The UNOFFICIAL GUIDE to INVESTMENT BANKING Issued by
CONTENTS MYTHS AND OVERV REALIT IEW OF IES INVE STMENINTRODUCTION T BANK ING 6WHY AN UNOFFICIAL GUIDE 4TO INVESTMENT BANKING? 3 GLOBAL 12ASSET FINANCE BANKING 8MANAGEM 10 ENT GROUP 22 TECHNOL GLOBAL OG & OPERA Y MARKETS 16 TIONS LEGAL, 24 RISK & CAPITAL HUMAN ES 20 RESOURC WORKING THE PROCESS TOP TIPS 28 30 GLOSSARY
Why an “UnofficialGuide to InvestmentBanking?”The aim of this guide is to give you a freshview of investment banking. A brochure ishelpful, but can read a little like a catalog.We think you need to know what your lifewould really be like, challenging out-of-datemyths and stereotypes, so you are able tomake the most informed decision possible.This is an honest look at investmentbanking and is based on the experiencesof people just like you, who have now gonethrough the graduate program and comeout the other side with blossomingcareers. It is the insidestory of investmentbanking written byanalysts for graduates,and you won’t hear thistale anywhere else.We’re going to tellyou about all thedivisions you couldwork for, what life’sreally like for analystsand show you that there’smore to banking than pitchbooks, power lunches and pinstripedsuits. And if you still want to go intobanking once you’ve heard the insidescoop, we’ll tell you about how to getthere and give you practical tips oninterviews and applications. Oh anddon’t worry if you come across wordsyou don’t understand, you’ll find themin the “glossary of incomprehensiblebanking jargon”.Happy reading and good luck!
OVERVIEW OFINVESTMENT BANKINGInvestment banks are among the largest brokers, commercial banks and assetand most complex organizations in the managers - investment banks now appearworld. They serve many different types bewilderingly huge.of companies, institutions and governments and play a huge role As if the range of different businesses in the financial sector. wasn’t enough, within each typically lies layer upon layer of complexity. This is, in Investment banking is part, due to the fierce competition for now a much broader notoriously large fees. Without innovation business than it was and a detailed understanding of markets even a quarter of and clients, these fees rapidly disappear. a century ago. The good news is that investment banks Many traditional need both specialists and those able to services grasp the bigger picture. As the opposite centered on function-by-function list suggests, a mix of helping responsibilities, roles and opportunities are corporate available to you. clients securefinancing to achieve key strategicobjectives e.g. mergers and acquisitions.Today, investment banks are much morethan well-connected intermediariesbetween investors and chief executives:the biggest players can meet virtually allthe financing and investment needs ofwholesale customers globally.The industry changed because of thesuccessive waves of consolidation in thefinance sector. Investment banks nowtrade and issue equity and debt as well aslend directly to clients and offer a range ofinvestment options. Having swallowed up
HUMAN RESOUR CESFINANCE ithin the compa ny. This division mak the enforcers w es sure you haveThese guys are pret ty much progress and, of the skills to keep an eye on L to compliance course, your payIt’s their role to are in order. HR and benefits hing from th e trading desk P& and costs to help also analyzes em ployee dataeveryt steer strategic de gulations. line with with financial re processes are in the banks future workforce. cisions on Do say: Al l our accounting Do say: I think st rong leadership regulation. ally cool! any team’s deve is key to e traders are re lopment. Don’t say: Rogu Don’t say: Pull yo urself together! for wimps. Training’sASSET MANAGEMENTResponsible for putting together investmentproducts for organizations with lots of LEGAL RISK & CAPITALcash to invest, asset managers and fund An extremely varied divisio full spectrum of risks the n that assesses themanagers have strong relationships with bank faces, both external and internal, from markettheir clients. Fund managers invest in equities, crashes and liquidity shortages to terrorist attafixed income, property and hedge funds on behalf cks and regulatory rulings It then analyses and mitiga .of clients. tes these risks to ensure the bank’s operations areDo say: Care to discuss asset allocation in my not affected. Do say: If the Bank of Engportfolio over dinner? land raises rates, you could lose £500,000 on thaDon’t say: I just open the Financial Times or Wall t deal. Don’t say: All that risk assStreet Journal, close my eyes and stick a pin in. essment? You might as well use a crystal ball. GY & OPERATIONSGROUP TECHNOLO and transaction GLOBAL MARKETS ologyManage all the techn nk. Don’t be This is where the image of the furiously competitiveprocessing challenges of the ba pace in banking comes from. This divis this is just a support ion buys andfooled into thinking etitive sells a variety of financial instruments rformance and comp across globalfunction; business pe r technology and markets either on behalf of clients or acro ss the superio advantage relies on bank’s own book. proce sses these days. Do say: P&L on my book is going throu nsaction work-flow gh the roof. Do say: The new tra the Don’t say: If I have to get in for 6.30am, a huge success, all can I have application has been a driver? wi thout a hitch. trading settled today billion? $50 million or $50 Do n’t say: Was that GLOBAL BANKING This is a huge division with a number of responsibilities. The division is split by industry, “I didn’t realize product and region to meet clients’ needs. Looking there were so many after the bank’s largest corporate clients, they provide everything from day-to-day banking services opportunities to to strategic financing advice. choose from – Do say: I think the current appetite for new search fantastic!” engine technology offers huge IPO opportunities for issuers and investors alike. Don’t say: Someone called wanting advice on an upcoming merger, but I told them we were too busy. what it’s like to be a tite! To find out more information on This is just a taster to whet your appe on… graduate in investment banking, read
MYTHS AND REALITIES OFINVESTMENT BANKINGThere are many assumptions madeabout investment banking, including theenvironment, work and people. Some ofthese clichés are based on truth and some are definitely rooted in misunderstanding. Deutsche Bank’s current analysts considered the myths they had heard before they joined the bank and whether these had turned out to be reality. MYTHS REALITYTYPE OF PERSONThe investment banking world is like TYPE OF PERSON anunapproachable old boys’ club – unless This is completely untrue! Yes, a good degree is you arean ivy league / red brick university grad essential but banks invest a huge amount in uate. trying to attract a very diverse range of people.TRADERS TRADERSTraders are ruthless dealmakers who only care This is partially true – traders must be veryabout money. focused and motivated as they conduct one of the bank’s core activities and therefore have a lot of responsibility to shoulder.THE HOURS THE HOURSThere are no normal working hours in Not entirely true, it does depend on the areainvestment banking – you have to give where you work. On the trading floor you work upyour personal life / girlfriend / boyfriend an intense 10 hour day; and when on a deal, /family / hobbies. investment bankers can pull all-nighters. Other areas generally have more standard work schedules. Starting a career in any industry requires long hours and dedication to get ahead, banking is no different.
