Investment Banking in London (UK)

If we look at the map of the world, we would see that London is at the center of the map. On the left, there is America, and on the right, there is Asia. In the middle, there is Europe. Moreover, London being the financial capital of Europe, has always become reliant on immigration and trade.

After September 11, 2011, when the USA needed visas for everything, from business trips to employment visits, visas in the UK for business deals and other employment opportunities were still easily available.

As a result, many immigrants from India, France, Spain, Italy, and Germany have entered the workforce of the UK and made it the best financial market in the world.

During that time, many investment banks had gone belly up in the USA (WorldCom, Enron, Lehman Brothers, etc.). Nevertheless, the UK had still been maintaining authority in financial markets.

The above has had a great impact on the world's financial market. As a result, London was considered the best environment to do business and create value for the people involved. As a result, investment banks in London are the best place to work.

So roll up your sleeves and do all you can for investment banking in London, UK (if you want to be an investment banker at all).

There is an entire gamut of services investment banking in London, UK, offers.

Let’s have a snapshot of them in brief –

• Research: Research is one of the basic things to do if any investment bank wants to add value to their customers. The investment bankers in London, UK proudly offer this service to their clientele to substantiate their recommendations about the market. Also, have a look at Equity Research
• Corporate Advisory & Broking: Two things matter in investment banking more than anything. First is the relationship with the clients, and second is the frequency of recommendations. In the UK, these two things are given maximum priority and based on these two fundamentals, investment banks’ corporate advisory and broking teams are built. The corporate broking team constantly updates customers about what’s going on in the market, plus they also provide regular market intelligence reports, capital market views, and investor relations services.
• Investment funds: This is one of London's best investment banking services. Every team is close-ended, and every team member is a specialist of some sort in sales, market research, corporate finance, etc. They provide customized services on various investment funds to their great & high net-worth clientele.
• Mergers & Acquisitions (M&A): Market leverage is the most important thing in investment banking, which is exactly what’s offered by the investment banks of the UK. Continuous monitoring of the market, providing leverage to the clients, offering bespoke solutions to them as per their needs are the three pillars in M&A services offered by investment banks in the UK.
• IPOs: From small-cap to mid to large, every company, when they decide to go public, UK investment banks help them leap with as little hassle as possible. From enhancing the firm's profile, releasing new funds for product development, and assisting them in growing their companies, all are duly facilitated by investment banks in London.
• Institutional Equities: The market position of an investment bank plays a big role in offering institutional equities. Almost all investment banks (even the small ones) offer services to hedge funds, long-only funds, investment boutiques, retail brokers, family businesses, and wealth managers. There are two parts to institutional equities – it helps clients build a stronger foot in market share and sales trading.

According to the Guardian UK 300 (i.e., the largest student survey in the UK on students' opinions), these are the investment banks that topped the list.

But before that, let's look at the source of the survey.

In 2016, a total of 52,000 students took part in this survey. They have the following characteristics –

• They expected an average salary of 32,462 UK pounds per annum.
• Out of all the students, 52% have experience in the related work field.
• These students most commonly studied economics, business or management, statistics, or mathematical science.

Now, let's look at the ten glorious, top-notch investment banks of the UK according to the above survey –

1. JP. Morgan: According to the survey, J.P. Morgan topped the London investment banks list. They have headquarters in London and other offices in Bournemouth, Glasgow & Edinburgh. J.P. Morgan is also one of the largest technology employers in Scotland.
2. Goldman Sachs International: Goldman Sachs International in the UK has taken the second spot on the list of investment banks in London. It has multiple offices in London. According to glassdoor.co.uk, most employees make more money than the students expected in the survey.
3. Barclays: Barclays is not exactly an investment bank, but it provides financial services and insurance services.
4. Morgan Stanley: Morgan Stanley in the UK has taken the 4th spot in the list of top investment banks in London. In 1977, Morgan Stanley started its European headquarters in London. It has more than 8000 employees in all of the offices in London.
5. Deutsche Bank: Deutsche Bank took the 5th position in the list of top investment banks in London. The London branch office of Deutsche Bank offers investment banking & underwriting services. This branch office acts as a subsidiary of Deutsche Bank AG.
6. Bank of America, Merrill Lynch: Bank of America, Merrill Lynch was on the 6th list of top investment banks in London. It has the capabilities, resources, and strengths to carve out a glorious future for its employees and investors.
7. BlackRock: BlackRock is one of the biggest in the UK, and they took the 7th spot in the list of top investment banks in London. According to their website, BlackRock had assets under management (AUM) of US$4.59 trillion as of June 30, 2014.
8. Credit Suisse: Credit Suisse has stood out at 8th. At the end of 2016, it was mentioned that more than 3000 employees are working full-time in the investment banking team (globally), and they expect to grow their investment banking capability by 60%.
9. Citibank: Citibank has dropped from position 8th in 2015 to position 9th in 2016. They have headquarters in Canary Wharf, London.
10. UBS: UBS is in the tenth position, according to the survey. They have a head office in London. As per the website, they have assets under management (AUM) 31.7 billion UK pounds in the UK as of December 2015.

