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
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
FMVA certification program
Advance your career in
investment banking, private equity, FP&A, treasury, corporate development
and other areas of corporate finance.
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