1. Financial Careers: Introduction
  2. Financial Careers: Qualifications and Credentials
  3. Financial Careers: Finance Employers
  4. Financial Careers: Investment Banking Jobs
  5. Financial Careers: Trading Jobs
  6. Financial Careers: Financial Advisory Jobs
  7. Financial Careers: Analytical Jobs
  8. Financial Careers: Financial Media Jobs
  9. Financial Careers: Analyst Jobs
  10. Financial Careers: Portfolio Management Jobs
  11. Financial Careers: Conclusion

This chapter of our financial careers tutorial will examine the most common types of institutions employing finance workers. We’ll look at a broad outline of common finance-related firms. Later on, we’ll examine some of these companies and their careers in greater detail.

Investment Banks

Investment banks typically specialize in providing strategic advice to corporations, as well as in providing financing to companies, large institutions, and even government. They also frequently buy and sell a range of investment products, such as stocks, bonds, and other securities. Common jobs at investment banks include salespeople, traders, and investment bankers.

Commercial Banks

Unlike investment banks, commercial banks often focus on deposits from individuals. They also frequently make loans to corporations, individuals, and governments. In many cases, commercial banks also engage in traditional investment banking endeavors as well, and these may include trading and raising of capital. Commercial bank jobs include loan officer, bank teller, security salesperson, investment banker, and trader. It’s worth noting that the distinction between investment and commercial banks has tended to become fuzzy over the years, and there are relatively few “pure” commercial or investment banks operating at this time. Most firms which are broadly considered “investment banks” are considered commercial banks from a regulatory standpoint, or they operate as a division of a larger commercial bank.

Money Management Firms

Money management is an area of finance often focused on investing assets on behalf of individuals or institutions. Money management firms come in a wide range of sizes and focus areas, and may invest in an array of asset classes or in certain highly specialized areas, such as small-cap stocks or high-yield bonds. Common finance industry roles at a money management institution include security analyst and portfolio manager.

Hedge Funds

Hedge funds are akin to money management firms, given that they also manage money for wealthy individuals and other institutions. What distinguished them from money management firms, in many cases, is that hedge funds tend to take a greater degree of risk than most “traditional” money management firms. The key goal of a hedge fund is to provide high returns, and they can achieve this by maintaining fewer restrictions on their investments. In recent years, hedge funds have come under fire by many investors because they have been unable to keep pace with the broader markets and other investment vehicles, in many cases. Nonetheless, they remain a popular class of institution in the finance world. Common roles at hedge funds include security analyst and portfolio manager.

Private Equity Firms

Hedge funds and money management firms often focus on trading public securities, while private equity firms tend to buy and sell entire corporations. These institutions also manage money for other institutions and for wealthy individuals, so it’s the area of investment interest that distinguishes them from those previous categories. When a private equity firm buys up a public company, it often “takes it private,” which helps to provide the industry with its name. Private equity firms aim to generate a profit by updating and improving the business operations of the companies that they purchase or by increasing the return on owner equity through additional means. Most private equity firms aim to resell the companies that they buy after making them more valuable to investors, or to take them public again in order to achieve a profit in that way. Private equity firms commonly employ investment bankers, with a range of functions including analysis, negotiation, fundraising, and working with target acquisitions to improve operations and profitability. (To learn more, see What Is Private Equity?)

Real Estate Firms

It’s easy for those outside of the finance industry to realize that real estate firms are a part of this area as well. Real estate companies usually either develop new projects or buy up existing ones in an attempt to better manage them, increasing returns and profit in the process. Real estate firms commonly hire financing specialists, analysts, and deal managers. Real estate is not limited to dedicated firms, also; private equity firms and other financial institutions may also have a real estate interest, too.

“Real Money”

Institutional investors focusing on “real money” work to invest money on behalf of a large entity like a pension fund, sovereign wealth fund, insurance company, or educational endowment. These investors attempt to generate returns large enough to support he organization and its financial goals over time. These companies often employ investment analysts, portfolio managers, and traders.

Fintech

The fintech industry is one of the latest to emerge within this broader list of financial institutions. Fintech companies utilize technological advancements in their operations and business efforts. The industry is quite broad, and may include companies focused on digital currencies and blockchain technology, to mobile payment systems, to new and alternative modes of investing, and more.


Financial Careers: Investment Banking Jobs
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