Bulge Bracket banks are some of the most profitable and largest investment banks in the world. Apart from that, they also have many clients across the world. These banks are also part of the top-tier businesses in the world. Additionally, these banks also provide a wide range of financial services to big businesses and individual investors. Some common examples of Bulge Bracket banks include JPMC, Goldman Sachs, Barclays, And Morgan Stanley.

In this article, you will learn about Bulge Bracket banks and some of the major features of these large firms. Apart from that, you will also learn about the workings of these large banks. Furthermore, we will also discuss the importance of these banks in general. Finally, we will share with you the major pros and cons of Bulge Bracket banks. Hence, to learn more, read on through to the end of the article.

What Are Bulge Bracket Banks?

According to Investopedia,

“Bulge bracket banks have a global presence and usually have a solid market capitalization. These large banks cater to clients like large institutions, corporations, and governments. They provide a full range of investment banking services and products worldwide. Bulge brackets commonly have investment banking divisions that handle large mergers, acquisitions, and underwriting services that private companies need for their IPOs.”

Generally, the term “bulge bracket” shows the companies present within an underwriting syndicate that issues a many securities. However, in the world of finance, bulge bracket firms are some huge multinational investment banks. These banks have clients all over the world, and those clients normally include governments, corporations, and institutions.

Apart from that, the opposite of bulge bracket banks are boutique banks. The latter include small and young banks. These banks specialize in specific areas and handle small deals in investment banking.

Some of the major bulge bracket banks are JP Morgan Chase, Goldman Sachs, Barclays, And Morgan Stanley.

These banks offer a large category of products and services. These offerings include trading securities, M&A advisory, underwriting, debt syndication, and the sale of various financial products. Furthermore, these banks are also famous for their large client base, which includes large corporations. As a result, these banks have high profitability and a global reach in general.

How Do Bulge Bracket Banks Work?

A bulge bracket is the largest firm in an underwriting syndicate. Hence, these banks also act as managers and co-managers of underwriting syndicates in general. In the world of investment banking, these banks help establish such syndicates.

The establishment of such syndicates helps underwriting companies to share profits as well as risks related to the issuance of new securities. The larger an issue is, the more likely a firm is to take part in the new issue through the syndication process.

According to the Wall Street Mojo,

“Since there is a lot of competition between these banks to stay at the top of the industry, they usually spend billions of dollars in perfecting many aspects of the firm. As a result, they employ the best talents from the world, attract capital, and stay ahead of the others in terms of newer technology.”

Apart from that, bulge bracket banks also offer financing and advisory banking services to other institutions. In addition to that, these banks also do jobs like marketing, sales, and research for financial products. Furthermore, such banks also act as book-running managers. Here, these banks control the allocation of securities to investors. In fact, you can find the name of a bulge bracket in large print over various covers.

Bulge Bracket Banks- Importance And Examples

The importance of bulge bracket banks lies in what they offer to individuals and institutions.

According to Investopedia –

“Bulge bracket investment banks usually provide both financing and advisory banking services, in addition to market making, sales, and research for various financial products. The bulge bracket is usually the book-running manager or the bank that controls the allocation of securities to investors. It is listed in the larger print above all others and on the prospectus cover.”

The bulge bracket includes investment banks of three tiers. The following are some of the major bulge bracket banks:

Tier 1

1. JP Morgan Chase
2. Bank of America

Tier 2

1. Goldman Sachs
2. Barclays Capital
3. Deutsche Bank
4. Credit Suisse
5. Citigroup
6. HSBC
7. Blackstone

Tier 3

1. BNP Paribas
2. SocGen
3. UBS

As massive investment banks of the world, these banks offer all types of financial services to their clients all over the world.

What Are The Pros And Cons Of Bulge Bracket Banks?

The following are some of the major pros and cons of working in bulge bracket banks:

Pros Of Bulge Brackets

Here are the major pros of bulge brackets that you must benefit from:

1. You will be able to work under a brand name. Furthermore, you will also connect with a notable alumni.
2. Access to both finance and non-finance roles.
3. You will have access to broad exit opportunities.
4. Since there are big clients, you can work on large and complex deals.
5. There are big opportunities for earning.
6. If you are a performer, you will have job security.
7. You will be able to learn a lot from hundreds of experienced people in the financial industry.
8. There are plenty of benefits for employees at those banks.

Cons Of Bulge Brackets  

Here are a few cons of bulge brackets that you need to be aware of:

1. You will have to work in an extremely competitive environment, despite having strong qualifications.
2. The work hours are long and unpredictable.
3. You will work in large teams. Hence, there is more competition and less probability for recognition.
4. How much you get paid can change depending on the region you are in.

Wrapping Up  

Hope this article was helpful for you in getting a better understanding of how Bulge Bracket banks operate. If you want to work in such a bank, you will need to be agreeable to work in a competitive environment. Furthermore, to become eligible, you need to be exceptionally qualified.

Do you have any suggestions on how to get a job at a bulge bracket bank? Consider sharing your ideas with us in the comments section below.

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