Heard lots about analysts but not a lot about the rest of the Investment Banking Hierarchy? I’m here to shed some light on all the roles in the Investment Bank…from the analyst to the associate and to give you a peek into the investment banking world.
This post will cover the lives of the Vice Presidents…who are they, where do they come from, what do they do and what is their life like?
What are Investment Banking Vice Presidents?
Vice Presidents are known by different terms at different banks however they all essentially do the same role. They are the execution machines. They do not spend much time pitching for deals like associates and analysts (and Directors who are trying to win business) but rather are responsible for executing the deals that Directors and Managing Directors win.
The role of the Vice President is one that evolves from the start of their tenure as a Vice President to the end of it. Although I have described them as being ‘process machines’ above they need to constantly be developing their client relationships skills so that they can transition to the role of Director and start winning business.
Everyone agrees that the Vice President role is the ‘sweet spot’ in the Investment Banking Hierarchy. They are paid an incredible amount of money, they work reasonable hours and they do not have the pressure of winning the deal that is constantly on Directors and Managing Directors.
What do Investment Banking Vice Presidents Do?
A good way of thinking about them is as a conductor or ringmaster. They get the deal from the Managing Director or Director and deal with the client and decide and allocate what needs to be done by whom. They then coordinate the analysts and associates who actually do the grunt work and make sure that everything runs according to plan.
The Vice President is a kind of jack of all trades and although their role is one about co-ordination they will get involved in almost all parts of the deal. The Vice President will often be there for client interactions with the Director, they will be a second set of eyes on the model with the associate and at the pointy end of a transaction they will be helping the analyst pull together presentations, deal with data rooms and bind documents.
Vice Presidents also have to start developing their client relationships and to carve out a space for themselves. This is tricky as Directors and Managing Directors do not like giving up their own clients or having them ‘poached’ by a more junior banker but the Vice President is expected to start making revenue as soon as they make Director so a lot of their ground work needs to be done beforehand.
What is the work life balance of a Vice President like?
Vice Presidents are the most junior staff member to actually have a life and work hours that are remotely sustainable. When they are not on a live transaction they will often leave between 7 and 9 in the evening and finish their work at home. Not all Vice Presidents are like this and there are some who insist on working incredibly long hours…even when they don’t need to.
However, when a Vice President is on a live transaction they can work incredibly long hours. They will be there with the analyst and the associate pulling together the presentations, RFPs and Prospectuses and doing whatever else needs to be done to complete the transaction.
A lot of Vice Presidents are actually married and have children. Most complain that they don’t see their children enough as they are travelling far too often and the hours are just that little bit too long for them to be an ‘involved’ parent. It is not a ‘normal’ 9 – 5 life but it is not a bad one (especially when you consider the amount of money they are actually making).
Where do Vice Presidents come from?
Vice Presidents are almost always drawn from the associate ranks of an investment bank. Although the associates themselves may have a variety of experiences (i.e. they may not have started out as analysts) it is incredibly rare to see a person lateral into the position of Vice President.
Although it is incredibly rare you will, very occasionally, see a lateral transfer into a Vice President role. Typically this happens when the Investment Bank is hiring someone with a significant amount of experience and they want to hire them as a director but they want to make sure that they actually understand and process a deal before they move them up to Director. However this is typically more a ‘testing period’ than a true VP level entry.
Exit Opportunities for Vice Presidents
Exit opportunities for Vice Presidents are incredibly limited. I have written before about the fact that there is an optimal window to leave investment banking if you want to do something else. For Vice Presidents this window has well and truly closed.
Exit opportunities do exist, especially in the corporate world, but these are few and far between and it is reasonably rare (except for those Vice Presidents who are told that they are not going to be made up to Director) for a Vice President to jump to one of these positions of their own accord.
There is nowhere else they can go where they can get even close to the same level of pay with the experience that they have. Most don’t want to go anywhere either. They are so close to the upper echelons of the Investment Banking hierarchy that they can almost taste it. As long as they don’t get fired they are very close to being able to control their own destiny as a Director and Managing Director.
The big danger for a Vice President is that they do not have the greatest amount of job security. They are expensive and do not generate any revenue nor are they essential for actually producing the work. If the bank goes through a cost cutting cycle (which happens every time Investment Banking work dries up) they are most at risk of getting cut.