Careers in Investment Banking: Corporate Finance


Thinking about a career in Investment Banking?  I-Banking is one of the best ways a young person can learn about finance and make good money right out of school.  Even if you ultimately decide to reclaim your personal life by pursuing other options, the skills you learn on Wall Street will be valuable in most business careers.  Check out the following overview, if you think you might be interested in pursuing an internship or career in Corporate Finance.

What is Corporate Finance?

The Corporate Finance group (banking or CorpFin) serves sellers of securities.  The sellers could Fortune 1000 companies that are looking to raise cash to fund growth, or they could be private companies that are looking to go public. Think of CorpFin as a financial consultant to corporations.  This is where CEOs and CFOs turn when they’re trying to figure out how to finance their operations, structure their balance sheets, or how to best move ahead with plans to sell or acquire a company.

The activities of the CorpFin department can range from providing pure financial advice to leading a company through its first equity issue, or IPO.  As a result, industry or product knowledge is key; many investment banks divide their corporate finance departments into industry subgroups such as technology, financial institutions, health care, communications, entertainment, utilities, and insurance, or into product groups such as high-yield, private equity, and investment-grade debt.

As a whole, CorpFin does any or all of the following:

-Underwrites equity offerings.  The investment bank buys all of the shares of stock for sale from a corporation or government entity and then sells them on the market to investors

-Underwrites fixed-income (debt/bond) offerings.

-Helps firms analyze their financial needs.

-Helps firms devise and implement financial strategies. For example, structuring their balance sheets and proceeding with funding initiatives.

-Determines valuations for offerings. For example, what the opening price for the stock should be.

Who Does Well in Corporate Finance?

I-banking jobs in corporate finance require critical, detail-oriented thinking.  If you have a knack for crunching and using numbers to understand patterns that influence business, you’re going to be valuable to a company.  You should also enjoy and excel at solving problems and be able to think critically about the numbers you’re working with.

CorpFin jobs also require excellent people and communication skills because you’ll be working on a team and building solid relations with clients.

This career isn’t only for MBAs.  Lawyers can be a good fit, as can experienced candidates with a strong background in a given industry.  But, with rare exceptions, some kind of advanced degree is required, and so is sales ability because it’s necessary to sell banking business to potential clients.

What type of I-Banking career are you interested in? Does CorpFin sound like a good fit?

[Photo Source : The Real Deal]

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