Investment Banking Hierarchy

Analyst

This is the lowest form of life in I-Banking. Now to distinguish between the Analysts, we have classification among Analysts as Analyst 1, Analyst 2 and Analyst 3. The numeric associated with term Analyst signifies the amount of years spent in Investment Banking. From here the Analyst can transform into an Associate or jump ship and go to work for one of the sorry companies the analyst has been working for. The third is to move to a equity house or a hedge fund and the last thing what he can do is to be called a dumbass, i e. to get fired.

General Role:

Analysts are typically men and women directly out of undergraduate institutions who join an investment bank for a two-year program.  Top performing Analysts are often offered the chance to stay for a third year, and the most successful Analysts can be promoted after three years to the Associate.

Being at the bottom of I-Banking ladder they generally perform three types of work: Analysis (which till date I am unable to figure out what analysis I have been doing till now), Presentation and Administrative roles.

Pretty much anything done in Excel is considered “analytical work.”  Examples include entering historic company data from public documents, analyzing such data for valuation purposes and projecting a company’s financial statements (”modeling”). Presentation work involves the putting together and writing of various PowerPoint presentations including marketing documents (”Pitches” or “Pitchbooks”) and documents for live transactions (for example, a presentation to management or the Board of Directors).   These PowerPoint presentations get printed in color and are bound with professional looking covers for meetings with clients and prospective clients.   Administrative work, being the third type of task, involves things like scheduling and setting up conference calls and meetings, making travel arrangements and keeping a list of dealteam members updated.

Associate

The next in line are the Associates. They are the ones who don't spare a chance to point mistakes in the work that an Analyst has done. The good associate will not give a damn, whereas the bad associate always will. All associates are bad associates. Associates are always keen to get on the good side of important people. To be etymological, they are sycophants.

General Role:

Associates are typically either folks directly out of top MBA programs or Analysts that have been promoted.  Typically, bankers will be at the Associate level for three and a half years before they are promoted to Vice President.  Associates are also categorized into class years (i.e. First Years, Second Years and Third Years).

Associates main role is to check the Analysts work and point out the mistakes and most often they try their level best to humiliate or degrade the  Analysts.....Show of strength!!

A typical conversation between an Analyst and an Associate is somewhat like the following:

Analyst:  “I’m finished with the valuation”

Associate: “Is it right?”

Analyst:  “I think so”

Associate:  “Well, check it again and come back when you are SURE it is right. Also check each and every value and match it with the relevant sources- Bloomberg, FactSet and the company filings, website & research reports” 

In addition to overseeing the Analyst’s work, the Associate will often help write the text for the presentations as well as do much of the modeling work.  On live transactions, the Associate, while also playing an administrative role with the Analyst, will likely have significant ongoing interaction with the client and with the opposing investment bank (i.e. the buyer’s advisor if the Associate is on a sell-side deal)

Vice President

The primary role of the Vice President is to be the “project manager,” whether for marketing activities or on a transaction.  It is the VP that typically decides the structure (usually the Table of Contents or “TOC”) of the presentation (e.g. a pitchbook).  On live engagements, the VP is typically the banker “running the deal.”  The VP must manage the client, manage the senior bankers and manage the Analysts and Associates that are actually doing the work.  It is often at the VP level that bankers begin to form valuable relationships with clients.  Depending on the individual and also the bank, some VPs will start to play a role in client development and marketing.

Senior Vice President

Depending on the person (and sometimes the bank), the Director or SVP may either act more like a Managing Director (play a high level client development role) or more like the VP (play a project manager role).  Sometimes, the Director/SVP’s role will depend also on the specific situation and/or other dealteam members.  Ultimately, for Director/SVPs to be promoted to Managing Director, they will have to demonstrate that they can form client relationships and have the ability to market and to bring in new business.

Director Managing Director

As the senior level banker, the role of the Managing Director (”MD”) is mostly one of client development.  The MD will likely be the one with the senior level company relationships (CEO, CFO, head of Corporate Development) and is typically responsible for spearheading marketing efforts.  On a live transaction, the MD often plays only a minor role, getting involved when difficulties arise in the deal and during high level negotiations.

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