Many articles about investment banking say that as an Analyst, you’ll be “in charge of Excel and PowerPoint deliverables, administrative tasks, and responding to requests from clients and potential clients.”
That is true, but it misses the point of the Analyst role.
1. If I’m an Investment Banking Analyst, will my Job be the same as in the Job Description?
As an Analyst, your job is to do whatever it takes to support senior bankers in winning and closing deals, even if that means doing ridiculous tasks that have nothing to do with accounting or finance.
Many students from top universities kill themselves earning high grades and winning multiple internships, all to land that elusive investment banking role…
…and then they start working and are disappointed to find that most of their time is spent revising presentations, tracking buyers and sellers, and doing mind-numbing market updates.
Even in highly technical groups, you’re unlikely to spend even 50% of your time on tasks such as financial modeling and valuation.
The “average case” for your time on the job might look like this:
50% PowerPoint for Pitch Books and Other Presentations
30% Random and Administrative Tasks
20% Excel-Based Financial Modeling and Valuation
In less technical groups, such as Equity Capital Markets, you’ll spend even less time in Excel, and in more technical groups, such as Restructuring, you might spend closer to 40-50% of your time on technical tasks.
Finally, note that even if you happen to spend more time on the “interesting work,” it’s still not all that interesting.
Unlike in buy-side roles, where you might use your own research and market/customer analysis to inform your models, many IB models are “paint by numbers” where the numbers are linked to the client’s demands – even if those demands are unrealistic.
You may occasionally get something more interesting, such as an on-site visit, meeting a company’s finance team, or brainstorming potential buyers or sellers, but don’t get your hopes up.
2. Getting Straight to What the Myth is all about: Investment Banking Analyst Hours
On average, you’ll be in the office 70-85 hours per week, though you won’t necessarily be “working” that entire time.
However, you will be on call 24/7, and you’ll have to respond to urgent requests and emails all the time, making it difficult to have a life or plan regular activities.
Banks have tried to improve the hours over time with “protected weekends” and other mandatory time off, but the results have been mixed.
An “average day” in the life of an Investment Banking Analyst
9 AM – 12 PM
Arrive at the office, update a status report on potential buyers in an M&A deal, send it out, and join an update call with the client’s management team.
The senior bankers do most of the talking, so you work on a pitch book for a different, potential deal in the background.
12 PM – 3 PM
You join a few “due diligence calls” for another deal, where the potential buyer asks customers of the seller questions about why they use its products and services.
You’re just there to monitor the calls and make sure the potential buyer doesn’t go too far with its questioning. After that, you run to Starbucks with a few Analysts for a quick break.
3 PM – 5 PM
There’s a huge incident as a traveling Managing Director requests briefing materials for an upcoming pitch ASAP, and you have to scramble around to find and send hundreds of pages of reading.
5 PM – 7 PM
Your Associate comes over to review the Confidential Information Memorandum (CIM) for the client from this morning, and you start making his changes to the financial summary and market sections.
There’s a bit of downtime after this, so you order food and then shop for furniture online.
7 PM – 10 PM
As one of the VPs is leaving the office, he decides that the team needs to re-do a pitch book for an upcoming initial public offering (IPO), and he wants to see the new draft by tomorrow morning.
You start coordinating with the Equity Capital Markets (ECM) team to get market updates and case studies.
10 PM – 1 AM
The Associate signs off on the new qualitative slides in this draft of the pitch book, and he leaves the office. You continue to tweak the valuation and Excel-based parts.
1 AM – 2 AM
Another Analyst at the office is having a major problem with a complicated Excel model not working, so you decide to stay another hour to help out, and then you go home.
This is a fairly busy day, but not an outrageously busy or terrible one.
Factors that create “bad days” include:
- Multiple Live Deals: If you’re on 3-4 deals that are all active at the same time, the workload is unpredictable, and you could get streams of requests throughout the day.
- Big Upcoming Pitches: Since pitches have hard deadlines and bankers like to do unnecessary work, you could easily end up staying late or even pulling an all-nighter to finish a long and detailed pitch book.
- Last-Minute Emergencies: For example, if a traveling MD suddenly needs information for a meeting taking place in 1-2 hours, be prepared to scramble.
- “Good days” or “slow days” tend to happen when you can focus on a specific deal or client instead of being pulled in 10-15 different directions.
Interacting with management teams is probably the best part of the Analyst job, so those discussions can also create good days.
3. How about the Salaries and Bonus?
Wait… Why Would Anyone Ever Want to Be an Analyst?!!
“Wait a minute,” you say, “this job sounds awful. Most of the work is boring, you work 80 hours per week, and you deal with crazy people all day. Why would anyone do it?!!”
Base salaries at large banks in the U.S. are just under $100K USD.
Bonuses are often 0.5x to 1.0x your base salary, so average total compensation might be between $150K and $200K.
Pay is lower outside the U.S., even in other financial centers such as London, and pay also tends to be lower at boutique investment banks.
Other than salary and bonus, most IB Analysts do the job because:
- It’s Not a Long-Term Position – You do it for 2-3 years, and then you move up into senior roles in investment banking, or you move into jobs such as private equity or hedge funds.
- You Gain Access to Great Exit Opportunities – And you can win more interesting roles in private equity, hedge funds, venture capital, corporate development, and other fields after working as an IB Analyst. For more, please see our article on exit opportunities.
4. Is Investment Banking Analyst the Right Job for You?
Instead, there are two specific questions you should ask yourself:
- Do you need to work as an IB Analyst first if your ultimate goal is something else in finance, such as hedge funds or private equity?
- What is the long-term outlook for this job? For example, if you’re in high school or your first year in university, will IB Analyst roles still be around in the future? Will they be automated or displaced?
The short answer to the first question is, “No, you don’t necessarily need to start as an IB Analyst anymore if you can win a good offer at an established buy-side firm right out of undergrad.”
However, if you’re not sure what you want to do in the long term, then you can’t go wrong with an IB Analyst role because of the options it gives you.
On the second question: unless something very fundamental in the economy and financial markets changes, Analyst roles are unlikely to go away or even change significantly.
Many people also “predicted” that Analysts would go extinct after Excel was developed and adopted by everyone, and that didn’t exactly happen.
I could see programming skills becoming more important, as they have in sales & trading, but I doubt that most IB work will shift away from Word/Excel/PowerPoint in the near future.
So, once you put in the time and effort required to get into the industry, you start working, and then you start complaining about your job, you can look back fondly on this article, and see that everything I’m trying to tell you right here, right now – is true.