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This Infographic Breaks Down Careers In Finance, From Hedge Funds to M&A

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Finance Careers infographic

Careers In Corporate Finance, From Hedge Funds to M&A

Corporate finance is a key pillar on which modern markets and economies have been built. And this complex ecosystem consists of a number of important sectors, which can lead to lucrative career avenues.

From lending to investment banking, and private equity to hedge funds, the graphic above by Wall Street Prep breaks down the key finance careers and paths that people can take.

Let’s take a further look at the unique pieces of this finance ecosystem.

The Lending Business

Lending groups provide much needed capital to corporations, often in the form of term loans or revolvers. These can be part of short and long-term operations or for events less anticipated like the COVID-19 pandemic, which resulted in companies shoring up $222 billion in revolving lines of credit within the first month.

Investment Banking

Next, is investment banking, which can split into three main areas:

  1. Mergers and Acquisitions (M&A): There’s a lot of preparation and paperwork involved whenever corporations merge or make acquisitions. For that reason, this is a crucial service that investment banks provide, and its importance is reflected in the enormous fees recognized. The top five U.S. investment banks collect $10.2 billion in M&A advisory fees, representing 40% of the $25 billion in global M&A fees per year.
  2. Loan Syndications: Some $16 billion in loan syndication fees are collected annually by investment banks. Loan syndications are when multiple lenders fund one borrower, which can occur when the loan amount is too large or risky for one party to take on. The loan syndication agent is the financial institution involved that acts as the third party to oversee the transaction.
  3. Capital Markets: Capital markets are financial markets that bring buyers and sellers together to engage in transactions on assets. They split into debt capital markets (DCM) like bonds or fixed income securities and equity capital markets (ECM) (i.e. stocks). Some $41 billion is collected globally for the services associated with structuring and distributing stock and bond offerings.

The top investment banks generally all come from the U.S. and Western Europe, and includes the likes of Goldman Sachs and Credit Suisse.

Sell Side vs Buy Side

Thousands of analysts in corporate finance represent both the buy and sell-sides of the business, but what are the differences between them?

One important difference is in the groups they represent. Buy-side analysts usually work for institutions that buy securities directly, like hedge funds, while sell-side analysts represent institutions that make their money by selling or issuing securities, like investment banks.

According to Wall Street Prep, here’s how the assets of buy-side institutions compare:

Buy side institutionTotal assets
Mutual Funds, ETFs$21 trillion
Private equity$5 trillion
Hedge funds$3 trillion
Venture capital$0.5 trillion

Also, buy-side jobs appear to be more sought after across financial career forums.

Breaking Down The Buy Side

Mutual funds, ETFs, and hedge funds all generally invest in public markets.

But between them, there are still some differentiating factors. For starters, mutual funds are the largest entity, and have been around since 1924. Hedge funds didn’t come to life until around 1950 and for ETFs, this stretched to the 1990s.

Furthermore, hedge funds are strict in the clients they take on, with a preference for high net worth investors, and they often engage in sophisticated investment strategies like short selling. In contrast, ETFs, and mutual funds are widely available to the public and the vast bulk of them only deploy long strategies, which are those that expect the asset to rise in value.

Private equity (PE) and venture capital (VC) are groups that invest in private companies. Venture capital is technically a form of PE but tends to invest in new startup companies while private equity goes for more stable and mature companies with predictable cash flow patterns.

Who funds the buy side? The source of capital roughly breaks down as follows:

Source of capitalCapital amount
Individuals$112 trillion
Banks$51 trillion
Pension funds$34 trillion
Insurance Companies$24 trillion
Endowments$1.4 trillion

Endowment funds are foundations that invest the assets of nonprofit institutions like hospitals or universities. The assets are typically accumulated through donations, and withdrawals are made frequently to fund various parts of operations, including critical ones like research.

The largest university endowment belongs to Harvard with some $74 billion in assets under management. However, the largest endowment fund overall belongs to Ensign Peak Advisors. They represent The Church of Jesus Christ of Latter-day Saints (LDS), with some $124 billion in assets.

Primary Market vs Secondary Market

One of the primary motivations for a company to enter the public markets is to raise capital, where a slice of the company’s ownership is sold via an allotment of shares to new investors. The actual capital itself is raised in the primary market, which represents the first and initial transaction.

The secondary market represents transactions after the first. These are considered stocks that are already issued, and shares now fluctuate based on market forces.

Tying It All Together

As the infographic above shows, corporate finance branches out far and wide, handles trillions of dollars, and plays a key part in making modern markets and economies possible.

For those exploring a career in finance, the possibilities and avenues one can take are practically endless.