THE SALARY THE SALARY You earn so much money; you can retire at 30 Not quite, bankers are not the Hollywood A-list. with a jet, yacht and country house. Most people have normal, down to earth lives. You may earn more than comparative roles in other industries, but a private jet might be going a bit far… THE CULTURE THE CULTURE The working culture is stuffy and closed. You This is not true. In investment banking you have to make sure you keep your head down are always learning and there’s an open, and don’t ask too many questions. feedback culture. THE MATHS THE MATHS Being able to understand and express ideas You have to be a mathematical genius to apply with numbers is certainly an important skill in to banking – an arts graduate has no chance. many roles, but what degree you have graduated with is not necessarily the qual ifying factor – in fact, Deutsche Bank recruits the best from all disciplines. If you want more information on what it’s like to work for Deutsche Bank, visit www.db.com/careers. DIVERSITY DIVERSITY t banking – Diversity is considered a very important, There is not much diversity in investmen there are few wom en and minorities represented. strategic business driver at Deutsche Bank. This is for two reasons: it mitigates the risk that is involved in homogenous thinking; and it allows us to reflect our client base – and they are a diverse group of people.THE JARGON THE JARGON youThere is so much jargon in banking; it’s like That’s right; there is a lot of jargon. Once have learned it (on the excellent traininghaving to learn a new language. without programs) you’ll wonder what you did it. Check out the glossary if you need help.THE ATTIRE THE ATTIREYou have to wear a bow tie and pinstriped suit Of course some people like the old school attire,everyday – it’s the unspoken uniform of but the bow tie look is really not that coolinvestment banking. anymore… YOU HAVE TO SPEAK GERMAN Bank YOU HAVE TO SPEAK GERMAN Deutsche Bank is a leading European g Deutsche Bank is very German in the way it does with a multinational workforce. It has a stron business and everyone has to speak German. global presence with offices in London, New ey and York, Hong Kong, Singapore, Tokyo, Sydn Frankfurt (to name a few). And speaking German is not mandatory! GRADUATES GRADUATES Quite the opposite. Graduates are given a Graduates get all the mundane, admin tasks surprising amount of responsibility and anyone while the rest of the team does the fun stuff. who’s skilled and willing is recognized.
ASSET MANAGEMENTWHAT DOES THE ASSET MANAGEMENT opportunity to invest in hedge funds.DIVISION DO? Typically this is attractive to organizationsAsset Management firms manage other that want to diversify from traditionalpeople’s money, usually belonging to instrument types, e.g. equities (stocks) andcompanies, institutional investors, or fixed income (bonds) to boost returns.private parties, by converting this moneyinto assets – stocks, bonds, derivatives, There are two main functions in each ofand other types of investments – with the above areas:the goal of making that money, make moremoney. Asset managers use a combination INVESTMENT MANAGEMENTof investment theory, quantitative tools, This function is responsible for investingmarket experience and research to pick clients’ funds in specific asset classes,investments for their portfolios, ranging such as equities and fixed income asfrom high-risk stocks to commercial real well as hedge funds. Portfolio managersestate or cash accounts. specialize in particular instruments and markets and are responsible forWHAT ROLES ARE THERE WITHIN ASSET performance of a portfolio of fund typesMANAGEMENT? (e.g. growth, value, domestic or regional).Asset Management is typically split intothree main areas according to investor and SALES AND DISTRIBUTIONinvestment types: This function is responsible for creating, positioning and selling the investmentINSTITUTIONAL INVESTORS products the bank offers. The MarketThis area specializes in providing Strategy teams create the investmentinvestment advice and products to pension products, making sure each portfolio has afunds, insurance companies, charities and mixture of instruments that meet clients’corporates wanting to make long-term needs. Sales & Marketing are responsibleinvestments of their assets. for explaining the products to institutional investors. For any fund to flourish, theRETAIL INVESTORS sales team must first convince clients ofMost investment managers don’t deal its attractions: without investors, there candirect with individual members of the be no fund.public, but do develop products tailoredto the retail needs which are marketedthrough retail banks or independentfinancial advisors.ALTERNATIVE FUNDSThis segment includes real estate andhedge funds. Real estate enablesinvestors to buy into funds featuringproperty types including domestic,commercial or industrial property.Asset managers increasingly offer the
WHAT IS THE GRADUATE PROGRAM LIKE? bank. Analysts tend to be hired Roles in Asset Management are less flexible than in any other area of the into either investment management or sales and distribution. Then rotations may transpire throughout wanted to do already) and the program to allow trainees to find their niche (unless you knew what you become a specialist.LIFE AS AN ANALYSTOn the investment management side, there are fewer placements and success depends on niche marketknowledge and building long-term relationships with clients. Specialization is crucial to demonstratingvalue to clients, but relationships and networking can be just as important. This adds up to long hours, buta varied and fulfilling working day. Eventually, you’ll become a true specialist in your area and an extremelyvaluable team member.If you want to create and strategize on products, position them in the market and win over investors, businessmanagement is for you. You get to be the link between the asset managers, clients and Controlling – it’shectic, but you will get to know your market really well. There are only a few graduates and commitment iskey – you can’t forge a relationship with a client one year and dissolve it the next.SO, IS ASSET MANAGEMENT FOR YOU? as a good degree. Many gradsThe profession requires excellent quantitative and analytical skills, as wellstudied business or economics, but it’s not as essential as keenness and good communications skills. All of the program and this happensanalysts have to take the Investment Management Certificate (IMC) as partoutside of work time. Many analysts also opt to take the Chartere d Financial Analyst (CFA) exam. BUT BEWARE... DO YOU WANT TO... • Lots of networking is required • Become an expert in a specific sector of • Focus is key in thi the financial indices s division – you need be certain of your ch to oice of career • Work with and influence the world’s • Its not as fast-pac biggest investors ed as Global Marke • Hours can be lon ts • Understand how different financial g • Its very challengin instruments behave g – knowing your sp sector is hard work ecific • Deal with long term investments • You are required to (so work is not as deadline driven) take professional ex ams • Have a great opportunity to shine – only a few grads are taken on annually “Working with Alternative Investments is a bit like being party coordinator between the portfolio managers and the underlying funds (fund of funds) You get to know Controlling and . many other aspects of the bank.”
