IBD, Equity Research, or Global Markets? Breaking Down Investment Bank Roles

Hello and welcome back to the Market Maker podcast. And in this episode, we're going to address one of the common questions that we often get from many of the students we interact with. And that is, they might know that they want to work in finance or at an investment bank, but they don't specifically know the division of the different roles within the bank, whether it's IBD in the investment banking division or in equity research or global markets. So in this conversation, we're going to try to address that. Talk about some of the difference in roles within those divisions or parts of the bank, talk about what interests that might align well with these types of jobs for your future career, and then the types of skills that are necessary in order to break into the bank. As ever, I am joined by Silvia, who is a former Goldman Sachs equity research analyst. So she'll cover the sides of the bank related to equity research and IBD, and then myself coming from a macro strategist background, we'll talk about global markets. So Silvia, thank you very much for joining me again.

Not at all. Hi Anthony, and hi everyone. Great to be here.

Yeah, great to have you on in the new year, and perhaps we could start with perhaps probably one of the most favorite parts that a lot of young people will be looking at to start their career, and that is the investment banking division. So what type of roles are there then in summary within that that part of the bank?

Yeah, absolutely. So, first of all, I think that one thing to bear in mind is that when you look at an IBD team, you will pretty much have some parties, like some associates, VPs, analysts, which are more working on the execution of the deals. And instead, you will have core MDs and relationship managers that, as the word says, are really looking into nurturing those relationships with their clients and making sure to keep in touch with them, to share new ideas generated by the analysts with a lot of research. So you have this distinction a bit between relationship and execution. And then, as we also covered in previous episodes, you always have the division between what we know as M&A, M&A transactions, we can say deal advisory, where we can also find restructuring deals, for example. And instead, on the other side, we have product groups. So all much more linked to capital raising.

Okay. And then in equity research, how does that differ? Because they, do they sit in the same part of the division of the bank? And how does that break up?

Yeah, absolutely. For equity research, usually, first of all, you have a division similar to IBD in terms of regions. So if we are, for example, working in London, we are going to be covering EMEA stocks usually. And then you have a division in terms of different industries, again, pretty much reflecting the same structure as IBD. And inside of each team, you can find the MD, which again is more the one nurturing the relationship, keeping in touch with the company's management team, as well as with the investors, which are our key clients in equity research. And then you have senior analysts and associates that are going to be covering the subsector, for example, inside of their team. And analysts are going to be more working on the drill work in terms of the models, doing research. Solving some problems and requests from the clients and starting helping out the team as they grow on the report themselves.

So just in terms of the S&P 500, so the major US stock index. So within that, let's say 11 main sectors covering things like energy, financials, healthcare, technology, and so on. Would it be that someone would sit within one of those, or would they jump, would they move around a little bit? In terms of exposure to other sectors?

Yeah, so I would say there is a bit of difference. So you have the management team, which will sit above everything, let's say, and just look more strategically into the equity research as a whole. And then you will have sectoral teams, as you said. So you will have a team for software, for example, it was the team I used to work in. And then you have luxury goods, you have other teams like oil and gas, et cetera, et cetera, for pretty much all of the sectors you can think about.

Yeah. And then I remember one of the students that we worked with many years ago, I think he went on to work at a bulge bracket, but then a boutique. And he actually came from a PhD in the sciences, I think, but he joined specifically a healthcare team. So would there be different onboarding points as well, depending on your academic journey? So there's a grad route, but is there also a kind of domain expert route that comes in as a PhD, maybe for some of these more specific stuff.

That'd be right. Yeah, absolutely. There are major bulge bracket banks all offer some sort of fellowship programs that run, as you said, a little bit in parallel with respect to the grad program or the summer analyst sort of cycle programs. And usually those are for those very technical people that have a bit of a different background. It is usually not in finance, so they will have a little bit more of a learning curve in terms of the finance concepts, but instead are entering the bank as the core experts in the field, because as research is so wide and you basically need to become an expert in terms of the sector and the industry you're covering, it really needs also those experts. Actually, one of my best friends I used to work with when I was at GS entered exactly with that route, as she had a pharmaceutical PhD.

