Guides / Career guides / Investment banking
Investment banking: where most finance careers start.
Investment bankers advise companies on buying and selling businesses (M&A) and on raising money. The analyst programme is the most common way into finance, and the best-known training ground for private equity, hedge funds and corporate roles.
Last checked 15 November 2026
Coverage or industry groups
Bankers who own client relationships in one sector, such as technology, healthcare or financial institutions (FIG). They pitch ideas and run deals for those clients.
Product groups
Specialists in one type of deal: M&A, leveraged finance, restructuring, or equity and debt capital markets. They work across sectors with the coverage teams.
Bulge bracket, elite boutique or middle market?
| Compare | Bulge bracket | Elite boutique | Middle market |
|---|---|---|---|
| Examples | Goldman Sachs, JPMorgan, Morgan Stanley, Bank of America, Citi | Evercore, Centerview, Lazard, PJT Partners, Moelis | Houlihan Lokey, William Blair, Baird, Lincoln International |
| The work | Advisory plus financing, so you see M&A, debt and equity deals | Pure advice: large M&A, restructuring and defence | Smaller companies, more sell-sides for private equity owners |
| Pay | The industry standard | Often the highest bonuses at junior levels | Somewhat lower, closing the gap at some firms |
| Analyst class size | Large, often 100+ in New York | Small, so every analyst gets real work | Small to medium |
Firm names are examples, not rankings. Every firm has strong and weak teams.
A typical day in investment banking.
A realistic junior day on a normal week. Live deals, results seasons and market shocks make it longer.
- 9:00
Check overnight emails and comments from your associate and VP on the pitch book you sent last night.
- 10:00
Update the trading comparables with yesterday’s closing prices and the latest quarterly results.
- 12:00
Internal call on a live sell-side deal: which buyers have signed NDAs and who has asked for more data.
- 14:00
Build pages for a client meeting: a market update, the valuation range and possible buyers.
- 17:00
Turn comments from the VP. Expect several rounds; formatting and accuracy both matter.
- 20:00
Dinner at your desk, then work on the financial model for the deal.
- 23:00 to 1:00
Send the final version of the book, check it twice, and go home. Busy weeks run later.
The career ladder and pay.
| Level | Typical years | What you do | All-in pay |
|---|---|---|---|
| Analyst | 0 to 3 years | Models, pitch books, data rooms, comparables, and a lot of checking | $170k to $250k |
| Associate | 3 to 6 years | Runs the analysts, checks every model and page, first point of contact on deal process | $300k to $500k |
| Vice president | 6 to 10 years | Manages deals day to day and the client relationship below the MD | $500k to $800k |
| Director or executive director | 9 to 12 years | Starts to bring in business; leads parts of the client relationship | $600k to $1m |
| Managing director | 12+ years | Wins mandates, owns client relationships, signs off on advice | $1m to $5m+ |
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.
In the US, banks hire almost all analysts through junior-year summer internships, and recruiting for those starts a year or more ahead: many banks interview sophomores in the spring. Offers at the end of the internship fill most of the full-time class.
In London and Europe, the route is spring weeks in first year, summer internships in the penultimate year, and graduate roles for anyone who missed those. Many banks review applications as they arrive, so applying in the first weeks matters.
The process is usually an online application, a numerical or situational test, a recorded video interview, then a superday: three to five back-to-back interviews mixing fit and technical questions. Networking does not replace the application, but a referral or a name to mention helps you stand out.
Who hires.
| Type | Examples | What it’s like |
|---|---|---|
| Bulge bracket | Goldman Sachs, JPMorgan, Morgan Stanley, Bank of America, Citi, Barclays, UBS, Deutsche Bank | The largest deals and the biggest training programmes; also run capital markets and lending. |
| Elite boutique | Evercore, Centerview, Lazard, PJT Partners, Moelis, Perella Weinberg | Advisory only, lean teams, very high pay at junior levels. |
| Middle market | Houlihan Lokey, William Blair, Baird, Harris Williams, Lincoln International | Smaller deals, often selling companies owned by private equity firms. Great modelling experience. |
| Regional and specialist | Sector boutiques, national champions in Europe and Asia, Big Four corporate finance teams | Easier entry points and a common route for non-target students to move up later. |
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.
- 12 months before applications open
Learn the basics
Accounting, the three statements and enterprise value. Join your university finance society and start reading the financial press every day.
- 9 months before
Build your story and your list
Write your “why banking” answer. List 30 to 40 target firms across tiers and start networking: alumni first, then cold emails.
- 6 months before
Go deeper on technicals
Valuation, DCF, M&A and LBOs. Build a simple model yourself. Follow three live deals closely.
- 3 months before
Practise interviews
Timed mock interviews twice a week, out loud. Polish your CV with people already in banking.