FINANCEWHAT DOES THE FINANCE DIVISION DO?For any company, integrity is crucial to its LEGAL ENTITY CONTROL (LEC)ability to do business. When a company’sregulatory compliance or internal controls fall LEC is responsible for reporting the financialshort, we’re all aware of the scandal that can results to Corporate Centre and for statutoryensue (think WorldCom or Enron). reporting to regulators, such as the UK’s Financial Services Authority (FSA) and theFor banks, as financial intermediaries, it’s Federal Reserve in the US. All regional Financedoubly important that there is a robust functions report on a monthly and annual basisframework to establish control and ensure on the managerial and financial aspects of theintegrity. business. This function is also tasked with making sure Deutsche Bank’s reportingThe Finance division at Deutsche Bank does structure makes the best use of technology.just this. It is a bit like a police force for thebank. It enforces the external laws that govern GROUP RISK CONTROL (GRC)the financial industry and sets the internal GRC is the centre of competence withincontrols to ensure the bank conducts Deutsche Bank for risk measurementits business effectively and and reporting. GRC teams workprofitably. closely with Legal, Risk & Capital to implement risk methodology. GRC’sWHAT ROLES ARE THERE role includes the measurement,WITHIN FINANCE? analysis and reporting of Credit, Market, Operational, Investment,Finance is split into four areas: Business and Liquidity Risk. In GRCBUSINESS AREA CONTROL (BAC) you will be responsible for quantifying risk and ensuring the quality and integrityWhen traders are doing deals, they don’t of risk related data.have much time on their hands. They are thereto make money for the bank and don’t have GLOBAL VALUATION GROUP (GVG)time to check the fruits (or foibles) of their dailytrading activity. For each business area, BAC This department makes sure that all thosecalculates, analyzes and reports risk and profit exciting and exotic investment products areand loss (P&L) to the trading desks and senior priced correctly. The GVG uses industry standardsmanagement daily, often using numerical as well as complex mathematics to support itsmodels to tally these figures against what the own pricing models. Some new investmenttraders ‘think’ they made that day. BAC are key products being created these days are so newpartners with the traders when it comes to that there is no industry standard, sosetting up new products and business streams, it’s important to assess pricing. Thisdesigning and implementing infrastructure group is also responsible forchanges and in providing information for them making sure that trading desksto manage their businesses in the most globally have their pricingprofitable and scaleable manner. BAC also tested on a regular basis.interfaces with Legal Entity Control and Risk Finance interfaces with theManagement/Group Risk Control to ensure there Group Technology andis accurate and fair Operations functions regularly,information in the firm’s ensuring that systems are ablefinancials and Value at to cope with its requirements.Risk (VaR) respectively. Finance and Operations are also in charge of the ledger and making sure that the money is in the bank after a hard day of trading.