All right, cool. And then just to cover off global markets, so I guess one thing to mention at the top, if you're a US bank or a European bank, sometimes there can be some differences in terminology. So one that comes to mind I think is UBS. I think they have a, when they say investment banking, it's kind of housing within that a markets and an M&A advisory type of team. Whereas in a US firm, sometimes the division can be more clear in a sense of there's global markets and then there's capital markets or their investment banking division and so forth. So there is a little bit of crossover there with the kind of jargon, but they both kind of mean the same thing. So on the global markets side, this is where it houses your trading activity. So you'd have things like traders, market makers, you have risk, for example, compliance, these types of people and structuring. So I guess the differences here, just top level, would be Your traders and salespeople, how are they working together? Your salesperson, well, think about the, I guess the chain, if you like, of information to execution. So you have actually a research arm within global markets, but instead of looking at independent kind of stocks, like you just mentioned, Silvia, this would be looking more on global macro. So given the talk of the day of early 2026, I'd be producing some macro research about Venezuela. To try and educate my clients about who might not necessarily know a great deal about, you know, the geography, the history, the trade relationships, the commodity implications. And so they would come to us and we would provide this kind of macro insight, for example. So that would be from your research team or analysts, and then they would feed that to the sales team. And the sales team are the people that hold these relationships then that are able to communicate that directly with the client. They know what the client's needs and wants are. And then you have the traders who, once the client says, yes, we agree with your view, or we want to hedge a position or whatever it might be, they'll have that relationship with the salesperson, and then the trader will go ahead and execute or make that market for them in that sense. And then the risk is kind of coming in, in order to manage that on the bank's balance sheet. So yeah, that's the kind of the global market side, the structuring part. You know, you can kind of think of these as more the architects of designing more complex financial solutions to people's problems. So sometimes it's not, say, a person wanting to buy a position in a stock, but they want to do it in really big size as a hedge fund client. And so they want to just use the bank to offset some risk. In this case, It might be a genuine, you know, real case use, like a farmer who has, you know, a crop and they want to hedge that from weather conditions or currency fluctuations. And so therefore they need to have a kind of a built solution that might be buying and selling multiple different instruments in order to hedge themselves against those risks so that they can indeed, you know, run a business, for example. So That's where the structuring team might come in as well. All right, well, look, let's talk a little bit then about how they make money, like how do they actually make money for the firm? Because there's probably a little bit of difference between these. So maybe back to IBD again.

Yeah, I think it is really interesting because it really means we can understand what is the business model of each division, because we may think that a bank just works in the same way, no matter what is the division. Reality is that, as we will see now, it's really different. So starting from IBD, as you said, it really is fee-based. So this means that essentially, if there is not a deal, you're not earning the revenue. So when we are thinking about an M&A transaction or an IPO, essentially the client is going to pay a fee, which is a percentage in terms of the overall value of the transaction. And usually this is a bit variable for a $100 million plus dollar value, for example, for a transaction, it can be between 1 and 2%, which seems really low. It's something that I touch always on with students when I deliver sessions, but actually, if you think about the size of the deal, it actually is a good amount of money to bring back home to the bank. And then he said, for a smaller type of these deals, it can fluctuate between everything from 3 to 10%, I would say. Which is really different with respect to research instead, because in terms of research, one interesting thing is many times, maybe chatting with students, they ask me, can I have a look at some reports that you have been working on? And the reality is unfortunately not, because most of all the reports produced by research are not publicly available, but instead investors, which are the clients, are going to get access to these through a subscription. So they will essentially pay an annual subscription to the research of the bank and get access to this, which again, is not really a fixed number because it can fluctuate a lot from, I don't know, $10K to over $100K a year based on the type of level of research you're getting access to.

