Investment Banking Advisory Career Profile

What is Investment Banking M&A Advisory?

The investment banking division (IBD) of an investment bank helps governments, corporations, and institutions raise capital and complete mergers and acquisitions (M&A). An investment banking career is extremely demanding with analysts frequently working 100-hour weeks. The competition for positions is intense, compensation is very high, and the work is very high-profile. The tradeoff, however, is long hours, a military-like culture, and a lot of grunt work.

The IBD of the bank may be further divided into industry groups, such as the TMT investment banking group.

In this article, we will focus on investment bankers working in mergers and acquisitions, as opposed to capital markets.

Investment Banking M&A Jobs Overview

When most people think of investment banking, they typically think of M&A bankers working on various transactions. The M&A role involves working with clients to analyze and execute various transactions. This could involve advising clients on acquiring another company (which is known as a buy-side engagement) or advising the sale of the company itself (a sell-side engagement). M&A is a crucial focus to help clients achieve their strategic growth targets and potentially unlock additional value.

An M&A investment banking career is extremely demanding, with work weeks often exceeding 100 hours. In order to land one of these jobs, prospective candidates must know the competition for positions is very intense.

An M&A banker provides strategic advice to clients on mergers, acquisitions, and divestitures. This role involves working closely with clients and upper management to understand their goals and objectives. M&A bankers will identify potential M&A targets (if representing a buyer) or potential buyers (if representing a seller). M&A bankers perform valuations and pro forma accretion/dilution analysis, as well as evaluate deal terms and help negotiate the transaction agreement. Bankers could work on multiple transactions at once, so candidates need to know how to manage their time.

Because investment banks expect to employ the cream of the crop, so to speak, they typically pay their employees top-dollar salaries and generous performance bonuses.

Key Skills for Succeeding in Investment Banking M&A

An M&A banker must have an excellent grasp of financial analysis and valuation, and understand how to conduct due diligence. Negotiation skills are more important the further up you go at an investment bank, as is bringing in client business. Strong communication and interpersonal skills are critical, as the banker will work closely with clients, potential buyers or sellers, lawyers, accountants, consultants and other potential stakeholders. Finally, attention to detail is of the utmost importance, as is the ability to work under pressure and meet tight deadlines.

Specific technical skill requirements include:

• Financial modeling
• Valuation
• M&A modeling
• LBO modeling
• General financial analysis

The personality of someone well suited for working in investment banking typically has the following character traits:

• Highly ambitious
• Competitive
• Detail oriented
• Quantitative
• Problem-solver
• Polished and presentable

Getting into Investment Banking M&A

There are two main entry points into investment banking: analyst and associate.

Analysts are recruited from undergraduate programs at target schools or other highly regarded universities. An analyst is typically expected to stay at the position for two to three years, at which point they will either be promoted, go back to business school, or move on to something else.

Associates are recruited from MBA and/or other graduate student programs. Strong analysts can be promoted to associate roles, but typically analysts are required to go to business school before being promoted. Associates have similar responsibilities as analysts but take on more responsibility quickly and are on the fast track for promotion. Both roles require extensive financial modeling and presentation-building skills.

Investment Banking M&A Exit Strategies

Analysts or associates typically go on to work in private equity, equity research, in-house at a corporation, or do something entirely different. Most investment bankers dream of “graduating” to PE, and the banks are natural feeder systems for these firms. Corporate development (corp dev) is a pleasant stepping stone from IB and provides exposure to similar transactions, but on the client side (with little less grueling hours!).

A Day in the Life of an M&A Analyst/Associate

A day in the life of an analyst or associate can vary depending on specific responsibilities, the size of the firm, and whether there is a transaction in the works. Associates will usually spend most of a typical day working on a financial model for an acquisition or prepare information for a planned sale. A lot of work is spent in PowerPoint building confidential information memorandums (CIMs) and teasers. Analysts and associates are also tasked with managing the due diligence process, including data rooms and various diligence requests.

Interview Prep for Investment Banking M&A

Interview prep is critical for landing a job in M&A. There are three main categories of questions in investment banking interviews: behavioral, technical, and prior deal experience. For behavioral and technical questions, check out our investment banking interview guide. When talking about any previous M&A experience, you should discuss it in a way similar to how you have it written on your resume. Start with a summary describing the main deal/overview, and then dive into two or three key issues or pieces of analysis that you played a big role in, and how they impacted the outcome of the deal.

With regards to technical questions, taking investment banking courses can be an invaluable way to learn what’s required on the job before you get hired.

It’s important to start with a solid understanding of accounting fundamentals. Next, you should have a solid Excel crash course under your belt, which will teach you the basics including shortcuts, formulas and functions. From there you can progress to financial modeling courses, which will be the basis of your day-to-day job in IB. By taking a few courses you’ll learn about various industries and see different types of models.

Preparing for a Career in M&A Banking

A career in M&A investment banking can be highly rewarding, both financially and personally. This is one of the most sought-after careers in finance and can lead to numerous exit opportunities.