IBD Finance

What is the Investment Banking Division (IBD)?

IBD is an acronym for the Investment Banking Division within the overall investment bank.  IBD has responsibility for working with corporations, institutions, and governments to carry out capital raising (underwriting in equity, debt, and hybrid markets) as well as for executing mergers and acquisitions and various types of advisory mandates.

Other Divisions of an Investment Bank

Within an investment bank, there is a clear line between the Investment Banking Division (IBD) and other areas of the bank such as:

·         Equity research

·         Sales and trading

·         Commercial banking

·         Asset management

·         Retail banking, and other areas

 

All of the above jobs are considered “front office” (think: client-facing) careers.  In addition to front office careers at an investment bank, there are also careers in the “middle office” such as operations, technology, and human resources.  Finally, there are also “back office” careers such as accounting, payroll, tech support, etc.

                                                     

Not Everyone Who Works at an Investment Bank is an Investment Banker

If someone says they “work in investment banking” they should be referring to the IBD within an investment bank, although people will often claim to work in investment banking when they don’t have work in that division.

For this reason, true investment bankers are clear about the fact that they work in IBD.

Not everyone who works at an investment bank is an investment banker.

To learn more about skills required in the investment banking division launch our investment banking courses!

Industry Groups with IBD

The IBD is further subdivided into industry groups.  The most common groups are:

·         Technology Media & Telecommunication (TMT)

·         Financial Institutions Group (FIG)

·         Energy

·         Mining

·         Healthcare

·         Industrials

·         Real Estate

Job Titles in the Investment Banking Division (IBD)

There is a standard hierarchy within the IBD that’s nearly the same at most banks.  The titles and career path at most banks are as follows:

·         Analyst – focused exclusively on financial modeling, valuation work, and pitch book support

·         Associate – manages the Analysts, also does modeling and drafts pitch books

·         Vice President – manages Associates, designs pitch books, goes to client meetings

·         Director – meets with clients, structures deals, leads the team

·         Managing Director – focused almost exclusively on winning new business/clients

To learn about compensation at each level check out our investment banking salary guide.

                                                         

Additional Resources

This has been the CFI guide to how investment banks are structured and hopefully sheds some light on exactly what it means to be in the IBD.  To keep learning and developing your career, we highly recommend these additional resources:

·         What Do Investment Bankers Do?

·         Investment Banking Interview Questions

·         Equity Research vs Investment Banking

·         Financial Modeling Guide

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