Yeah. And on the market side, I guess you can think of it again with jargon words that you'll hear banded around is kind of flow and non-flow business. So flow being, yeah, execution of trades. And in summary, the trader who executes will get a commission on the back of that, and that's how they generate revenue. So if you look at the investment banks and how they've performed through 2025, we've had an incredibly volatile macro year because of, let's say, geopolitics and uncertainty about interest rates and trade wars and inflation and all that sort of stuff. And what that means is then buy-side clients are having to adjust their portfolios, their positioning in the markets, and the banks are helping that facilitate that. So the flow of orders is coming in thick and fast, and that allows them to generate more ideas. And this is how all the teams kind of plug in together. So the more ever-changing the macro climate, the more we can produce research, the more we can sell that research and monetize that. The more then the client will need to take action because the future is very uncertain and keeps changing. So the more we can execute that flow business. At the same time, the non-flow stuff is really where that structuring part comes in. So the structuring being, it's more complicated. It might play out over a longer timeframe. This is much more when it comes to more like modeling in a traditional sense, whereas the flow side can be much more reactive and much more fast-paced. Alright, well, maybe we could talk about then, well, let's talk about hours because a big consideration that people will think is, and there's no right or wrong answer here. I always say it's to students, but I think what our sitting in the intersection of both the employer and the student, our job is to be as honest and transparent as possible so people make the best decision for themselves. And the hours here do differ between these different divisions, I guess, in the working style and patterns. Maybe, yeah, IBD, we'll start there.

All right. Let's kick off with IBD. So I think everyone listening probably knows something about the fact that it's a very long working hours job. So why you really need the stamina for the job. But yeah, I think that this is a point we touched upon as part of one of our recent bootcamps, Anthony, because a student asked us what was the difference and how to choose anything. Reality is that you just really need to know yourself because I will tell you about IBD. IBD usually doesn't have a very early start. You may start at 9:00 AM, pretty much, maybe 8:30, but then you usually have a very long night. Not every day is the same. It doesn't have to be that every day you're going to finish at 2:00 AM, but when there is an active deal and you really need to execute on it and close the deal, you will probably spend a lot of nights inside of the bank, which has pros and cons. Reality is that you work as part of a team when you are in IBD and same as in research. So, you can actually bond a lot with your teammates and spend a lot of time with them. It will not be you alone in front of your laptop, but yeah, it is a long working hour job and it's good for everyone who can really push through during the night. Instead, I think equity research was actually perfect for me because as you know well, Anthony, I'm one of the first arriving to the office every day, pretty much here, because I love to work in the mornings. I'm just have so much energy in the morning and then perhaps instead towards the end of the day. I start declining a little bit in terms of energy. So actually starting very early was perfect for me. And here we're talking about a 6:00 AM start, 7:00 AM start if you are not in pure earnings season, I would say. And then usually it is pretty much a 12-hour working day, if not because there is something that is popping up in the market on the same day and you immediately need to react. So you also need to be very flexible. But what about markets instead, Anthony?

Yeah. Yeah. It's quite similar in that sense. I mean, one of the things that I'd normally say to people is that the benefit of working in markets is that, you know, because no one's covering every single asset class and every single product, you are normally given responsibility of a certain thing, maybe a geography, an asset class, or a product. And therefore your day has quite a fixed structure and market hours typically would be when the market opens and closes. Even though you can trade derivative products pretty much 24/7, but those, those most products have defined trading times from a volume perspective. So when is it that you are able to trade and when is it that it's most useful to trade in terms of liquidity and things like that? So yeah, the day similar sort of starts pretty early, so it would probably suit an early riser. I would say probably a little bit of difference depending on what specifically you are overseeing. But yeah, a 6 to 7 type of start is within that window. The main thing in markets, actually the busiest time of day I remember in my career would always be those first few hours in the morning. So as soon as you get in, you can't be one of those people where it takes you a little bit of time to warm up. Like your most productive time of the day, certainly me, I sat in the research part of markets, let's say. Would be at 6 to 7 would be probably my most optimal part of the day in terms of productivity. Then the market opens and then you kind of see how things play out. And then there's a lot of economic data that drops in Europe, in the UK in the fairly early part of the morning. And the lull actually comes late afternoon and then it kind of repeats when the US come in. 'Cause you know, the benefit of in London, we get to see both sessions and then Yeah, wrap up the day. A lot of cash markets sort of close, or FX rates around 4:00, 4:30, and then it's a bit of housekeeping. And then yeah, by 6:00 it's kind of wrapped up. So similar in a kind of 12-hour stint. And people would say, wow, 12 hours, you're talking about it like that's a low amount. And one thing I would say is that there's quite a big difference, at least correct me if I'm wrong, because you've lived the other side of the bank. But in markets, I kind of think of analogy of it's more like a sprint. It's more like high intensity and a bit more fixed and structured. Whereas on the banking side, it's more like a marathon. It's a bit more, you don't have such constant deadlines that are happening, literally can be every few minutes when you're working and reacting to markets. Because of course, anything can happen at any time around a So again, that can serve different people and their personalities and working ways better or worse, depending on, on what you're like.

