Wednesday, 18 August 2010


Morgan Stanley BuildingImage via Wikipedia
There are various differences between the types of employers and institutions in Banking & Finance, and all pose different career aspects such as training, exposure, professional development and progression, amongst other things.

Tier 1) 
Bulge Brackets - The term 'bulge bracket' frequently refers to the group of investment banks considered to be the largest and most profitable in the world; their investment banking clients are usually large corporations, institutions, and governments. They usually provide both advisory and financing banking services, as well as the sales, market making, and research on a broad array of financial products including equities, credit, rates, commodities, and their derivatives. They are also heavily involved in the invention of new financial products, such as mortgage backed securities in the 1980s, credit default swaps in the 1990s, and today, carbon emission trading and insurance-linked products. Bulge bracket firms are usually primary dealers in US treasury securities. Bulge bracket banks are also global in the sense that they have a strong presence in all three of the world's major regions: The Americas, EMEA, and Asia-Pacific. Several, if not all of, the Investment Banks offer defined and prestigious graduate schemes and internships for those who have just graduated or obliged to take a year out in industry as part of their degree. What you will find is that many of these dedicate significant budgets for Marketing and HR purposes to showcase and make students aware of thie presence in Banking & Finance. You may even find that some of the larger Investment Banks offer the opportunity to begin your graduate scheme with training abroad, for example on Wall Street in New York. Graduate schemes look to draft the best of the best of fresh graduates; those that are academically brilliant, have had previous experience in the sector, and those who are armed with the right mentality and approach. For these reasons, the application process is extremely competitive. The following is a list of the major Bulge Bracket Investment Banks:
ABN Amro, Bank of America, Barclays Capital (Barcap), Citigroup, Credit Suisse, Deutsche Bank, Dresdner Kleinwort, HSBC, J P Morgan, Merrill Lynch, Morgan Stanley, Societe Generale, UBS, Goldman Sachs.

Tier 2)
Mid-Caps (mid-capitalisation) - These organisations are smaller in stature in comparison to the bulge brackets, and tend to utilise the likes of consultants to make people aware of them. These firms do not have the same level of capacity in terms of marketing and HR budgets, but you may find that you are offered more exposure and at a quicker rate, through learning on the job. A prime example of a mid-cap Investment Bank would be BNP Paribas, specialists in IB and Corporate Finance, or Brewin Dolphin. The term 'mid-cap' is a shortened version of the phrase 'mid-capitalisation';  


A mid-cap company is one that has market capitalisation that is too small for it to be a blue chip (or large cap), but which is bigger than a small cap. As businesses that have reached a certain scale they tend to be more stable than similar smaller companies. Being smaller than large companies, mid-caps are more likely to have room for growth within their industry. They tend to be less complex than large companies, and therefore easier to analyse.

Tier 3)
Boutique Firms - Small investment Banks that specialize in certain types of investment banking. They are fiirms that do not have the resources to dedicate towards a detailed training scheme, or to offer a varied range of different services. You will often find that your exposure to real-world projects and applications tends to start from day one. In recent times, boutique firms have been attracting alot more in terms of employees, as individuals are not only attracted to the opportunity to climb the corporate ladder in quick time, potentially becoming a partner, but also because of the ability of these firms to specialise in a chosen niche area. The future looks bright for these firms because of these recent trends. Typically, Boutique Investment Banks have one or two offices and may specialize in advisory services for certain geographic regions. Some banks may specialize in certain types of transactions. An example of a boutique firm would be Baillie Gifford & Co or Brown, Shipley & Co.
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