WHAT IS THE GRADUATE PROGRAM LIKE?You will become part of a valued team and be given as much responsibility as you are ready for. Rather than doinglots of different rotations in each area, with Deutsche Bank you will begin a real job from the day you start. Beforethe end of your first year you will be a productive member of the team. The continuo us development plan is tailoredto suit your individual needs. During your first couple of years with Finance, not only will you be given the optionto choose the most appropriate professional qualification for you, you will also be given the opportunity to take upa different role in another part of Finance – so you have some significant input into where your career goes!LIFE AS AN ANALYSTIn all areas of Finance you’ll be expected to contribute to critical processes straight away. Even during yourgraduate program you will work on annual reports or with key traders and risk managers in, say, creditderivatives. The environment is fast paced, especially when you’re working with traders, but the hours aremostly sociable. The division is geared towards mentoring its grads, but you’ll get further quicker with aninquisitive nature and by showing willingness to take on responsibility.As a part of the overall Finance team you’ll need to be able to stand up for yourself and your work. In BAC, RCand GVG you will find that traders are very focused and motivated individuals and as a result, you may need tostand your ground in the cauldron of the trading floor to make yourself heard! RC and GVG are less exposed totraders day-to-day, but the pressure of calculating acceptable levels of risk and pricing structures demandsconfidence in your models. Meanwhile the focus in LEC is more on the entities and regional managementpriorities, but the responsibilities are just as important, since the company’s financial reputation is at stake.Report writing skills and being able to talk to management with confidence are key. “Within a year of working with the BAC group, I am managi ng my own set of trading books and talking to the Head Trader .” “Attention to detail is really important. It can seem tedious until you realize that a small mistake can have massiv e implications, like slipping a zero in the ledger” SO, IS FINANCE FOR YOU? mathematical in all areas of Finance, a love of creating Although you need to be numerate to work or the Global Valuations Group. interest in Group Risk Control models would better suit those with an Finance folk, but if you’re really A background in business and management is common amongst the erical mind can apply. keen, anyone with an analytical and numDO YOU WANT TO... BUT BEWARE...• Get a good understanding of a bank’s • It’s not for those shy of numbers! control environment • There is the challenge of working with• Be part of a nurturing culture where you difficult traders learn on the job • The hours can be long at key times in• Have the opportunity to take on lots of the month/year responsibility • This is not the job for a Finance Stereotype!• Be exposed to other areas within the bank• Have support in working towards professional qualifications• Be paid better than you would at an accountancy firm
GLOBAL BANKING BANKINGWHAT DOES THE GLOBALDIVISION DO? provides you with anJust like your local bank ment opportunities,account, loans and invest e to manage theircompanies need someon lly multinationalfinances too. Large, typica ment banks because corporates rely on invest required. of the scope of ser vices ks provided Previously, investment ban corporates with advice and , rather introductions to investors than lendin g their own funds like a nowadays, commercial bank. Banks demands, in order to meet increased ge of have broadened their ran products and ser vices. That is Global Banking consists of Corporate Finance certainly the cas e at Deutsche Bank. and Global Transaction Banking. Corporate Finance comprises the complete range of integrated investment banking products and industry sector coverage, enhanced by extensive country and local market knowledge. Products and services delivered across a cohesive global platform include Mergers & Acquisitions Advisory, Equity Capital Mar kets, Leveraged Debt Capital Markets, Commer cial Real Estate, Asset Finance & Leasing and corporate lending services. Corporate Finance at Deutsche Bank emp loys approximately 4,250 professionals in 37 countries. (June 2007) Equally, within Global Transaction Banking there is a complete range of Cash Managem ent, Trade Finance, Trust & Securities Services and Capital Market Sales available making Global Ban king one of the most diverse businesses at Deutsche Bank. All the various services within Deu tsche Bank are dedicated to fulfilling the com plete financial needs of companies.
WHAT ROLES ARE THERE WITHINGLOBAL BANKING?Because of the wide range of client needscatered for by Global Banking, there is a greatvariety of specialist and generalist roles.A common distinction is between clientcoverage and product teams:CLIENT COVERAGEClient coverage involves senior professionalswith specialist experience looking after clients Commercial Real Estate – Provides financingdesignated by geography or by industry sector. services to organizations owning or acquiringThis provides clients with access to an commercial real estate ass ets includingextensive skill and knowledge base built on arranging debt facilities and supplying liquiditya deep understanding of their market and to real estate institutions. Deutsche Bank is aindustry from which they can leverage. global leader in Commerc ial Real Estate with an extensive team of pro fessionals based inWhen coverage bankers have identified the US, Europe and Japan.specific needs, they will call on productspecialists to provide further advice and Equity Capital Markets – A globalservices while continuing to act as a bridge provider of primary equitybetween the client and product specialist to products like IPOs, block tradesensure client satisfaction is maintained. and rights issues and inn ovator in new product development s.PRODUCT TEAMSSo that our clients get a comprehensive,integrated service from Deutsche Bank,Global Banking: Corporate Finance has beenstructured to offer:Asset Finance & Leasing – AFL is a globalprovider of structured financing solutions aswell as comprehensive advisory and arrangingservices for long-living, high-value assets suchas: aircraft, ships, real estate, infrastructure,renewable energy and alternative assets, likepatents and private equity. mapsinternational.co.uk
leading technology across its global networkGLOBAL BANKING continued to increase the efficiency of cross-border trading. Trust & Securities Services – This team looksLeveraged Debt Capital Markets – This team uses after the administration of securitiesinnovative and complex structures to supply transactions once theyre closed. Clients arefinance to organizations with limited access to either the issuers of stocks and bonds or the traditional capital markets. Deutsche asset managers who buy them and require Bank has been involved in more them to be held securely. This group also high yield new issuance than maintains relationships with investment any of its competitors over the bankers, lawyers, rating agencies and other last six years (Source: third parties. Thomson Financial, 2001- 2007 YTD) and is a leader in Capital Market Sales – This team provides jumbo leveraged buyouts. clients with asset, liability and risk management solutions across a wide range of different Mergers & Acquisitions asset classes, such as foreign exchange, (M&A) – Buying another interest rates, equities, commodities and credit. firm is a critical moment inany company’s development and they are willingto pay high fees for high-quality advice on thechoice of financing options available. DeutscheBank’s M&A bankers have the ability to enable “Our relationship withtheir clients to achieve their strategic objectives as the Global Markets teamthey can place the most powerful product platform is really interesting.and network of relationships at their service. We can ask them forWithin the Transaction Banking section of Global information on theBanking, services relating to the movement of market, but they can’tcash and securities have been split into three ask us for informationmain areas: on deals because of clientCash Management – Large corporates often have confidentiality.”thousands of bank accounts and hundreds ofbanking partners. This can make it very hard tokeep track of (and use!) all of the cash within thefirm. The Cash Management team providesservices to help consolidate cashflows and investthem short-term to maximize liquidity. “You need to be driven andTrade Finance – This team offers comprehensive ambitious. You have to be able tosolutions along the client’s trade value chain by work with lots of differentcombining international trade risk mitigationproducts and services with custom-made people internally and externally –solutions for structured trade and export finance. and be prepared to travelWith Deutsche Bank as a trading partner, clients and work with differentcan seamlessly manage documentary collections, cultures. As long as youletters of credit and trade guarantees alongsidetheir risk management and structured export are hard working,finance. The Trade Finance team uses industry- analytical and smart, you’ll go far.”
