Hard work, high pay - bank on it

Jobs in investment banking dried up after the dot.com bubble burst. But now they are making a comeback - and so are the big salaries

When Alison Fort found herself working for Esso during her year out from her management degree at university in Manchester she didn't realise it would lead to a career in investment banking. But during her time working at the oil company as an oil accounting analyst, Esso's merger with Mobil was announced. "Seeing it first-hand, I wanted to know: 'how does this happen?'," she says. "Who is negotiating? What's gone on in the background to enable these two companies to come together?" By the time she returned for her final year at the University of Manchester Institute of Science and Technology, she had set her sights on becoming one of these behind-the-scenes advisers and started applying to become an investment banker. After a tough selection process, she joined Deutsche Bank in September 2001, and is now a member of the global corporate finance division, working in the energies, utilities, chemicals and healthcare corporate advisory team.

"This is not the kind of job where you can think, 'Oh, it's only a job' and do it nine to five," she says. "It's a tough job. You are working long hours and meeting tight deadlines. You need to be very diligent and have stamina."

It is also a job which, for the past three years, has had a pretty bad press. The end of the bull market in stocks and shares meant that the investment banking core business of corporate mergers and acquisitions all but dried up. The banks cut back on recruits from universities, and laid off thousands of employees, including some who had barely completed their graduate- training programmes.

But with signs of new optimism in the City and talk of renewed mergers and acquisitions activity, recruiters at investment banks are working overtime on university campuses and offering salaries of up to £40,000 for the best talent.

According to the latest survey by the Association of Graduate Recruiters (AGR), vacancies in investment banking are up by 34 per cent this year. JPMorgan has almost doubled its intake from 165 to 340, Goldman Sachs anticipates it will be recruiting 25 per cent more graduates this year, and Merrill Lynch and Morgan Stanley are looking at similar increases.

"What I'm seeing among competitors is an increase in vacancies, which is in line with the confidence returning to the market," says Helen Bostock, a director of the Association of Graduate Recruiters and head of graduate marketing at JPMorgan. "As the economy picks up, there's a knock-on effect, with people deciding to go to market and to float their companies."

And that's where the investment banker comes in: analysing the markets to see if it is a good time for a company to buy or sell, at what price, and then to facilitate that process. In leaner times, investment bankers are needed by companies to help them cut costs and to shore up their balance sheets.

"The attraction of banking is that it is a challenging industry. It's not a career option for the faint-hearted," says Bostock. "It's complex and attracts some of the brightest individuals."

A 2:1 or a first-class degree is a must, and it is increasingly the norm for serious contenders to have had one, if not two, 10-week internships with an investment bank before their final year at university.

"We are keen to reach students early, and have recently launched a two-week programme aimed at first-year students to provide them with a flavour of investment banking," says Calum Forrest, head of European recruitment for Goldman Sachs. "We go to a number of universities across Europe and hire candidates from any discipline, as long as they have a strong record of academic and extra-curricular achievement."

One of those extra-curricular activities must be a keen interest in the markets. Anyone who is not an avid reader of the financial pages and a follower of the FTSE 100 index should not consider investment banking as a career.

Although many people would struggle to describe what an investment banker does, most tend to have a clear, albeit stereotypical, image of what one is like: a besuited male, armed with a public-school background and Oxbridge degree, making more money than even a National Lottery winner could dream of. It is an image the recruiters are keen to dispel. Sallyann Birchall, head of UK graduate recruiting for Deutsche Bank, adds: "You're looking for the elite at graduate level, but it is important to have a really diverse cross-section of people coming through the door.

"At the end of the day a degree is a level of academia and what's equally important is their interest and hunger for the market and their wanting to be successful. Graduates can't just think they want it, they really have to want it"

Bostock says it is a mistake to think that investment banking is all to do with high-profile mergers and acquisitions. Graduates tend to be less familiar with other parts of the business which offer equally attractive and exciting opportunities. These include trading, research, private banking, treasury and security services and investment management.

But if investment banking is notoriously difficult to get into - Deutsche Bank interviewed 3,500 for 250 graduate positions in London alone last year - it is no less pressurised once inside the industry. "A 12-hour day is normal and the average is more like 14," says Siddhart Nahata, 24, an analyst with JPMorgan. "If you suddenly have a hostile offer for a company and you are on the defence side, you are not going to leave the office until very late."

Originally from Madras, Nahata graduated from Warwick University in 2000 with a 2:1 in accounting and finance before taking a Masters at the London School of Economics. "It can be quite demanding at times, depending on the workload and what the clients expect. It's a lot of personal investment in terms of time in the initial years, but the amount you get to learn is far more than in any other industry.

"After less than one and a half years of working here, I was flying out to various countries, meeting clients who included senior executives and government officials."

The financial rewards match the responsibility, with eye-popping bonuses for those pulling off the biggest deals, but the hours are long and the work demanding. Equally, those not seen to be making the grade during their first two years can find that their career in investment banking is very shortlived.

"The salary is highly attractive at the outset, but it can be stressful and your social life often needs to take a back seat," says Alison Fort. "But that is the nature of any professional career."

However, it is the variety of work which really keeps her motivated. "You might fly off to Vienna in the morning and come back to do a conference call in the office in the evening. When I look at my 'to do' list on the Tube in the morning I know it will have totally changed by the time I get to work."

'THE PACE OF THE INDUSTRY IS VERY, VERY FAST. IT'S CERTAINLY DIFFICULT TO GET BORED'

Ann Berry, 22, graduated from Cambridge University with a first in economics last year. She joined Goldman Sachs as an investment banker in September and works in the mergers and acquisitions division.

"I did a 10-week internship programme at Goldman Sachs in my penultimate year at university. It was a great experience. It's difficult to understand what an investment banker does on a day-to-day basis until you have been given a chance to do it.

"People have very set preconceptions about what life and attitudes in this industry are like. The stereotype is a very aggressive, male-dominated atmosphere: my internship gave me the chance to realise that it is not like that at all.

"I found Goldman Sachs to have a diverse work force and to be very strong on meritocracy, which was hugely attractive. You are put on a training programme when you first come here. Within a week, you have to learn all the key financial terms and issues, and then you hit the ground running really.

"The job is hugely varied. It is impossible to say what the typical day is like, but I might be assigned to a new project - for instance, a client with surplus cash might be thinking about what to do with it and I will work with a team to consider what strategic acquisition they might consider.

"I could be looking at the debt structure of a company or I could be travelling to another country to meet with senior managers to get a better insight into their business. Or I might be working on a live deal when you spend a lot of time meeting with lawyers, accountants and consultants.

"Teamwork is critical - the more junior bankers are hands-on, producing both the 'big picture' and detailed analysis, and work very closely with senior bankers who have the experience to see whether their conclusions are sensible.

"You need to be intellectually curious to do this job and to be able to jump on a steep learning curve from the day you join. The pace of the industry is very, very fast. It's certainly difficult to get bored."