Structured finance is a sector within investment banking that focuses on creating complex financing solutions through financial engineering. Investment banks have structured finance divisions that help companies and governments raise capital in unique ways. When considering a career in investment banking, it’s important to understand the structured finance sector, the skills required, career progression, and top firms to target. This article provides an overview of key aspects of getting into and succeeding in structured finance investment banking.
Required skills and day-to-day work in structured finance investment banking
The structured finance team designs customized financing vehicles to meet client needs. This involves complex financial modeling and analytics using Excel, VBA, Python and R. Key technical skills include financial statement modeling, discounted cash flow valuation, deal structuring analysis, and risk management modeling such as Monte Carlo simulation. Soft skills like communication, presentation, and relationship management are also vital when interfacing with clients. The typical workflow includes meeting clients to understand their funding needs, developing innovative deal structures and financial models to pitch, and executing transactions by preparing offering documents and closing deals.
Career progression from analyst to managing director in structured finance investment banking
Most join structured finance investment banking as analysts after undergraduate or masters degrees. Analysts typically do financial modeling, analysis, and pitchbook creation under the guidance of associates and VPs. After 2-3 years, high performing analysts may get promoted to associate. Associates play a key role in leading deal teams, overseeing analysts, directly interfacing with clients, and reviewing work product. After 5+ years investment banking experience, associates may reach VP level, taking on business development and people management duties. The MD role requires 10+ years relevant experience along with a proven track record, bringing in significant revenues by originating deals and overseeing execution.
Top structured finance investment banking firms to target
The top investment banks all have structured finance teams within their fixed income divisions. Leading firms include Bank of America, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and UBS. Boutique structured finance firms also present good opportunities, such as Natixis, MUFG, and Societe Generale. When targeting firms, it’s important to customize your background to the specific bank’s focus areas by researching deal histories and rankings.
How to break into structured finance investment banking
The best way to break into structured finance investment banking is through internships. Top Master’s in Finance programs place ~50% of students into relevant summer internship roles. Investment banking internships often convert to full-time roles, making graduate schemes extremely competitive. Thus enrolling in a top MiF program to access structured finance internships is a primary pathway. Alternatives like boutique and Big 4 internships can also provide opportunities to lateral across later.
In structured finance investment banking, financial engineering and modeling skills are vital for designing innovative financing solutions. Career progression goes from analyst to associate to VP and eventually to managing director levels. Top firms include Bank of America, Goldman Sachs and JPMorgan. Getting an investment banking internship via a Master’s in Finance program is a key way to break into this competitive sector.