WHAT IS THE GRADUATE PROGRAM LIKE? In Global Banking, you’ll do rotations of up to a year, but the extent you move between departments varies depending on the region you are in. One thing is for sure, expect the first year to be incredibly hard work – this is not for the faint-hearted who are precious about their spare time. The rewards, however, of working in Corporate Finance are attractive! You will have a direct impact on the financial fortunes of the largest blue chip companies in the world – it’s a privileged position and that means you have to put in the hours. The Global Transaction Banking training program is slightly more flexible than Corporate Finance; some analysts have commented on the seamless transition between when the ‘program’ ends and the ‘career’ begins. The hard slog doesn’t last forever. Once the first year or so is over, you can generally start living a slightly more sociable life and things get easier as you get to know the ropes. LIFE AS AN ANALYSTWorking in any part of Global Banking will mean you have to perform in a high pressure and intenselydemanding atmosphere from day one. If you think you’re the kind of person who can thrive in a hot-houseclimate, then this is your ideal environment.If you start in Corporate Finance, you could get to advise the CEOs of the world’s largest companies on a regularbasis, create complex financial structures that help multinationals achieve growth strategies and strike dealsworth millions. You have to be highly numerate as you’ll be working out how different strategies impact clients’financial structures. It’s really challenging work, and you’ll need a cool head and plenty of stamina.If you join Global Transaction Banking you will be talking regularly with clients and interacting with lawyers,other internal teams, other banks, market infrastructure organizations (i.e. clearing houses and exchanges) andrating agencies. It can take a long time to understand the roles of the different counterparties within GlobalTransaction Banking and the variety of clients’ needs mean you will build up the picture gradually but powerfullyover time.SO, IS GLOBAL BANKING FOR YOU? out application, drive, flexibility y is essential but this is insufficient withAs with most jobs in banking, numerac ee will help you get on the y Economics or Finance, an excellent degrand people skills. You don’t have to stud up to you.program, but the way you progress isDO YOU WANT ... in finance BUT BEWARE ...• One of the most high powered jobs• A massive learning curve and investment in • The first year is the har dest working year of your your development • Long hours life role• A client-facing, networking oriented • Lots to learn which the you start late and y didn’t prepare you for• To avoid the rush hour – at university you the late nights mean the bank pays for • You have to be a good wri to get home ter and numerate • You may have to spend time entertaining clients • Long term, satisfying projects • You may eat too many meals at the office • High excitement!
GLOBAL MARKETS WHAT DOES THE GLOBAL MARKETS DIVISION DO? Global Markets is what most people think of as investment banking (along with corporate finance). Although until relatively recently many roles dealing in the capital and money markets were performed by smaller specialist institutions. The trading floor has also changed dramatically in recent years, with phones,then computers gradually replacing openoutcry trading in most markets. However itstill performs the same function – tradersbuying and selling financial instruments(e.g. equities and bonds) with the aim ofturning a profit either directly for the bank or WHAT ROLES ARE THERE IN GLOBALfor clients (with the bank earning commission). MARKETS? Investors deal in the markets for a number of Global Markets is sp lit up into desks co reasons: as well as those that deal for the specific markets an vering d regions. There arshort term (using their market expertise to different roles but all e revolve around‘beat the market’) and the long term (‘buy and presenting and exec uting new investmenstick’ investors who wish to achieve a return opportunities to cli t ents:over a given period), many also trade as partof a risk management strategy (dealing in SALESparticular instruments to offset a predicted Sales is responsible for making sure thatfinancial risk). As such, clients may include clients are offered opportunities and traasset managers, hedge funds, other banks, strategies through ding liaising with the tramortgage institutions and corporates. researchers on what ders and they have on their bo and their knowledge oks of the market. SalesThe pace of life is infamous; those that work also responsible fo is r raising capital onon the trading floor need that legendary companies and gove behalf of rnments by placingstamina to think and act as quickly as required newly issued bonds their and shares with invthroughout their day. estors. TRADING Traders make price s, book trades and risk on behalf of cli manage ents. They generally with the sales team liaise on their desk to unde what clients want, wh rstand at ideas Sales and Research are pushing to clients and whet these are realistic ac her cording to market pr ices.
RESEARCHDepending on the desk, researchers are oftenclient facing with Sales, presenting theirresearch and ideas on how different marketswill perform. This might include analysis of acompany or industry sector’s financialperformance, or an opinion on the GrossDomestic Product (GDP) growth prospects of aparticular country.STRUCTURINGThese are the people who create the more DEBTcomplex, over-the-counter instruments, they Also known as fixed income,have their own desks and interface with clients. and sell debt many banks (typically bon buy governments ds) issued by , institutions Organization and corporatThere are hundreds of trading desks globally s issue debt es. to secure fun instrumentsin large investment banks, but they can be ds for a fixed in order years. Invest term, perhapsplit into some key areas: ors buy bond s 5-10 interest paym s for the regu ents they rece lar instrument m ive before an EQUITY atures and th Debt is somet e debt is rep These desks handle investments in various imes consider aid. than equities ed less fast-p companies across the world. Investors due to a high aced longer-term er proportion typically buy and sell equity in companies investors. of based on expectations of future profitability. The Research function plays an important part: analysts examine company performance, investigate industry trends and scrutinize any issues impacting the companies’ finances. Traders pay close attention to results statements, but any information that could affect future financial performance of a company will result in swift buying or selling activity. If the news impacts a large firm or group of firms, the Dow Jones or FTSE 100 may also fluctuate in response.
