Data Warehousing and Data Science

19 September 2015

Investment Banking Books for BAs and Developers

Filed under: Business Knowledge — Vincent Rainardi @ 7:04 pm

A friend recently asked me to recommend books in investment banking and this was the list I came up with. The intended audience of these books are people who don’t have investment banking background or work experience, but have experience in database development or data architecture. So it is more of “I’m a BA, developer or architect with retail / healthcare / manufacturing experience and want to get into investment banking or asset management* (as a BA/developer/architect, not as a trader or financial analyst!), what books should I read?” So it’s kind of “I want to learn the business processes from IT point of view”.

There are two meanings of the words “investment banking”. Traditionally it means Merger, Acquisition and LBO (Leveraged Buyout). It is about analysing financial statements, valuation methods, and M&A modelling. These are skills and knowledge required to do the traditional business of an investment bank, which is to help clients raising capital by issuing securities as well as advising clients on M&A (link). I went to an investment banking course with IBI in 2011 and learned these traditional functions to my surprise. The second meaning is: an investment bank is a bank who trades financial securities, or acting as an intermediary in the trade as brokerage or market maker, as well as providing analysis, research and ratings (aka the “sell side” of Wall Street). The buy side of Wall Street are investment companies such as asset manager, who buy securities for investment purpose and fund management (see below).

Below I’m suggesting one book for each area of investment banking (both meanings above), as well as the buy side.

  • Introduction: Investment Banking Explained: An Insider’s Guide to the Industry, by Michel Fleuriet, link
  • Trading: The Trade Lifecycle: Behind the Scenes of the Trading Process by Robert P. Baker, link.
  • Equity: Investments: Principles of Portfolio and Equity Analysis (CFA Institute Investment Series) by Michael McMillan and Jerald Pinto, link.
  • Fixed Income: Fixed Income Analysis by Frank J. Fabozzy, link.
  • Derivatives: Derivatives Demystified: A Step-by-Step Guide to Forwards, Futures, Swaps and Options by AM Chisholm, link.
  • Merger & Acquisition: Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisition, by Joshua Pearl & Joshua Rosenbaum, link.
  • Asset Management*: A Guide to Fund Management by Daniel Broby, link.
  • Risk: Risk Management and Financial Institution by JC Hull, link.

*Asset Management or Investment Management is an industry sector containing investment companies, which manage pooled funds or segragated mandates from clients, and invest in stock market, bond market, currencies,  properties, cash or in other investments such as commodities, derivatives, etc. These investment companies are called Asset Managers or Fund Manager (link), e.g. Schroders, Invesco Perpetual, Fidelity, Blackrock. Investment banks like JP Morgan, Credit Suisse, HSBC, and UBS also have asset management division (link, link).

There are departments in Investment Banking which are not listed above, i.e. Finance, Compliance, Treasury, ALM. But these departments exist in all 3 types of banking (retail banking, corporate banking and investment banking), not just investment banking. So below I list the books in banking, not just investment banking, including those departments above. But again this is for IT developers (not system analyst!) or BAs or architects who wants to get banking knowledge or a job in banking.

  • Introduction: FT Guide to Banking by Glen Arnold, link.
  • Retail Banking: Retail Banking by Dr Ramamurthy Natarajan, link.
  • Corporate Banking: Corporate Banking: A guide book for novice by Dr Ramamurthy Natarajan, link.
  • Central Banking: Central Banking: Theory and Practice in Sustaining Monetary and Financial Stability by Thammarak Moenjak, link.
  • Treasury: Treasury Operations Handbook by Philip JL Parker, link.
  • Compliance: Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight, by H David Kotz, link.
  • Finance: Accounting and Finance: An Introduction by Dr Peter Atrill & Eddie McLaney, link.
  • ALM: Bank Asset and Liability Managment: Strategy Trading Analysis by Irving Henry & Moorad Choudhry, link.

My banking experience: I was lucky to have a bit of investment banking and asset management experience since 2011 to date working at RBS (credit risk and credit portfolio management), Barclays (fixed income, CDS), UBS (finance, reporting), Bluebay (asset management, fixed income, risk), Insight Investment (asset management, LDI and fixed income). I had my retail and corporate banking experience when I was working for Andersen Consulting (now Accenture) in Jakarta, Indonesia, where we did a system project for Bank Exim (corporate banking), a BPR project also at Bank Exim (retail banking) and a Merger & Acquisition project at Bank Mandiri, the largest bank in Indonesia. I was fortunate that my father was a bank manager, worked for 3 banks in his career (Bank Ekonomi Indonesia, Bank Karman, Bank Umum National), from whom I got my banking passion and inspiration.

Magazines and news websites in Investment Management sector are listed below. This list is UK focus.

  • Investment Week, link
  • Global Investor, link
  • Institutional Investor, link
  • Portfolio Advisor, link
  • The Hedge Fund Journal, link
  • Risk.Net, link
  • What Investment, link
  • Institute of Asset Management, link
  • Fund Web, link
  • Financial Advisor, link

Magazines and news websites in Investment Banking (trading, FX, credit, equity, derivatives, M&A) are listed below. It is by no means comprehensive as I only spent like five minutes on it, with the intention to enhance the list over time, i.e. removing the one which are not so useful, and adding new ones.

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