Yeah, absolutely.

All right. Well, let's talk. So we're just going to say about skills and then maybe a little bit about interactions across different teams.

Yeah, perfect. So again, let's start with IBD. I think that's a very interesting exercise I do all the time as part of my sessions when we do an M&A focus or IBD focus in general. Is I ask students to put in a bit of a word cloud what they think is the one most important skill that they need to have as an investment banker. It's always so interesting because our word cloud becomes like huge because there are so many different skills that are put in it. And it actually reflects what is the reality. It's not all just by about financial modeling. It's not all just about communication. There are a lot of very important pieces, but maybe I will select, let's say, 4. So, Just like thinking back to what we were saying before, I mentioned stamina. So again, long working hour jobs, a bit of a marathon, as you said, because the reality is that it's not as intense in those working hours, but still you need to continue pushing through. So that is absolutely really important. Just making sure you can remain focused and meet all of your deadlines, which will be your deals when you need to execute. But in terms of core skills, again, financial modeling, Definitely one. I think it's not something that people should be scared about because it doesn't mean that if you're not of Excel width, so when you're joining the bank as an intern, then you will never land a role. The learning curve will be really steep. It's something that you will need to pick up, but it's one of those core skills. But at the same time, investment banks are not expecting that you know everything when you're joining, especially if you're really junior. And then communication. You will be working on very complex deals. You may have your 35 tabs wide spreadsheet and you need to convey this as a really clear idea and message to your client. If you want to convince them that you are 100% sure what is the right target for them to acquire, for example, and you need to pitch your idea to them. And finally, and I think this goes over what is the financial modeling, your pitch deck, everything is attention to detail. It's so important whether it is again, You're putting one zero more, one zero less in your spreadsheet, or you're doing one link wrong in your spreadsheet, everything can mess up. And at the same time, also in terms of the actual products you deliver, when you are delivering a presentation in front of your client, they will notice if you're using— it sounds really silly, but they will notice if you're using a font which is different one slide from another and you're working as a team, maybe two people are working on that. And it's so crucial to make sure that everything is nice and aligned and produce in a professional way so that all your visuals are nice and crystal clear. They're not fuzzy. And so attention to detail, definitely a key one I missed off on.

Now, I know it's hard to have real certainty on what tools are being used because I know that there's a lot of AI adoption, particularly some of the big US banks who have more kind of firepower to invest in technologists, but Any sort of skills that you think that could be emerging that would be useful for people to possess, even going into IBD or equity research that could help with these sorts of things, do you think?

Yeah, absolutely. I think that's definitely something that we can notice whenever we're using any AI type of tools is that usually it really depends on what you're asking the AI, but they produce a large quantity of information. And again, whether it is something that you are finding on your ChatGPT or whatever it is, the AI. AI tool, or whether instead you're just Googling online or using the company researches. I think that's something really important, especially for research, but also for IBD, is information synthesis in general. You're going to get in front of so much material and you need to draw down what are the most important pieces that then you need to embed in your email for a client request or to reflect in your model. I used to work on some client requests, I remember, which was like, try to understand what was the sentiment over the last 2 years of earnings calls. And not everything that is said in any specific earnings call will be important. You just need to capture what is the most important thing and like identify that pattern. So there's definitely something important, which again, I think links nicely back to the AI use, which often delivers to us a lot of material, a lot of information, and we really need to understand what is important and the crucial point for us.

