Many students are drawn to the world of investment banking and the promise of a high earning potential. As a result, securing a summer internship with an investment bank is highly competitive and often only available to students from top universities. For those able to secure a position as a summer analyst, the financial rewards can be good.
Due to the increasingly competitive nature of investment banking, often referred to as IB, most investment banks focus the majority of their recruiting efforts at the nation's elite universities. In addition, most students who are selected for investment banking internships are pursuing degrees in finance, business or economics. Because investment banks are focused on helping individuals, companies and government in raising capital in the form of securities, students with an understanding of the financial industry are considered those most likely to succeed in the company.
Unlike many other types of internships, investment banking analysts are required to do much more than run errands and make copies. Analysts must perform financial valuations, learn financial modeling and research techniques as well as learn how to interpret company financial statements. Analysts may even be asked to work on client projects with the assistance of senior employees. Hours are demanding and usually go well beyond a 9 to 5 schedule. Most internships last approximately 10 to 12 weeks. Success as an intern can lead to a job offer after graduation.
Large IB Vs. Boutique
Compensation for a summer analyst varies based on the investment bank, with large well-known banks offering the highest pay. According to Glassdoor, UBS and Macquarie, two of the top investment banking firms, pay their summer interns between $72,000 to $78,000. Other top investment banks, which include Merill Lynch, Citigroup, Morgan Stanley and UBS, pay their summer interns between $57,000 to $68,000. Boutique, or smaller investment banks, generally pay their interns less than larger investment banks and may or may not offer the same quality of experience.
While most investment banking analysts are chosen from students who are juniors or seniors in college, students who have recently graduated and those with relevant work experience may also be eligible for positions as summer analysts. Those who take this route should be aware that due to the nature of investment banking recruiting, their experience may or may not be an asset from the perspective of the employer. To find out about on-campus recruiting dates, you can contact your school's Career Center.