Investment Banking (IB) is one of the most coveted career options if you love finance.
Increasingly Investment Banks are hiring CAs for middle and back-office roles.
In a conversation with The Finance Story, CA Aditya Parekh shares how his hard work and extroverted personality got him the Investment Banking Analyst role at HSBC.
It’s not your typical 9-5 job so if you want a laid-back lifestyle, IB is not for you.
Excerpts from the interview
How did you decide on a career in Investment Banking?
Aditya: When I look back, the roots of my career in investment banking were planted during my articles. (CA Articleship is a mandatory practical training program of 3 years)
I was fortunate to join a big CA firm in Ahmedabad where I got some great exposure.
We did lots of work around Mergers and Acquisitions (M&A) tax, audit, and accounting. It built a good base for my career.
Until now, I was not acquainted with the term Investment Banking.
After qualifying as a chartered accountant, I worked at my dad’s firm Rajesh Parekh & Co. It was here that I decided to look beyond typical CA duties.
Since I was very keen on finance and had worked on quite a few valuation assignments, I decided to pursue (Chartered Financial Analyst) CFA US. I only completed the CFA level 2, but met a lot of people and grew my professional network.
Now I wanted to do something that was far more interesting than a small setup in Ahmedabad.
I started applying for jobs focusing on valuation in Investment Banking. The HSBC opportunity popped up.
Since I was a lateral hire, there were a few good rounds of interviews before I got into HSBC.
When you joined HSBC, what were your roles and responsibilities? How have they evolved?
Aditya: I started in a team that focused on M&A. My key responsibility was preparing pitch books for potential acquisition and divestment opportunities for our clients.
Initially, I was working with one associate who had 4 – 5 years of experience. It was challenging for me because he had a lot of work and I didn’t quite know how to prepare a pitchbook.
It took me some time to get the hang of it, but I was able to keep pace. Shortly after I was helping my seniors, efficiently prepare pitchbooks and had gotten really good at it.
What changed the trajectory of my career? One deal.
Since I joined HSBC pre-covid, the deal flow did not look good. But post-covid when everything came back to normal we were able to sign a very big deal; one of the largest M&A deals ever done by HSBC. I was part of the team.
Given the deadlines, and given we had a very tight deal team, I was willing to put in a lot of hard work, The learnings were terrific, and my hard work was recognized.
Moving on, I wanted to explore different opportunities within the organization and moved into a sector-agnostic M&A product role about 3 months ago. The credit for that goes to, the head of the team with whom I was working in the oil & gas sector.
I worked with him for quite a long time so he knew that I could deliver and was ready to put in the hours.
It was hard work and luck that played a role in my transition from Bangalore to London.
The work culture in the UK is quite different from what it is in India. What has been your experience working at HSBC?
Aditya: Investment Banking is always a challenging job, no matter where you are. When you are involved in a deal, you don’t control things, and neither does the client.
The main thing about IB is that you are not getting into a 9-5 job, sometimes you need to put in a lot of hours. For someone who wants a relaxed life, IB is not for them.
Thankfully HSBC offers a flexible work life, so you can go to the office 3 days a week, and work from home for 2 days.
The junior employees work significantly hard. They are cognizant of the fact that they would also get recognized and get financial rewards.
Apart from that, it’s about building relationships and trying to deliver your best.
Banks like HSBC promote speaking up. So if you speak with your manager or seniors about what you want to do next in your career, they would ensure that you are placed in a position that interests you more.
Apart from technical skills are there any other skill sets that are required for the role of an Investment Banking Analyst?
Aditya: When you move into the front office in an Investment Bank, (which is called a client-facing role), you have to deal with a lot of clients. For that, you need to have good communication skills and confidence.
Have confidence in yourself, only then the client will have confidence in you.
What I’ve read and people say is that going forward, hard skills or technical skills will get you into investment banking and soft skills will get you up the ladder.
This is a role where you need to build professional relationships with a lot of people, you need to speak with a lot of people regularly.
There are millions of people who want to get into investment banking, what would you advise them? How should they start their journey?
Aditya: In my opinion, Chartered Accountancy is a good pathway to getting into Investment Banking.
They should probably aim for getting into the front office role in an Investment Bank. But if it’s impossible, then a back-office role would be their best bet. In India, there are a lot of back-middle office roles that investment banks keep on hiring for.
If that is also not possible then try to join a Big 4 in their valuation team.
The last resort would be to get into an audit and upskill yourself. Learn financial modeling so that whenever an interview or opportunity arrives you can showcase your skills and get through. And then transition into investment banking.
If none of these works out, try to get an MBA from a good college. The chances of getting into Investment Banking through College placements are quite strong.
For a B.Com graduate, what do you think would be a more suitable path to get into Investment Banking?
Aditya: For a B. Com graduate who is not a CA, there are a few investment banks hiring junior analysts. Small domestic investment banks also hire junior analysts or research analysts.
I suggest you get into a role that pays less but learn on the job as well as out of the job.
Depending on where you want to reach in your IB career, connect with the right people. Get to know what skills they required to progress in their career.
Upskill yourself through different courses in financial modeling (available on Coursera) and valuations, LBOs, etc.
If you have good enough skill sets which are required for this job, you don’t need to have any particular degree.
When I joined HSBC they preferred hiring CAs who had passed CFA levels 1 and 2. But the scenario is changing. Nowadays they are hiring chartered accountants or B. Com graduates with no CFA qualification, but are good for the role and can deliver.
It is more about how much you want to learn, and how much you are willing to work.
Do your homework, read about the things related to your job, and prepare for the interview.
What does the future look like for an Investment Banker?
Aditya: There are probably two options that I would pick for myself.
I’ve been in this role for quite some time now and got hands-on experience with the work that I do.
I would try to engage in more conversations with clients and bring in more deals, to get promoted to managing director or senior position quickly in my organization.
The second option would be to move to a private equity fund, which is considered to be the buy side or investment side.
When you are at a private equity fund, you’ve got to gather capital that you’ve raised from different investors and invest in securities or businesses.
If you are not interested in going into investment banking then you could probably move to a private equity fund.
Those are the two paths that Investment Analysts can consider.
It’s a performance-driven role, so it depends on what amount of returns you can generate and how many deals you’re able to get.
The third path would be moving to a corporate role. You could move into an M&A role in a company, handle their investments, fundraising among others.