Back on campus after Internship...

Back in campus after completing my internship in the research department of a top investment bank. I was among the few lucky ones to get an opportunity to intern with an I-bank, just a couple of months after Lehman went belly up (and the rest is history ...). My internship experience was great, primarily because it helped me find a fit (yeah you may call it cliche) for myself within an investment bank. I decide here to write about one of the lesser talked about functions of an investment bank on the markets side - "research".

(1) Compensation: Probably a good place to start is 'money' - we are talking of I-banks after all. At the outset, research may not pay you as high as Corporate Finance(CF) or sales & trading(S&T) functions. But, once you are recognized as a star analyst, compensation is easily comparable to what one may get in these roles. In any case, one makes good amount of money - it's just a bit less obscene ;)

(2) Work life balance: Typically, 8 AM - 9 PM kind of job, work life balance sits somewhere in between that of a trader and an analyst in CF. The corporate results months are tough but unlike an analyst in CF, the day does end for a research analyst.

(3) Glamour: Though a research analyst may not really be advising a company board on a huge M&A deal, the job does have its fair share of glamour. Analysts get to meet the top honchos, CFOs & CEOs of the companies they cover in order to perform fair valuation. They also meet the buy-side clients of an I-bank to market their ideas alongside the sales guys. In this sense, research is unique because it gives perspective from both the buy-side as well as corporates.

(4) Thrill: While the joy of making real money in an intense high pressure environment may be missing, research still is entwined with the market. The thrill of market, therefore, does not go away.

(5) Exit options: Research is fairly open in the sense that one can join research coming in from a consulting background or any core industry background. The exit options are also fairly open. On the other hand, trading goes by the maxim - 'Once a trader always a trader'

However, research folks are often criticized as their views change all too often. The reports published after hours of analysis become futile in a couple of weeks because of dynamism in the environment. However, research performs the crucial function of reducing information asymmetry in the market. The job is a bit academic in nature requiring diligent evaluation and (a lot of)report writing.

At the end of the day, it is a personal choice. If you are not the kind of person who can work in an intense trading environment or at a stretch for 20 hours a day, but still love I-banking, research is definitely an option worth considering.