Guides / Career guides / Capital markets
ECM and DCM: the other side of the deal.
Capital markets bankers help companies raise money: equity capital markets (ECM) through shares, and debt capital markets (DCM) through bonds. Shorter hours than M&A, closer to the markets, and a different career path.
ECM
IPOs, follow-on share sales, convertible bonds and private placements. The job is telling a company’s growth story to investors.
DCM
Investment-grade bonds for companies, banks and governments. The job is pricing debt against live market data.
M&A, ECM or DCM?
| Compare | M&A | ECM | DCM |
|---|---|---|---|
| Analyst hours | 85 to 100 a week at bulge brackets | Driven by the deal pipeline: about 8 to 12 intense weeks a year, versus 25 to 35 in M&A | About 55 to 70 a week, with little weekend work |
| The work | Deep valuation and transaction models | Market updates, investor analysis, pitching offerings | Pricing, credit analysis, capital structure |
| Pay | Highest bonuses | A similar base to M&A, with lower bonuses and a lower ceiling at senior levels | Similar to ECM |
| Where people go next | Private equity, hedge funds, corporate development, growth equity | Investor relations, equity research, other banking teams | Credit funds, fixed-income asset management, distressed debt, direct lending |
Ranges from published industry guides; they vary by bank and market cycle.
A typical day in capital markets.
A realistic junior day on a normal week. Live deals, results seasons and market shocks make it longer.
- 7:00
Read overnight market news. In ECM, check how recent IPOs and share sales are trading; in DCM, check credit spreads and the new-issue calendar.
- 8:00
Morning market update for clients: what priced yesterday, how it performed and what’s coming.
- 10:00
Calls with the syndicate desk about investor demand for a deal launching this week.
- 13:00
Prepare a pitch: why now is a good window for a client to issue, at what price or spread.
- 16:00
Live deal: track the order book, update the client, and agree the final price or spread.
- 19:00
Finish allocations and documents. Most nights end earlier than in M&A, but launch weeks are long.
The career ladder and pay.
| Level | Typical years | What you do | All-in pay |
|---|---|---|---|
| Analyst | 0 to 3 years | Market updates, pitch materials, comparable deals, order book tracking | $170k to $230k |
| Associate | 3 to 6 years | Runs the analysts and the materials; starts to talk to clients and investors | $280k to $450k |
| Vice president | 6 to 10 years | Executes deals and manages issuer relationships day to day | $450k to $700k |
| Director and managing director | 10+ years | Wins mandates, advises on timing and pricing, owns key clients | $700k to $3m+ |
Approximate all-in pay (base plus bonus) in US dollars at large firms in New York in recent years. London is usually 20 to 30% lower; smaller firms and other cities pay less. Bonuses swing with the market.
How recruiting works.
Most banks hire capital markets analysts through the same internship and graduate programmes as M&A. You either apply to ECM or DCM directly or are placed after a general programme, so say clearly that you want capital markets and why.
Interviewers expect normal banking technicals plus a real interest in markets. Know where rates and equity markets are, a recent IPO and a recent bond deal, and be able to explain why a company might pick one over the other.
Who hires.
| Type | Examples | What it’s like |
|---|---|---|
| Bulge brackets | Goldman Sachs, JPMorgan, Morgan Stanley, Bank of America, Citi, Barclays, Deutsche Bank | Lead most large IPOs and bond deals; big balance sheets to underwrite them. |
| European and Asian banks | BNP Paribas, HSBC, Société Générale, UniCredit, Mizuho, MUFG, SMBC | Very strong in bonds and in their home markets. |
| Independent ECM advisers | Firms that advise issuers on IPOs without underwriting them | Small teams; advice on structure and which banks to hire. |
Firm names are examples, not a ranking or an endorsement.
Are you ready to apply?
Tick what you can honestly do today.
Your plan, step by step.
- 9 months before
Learn the core technicals
The same accounting and valuation as M&A, then IPO mechanics and bond maths.
- 6 months before
Follow the market
Track three IPOs and three bond deals. Write a one-paragraph view on each.
- 3 months before
Network with capital markets teams
Most students network with M&A only. Speaking to ECM and DCM bankers makes you stand out.
- Interviews
Show market judgement
Have a view on the issuance window: is now a good time to raise money, and why?
Where it leads.
Investor relations
Helping a listed company talk to its shareholders.
Equity research or long-only investing
A natural move from ECM, which works closely with investors.
Credit funds and fixed-income asset management
A natural move from DCM and leveraged finance.
Corporate treasury
Running a company’s funding and cash, often at a large corporate.
Myths and reality.
“Capital markets is “less serious” than M&A.”
It’s a different job: closer to live markets, with more client and investor contact and fewer all-nighters.
“There are no exits from capital markets.”
Exits are different, not missing. Credit, investor relations and long-only investing all hire from it.
What to read.
- The FT’s markets coverage and Lex column. Short daily views on companies and deals.
- IFR (International Financing Review). The trade publication for bond and equity deals, if your university has access.
- Bond Math by Donald Smith. A clear guide to yields, duration and pricing.
What they ask in capital markets interviews.
Expect the same accounting and valuation questions as M&A, plus markets questions like these.
ECM Why might a company choose an IPO over selling to a private buyer?
An IPO raises growth capital while founders keep control, gives existing shareholders a route to sell over time, can achieve a higher valuation, and creates listed shares to use in future acquisitions. The costs are fees, ongoing disclosure and exposure to market swings.
ECM What is a greenshoe?
An over-allotment option, usually up to 15% more shares, that lets the underwriters sell extra shares and then support the price after listing by buying back in the market if it falls.
ECM What is the difference between a primary and a secondary offering?
In a primary offering the company issues new shares and receives the money. In a secondary offering existing shareholders sell their shares, and the money goes to them.
DCM Interest rates rise. What happens to existing bond prices?
They fall. A bond’s fixed coupons are worth less when new bonds pay more, so its price drops until its yield matches the market.
DCM What is a credit spread?
The extra yield a bond pays over a benchmark, such as a government bond of the same maturity, to compensate investors for the issuer’s credit risk.
DCM What separates investment grade from high yield?
Investment grade means a rating of BBB− or Baa3 and above; anything below is high yield. At most banks DCM handles investment grade, while leveraged finance handles high yield.
Test yourself: capital markets
Questions from the Mandate app. Try each before you open it.
An equity capital markets (ECM) team mainly works on…
IPOs, follow-on offerings, block trades and convertibles. ECM sits between corporate clients and equity investors.
Why are IPOs usually priced at a discount to estimated fair value?
To reward investors for the risk and support trading. A modest first-day rise helps future fundraising.
“Free float” means…
Shares available to trade publicly. Index providers often require a minimum free float.
What does a stabilisation manager do after an IPO?
Uses the over-allotment to support the share price. It buys shares in the market if the price falls below the offer price.
The capital markets track is live in the app.
IPO and bond mechanics, credit analysis and capital markets interviews, on top of the Mandate core technical units.