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Countries

Charted: Hours Worked vs. Salaries in OECD Countries

What are the average work hours and salaries in OECD countries? We look at the data for trends across regions.

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A cropped chart with the average number of working hours per week, with a typical weekly wage in 35 OECD countries.

Comparing Weekly Work Hours and Salaries in OECD Countries

The Organization for Economic Co-operation and Development (OECD) is generally regarded as a collection of highly developed, high income countries. However with 38 member states from across the globe, economic prosperity can still vary widely between these nations.

To illustrate this, Truman Du from Genuine Impact charts the average weekly work hours and salaries across the OECD in 2022.

For wages, the OECD divided a country’s total wage bill by the average number of employees, accounting for inflation by using USD constant prices with a 2016 base year. Importantly, they also adjust using purchasing power parity (PPP) for private consumption of the same year.

Ranked: OECD Countries By Working Hours & Average Pay

Here’s a list of 35 OECD countries ranked by their weekly wage in 2022.

Iceland has the highest weekly wage at $1,528 in the OECD block much higher than all four of its Nordic neighbors. This results in Icelandic workers, on average, earning nearly $55/hour.

RankCountryAvg. Weekly Wage (USD)Avg. Weekly Work (Hours)Avg. Hourly Rate (USD)
1🇮🇸 Iceland$1,528.3327.87$54.84
2🇱🇺 Luxembourg$1,505.9628.33$53.15
3🇺🇸 United States$1,489.6834.83$42.78
4🇨🇭 Switzerland$1,403.7129.40$47.75
5🇧🇪 Belgium$1,247.0729.35$42.50
6🇩🇰 Denmark$1,233.2026.38$46.75
7🇦🇹 Austria$1,226.9527.76$44.19
8🇳🇱 Netherlands$1,215.8727.44$44.31
9🇦🇺 Australia$1,142.4632.83$34.80
10🇨🇦 Canada$1,135.5832.42$35.02
11🇩🇪 Germany$1,133.4725.79$43.96
12🇬🇧 United Kingdom$1,038.1729.46$35.24
13🇳🇴 Norway$1,033.7727.40$37.73
14🇫🇷 France$1,014.6829.07$34.91
15🇮🇪 Ireland$1,004.6731.87$31.52
16🇫🇮 Finland$996.8428.81$34.60
17🇳🇿 New Zealand$975.4333.62$29.02
18🇸🇪 Sweden$969.3627.70$34.99
19🇰🇷 South Korea$940.8136.56$25.73
20🇸🇮 Slovenia$907.7631.13$29.16
21🇮🇹 Italy$863.3332.59$26.49
22🇮🇱 Israel$849.1536.38$23.34
23🇱🇹 Lithuania$843.7431.23$27.01
24🇪🇸 Spain$824.2231.61$26.08
25🇯🇵 Japan$798.2530.90$25.83
26🇵🇱 Poland$709.5534.90$20.33
27🇪🇪 Estonia$667.4034.05$19.60
28🇱🇻 Latvia$656.4629.87$21.98
29🇨🇿 Czech Republic$643.7633.73$19.08
30🇨🇱 Chile$635.4237.75$16.83
31🇵🇹 Portugal$613.8831.44$19.52
32🇭🇺 Hungary$547.5932.68$16.75
33🇸🇰 Slovak Republic$505.0531.19$16.19
34🇬🇷 Greece$499.6036.27$13.77
35🇲🇽 Mexico$320.8742.81$7.49

Note: 2022 data for OECD members Colombia, Costa Rica, and Türkiye is missing from the source and has not been included.

Luxembourg, ranked second place, is the only other country with an average weekly wage that comes in above $1,500.

The U.S. ($1,490), Switzerland ($1,404), and Belgium ($1,247) round out the top five countries with the highest weekly pay in the OECD.

On the other hand, Mexican workers make around $321 a week, the lowest in this dataset.

Hourly Wages & Cost of Living

Despite the wage data using PPP-adjusted metrics, it still doesn’t fully account for discrepancies in local prices, which are influenced by complex factors like tariffs and fuel costs for imported goods, the impact of monopolies and cartels, the price of non-traded goods (energy, housing costs) and government taxes.

And while the difference in salaries seem massive, paying workers enough to meet their costs of living also plays a factor. Countries with higher weekly wages also correlate with a much higher cost of living and vice versa.

Switzerland, Denmark, and Iceland for example are in the top 10 countries with the highest cost of living compared to Mexico, which is far more affordable.

So, while it seems that an average Icelandic worker makes almost 7x what an average Mexican worker makes, the reality of how much of that wage is spent in supporting an average lifestyle in both countries is less direct.

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