So some of the things you were mentioning there in terms of characteristics and skills, I would say definitely carry over to markets. I mean, the attention to detail aspect kind of remains, but I guess, yeah, similar in a way, like you said, the zero here, zero there, or what otherwise we'd call a fat finger.

That's good.

Inputs like an incorrect order size. Obviously that can have an immediate impact and that could be very costly. But it's more about pressure and intensity. It's like because of the timeliness that's required to execute, because prices are moving all of the time, it's that hesitancy can really cost you in terms of from execution perspective. So it's kind of attention to detail, but the, I guess the pressure component is slightly different in the banking side. I guess it's more about, okay, I have this time to submit it and then it's like, it could be a very costly mistake. So I feel the pressure of that burden of what if, whereas with trading you've just gotta do it quick snap and it's gotta be made. So equally, I guess numerical agility. So quick math, being able to read and calculate numbers pretty quick. And I wouldn't want anyone to confuse this from having like advanced maths. Standard. This isn't quantitative finance that we're talking about here. Let's say a cutting-edge hedge fund. For a lot of traders just working at banks, it's more about just that quick use of numbers to compute things very quickly and dealing with client order flow in that way and market positioning, these sorts of things. Synthesizing a lot of information is super important. Even in my 20 years working in markets, it's changed dramatically in terms of the aggregation of information. It's just so constant and so fast and so much. So in a similar way to, as you were describing, in this sense though, instead of looking at like an output on a bunch of financial statements and data, here we're just looking at news and information. So it could be data, but it could be qualitative in a sense of politicians are saying things and there's weather that could impact commodity prices and all these different things. So it's like, how do you take a lot of that and condense it down into something really meaningful and concise? And I often think this is something that students can really struggle with because in academia you are almost taught the exact opposite. Everything's gotta be long form. It's gotta have full referencing. Often targets are to write whole thesis about certain subjects that are very deep. Whereas as a trader on the market side, a lot of the time you need to have the intellectual power to be able to compute the information of what your research team, for example, might be telling you, but to articulate it in a really short, sharp, concise, impactful way. And that transition is something which is really important. And then communication is probably the final one. So, you know, a lot of people can often come from those sort of similar settings. I guess sport is an analogy where you've grown up, where if you think about any sport competition, you're working with other people within your team. There's the pressure of time or a score, and you're trying to work within that environment to, you know, have a positive outcome. So, you know, being able to communicate under pressure clearly, concisely as well is a really important thing. And I think for anyone thinking about the crossovers of experience, you know, you might have run a club at your, like a society at your university. You might have been part of a debate club. You might have worked at a restaurant or a bar, for example, as a part-time job at some point in your life. Any ways and means to demonstrate an ability to communicate with a variety of different people, confronting a variety of different situations, but keeping composure and clarity. I think serves really well for that side of things. On the sales side, obviously think about, you know, I always like to demystify it. And I think being a good salesperson, it doesn't matter if you're selling, you know, SaaS enterprise software as a tech firm, or you're selling via cars at a forecourt, for example, at the end of the day, what is it that makes a salesperson a good salesperson? It's that relationship building component. So building rapport, how do you get on with people? If you're one of those people that naturally has that, ability to get on with people really well, then, but you've also got the ability to be able to really be enthused and understand and be able to talk about and converse about these themes in markets, you know, more so than a researcher who might be more down, really more caring about finding the solutions rather than finding the solution to the client's problem. They want to find a solution to the problem in itself. So that's kind of the delineation of thought. All right. I think we're pretty much there. Anything else that I've missed in terms of our list that we want to cover, Silvia?

No, I think we covered pretty much everything. Something that I was just thinking about now while you were talking about markets, just how something I always notice in my equity research role is how it basically sits between what you can see as all the corporate finance space and markets instead. And Instead, indeed, if you are an equity research analyst, you will need to have that financial modeling, but also the quick math you talked about at the same time, communication, which can be just simply like being on the phone and having 10 minutes in order to convey your idea and convince investors about your investment thesis. But at the same time, something perhaps a bit more peculiar about equity research or investment research is more the written part of it, because you are going to produce a report, like that will be your final product. And so also being able to put in writing your ideas in a very convincing, concise way is also really important, as well as curiosity. I think, again, I love my job when I used to work there. I think it was something perfect for anyone who is really curious and perhaps who is a bit undecided between those two spheres, like the banking world and the market side on the other side. So I think it is often one, not one of the most commonly known one, equity research, but could be interesting for everyone to check out.

