition most investment bankers look forward to.
It is also the investment banker's duty to tour a company if their client is to go through a process of acquisition or merger. The concept of merger and acquisition will be discussed shortly. Know that investment bankers are known to work hard. Very hard. They, more often than not, are driven to work their fingers to the bone to stand true to their role.

Job Description

❒ As mentioned earlier, an investment banker is the representative of the financial institution (investment bank) that helps companies and governments raise capital. -- Unlike traditional banks, they do not give loans or accept deposits from the public.
Once the investment banker decides to underwrite the issue, the securities -- both debt as well as equity -- are purchased by the investment bank at the agreed price, thus guaranteeing the issuer of receiving funds.
This guarantee holds good even if the investment banker is unable to resell the issue due to undersubscription. In this case, the investment bank is forced to hold a part of the issue.
In case of oversubscription, the investment bank earns a huge profit by selling the issue for a high mark-up. The risk and reward, thus, are proportional. Sometimes, investment bankers may be required to buy the issue in the open market to peg prices.
❒ Investment bankers are contacted in case of mergers and acquisitions to negotiate either the buy or the sell side of the deal. -- A merger refers to the process by which two companies become one entity. Mergers could be horizontal, vertical, or conglomerate.
In case of an acquisition, a larger company takes over the smaller company. If the target has a strong brand name, the acquirer prefers retaining it. One must note that an acquisition does not result in the formation of a new company.
An investment banker may be called upon to work for the buy side or the sell side. The latter involves finding an acquirer with a strong strategic fit, while the former involves pursuing a suitable target. An investment banker's advice may be sought, when the prudence of a merger or an acquisition is questionable.
While working for the sell side, the investment banker may help find a solution to help the company restructure its equity or debt and ease its financial distress. In other words, corporate restructuring is also one of the duties of an investment banker.
❒ Investment bankers are also called upon for facilitating private placements. -- Many a time, companies may decide to opt for private placement to avoid the hassles associated with public offering.
In case of private placements, companies do not have to register the placement with the Securities and Exchange Commission (SEC) or submit audited reports on a yearly basis to the SEC. Sometimes, companies that were previously public, may also decide to become private to tide over difficult times.
The bottom line: People who are comfortable with the idea of crunching numbers, working long hours, and have excellent analytical and interpersonal skills may explore their opportunities with a career in investment banking.