What Majors Do Investment Banks Look For? A Guide for Business School Applicants

发布时间：Date: 2023-02-11 返回新鲜资讯Back to News

Investment banks, as financial institutions centered on securities business, cover key areas such as restructuring, M&A, corporate financing, and asset management, playing an important intermediary role in primary and secondary markets. This article details the nine top-tier investment banks (Bulge Bracket) and other renowned firms, helping job seekers clearly identify target platforms. For students eager to enter this high-paying but high-pressure industry, understanding the business scope and market position of investment banks is the first step in planning academic and career paths.

The internal structure of an investment bank is clearly divided into front office, middle office, and back office, each with differentiated demands for professional backgrounds. The front office focuses on client interaction and deal execution, including IBD, Sales & Trading, and Research; the middle office concentrates on risk control, compliance, and quantitative analysis, particularly favoring candidates with strong mathematical modeling skills; the back office provides technology, finance, and operations support. CheersYou（清柚教育） advises students to precisely match their own professional strengths and skill sets with the appropriate functional departments, thereby gaining an edge in the fierce competition of business school applications and job hunting.

When it comes to investment banks, we immediately think of six-figure monthly salaries and an extremely hectic work life! So, what exactly do investment banks do? What are their functional departments, and what majors do they need? This article will answer all your questions.

What Is an Investment Bank

An investment bank, or simply IB, is a type of financial institution that primarily engages in securities business. Nowadays, investment banks have essentially moved beyond the traditional banking category and are specialized securities firms.

Typically, a full-service investment bank engages in a range of activities including restructuring, mergers and acquisitions, corporate finance, securities issuance, underwriting, research, brokerage services, investment advisory, asset management, and wealth management, though some may specialize in only a few areas.

Scope of Investment Banking Business

The core of investment banking business is the securities market, centered on stocks, bonds, and other instruments. In the primary market, they handle securities issuance; in the secondary market, they facilitate trading and circulation. Products can be divided into equity, fixed income, M&A, and research. Overall, investment banks act as intermediaries in various securities market activities.

What Is a Bulge Bracket?

Within the industry, these are called Bulge Bracket, or BB for short.

The commonly known nine major bulge bracket banks are:

Goldman Sachs / Morgan Stanley / JP Morgan

BAML / UBS / Credit Suisse

Deutsche Bank / Barclays / Citi

Other notable non-BB firms include:

HSBC / BNP Paribas

Nomura

Investment banking functions are generally divided into front office, middle office, and back office.

Front Office

The front office is the primary client-facing and trading side of the investment bank, including the Investment Banking Division (IBD), Sales & Trading, Research, and Private Banking. The trading desk handles institutional client business for stocks, bonds, etc. Sales is responsible for marketing financial products and maintaining client relationships, while trading involves pricing and selling financial products. Equity research focuses on analysis, using deep industry knowledge and models to evaluate a stock's prospects.

Middle Office

The middle office primarily engages in risk analysis, management, and control, supporting the front office. It mainly includes: Risk Management, Financial Control, Compliance, and Quantitative Analysis (Quant).

The quantitative analysis department is responsible for modeling and valuation, analyzing complex financial derivatives, etc. The risk management department controls market risk, credit risk, operational risk, and liquidity risk. The middle office has high demands for students' mathematical and modeling skills. Chinese students generally have strong logical reasoning abilities, making them relatively favored by these departments.

Back Office

The back office generally includes Technology, Finance, and Operations.

These are support functions like data and operations, ensuring the accuracy of transaction data and the smooth running of systems and research. Finance, broadly speaking, manages the bank's money. Operations are similar to administrative departments, handling a variety of tasks. IT is roughly divided into software development, engineering, system maintenance, and business analysis.

Careers in Investment Banking – What Majors Can Get You In?

Financial Engineering

This major aims to equip students with the ability to use mathematical and computational skills to solve financial problems. In some U.S. programs, courses such as optimization models, stochastic models, and computations are common. As a result, graduates often enter investment banks starting as analysts or quants.

Mathematics, Statistics, Business Analytics

Students in these majors possess solid data mining and modeling skills, enabling them to pursue quantitative analysis roles after entering an investment bank. In addition, students from other fields such as accounting, financial management, and law also have opportunities to enter related areas each year.

Finance, Economics

In recent years, finance and economics programs have not only focused on theoretical courses but have also become increasingly quantitative. Beyond traditional finance theory and financial management, courses such as data analysis, securities, and derivatives have been added, better aligning with current employment trends.

CheersYou（清柚教育） has helped many students secure offers for investment banking-related programs.

If you are interested in information about the above programs for studying abroad, feel free to consult CheersYou（清柚教育） at any time for further guidance.