The Wharton School at the University of Pennsylvania recently asked a few investment banking heavyweights to proffer up their advice to the school’s MBA students. CEOs, Co-Chairmen and economists from top firms such as UBS Securities, Merrill Lynch, J.P. Morgan Chase and Citigroup attended the Wharton Finance Conference, according to Deal Journal, a blog published by the Wall Street Journal. Some of their insights include:
Investment banking will survive, but the business model built upon short-term funding and popularized by firms such as Lehman Brothers and Bear Stearns is indeed dead. However, bank deposits, which are more secure than overnight loans from other banks, will continue to fuel what investment banks do best: namely, lending, trading and financing.
The M&A advisory side of the business will be more active in the next few years than the capital-markets side. And the most active part might be restructuring, which advises bankrupt companies. This may be a particularly good investment banking career choice, at least for the next few years until the economy recovers.
If you are thinking of working on the M&A advisory side, consider boutique investment banks. The article mentioned boutiques such as Evercore Partners, Houlihan Lokey Howard & Zukin, Perella Weinberg and Greenhill as good candidates, given that they have all had an increase in their M&A business recently.
And if you are considering capital markets, focus on distressed debt, because there will be plenty of troubled assets looking for buyers. Or consider emerging markets, because the investment banking business is increasingly global.