Investment Banking Exit Opportunities – After working in Investment Bank for a sufficient amount of time, you may want to move on to new opportunities. Reasons may be very different for each individual, sometimes personal space takes a beating, many times investment bankers shift for better career opportunities. Exit opportunities include private equity firms, venture capital, hedge funds and corporate works.
Why look for Investment Banking Exit Opportunities:
The Working Hours or the Lifestyle:
This is the most common reason for investment bankers looking for exit opportunities as Lifestyle in Investment Bank is very stringent. The hours you have to put in can be 16-18 hours which brings limitations to your lifestyle.
The Pay Involved
Sometimes, the pay can be a deciding factor as salaries in other streams may tend to be higher than that of the investment banks.
The kind of Work
People may get tired of doing repetitive work, where they may not find broadening their career opportunities and hence seek for new career growth development.
Who can think of Investment Banking Associate Exit Opportunities?
The analyst who has gained, solid experience of 2-3 years can go for exit opportunities. But the associates are expected to stick around in banking for the long term.
Which Investment Banking Exit Opportunities you can look for?
There are many options available as said above.
- Hedge Funds: This exit opportunity is better for those who are more inclined towards markets and interested in trading transactions.
- Asset Management: Asset Management is all about achieving a superior return on a client’s money. One can land up in asset management where a lot of Research and Development work is involved. Hedge Fund is also a kind of Asset Management.
- Private Equity (PE): Private Equity works on similar background of banking. In this, you can work on big projects with aspects like analysis, due diligence, valuations etc.
- Venture Capital (VC): Venture capital provides funds to the emerging businesses. So one can go for it, if this area attracts him/her.
- Corporate Development (Internal Corporate Finance): This is a kind of relaxing option as here you will get access to a better lifestyle. Of course, the salary would be another aspect which you may have to compromise.
- Start with New Businesses (Entrepreneurship): Some analysts even leave finance to set their businesses. This can be a good choice for the people with creative ideas.
What are the work timings in this Investment Banking Exit Opportunities?
In the case of Private Equity firms, the working hours are not going to be much different than that of Investment banks. For smaller firms, it may be less but one cannot guarantee a schedule as they have to meet people, analyze the organization and do many other things. In Hedge Fund working hours can be somewhat better as it is with respect to be market hours. But sometimes travelling may get involved. And you have to be ready before the market opens up.
Learn the fundamentals concepts of investment banking. Explore the concepts of financial modeling and valuation in detail. Exhibit skills to understand the process of M&A’s, IPO’s, equity research.
What are the pay scales after exiting Investment Banking?
Private Equity Firms
- The pay which you will be making is depending upon your experience, and sometimes it may not be different than that of, banks. At bigger firms, it may be even higher than that of entry-level banking associates.
- For the first year analyst/associate the salary can range from USD 50K-250K and for experienced it may be up to USD 170K-350K.
- For the senior positions, like Vice Presidents, Managing Directors it depends upon the company’s performance.
Hedge Fund Pay
- Hedge Funds pay you differently with a certain amount of base salary and bonus over it. Bonus is dependent upon the policy of the firm, performance etc.
- Approximately total compensation can be $300,000 which is much higher as compared to analysts with 1-2 years of experience.
Pay in Venture Capital and Other Jobs
These are the options which definitely will provide you with a better lifestyle than the other two, but the pay what you will make may be much lower than them. You may work a senior position in corporate developments but the pay may be less than that of, analysts pay in the investment banks.
Ultimately, the Choice is yours. Every prospect has merits and demerits. You have to analyze your abilities and requirements and based on that you have to make a choice.
If you are new to Investment Banking, you may want to know more about Basics of Investment Banking
Here are some articles that will help you to get more detail about the investment banking exit opportunities so just go through the link.