This site is primarily aimed at aspiring investment banking analyst and associates, although we appreciate that more tenured staff occasionally dabble in our contents. One aspect that is not well understood for most people outside of the industry, as well as people inside the industry, are the expectations that come with each title.
So, what exactly is an analyst or associate expected to do?
The answer, as per usual, is it depends.
What Does An Investment Banking Analyst Do?
The conversation usually branches off like this:
Analyst at Bank A: Hey analyst, I am so worried because I am 8 months in and I haven’t done any modeling. I just do random Excel data gathering and manipulation and spend a lot of time formatting slides.
Analyst at Bank B: I have already started modeling small pieces and schedules but it usually falls on the third year analyst and associate.
Analyst at Bank C: I am building full blown models from scratch. I heard at Barclays xxxx group, the associates don’t even model and it is mostly done by the VP. My associate is an MBA hire and does not really do anything.
The reality is that there is a lot of variability in what is expected at each role – to the point where hiring across banks, and sometimes even hiring across industry groups will result in at least some mismatch in expectations.
M&A is the group where analysts and associates are expected to have the most “standard” expectations whereas they may differ widely in coverage groups.
Investment Banking Responsibilities by Title
Fresh MBA associates and new VPs usually have blurred roles to some extent. Associates promoted from the analyst level have seen myriad deal processes and generally know what to do like clockwork. They are well positioned to check work and own a book. MBA associates or associates transferred from a less related product such as DCM will need time to be comfortable understanding the work before they can check it. Their modeling skills may not be top-notch, so there is a time period where they may take on some of the analyst burden until they are up to speed.
New VPs are eased into the responsibilities of client management slowly, so they may find themselves acting as supercharged associates for a little while. As VPs are historically supposed to be more hands off, there can be clashes due to perceived micromanagement.
However, at all groups, executive directors and managing directors will be in charge of client interaction and execution.
To our understanding, this is the most normal allocation of responsibility:
Investment Banking Analyst Job Responsibilities
Analysts are responsible for most of the grunt work. They are given specific tasks to execute.
Build financial models
Analysts will start off by running numbers through templated financial models for their first few deal processes. These models do not need to be tweaked and will be standard for valuation, mergers and leveraged buy outs. Once they are more experienced, they will be put on the deal team for more bespoke business structures and may start to build models “from scratch” – although rarely is this a blank excel sheet – formats and formulas will have borrowed elements from other models.
Analysts will be expected to manipulate large data sets using Excel and present results via data tables, regression analysis, goal seeking for breakevens, sensitivities via tornado charts, valuation ranges using football fields, etc.
Create presentation materials
Analysts will then be in charge of putting the data and analysis neatly onto meticulously formatted PowerPoint slides. Analysts will also be in charge of printing and binding the books when the copy centre is closed and a book needs to be pushed out late at night or early in the morning.
Maintain internal databases
Analysts will update “comps” for precedent transactions in their industry, update for new financials or news releases for market comparable companies analysis and update league tables for marketing materials to show that the investment bank is a top player in their niche.
Manage the data room
Analysts are responsible with the tedious task of uploading and downloading files from the data rooms.
Organize calls and material preparation
Analysts will organize meetings by checking the Microsoft Outlook calendars of involved parties and sending out dial-ins for conference calls. For in-person meetings, analysts should print out materials beforehand so that everyone can follow the discussion.
When it comes to client interaction, there is even more variability between groups and banks. For certain groups, especially if clients are in close proximity, analysts may get face-to-face client exposure early. Otherwise, they will mostly be responsible for relaying information over the phone for manual tasks.
Don’t screw these up. Investment banking meal expense is sacred.
Investment Banking Associate Responsibilities
Associates may do any of the analyst work if the team is stretched or understaffed but as a more senior staff member, are expected to own the actual numbers and presentation. As such, the associate is responsible for checking analyst work for mistakes in the modeling or flow and managing the master presentation for delivery to the VP. Between the analyst and the associate, they are expected to produce a finished book which will be revised or “turned” based on commentary from the VP and above.
As Microsoft Office files in the drive cannot be simultaneously edited like Google Docs (nor should they, for version control), the associate will captain the master PowerPoint while the analyst “cuts” certain slides out to work on which are dropped into the master when it is completed. As such, the associate is responsible for the book.
Especially for larger files with several analysts and associates, the associates are expected to manage expectations of the senior and junior staff. If there are insufficient resources the associate needs to push back to the senior staff and temper demands so that everyone is on the same page. If an associate is on a smaller file alone with an MD then they essentially work both roles (same as if an analyst does).
Investment Banking Vice President Responsibilities
Vice Presidents are responsible for executing the demands of the higher ups – basically the middle management of the investment banking group. The MD or ED will have a general idea of what they want to see and will tell the VP to construct materials for discussion with the client.
The VP will draw up the skeleton of the book and give it to the analysts and associates for execution. VPs may also be contact points with relevant client counterparties for routine questions where the C-suite and senior vice presidents of the clients will keep high level strategic conversations with the managing director.
At this point, VPs may start to have some basic client coverage, either from originating new, unestablished clients and serving as the point of contact (rapidly growing companies in the industry are reaching a size where they can become investment banking clients instead of just commercial banking clients) or taking drop downs from more senior relationship managers.
Job Responsibilities of Directors/Executive Directors and Managing Directors
These are relationship management roles and primarily involve higher level strategic discussions with the client. The pitch book is a prop that can be referred to, but the real expertise lies in a conversation on all the scenarios that could present themselves.
Generally, the numbers do not necessarily have to be “right” as long as they are close and directionally supportive of the MD’s narrative but woe to the junior staff member who is found out to have flawed analysis.
MDs are involved in fee negotiations, upkeep of the relationship via lunches, dinners and other market update meetings, pitches and collaboration with other group heads where their product is relevant. At the MD level, you can assume that you are looking at a relatively important person in the industry.
After managing director, the role shifts from investment banking to management in the overall investment bank as a franchise. After Group Head and Division Head titles, these MDs are removed from day-to-day client interaction (although they may be brought in for major clients that are familiar with them) and are in charge of strategy in growing the overall group revenues and communicating their work with the C-suite of the investment bank.