Yeah. And there are some good kind of career options, I guess, in terms of, I know that equity research analysts, I know there's a few hedge funds like Point72 is one that comes to mind where they'll have people who've come from that background because they'll look to specifically be investing in these stocks. So rather, you know, kind of bolt in this supply chain of information in-house rather than from an external, or I know that, you know, a lot of the big US hedge funds will trade in and around earnings season, which obviously would take someone of that background, be particularly useful. Really happy as well, you mentioned curiosity, because I was just thinking of commonalities between all of these roles just within this kind of corporate setting. I think curiosity is definitely important across all three. I think that's definitely a lever to pull to stand out against your peers when you are going for some of these roles. And I think resilience is the other big one, but in slightly different ways. Resilience in the fact that both mentally and physically, you know, banking is a challenge at times. And I think for markets, because of the nature of you're having to make decisions frequently and is a very black and white outcome, you are proven wrong a lot of the time. and there's an immediacy to your decision-making, and therefore you've gotta be the sort of person who has a growth mindset, can learn, can take negative outcomes, but be able to get over that and be able to perform again quite quickly. So something to mention. So in summary, I know Sylvie, you kindly, as a very diligent former equity research analyst, you very kindly put together a a key differences table for me. So perhaps to finish then, to conclude, to tie everything together, we have role type. So in investment banking, deal-oriented, equity research coverage-oriented, markets more client-oriented. And again, with markets, don't forget as well that you have your division of asset class typically. So again, jargon buster, you might hear FICC mentioned a lot, that being fixed income currencies and commodities. And the equity component tends to sit separate because that's such a big revenue center for most of these investment banks. It's so big in fact that sometimes it dwarfs FICC. And so it's kind of taken out in a separate core focus. So investment banking transactions, capital raising, so of course capital, companies listing, ECM, but debt, so DCM, equity research, stock analysis recommendations. So when you read in the FT or the Journal about buy, sell, hold, these sorts of things, that's the end result of a lot of background research that has gone into it. And then in markets, it's really access to the marketplace, which is why they exist. Hedge fund can't trade a massive big block order, which just means a massive trade. Without it having a negative impact on the price they execute at. So they use a bank to buy and sell these different assets. Revenue-wise, so investment banking direct deal fees, so a proportional small percentage, but over a big deal like the potential IPO of SpaceX could mean very meaningful fees generation. Equity research, research fees or trading related revenue, and then on markets, the commission aspect for the flow trading side. Client interaction, investment banking corporates and senior executives. And you know, just think about it, if you are there, you're dealing with some of the world's most famous companies. I mean, there's one ongoing at the moment. Everyone knows Netflix and everyone knows Warner Brothers, for example. And you're going to have to talk to their senior executives. They're all, you know, the decision makers behind these deals. Equity research would be investors. Or company management sometimes because they themselves want to think about, well, what's the future direction of our business? Should we be spending more money? Should we be building more factories? What's the economic climate look like? What does it look like for our business or our competitors? And then markets, think about portfolio managers, hedge funds, family offices, wealthy investors, these sorts of people. And then the output, Last one. So investment banking pitchbooks, executed deals, equity research reports and investment views, and then markets, trade ideas, and then essentially the executional side of things as well. So yeah, that pretty much wraps it up. So thank you so much for joining me, Silvia, and I'm sure we'll get another one of these in soon. Let us know what you would like Silvia to talk about next. Drop us a comment and we're more than happy to cover a variety of topics over 2026. But if you don't let us know, then we won't, we won't be able to tailor it accordingly and we are more than happy to do so. So thank you, Silvia, for your time.

Thank you so much. Bye everyone.