As expected, the recruitment process for investment banking in London is quite different from in the USA and other countries in the UK.

There are two to four stages of the recruitment process you need to go through to get the offer letter in your hands. Have a glance at them and prepare accordingly –

• The first round of interview: This is, in most cases, the telephonic round. Investment banks in the UK use this as a screening method to select the best lot from all people who have applied. As self-motivation is one of the keys to investment banking success, the telephonic round heavily focuses on the same. Investment banks also try to understand your competency level in the telephonic rounds.
• The second round of interview: At this stage, the interns and the graduates are assessed to be eligible for the assessment center. In investment banks, UK, having assessment centers for running two to four rounds of interviews is common practice. For internships, the second round of interviews may be the last, but in some cases, it may be the next to last. For example, Nomura takes four interviews each of 30 minutes to select their new interns. Following are resources you will find useful.
  • Investment Banking Interview Question and Answers
  • What is Investment Banking?
  • How to get into Investment Banking?
• The third round of interviews: For selecting graduates, the third round of interviews is often taken. For example, Citi and Deutsche Bank take three rounds of interviews. The third round of interviews is usually a combination of a panel interview and one-to-one with the HR or respective managers of the departments.
• The fourth round of interview is usually rare, but it happens when there is confusion among a few strong candidates. The idea is to pare down the number of candidates from a few to one or two.

In this case, you need to remember two things. First, there is a graduate scheme of the recruitment process where you are expected to complete a banking internship before applying for the Graduate job in investment banks. Second, there is an internship scheme for the recruitment process where you need to answer two specific questions – "why do you want this internship?" and "why do you want to join this bank?"

Culture is often shaped by the country, Government, regulations & compliances, and most importantly, ethics.

Let’s have a look at a few investment banks in the UK (London) and their organizational culture –

• Goldman Sachs: You need to work extremely long hours. You either like the culture, or you don’t like it at all – truly, there’s no in-between. The best part is the pay if you make it to the top positions.
• J P Morgan: This bank operates in the most European way possible. The worst part is it pays below the market. The best thing is the internships where the juniors are trained incredibly well.
• UBS: The place was incredible. People were happy, and the work environment was cool until the arrival of Ozzie Grubel and the up ramping process in fixed income. The worst thing is the pay, and the best part is getting hired in FICC.
• Morgan Stanley: People here are not very content, and they are usually busy remembering the past golden days.
• Credit Suisse: It is one of the happiest places to work in. If you join Credit Suisse, UK, you will find that the pay is the highest and the way the bank deals with the downturn is incredible.
• Deutsche Bank: It has a bad name for being overly political, but it has changed over the years. This bank is worst for putting people in comparative roles, increasing hostility. The best part is, of course, the pay structure.

According to the data collected at Emolument.com, the salaries of front office jobs in investment banking (M&A, ECM, Sales, Trading, etc.) increase drastically if one can stick to the jobs beyond the age of 25.

source: efinancialcareers.com

• Between 21 years of age to 25 years, you will become an investment banking associate from an Analyst, and your pay would increase to 80,000 UK pounds from 45,000 UK pounds per annum.
• From 25 years of age, if you stick till 30, you will become Vice President from Associate, and your pay would become 156,000 UK pounds per annum.
• If you still stick to the job and can continue till 35, you will become Director from VP and receive 231,000 UK pounds per annum.
• If you still have the guts to stay, at 40, you will become Managing Director and will receive around 315,000 UK pounds per annum.
• After that, you will become a Senior MD and receive around 475,000 UK pounds per annum.

• As an investment banking career is not for the faint-hearted, people often look for exit opportunities. If you want to go to the exit, many options are available.
• For example, you can go into private equity, become an entrepreneur or a trader, in-house advisory for any corporates, or maybe consult or hedge funds.
• The options are many, but you need to ensure that your reason for leaving investment banking is concrete.

Also, for further details, please look at Investment Banking Exit Opportunities

London (UK) is one of the best markets for investment bankers. So, if you would like to go into investment banking, London (UK) would be your best bet. Sure, there are issues within the cultures of investment banks in London (UK); but where wouldn't it be?

Do your due diligence, and you will know that a great career has been awaiting you all along.

This has been a guide to Investment Banking in London, services offered, culture, Investment Banking salaries offered in the UK, recruitment process, and exit opportunities. You may also look at the below article for more details on Investment Banking.

• Investment Banking in Nigeria
• Middle Market Investment Banks
• Investment Banking Internship
• Guide to Investment Banking Pitch Books