GLOBAL MARKETS continuedMONEY MARKETS & FOREIGN EXCHANGE E.g. an investor might use a structuredMoney market desks typically lend and borrow product to protect its investment in alarge amounts for very short-term periods wheat producing firm against the multiple(usually from a day to three months). Trading factors affecting the price of the grain,in foreign exchange (FX) also varies according such as oil prices, currency market to the time horizon. Banks do movements, global warming and local provide currency to clients for production costs. These instruments are immediate use (the spot often tailored to very specific needs and as market), but most currency is such require a detailed knowledge of bought and sold for future market dynamics and risk modeling to needs. Typically, clients want make the structured product attractive to to buy currency at a the client and profitable for the bank. guaranteed price, say, six months in the future, in order to meet a financial commitment in thiscurrency (e.g. a payment to a supplier). Clients “It’s not all aboutuse FX to offset risk, but banks trade for profit. making immediate trading decisions atDERIVATIVES a fast pace – I’m onThese are complex instruments based on theperformance of an underlying asset, e.g. debt a flow desk and someor equity. For example, you may want to buy of my trade ideas100 Company X shares, but current market might be for sixtrends mean that share price will likely rise in months or two years6 months, so you buy the option (not an in debt markets.”obligation) to purchase them in 6 months’time at the current price. If you’re wrong, youdon’t have to buy the shares; you simply sellthe option.Derivatives are a way of dealing in a particularfinancial instrument in the future underspecific circumstances, so they are often “Becoming a trader is aused to manage risk. One high-profile example to lifestyle choice – you haveis the credit derivative. These instruments are ea kind of insurance policy that allows financial work hard and play hard, truinstitutions to offset the risks of lending despite being a cliché! I do at(i.e. extending credit) to corporate clients. A have trading screens set upbank might buy a credit derivative that permits home, but my work is soit to sell on its exposure to a borrower inspecific circumstances. interesting I like to have access to the marketsMore complex still are structured products – whenever I want.”derivatives based on multiple, market factors.
WHAT IS THE GRADUATE PROGRAM LIKE?Everyone attends a global classroom training program, this equips you with thebasics you’ll need on the trading floor and you meet your future colleagues fromthe other regions. Most grads go into a generalist pool where you rotate in differentareas (products like credit, commodities, rates; and functions like sales, trading,research and structuring) before deciding on a permanent home. If you’re hired toa specific desk you’ll also have the opportunity to rotate in some relevant areas.LIFE AS AN ANALYSTGlobal Markets is a tough environment and requires an insatiable appetite to learn.In the first year the demands made on graduates are great and you will be workinglong hours in a high stress environment (there is a lot at stake!) – all difficultcircumstances in which to learn the ropes. As a trader, you will be given your ownportfolio to trade, but you won’t be put in charge of a $5billion book straight away.Learning is continuous but choose your time to ask questions carefully; time is thescarcest commodity on the trading floor.If you hate getting up early, this might not be the career for you. Trading requires you tobe in before the markets open and this means you can be at work for 12 hours a day starting at6.30am. Research and sales analysts work to deadlines and the pressure is high. You may evenbe tempted to keep an eye on market movements over the weekend.There are challenges working with your internal colleagues as well. Researchers can befrustrated at clients not buying into their ideas, and Sales can find it difficult if they can’t getwhat their client wants because market circumstances mean the trader is unable to do the deal.SO, IS GLOBAL MARKETS FOR YOU?Many traders and sales people have business or economics related degrees, but there area lot of humanities graduates too. If you like the sound of the structured products desk,you will have to be a keen mathematician. But most important is attitude: you must bequick to learn and enthusiastic in order to make a good impact during your internship orgraduate program.DO YOU WANT TO... BUT BEWARE...• Work in a demanding environment • The hours are often long with• Learn from highly skilled colleagues early starts• Deal in financial instruments worth $millions • It is hectic on the trading floor• Create complex, cutting edge • You have to be confident, assertive and investment ideas quick to learn• Play a part in affecting the • You need to be an all-rounder: intellectual, way markets behave sociable and thick-skinned!
HUMAN RESOURCESWHAT DOES THE • Compensation – design and deliverHUMAN RESOURCES (HR) DIVISION DO? employee compensation and benefit systems that can be applied across all functions ofThe banking industry is highly competitive. the bank around the world. They also handleThe key to a bank’s success is having the best international projects and assignments,people. HR partners with the different business advise on issues like tax and immigration –areas to hire, motivate and retain the best and of course they also make sure wetalent. But you may not be aware just how get paid!sophisticated and varied the HR role withinbanking has become. • Resourcing – responsible for the overall design and strategic direction of theWHAT ROLES ARE THERE IN HR? employer brand, recruiting and workforce management.The roles within HR are pretty diverse. There isroom for both generalists and specialists. • Development – design and deliver aHR covers: curriculum that covers the skills that people need to develop in their role and reach their• Advisory – relationship managers who advise a full potential, as well as tailored and designated division of the bank, they manage specifically designed innovative solutions for issues such as change management, strategic business teams. planning, compensation reviews, leadership, career development and employee relations. • Management Information Systems – provide analysis on employee data, produce• Diversity – help make the bank truly diverse analytical reports to support decisions on by supporting groups through community the future of the Deutsche Bank workforce. outreach and employee networks. “I was surprised at the opportunities available to take part in interesting, important projects that really make a difference to the bank.”
