Investment Bankers' Essential Software Toolkit

what programs do investment bankers use

Investment bankers use a variety of tools and software to perform their daily tasks. Some of the most commonly used programs include Microsoft Excel, Word, and PowerPoint for financial modelling, valuation work, creating pitch books, and other presentations. Bloomberg Terminal is another essential tool for investment bankers, providing real-time data, analytics, and news to support decision-making. Additionally, bankers use the internet and specialised tools to access financial statements, stock prices, and financial news. Communication tools such as email and smartphones are also integral to their work, allowing them to stay connected with clients and colleagues. Other software and platforms used include Stock Market Eye, CRM systems like Cloze and HubSpot, accounting software like QuickBooks, project management tools like Microsoft Project, and data storage solutions like Dropbox and Google Drive.

Characteristics Values
Primary tools used by junior-level investment bankers Microsoft Excel, Word, and PowerPoint
Tools to retrieve financial statements and data Bloomberg terminals, the internet, and financial news sources
Tools to stay connected Smartphones
Tools for quick calculations Calculator
Tools for data collection Stock Market Eye
Tools for cloud-based wealth management and financial planning eMoney Advisor

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Microsoft Excel for financial modelling and valuation

Microsoft Excel is a commonly used tool for investment bankers, especially those at the junior level. It is used for financial modelling and valuation work, as well as for creating pitch books and presentations.

Excel is used to build financial models that aid in understanding and performing analysis on a business to guide decision-making. These models can be incredibly detailed and complex, or relatively simple, but they are only as good as the quality of the work that goes into forming the estimates.

Financial models typically have the x-axis serving as the time (quarters and full years) and the y-axis breaking down the results by line items (e.g. revenue, cost of goods sold, etc.). Revenue estimates are often generated on a separate sheet.

For these models, the model-builder needs to input estimates for certain items and ensure that the mathematical formulas are correct. From this base, more sophisticated and interconnected models can be built for the income statement, balance sheet, and cash flow statement.

Excel's functions, such as NPV (net present value), can be used to process cash flow estimates and discount rates into a net present value, which can then be used to determine a company's valuation.

Additionally, macros can be created in Excel to allow investors to create "bull/bear/base" scenarios that can be changed with a click or two.

Investment bankers need to be proficient in Excel and know how to navigate its advanced features to build sound financial models and perform valuation work efficiently and accurately.

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Bloomberg Terminal for data collection

Investment bankers use a variety of tools and software to perform their jobs effectively. One of the most important tools they use is the Bloomberg Terminal, a powerful computer software system that provides lightning-fast access to relevant data, analytics, and news. In the fast-paced world of finance, having access to real-time information is crucial for making smart and accurate decisions.

The Bloomberg Terminal is an essential resource for investment bankers, as it enables them to stay ahead of the curve in the ever-changing financial landscape. With this tool, investment professionals can access a wealth of information, including market trends, financial news, and company-specific data. This up-to-the-minute data helps bankers make informed decisions on behalf of their clients, ensuring they stay competitive in the market.

The terminal is particularly useful for investment bankers conducting complex research and analysis. It provides a comprehensive view of the market, allowing bankers to identify suitable investors for their clients and make data-driven decisions. In the digital age, data is king, and the Bloomberg Terminal is a valuable tool for investment bankers looking to collect, analyse, and interpret vast amounts of financial information efficiently.

Additionally, the Bloomberg Terminal complements other software commonly used by investment bankers, such as Microsoft Excel, Word, and PowerPoint. While these Microsoft tools facilitate data gathering and presentation, the Bloomberg Terminal focuses on delivering timely and accurate financial data. This combination of software empowers investment bankers to excel in their roles, providing valuable insights and strategic guidance to their clients.

In summary, the Bloomberg Terminal is an indispensable tool for investment bankers, offering efficient data collection, real-time analytics, and critical financial insights. By leveraging this software, investment professionals can stay informed, make strategic decisions, and ultimately drive successful outcomes for their clients in the complex world of finance.

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Microsoft Word for memos

Microsoft Word is one of the programs used by investment bankers for creating memos, especially those related to Mergers & Acquisitions (M&A) offering. It is also used for gathering and presenting information.

Microsoft Word is part of the Microsoft Office suite, which also includes Excel and PowerPoint, both of which are used by investment bankers. Excel is used for financial modelling and valuation, and PowerPoint is used for creating pitch books and presentations.

