The Investment Banking Division — IBD or banking — is the advisory and capital-raising business. It is the part most people picture when they hear 'investment bank.' Its work falls into two main categories: corporate finance advisory (M&A and restructuring) and capital raising (equity and debt issuance).
Coverage groups vs product groups
IBD is organised along two axes. Coverage groups are organised by industry — Healthcare, TMT (Technology, Media, Telecom), FIG (Financial Institutions Group), Consumer & Retail, Industrials, Natural Resources, Real Estate, Power & Utilities, Sports & Entertainment. Coverage bankers own the client relationship for any company in their sector. They know the CEO and CFO. They know the strategic situation. They are the ones who get the call when the company is thinking about a deal.
Product groups, by contrast, are organised by deal type — M&A, ECM, DCM, Leveraged Finance, Restructuring, Private Capital Markets. Product bankers are the technicians who execute the specific transaction once a coverage banker has won the mandate.
Coverage owns the client. Product owns the trade.
On any given deal, a coverage team and one or more product teams work together. A healthcare-coverage MD might bring a deal to a healthcare company's CFO; the M&A product team and the ECM product team then execute the transaction.
The hierarchy
The hierarchy in IBD is rigid. Analysts (typically two-year rotations directly out of undergrad, working 80-100 hour weeks on financial models, presentations, and processing) are the most junior. Associates (post-MBA hires or analysts promoted internally) own the work product and manage the analysts. VPs (typically 3-4 years post-MBA) manage process and run day-to-day execution on deals. Directors and MDs are the senior people who originate deals, manage client relationships, and price the bank's services. The journey from analyst to MD typically takes 12-15 years.
A typical week for an analyst is dominated by 'pitch books' — slide decks of analysis the bank uses to win business — and live deal work. Models include three-statement operating models, M&A merger models with accretion/dilution analysis, leveraged buyout models, and discounted cash flow models. The work can be brutal in volume. The intellectual challenge is uneven; the volume is constant. The compensation reflects this: in 2024-2025, first-year analyst total compensation at major US banks ranged roughly $175,000 to $225,000.
Exercise
A Healthcare-coverage MD calls a TMT-coverage MD on a Friday afternoon. The Healthcare MD's client is a Kenyan pharma manufacturer that wants to acquire a Nairobi-based health-tech company. The TMT MD has the health-tech founder's mobile number. Walk through what happens next: who owns the relationship, who staffs the deal, what product groups are pulled in, and what each person does over the following six weeks until the announcement.