WHAT IS THE GRADUATE PROGRAM LIKE? Graduate Training Program takes place in LondonThe graduate program covers the many areas in HR. The Global a headstart before joining your team in your homewith your global HR graduate class. It is designed to give youlocation. The program includes the latest ideas and trends in Human Resource Management; it’s practical and Deutsche Bank. After the training program, in yourinteractive, giving you a taste of life as an HR professional at areas. This is a great learning opportunity and youhome locations you will rotate in various teams and specialistwill meet a wide range of people. Your first placement in our team is decided after rotations. The network of program will be invaluable as you start your career.contacts and colleagues you develop on the graduate trainingLIFE AS AN ANALYSTLife as an analyst is varied and challenging in an innovative environment. Bank’s HR Team. Rotations You will work on ‘live’ projects that contribute to the strategic objectives of Deutsche across the HR function give you great insight to help you decide the area you want to work in. about the businesses you There is a lot of on-the-job training, learning from colleagues as well as learning support. Self motivation, drive, communication, and creativity are skills that are often called upon to be successful in your projects and day-to-day responsibilities. who are creative and The great thing about banking and HR is that you work with very bright people, e and the ability to work hard. Important skills when working with this group of people are resilienc influence others. While your ideas and suggestions may be exactly what the business needs, you will your ideas. have the sell those benefits and best practices and get people on board with ed It is very rewardin g when things go well; an idea of yours has been accepted, you have contribut to a global project that has rolled out successfully. your clients will be The competitive environment and the truly global scope of HR practices means diverse in both location and business need. You will be in regular contact with people of various levels of are constantly in use. seniority, nationalities and expertise, so your excellent communication skills different backgrounds and As an Analyst you will work with a widely diverse group of professionals from experience success in a very competitive environment. SO, IS HR FOR YOU? Prior HR degree and knowledge is not a prerequisite to applying for our graduate program. Skills needed are diverse, so people from varied backgrounds and experience are intentionally recruited. If you have practical, on-the-job business experience and can prove your interest in investment banking HR you’re in a strong position. DO YOU WANT TO... BUT BEWARE • Have a surprising amount of responsibility • The environment is competitive • Work as part of a global team and challenging • Be part of a truly strategic partnership • Change is constant in the banking • Work in a fast paced and exciting environment industry and HR has to support the business through change • Have a structured career development program • The responsibility might be daunting • Be challenged on a regular basis • Work in a meritocracy that pays its HR people • Even routine work requires a high degree better than most other industries of accuracy • Have a good work/life balance • It’s a large and complex organization, understanding the sheer breadth of the business will take time
GROUP TECHNOLOGY& OPERATIONSWHAT DO TECHNOLOGY &OPERATIONS PEOPLE DO?Technology and operations form the backboneof Deutsche Bank, managing all infrastructureand IT requirements. Today’s financialservices industry is characterized by evermore complex trading methodologies andinstruments, and growing legislation and innovation allow us to provide an unbeatableregulation; all coupled with a need to reduce service to our clients.cost and risk, while improving client service.Having the right technology and infrastructurein place is key to banks meeting these WHAT DOES OPERATIONS DO?challenges and gaining andmaintaining that all The popular image of investmentimportant competitive banking is one of slick, fast-edge. moving dealmakers. But deals can only work if the right processes and people are in place toWHAT DOES TECHNOLOGY DO? back up the deal making.Technology has allowed Deutsche Bank to That’s why Operations is often described asbecome one of the largest global competitors the engine room of the bank. It’s a fast-in the financial markets. paced and diverse division that makes sure trades are settled, risk is minimizedAs the pace of change has increased, and clients are satisfied; and that’s justtechnology has allowed us to not only stay the start.leaders in markets where margins have beensqueezed but also to compete in marketswhere millisecond execution times are critical.The face of Deutsche Bank’s technology teamis also rapidly changing as we leverage theskills of a global workforce. Technology is nolonger a place where programmers work inisolation but one where communication and “ Operations is the backbone of the business. Without us, the rest of the organization wouldn’t be able to stand up properly! ”22
WHAT IS THE GRADUATE PROGRAM LIKE? After the Global Orientation, the program starts with a week’s introduction to finance, banking and the markets, crucial for getting everyone up to speed. Topics covered include the tradingprocess and the roles of each of the divisions in the Bank. This is then followed by another fourweeks of general management, operations and technology training.Depending on the area you are placed in you will have the opportunity to do at least two rotationsduring the program, allowing you to really get your teeth into an area that interests you and make aninformed decision as to what to do next. The work is varied and includes ad-hoc tasks as well as ongoinglonger term projects, and you may soon have a higher level of responsibility. LIFE AS AN ANALYST who do the same thing! Most people working in technology or operations don’t know two colleagues ental or global budgets, On a daily basis you might be dealing with trade settlement, setting departm ent. In IT you may be risk reporting, business continuity management or client relationship managem working with Corporate Finance, Trading, Sales and Research all the time. This all takes place across a are high level, fundamental network of contacts from Bahrain to Belgium, Brazil to Bangalore. The roles and the internal clients are demanding. often using complex Everyone is motivated and focused, with one aim: to make money for the bank strategies and technology. GTO need to make sure trades end up being real money in the bank, and nd the business. that takes robust technology slick processes and innovative people who understa ent in the industry. It’s very rewarding – you won’t find a more complex, diverse and global environmSO, IS TECHNOLOGY OR OPERATIONS FOR YOU? divisions all day, so effectiveIn Technology and operations roles you have to deal with different people andcommunication is key. But there is no single ideal technolo gy or operations candidate; the people and their considered valuable. Operationsbackgrounds are as diverse as the division itself and all degree disciplines are you want to be a web architect, youhas seen many exotic graduates turn into successful managers. Of course ifneed to have a related degree.“ The level of sophistication of IT in a bank is extraordinary – the networks and systems are more complex than those of the ” hardware provider I did an internship with DO YOU WANT TO ... • Get an in-depth understanding of the whole trade process BUT BEWARE ... • Have a good work/life balance • There is a lot of banking jargon to learn hours can be • Be exposed to multiple divisions and products • Clients can be very demanding and long • Create truly cutting edge technology in a fast challenging moving environment • Global systems make for very complex, problems • Have excellent career development opportunities just the bank • Career development is up to you not • Have a lot of responsibility • Work with global systems and teams 23