Investment bankers also use a variety of other tools and software to perform their jobs, including Bloomberg Terminal, Stock Market Eye, cloud-based wealth management tools, and data collection tools. They also use the internet and specialised tools to retrieve financial statements and stay up-to-date with financial news.

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Microsoft PowerPoint for pitch books

Microsoft PowerPoint is a staple in the world of investment banking, used to create pitch books—sales presentations designed to win new business and persuade clients to take action and pay for the bank's services. Here are some key points about using Microsoft PowerPoint for pitch books in investment banking:

The Importance of Pitch Books

Pitch books are an essential tool in investment banking, often requiring significant time and effort to create. While some bankers complain about the long hours spent on pitch books, others swear by them, claiming they help win and close deals. Pitch books are particularly important for junior bankers, who spend a lot of time creating them and need to ensure they don't make mistakes to earn a good bonus.

Structure and Content of a Pitch Book

A typical pitch book follows a standard structure, including sections such as:

  • Title page: Featuring logos, date, and title.
  • Table of Contents: Outlining all sections of the pitch book.
  • Executive Summary/Situation Overview: Explaining the purpose of the pitch and providing a call to action or recommendation.
  • Team & Bank Introduction: Introducing the team members and highlighting the bank's track record and expertise in the client's industry.
  • Market Overview: Presenting charts, graphs, and commentary on the current market trends and environment in the client's sector.
  • Valuation: Utilizing methods such as comparable company analysis, precedent transactions, and DCF analysis to determine the value of the client's company.
  • Transaction Strategy: Detailing the bank's proposed strategy for the transaction, such as an IPO, acquisition, or sale.
  • Summary: Recapitulating why the team and bank are the best choice to lead the transaction, highlighting their expertise, market understanding, and proposed strategy.
  • Appendix: Providing additional information, such as financial modelling assumptions and backup data.

The Creation Process

Crafting a pitch book is a collaborative effort between junior and senior bankers. Managing directors, who have relationships with clients, initiate the process by creating an outline with a director or VP. The structure is then fleshed out by the VP or director, who works with associates and analysts to gather and analyse data. This process can take from a few days to several weeks, often involving numerous iterations and late nights.

Delivery of the Pitch

Pitch books are typically delivered in person at the bank's or client's office by senior members of the investment banking team, led by the managing director. Junior members may also attend to take notes and provide additional support.

PowerPoint Skills for Investment Bankers

Investment bankers need to develop advanced PowerPoint skills to create effective pitch books. This includes mastering functions, design principles, and formatting techniques to make their presentations visually appealing and informative. Courses are available to help analysts and associates become proficient in creating world-class pitch books, covering topics such as gridlines, guides, formatting text boxes, inserting tables and charts, and creating timelines.

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Stock Market Eye for portfolio tracking

Stock Market Eye is a portfolio management software that allows investment bankers to track and manage their investments. It is a great resource for asset managers and individual investors to keep track of multiple investment portfolios and monitor the markets to effectively manage their investments. The software is compatible with Windows, Mac, iOS, and Android devices, making it easily accessible to users.

One of the standout features of Stock Market Eye is its ability to store data locally on the user's computer while also offering an integrated online sync service for data sharing between users. This ensures data security and privacy for users. The software also provides portfolios, watchlists, charts, and alerts to help users stay on top of their investments.

The software is well-regarded for its ease of use, with a simple and intuitive interface that allows users to quickly access the information they need. Users can create different portfolios, register stock buys, sells, or dividends, and handle portfolios in different currencies. Stock Market Eye also offers alerts to notify users of any sell/buy criteria they have set, helping them make timely investment decisions.

While Stock Market Eye is a robust and feature-rich platform, there are a few limitations to consider. Some users have noted the lack of auto-synchronization and a lacklustre iOS app. There are also some bugs and limitations in charting and reporting capabilities. Despite these shortcomings, Stock Market Eye remains a popular choice for investment bankers due to its comprehensive feature set and ease of use.

Frequently asked questions

Investment bankers use the Bloomberg Terminal to collect relevant data with lightning-fast speed and obtain real-time data, analytics, and news to make smart and accurate decisions.

Microsoft Excel is used for financial modelling and creating spreadsheets.

Microsoft Word and Microsoft PowerPoint are used to gather and present information.

Stock Market Eye is a portfolio and tracking management software that helps investment bankers keep track of their portfolios and assess the market to effectively manage and update their portfolios.

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