You've made it into the debt capital markets (DCM) team of an investment bank, so what happens now?
As a DCM banker you face the same rigid, hierarchical career ladder as your counterparts in ECM – you start out by grafting for three years as an analyst before reaching the rank of associate. If you want to stay in the sector you must then perform well for about another three or four years before claiming the job title of vice president (VP) or – at banks such as HSBC and UBS – associate director. Director (sometimes called executive director, ED) is the next step up, while the select few will then go on to make managing director (MD).
Moving up the ranks in DCM largely depends on your ability to transition from a product-focused job at a junior level – where building technical skills and an in-depth knowledge of bond products are key – to one where you are trusted to interface with clients. “When you start as an analyst it’s really about offering support as we prepare for deals,” says Maryam Khosrowshahi, head of public sector debt coverage for Central Europe, the Middle East and Africa at Deutsche Bank. “As you become more experienced, you will have more direct exposure to clients. I try to be as inclusive as possible though – accountability is important and only when junior staff are included in the whole process will they really feel a part of it.”
Analysts and associates are also exposed to client interactions. It's the most effective way to contribute to their training as future senior bankers
Demetrio Salorio, global head of debt capital markets at Societe Generale says that at director and sometimes even VP-level you will get to assume sole charge of designing the commercial strategy for each client in your portfolio. MDs may also have regional or even global client-segment management responsibilities. “Analysts and associates help to develop the advisory ideas on which we base our service to clients,” adds Salorio from Societe Generale. “However, analysts and associates are also exposed to client interactions, this being the most effective way to contribute to their training as future senior bankers.”
Analysis of business trends also becomes more important as you progress in your DCM career because clients will expect you to present new ideas and solutions to them on a regular basis, especially if you’re advising on large and important transactions.
You will get to assume sole charge of designing the commercial strategy for each client in your portfolio
If ever-increasing client pressure sounds unappealing as a career path, there are exit options. People often shift from DCM into other desks within fixed income – sales, syndication, research or (less likely) trading.
Given the product-specific nature of DCM, moving to M&A or ECM is less common, although not impossible at a junior level. While DCM isn’t the best investment banking job for eventually moving to the buy-side, experience of high-yield debt may pique the interest of private equity firms that use this type of finance on leverage buy-outs.