When it comes to the most rewarding careers in the field of finance, a lot of aspirants have a hard time making a choice between Investment Banking and Asset Management. Both of these fields, primarily deal with handling money, similarly both of these fields, also offer really awarding salary packages. Recent statistics state that it is the Investment Banking and Investment Management firms, that offer the highest starting salaries to fresher’s. One big similarity between these two fields, is that they are both, fiercely competitive industries and are famous for hiring the best in class, talent from world’s renowned institutes.
Investment Banking denotes that area of the banking sector, which primarily assists in the generation of financial capital for all of its clients. The clients here can range from institutions, companies, governments as well as private individuals. In other words, this field functions as an exchange market, in order to raise money and make it available to those, who are looking for financing their various ventures. Any investment bank, raises money or capital, through debt or equity, as well as other IPO activities like consultation, book building process, framing a company’s memorandum of understanding, while at the same time covering the legal aspects as well. The various activities and functions here, can be classified into the buy side and the sell side . The buy side, basically is supposed to deal all the buying advice concerning mutual funds, hedge funds, unit trusts, life insurance companies, private equity funds and so on. The sell side, is involved in trading of securities as well as, facilitating market making along with raising capital through underwriting and research activities.
Asset Management, in simple terms is primarily, the business of handling other people’s money. These firms basically provide financial services, wherein the clients’ money is invested in securities, equities, debt, commodities, derivatives, currencies etc. These firms appoint those professionals, who are experts at handling somebody else’s money, in terms of investments. A good asset manager would be someone, who has an insight of all the needs of their client and would advice them, on the basis of their asset allocation. This field involves extensive amounts of planning, recommending and reviewing of all the investments of the client companies as well as individual clients.
Asset Management firms are also referred to as Investment Management firms and are usually known to employ those individuals, who have various analytical skills, as well as the ability to ascertain, which investment products would be beneficial for their clients, in order to help them achieve their financial objective, set with the specified guidelines. The various products, that the Asset Managers invest their client’s money in, are mutual funds, hedge funds, pension funds, retirement funds etc; as well as other financial entities like futures and equity derivatives. These firms usually look for the cream de la crème, when it comes hiring professionals. HR managers usually look for candidates, with a special credential like the Chartered Financial Analyst (CFA) or MBA while recruiting.
As both these fields, offer similar rewards and lucrative opportunities, candidates look to get an edge over their contemporaries, by taking up specialization courses. In this context, institutes like Imarticus Learning are sought after, as they offer a number of programs in Asset Management, Investment Banking, Financial Modeling as well as cracking the CFA exam.