This 3-part consulting advisory series is for all those who are planning to enter the Investment Banking industry.
Before I go into the unique opportunities MBA programs offer through relationship with IB employers, let us look at the broad definition of different kind of banks. For those who are already in the industry, feel free to skip this section.
Before Understanding Internship Opportunities – Understand 4 Types of Investment Banks
Bulge Bracket Banks: Bulge bracket banks are large, multinational investment banks that handle multi-billion-dollar transactions. These institutions are characterized by their global presence, extensive resources, and the capability to manage large deals. They engage in a wide range of financial services, including mergers and acquisitions (M&A), underwriting, and sales and trading. Examples of bulge bracket banks include Goldman Sachs, JPMorgan Chase, and Morgan Stanley.
Middle-Market Banks: Middle-market banks operate in the middle tier of the banking hierarchy, typically managing deals between USD 50 million to 500 million - falling between smaller regional banks and the large bulge bracket banks. These banks typically focus on serving medium-sized businesses, offering a range of financial services such as lending, advisory, and capital raising. Middle-market banks are often more specialized and regionally focused compared to bulge bracket banks. Examples include Piper Sandler, Raymond James, and Jefferies.
Regional Banks: Regional banks focus on a geographic area or region. They typically manage deal sizes in the range of USD 50 to 100 million. The size of the banks is smaller than bulge-bracket banks and middle-market banks - serving local communities and businesses. Regional banks provide a range of banking services, including loans, deposits, and customer-centric financial services. While some regional banks may cover a broader range of services, others may specialize in specific niches. Examples of regional banks include PNC Financial Services, SunTrust (now part of Truist), and Regions Bank.
Boutique Banks: Boutique banks are small, specialized financial institutions that focus on specific industries, sectors, or types of financial transactions. Unlike larger banks, boutiques are often more nimble and can provide personalized services. They are commonly involved in advisory roles for mergers and acquisitions, capital raising, and restructuring. Boutique banks may lack the extensive resources of bulge bracket banks, but they make up for it with expertise and tailored solutions. Examples include Evercore, Lazard, and Greenhill & Co. The deal sizes are typically less than USD 50 million.
To summarize:
1) Regional banks are a distinct category that operates on a smaller scale within a specific region, and they may cover both middle-market and boutique services.
2) Bulge-bracket banks are large global institutions that are more interested in large deals that you see in news releases.
3) Middle-market banks fall in between Bulge Bracket and Regional Banks, catering to medium-sized businesses.
4) Boutique banks are smaller, specialized firms often focusing on specific sectors or transaction types.
Each category serves a different market segment with varying levels of specialization, size, and global reach.
In the second part of Career Planning Advisory Series, I share a few recent experiences of clients from diverse backgrounds and schools (M7 and T10 to T20) and the role of the Career Service team and brand of the school in facilitating IB offers.
