Investment Banking Summer Analyst

 

Investment Banking Summer Analyst

The Investment Banking industry provides a multitude of career avenues. These avenues include corporate finance, sales and trading, equity research, and asset management. Most investment banking summer analysts work within the corporate finance division. And more specifically within the mergers and acquisitions team. The analyst role involves highly analytical tasks. It focuses on organizing and generating data and materials for the deal process. Higher-up positions focus on managing client relationships and presenting deal materials. In this hierarchical structure, the analyst originates all materials.  These materials then undergo multiple revisions before reaching the final product. This job has a strong focus on creation and then heavy revision to make the material ready for the client. Below is a list of the main tasks an analyst will do:

• Financial Valuations 

• Marketing Materials

• Administrative Tasks

Financial Valuations

Financial valuation is often regarded as the most interesting part of the role and most important of the deal process. The analyst will be responsible for formulating the three most common financial valuation methods: comparable transactions, comparable companies, and a financial model. The financial model often comes in the form of a discounted cash flow analysis. The first two methods of valuation require intensive research on online applications like Cap IQ. These online applications filter all available companies to find the most similar companies. The goal of this type of financial valuation process is to match the company they represent with the most similar companies. The two avenues are recently transacted companies or similar publicly traded companies. The analyst will receive multiple revisions from senior members. These revisions will tweak what companies are in the analysis.

 The second category of financial valuations is the discounted cash flow. The discounted cash flow shows the present value of future cash flows. This step takes a lot of work from the analyst level, involving deep understanding and analysis of the financial statements. The financial statements create the basic framework for the model. Senior management will critique each assumption and growth metric to ensure it's reasonable. Since the analyst creates the model, defending each metric used becomes necessary. This is to ensure that a client does not see a mistake or a grotesque assumption. A mistake would give a poor look to the team and diminish trust. This is why a high level of work quality is so important in this role. As a result, the analyst should expect many revisions on their deal materials. In Each position above the analyst will monitor the work diligently to ensure its quality. 

Marketing Materials

Marketing materials are often seen as a less glamorous side of the job yet still a necessary part. People sometimes attribute this part of the job to moving logos around in PowerPoint, but it is a very necessary part of the deal process. Marketing materials illustrate the qualitative side of the business to a prospective client. This includes what the company does, how its operations work, business plan, plans for growth, and management team. The CIM, confidential information memorandum, is a technical name for the main marketing presentation. Senior members expect the analyst to have a deep understanding of the business, its inner workings, and its plans for growth. The analyst will then create the CIM from this information to show how the company operates. Most banks have a general guide for the CIM. However, the analyst will work alongside the senior members for specific information on each slide. There is a large amount of strategy that goes into the CIM. It is very important to show the company in the best possible light to the client. Because of this, the first revision will look very different from the final. The analyst creates the individual slides. The analyst should anticipate numerous revisions to their deal materials.

 Administrative Tasks

While the two categories above showcase the main purpose of an investment banking analyst, there are also a multitude of other tasks that take up a considerable amount of time. These items could include scheduling, record-keeping, pitch materials, and reports. Also, because an analyst is the lowest on the hierarchy, higher positions will push off work to this position for them to complete. These materials are often outside of the scope of a deal they are working on. This could include a managing director asking for a list of available targets for a new deal, an industry write-up, or a one-pager on a particular company. The analyst is often tasked with the ancillary tasks from senior members. This is important so that more senior members can focus on managing clients and bringing in deals. 

An investment banking Summer Analyst should excel at managing many projects, deliverables, and deals at one time. This is a very demanding job as the most entry-level positions should know how to complete all deal materials. This basic understanding is also crutched with keeping their head above water in the amount of work. This position can lead to a lot of stress and anxiety. There are a multitude of materials getting passed down to the analyst which are all expected to be at a high caliber. The overarching purpose of an investment banking analyst is to deeply understand the process and materials. This knowledge will shape their client interactions later in their career. 

Qualifications 

• Strong academic performance and relevant coursework

• College Degree 

• Proficiency in Microsoft Office

• Deep analytical and quantitative skills

• Relevant internship experience

• Teamwork skills

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