Updated October 7, 2023
What are Investment Banking Exit Opportunities?
After working in an Investment Bank for a sufficient time, you should move on to new opportunities. Reasons may differ for each individual; sometimes, personal space takes a beating, and investment bankers often 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
It is the most common reason for investment bankers looking for exit opportunities as the Lifestyle in Investment Bank is very stringent. The hours you have to put in can be 16-18 hours, which limits your lifestyle.
The Pay Involved
Pay can sometimes be a deciding factor, as salaries in other streams may be higher than that of investment banks.
The kind of work
People may get tired of doing repetitive work and need to broaden their career opportunities and seek 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. However, the associates are expected to stay in banking for the long term.
Which Investment Banking Exit Opportunities Can You Look for?
There are many options available, as said above.
- Hedge Funds: This exit opportunity is better for those more inclined towards markets and interested in trading transactions.
- Asset Management: Asset Management is about achieving a superior return on a client’s money. One can land up in asset management, where much Research and Development work is involved. Hedge Fund is also a kind of Asset Management.
- Private Equity (PE): Private Equity works on a similar banking background. You can work on big projects with analysis, due diligence, valuations, etc.
- Venture Capital (VC): Venture capital funds emerging businesses. So one can go for it if this area attracts them.
- Corporate Development (Internal Corporate Finance): This is a relaxing option as you can access a better lifestyle here. 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 up their businesses. It can be a good choice for 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 will not differ much from that of Investment banks. It may be less for smaller firms, but one cannot guarantee a schedule as they must meet people, analyze the organization, and do many other things. In a Hedge Fund, working hours are better than it concerns market hours. But sometimes traveling may get involved. And you have to be ready before the market opens up.
Learn the fundamental concepts of investment banking. Explore the concepts of financial modeling and valuation in detail. Exhibit skills to understand the process of M&A’s, IPOs, and equity research.
What are the Pay Scales After Exiting Investment Banking?
Private Equity Firms
- The pay you will be making depends upon your experience; sometimes, it may be similar to that of banks. It may be even higher at more prominent firms than entry-level banking associates.
- The first-year analyst/associate’s salary can range from USD 50K-250K; for experienced, it may be up to USD 170K-350K.
- Senior positions, like Vice Presidents and Managing Directors, depend 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, much higher than that of analysts with 1-2 years of experience.
Pay in Venture Capital and Other Jobs
These options will provide you with a better lifestyle than the other two, but the pay you will make may be much lower than theirs. You may work in a senior position in corporate development, but the payment may be less than that of analysts in 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 should know more about the Basics of Investment Banking.
Recommended Articles
Here are some articles that will help you get more details about the investment banking exit opportunities, so go through the link.
