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How to Prepare For an Investment Banking Interview

by GBAF mag
Editorial & Advertiser disclosure

Investment banking is an important segment of commercial banking activity that assists people or organisations invest in the financial markets and offer them financial advice. They function as brokers between investors and financial security providers and assist new companies to go public through private equity. They also facilitate private sector buyouts of businesses by providing investment management advice to the finance sector on issues relating to mergers and acquisitions, debt financing and capital budgeting. The investment bankers can work with private equity firms, venture capitalists and accredited depositaries of wealth.

Most commercial banks offer some i-banking services, particularly investment banking since they have their own money management departments. They also have investment banking desks where they manage other bank accounts such as corporate, treasury, savings and current accounts. They also undertake a wide range of private equity, merchant financing, leveraged buyouts and distressed debt financing. A major portion of their business is dedicated to commercial mortgage banking, commercial real estate lending and commercial property management. They also provide investment banking services to individual investors, corporate borrowers, self-directed private equity firms and global businesses.

To find out how to prepare for an investment banking interview, you need to understand how the investment banking industry works. You have to learn how to obtain appointments with prospective bankers and meet with them to discuss investment banking options. During this stage you should understand the difference between i-banking and traditional banking. You need to network with other professionals in the field to learn how to navigate the industry and understand the different options available to you.

In the investment banking industry there are three different types of bankers-securities dealers, private equity firms and commercial banks. They also operate in different stages of the business cycle. The dealer banks operate between capital raising and origination and first processing, later taking delivery and servicing the loans. The banks that are more traditional take on the entire process from beginning to end.

Private equity firms are usually independent and work for or in the investment banking and capital markets industries. They typically originate private investor loans to businesses or individuals with a sound business plan and strong collateral. The firms underwrite the loans and oversee servicing and refinancing activities.

The third type of banker is the commercial bank. These banks offer various forms of commercial financing including mortgage banking, commercial real estate loans, corporate loans and wholesale cash advance facilities. They also do direct market access financing for small business purchases and for residential mortgage refinancing. To learn how to prepare for an investment banking interview, you will want to understand each of these different types of banks and the processes they follow to provide commercial financing.

In addition to the types of banker discussed above there are a few other terms you should become familiar with. These include leveraged buyout (LTV), front end value (FEV), fair value (FMV), and fair value measurement (EFV). These are terms you will want to know because they will be used in your preparation for investment banking interviews. Each term has a different meaning to different types of clients and knowing them in general terms will help you better understand what is expected of you during the interview process.

Investment banking and capital markets are one of the fastest growing areas in the financial services industry. Millions of dollars in capital are funneled through investment banks every year. As investment bankers and traders are growing in number, the need for thorough and reliable information from clients has increased as well. This means the types of questions being asked to potential clients will only increase over the next few years as investors and corporate borrowers realize the importance and significance of investment banking.

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