Understanding Investment Banking Division (IBD): Roles, Industry Groups, and Career Paths
What is the Investment Banking Division (IBD)?
Investment Banking Division (IBD) is a crucial part of an investment bank that helps corporations, institutions, and governments in carrying out capital raising, underwriting in equity, debt, and hybrid markets, as well as executing mergers and acquisitions and different types of advisory mandates. IBD is often considered as a client-facing area of the bank.
Other Divisions of an Investment Bank
Apart from IBD, an investment bank also has other departments that include equity research, sales, and trading, commercial banking, asset management, and retail banking. All of these departments fall under the front office area of an investment bank. Additionally, there are middle and back-office departments that include operations, technology, human resources, accounting, payroll, tech support, etc.
It is important to note that not everyone who works at an investment bank is an investment banker. In fact, it’s common for people to say they work in investment banking when they are not involved with IBD. However, true investment bankers are clear about their work and focus on IBD.
Industry Groups with IBD
IBD is further subdivided into different industry groups that cater to different sectors, such as Technology Media & Telecommunication (TMT), Financial Institutions Group (FIG), Energy, Mining, Healthcare, Industrials, and Real Estate. Each group has a dedicated team of professionals who specialize in providing services to their respective industry.
Job Titles in the Investment Banking Division (IBD)
There is a standard hierarchy of job titles within IBD, and the career path is similar across most banks. Analysts are responsible for financial modeling, valuation work, and pitch book support, while Associates manage analysts and perform modeling and pitch book drafting. Vice Presidents manage associates, design pitch books, and attend client meetings. Directors meet with clients, structure deals, and lead the team, while Managing Directors focus primarily on winning new business and clients.
Investment banking is a vast field, and there is always more to learn. To keep developing your skills and knowledge, check out some additional resources, such as Investment Banking Interview Questions, Equity Research vs Investment Banking, Financial Modeling Guide, FMVA certification program, and Investment Banking Salary Guide. With the right tools and resources, you can advance your career in investment banking, private equity, FP&A, treasury, corporate development, and other areas of corporate finance.
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