- Applications open
Apply early and in batches
Submit the strongest applications in the first two weeks, then keep going. Prepare for online tests and video interviews.
- Superday
Perform on the day
Know your CV line by line, have two deals ready, ask good questions, and send short thank-you notes.
Where it leads.
Private equity
The most common exit. On-cycle recruiting at the largest US funds can start in the first year of the analyst programme.
Hedge funds and investing
Long/short equity and credit funds hire bankers who enjoy forming their own views on companies.
Corporate development
In-house M&A at a large company, with better hours and a closer view of the business.
Growth equity and venture
Investing in fast-growing private companies; more about market and product than leverage.
Startups and operating roles
Strategy, finance or chief-of-staff roles at growing companies.
Staying in banking
Many people stay and progress to associate, VP and beyond, where the work moves towards clients.
Myths and reality.
“You need to go to a top university.”
It helps, but every bank hires from a wider list than you think, especially boutiques, mid-market firms and banks outside New York and London. Strong technicals and networking close a lot of the gap.
“It’s all about maths.”
The maths is arithmetic and some algebra. The hard parts are accuracy, organisation and staying calm when things change at midnight.
“Analysts don’t do anything important.”
Analysts build the numbers every decision rests on. One wrong cell can reach a client’s board.
“You have to love finance already.”
You have to be curious about how businesses make money and willing to learn fast. Many bankers studied history, engineering or languages.
What to read.
- The Financial Times or The Wall Street Journal. Read the companies and markets sections daily.
- Bloomberg’s Money Stuff newsletter. Matt Levine explains deals and markets clearly and with humour.
- Investment Banking by Rosenbaum and Pearl. The standard textbook on valuation, LBOs and M&A.
- Barbarians at the Gate. The classic story of the RJR Nabisco buyout.
- Your target banks’ deal announcements. Read the press releases for deals your target teams worked on.
What they ask in investment banking interviews.
Expect fit questions, accounting, valuation, and at better banks M&A and LBO questions too.
Fit Why investment banking?
Give a short, specific story: what first got you interested, what you have done to test it (a society, an internship, a deal you followed), and what you want to learn. Avoid money and “fast-paced environment”. End with why this bank.
Accounting Walk me through the three financial statements.
The income statement shows revenue, expenses and net income over a period. The balance sheet shows assets, liabilities and equity at a point in time. The cash flow statement starts from net income, adjusts for non-cash items and working capital, then adds investing and financing flows to explain the change in cash.
Valuation How would you value a company?
Three main ways. Comparable companies (trading multiples of similar listed companies), precedent transactions (multiples paid in past deals, which include a control premium) and a DCF (the present value of future free cash flows). For buyouts, an LBO analysis shows what a private equity buyer could pay.
Valuation Why might two companies in the same sector trade at different multiples?
Differences in growth, margins, risk, return on capital and size. A company growing faster, with higher margins or more predictable earnings, usually trades at a higher multiple.
M&A When is an acquisition accretive?
When the buyer’s earnings per share rise after the deal. As a quick check for an all-stock deal: it is accretive if the buyer’s P/E is higher than the P/E it pays for the target. For cash or debt, compare the target’s earnings yield with the after-tax cost of the cash or debt used.
LBO Walk me through a basic LBO.
A sponsor buys a company using mostly debt. You set the purchase price and the debt and equity mix, project cash flows to pay down debt, assume an exit multiple after about five years, and calculate the sponsor’s IRR and money multiple on the equity it put in.
Markets Tell me about a deal you’ve followed recently.
Pick one deal and know it well: who bought whom, the price and multiple, how it was paid for, the strategic logic, and one risk. Have an opinion on whether it was a good deal, and say why.
Fit Tell me about a time you worked under pressure.
Use a clear structure: the situation, what you did, and the result, with numbers if you can. Show that you stayed organised and accurate, not just that you worked late.
The investment banking interview prep pack
Every interview question on this page with answers, the readiness checklist and your step-by-step plan, as a printable PDF.
Here it is.
Test yourself: investment banking
Questions from the Mandate app. Try each before you open it.
Which is NOT a common reason for an acquisition?
Deliberately weakening its own credit rating. A lower credit rating is a risk of some deals, not a goal.
Why do acquirers usually pay a premium over the target’s share price?
To gain control and capture synergies. Control and synergies justify paying more than the trading price.
A sell-side adviser…
Advises the owners selling the business. The buy-side adviser works for the acquirer.
A teaser is…
A short, usually anonymous summary for buyers. Interested buyers then sign an NDA to get more information.
Investment banking is the core path in the app.
Twelve units take you from accounting to LBOs, with mock interviews scored on key points, structure and pace.