WHAT ROLES ARE THERE IN LRC? There are five distinct hiring streams: CHIEF OPERATING OFFICE The Chief Operating Office is responsible for the control and management of all credit data across Deutsche Bank globally. Its remit also includes the management of headcount, costs, and outsourcing projects across LRC. It also provides operational support functions within the division. These functions include business management, communications and credit and market operations. COMPLIANCE Failure to comply with the regulations can cost a bank its business. That’s why Compliance’s work of identifying and managing regulatory risks is so critical. Compliance advances lawful and ethical business conduct and prevents andLEGAL, RISK detects violations of law, helping to protect and maintain Deutsche Bank’s integrity and& CAPITAL reputation. & E LEGAL, RISK CREDIT RISK MANAGEMENTWHAT DOES TH ON DO? Credit Risk Management (CRM) is the independentCAPITAL DIVISI must manage credit approval and monitoring function for the every industryEv ery company in risks are whole of Deutsche Bank. CRM represents ness. But some the ris ks to their busi edit losses, Deutsche Bank’s centre of competence for all ment banks. Cr distinct to invest dity shortages, counterparty risk related matters. The division ket prices, liqui volatility of mar can all have uses its expert local knowledge from around the d legal matters an d regulatory an putation. globe to maximize Deutsche Bank’s risk-adjusted ’s capital and re an im pact on a bank revenue and rate of return. It provides structuring advice and nk to generate For Deutsche Ba used and credit approval on transactions, manages the pital needs to be make a profit, ca rofit) without credit exposure of Deutsche Bank’s derivative is no reward (p ris k taken. There the and foreign exchange portfolios, actively ensures itical to balance risk. However, it is cr pacity ainst a bank’s ca the recovery of impaired loans and makes sure risk/rew ard equation ag ading and that the global risk and management reporting wnside to risk (tr to absorb the do strives to systems are timely and accurate. utsche Bank also le nding losses). De g provider of tion as a leadin mai ntain its reputa e ultimate ns. These are th financial solutio tal (LRC). gal, Risk & Capi objectives of Le 24
perform the complex risk analyses that are crucial to inform their business decisions. Investment Risk Management (IRM) looks at all risk-related aspects of potential acquisitions and is responsible for overseeing the integration of their risk processes. IRM also reviews Deutsche Bank’s principal investments. These include, for example, when the bank takes an equity stake in a company or project that it has been involved in from an advisory perspective. Treasury & Capital Management (TCM) is responsible for the capital, liquidity, and balance sheet of Deutsche Bank on a global, regional, and local basis. TCM manages these resources with a view towards shareholder and bondholder value, as well as regulatory requirements and other external influences. OPERATIONAL RISK MANAGEMENT AND CORPORATE SECURITY & BUSINESS CONTINUITY Threats as diverse as product liabilities, information security, IT system failure, frauds, and even natural disasters fall within the TMENT MENT, INVESMARKET R ISK MANAGE remit of Operational Risk Management. ASURY ENT, AND TRE The division raises awareness of theseRIS K MANAGEM ANAGEMENT alyses and& CAPITAL M ent (MRM) an threats, performs value adding analysis, and Market Risk Managem tsche to ensure Deu sets and monitors loss and capital targets market risk, aggregates relationship used within Deutsche Bank. s risk-reward Ban k optimizes it ble losses. to unaccepta and is not exposed tivity on the Corporate Security & Business Continuity cus on the ac MRM h as a strong fo h, and on ks closely wit ensures Deutsche Bank’s critical businesses, dealing fl oors and wor r managers to data, and functions can recover after an adverse ers and senio b ehalf of, trad event, and provides rigorous assessment of the global security situation and business-specific risks. It applies a fully integrated approach to risk intelligence gathering, staff safety, threat analysis, and application of protection measures. 25
PROGRAM LIKE? rk in. WHAT IS THE GRADUATE the different stream you wo are different depending on The nature of the wo rk and the skills required you apply. All areas hav e their own tailor-made a you want to go into before ortunity to complete an You should know which are inesses, as well as the opp osu re to a variety of bus programs that provide exp international rotation. LIFE AS AN ANALYST client You could be managing a t within LRC varies widely. en by With so many dis tinct areas, life as an analys ncial performance , or analyzing the risks tak monito ring of industries and fina osure. portfolio that entails daily s on Deutsche Bank’s exp -to-day market movement trading desks and the impact of day actual, and their implementation, You might find yourself evaluating the bank’s acquisitions, both potential and or reviewing security risks within a particularly hostile country and ensuring that any staff members visiting this country are aware of the situation. is to identify the bank’s key systems, and ensure Alternatively, you could be conducting a detailed analys tions to be switched seamlessly in the event of a power appropriate procedures are in place to allow opera ns for addressing regulatory rule changes or investigatio outage or evacuation. You could also be responsible che Bank. that could result in new or enhanced controls for Deuts Whichever LRC function you’re in, you will be working closely with numerous other parts of the organizatio n and will get a good grounding in how the whole bank works together.26
“LRC is a great mix of the big and the small world, a melting pot of corporate finance and economics. You need to know the small world, knowing your counterparty in detail, but as also the big picture such macroeconomics.” “I have been presented with multiple career opportunities since I joined LRC. After six months into the program, I’ve gained exposure to a huge variety of corporates, banks, sovereigns, funds and securitizations.”SO, IS LEGAL, RISK & CAPITAL FOR YOU? for numbers and anAlthough you don’t need to be a mathematical genius for all the roles, a passion at wider issuesanalytical mind helps. LRC appeals to humanities graduates too – because you’ll be lookingin companies and markets that affect trading. Good people skills are essential and second languages are abonus because of the international nature of the roles. just as much asLRC is an ‘art, as well as a science’. Common sense and market intuition is neededanalytical ability.DO YOU WANT TO... BUT BEWARE...• Be part of a fast-paced, global team?• Be at the core of the bank’s business? • You might have only a sm all influence on big• Get an in-depth understanding of complex markets? decisions as a graduate• Get a close view of clients’ finances and strategies? • You will deal with demand ing clients• Have a fundamental understanding of the bank’s • There can be a lot of pap er and database work processes and associated risks? • Hours can be long 27