What is structuring in investment Banking?
Structuring is one of the more arcane jobs in banking. It’s also one of the most interesting. A senior structurer at Deutsche explains why it’s a good career.
Structurers manipulate financial DNA
Even if you’re a student who wants to work in investment banking, you probably have a fair idea what M&A bankers or sales and trading professionals do on a day-to-day basis. However, the life of a structuring professional is bit more arcane. What, for example, is being structured? What is it being built from? What’s it for? And what makes structuring an interesting career?
We put these questions, and more, to Hamzah Kahloon, head of structuring for MENA and Turkey at Deutsche Bank. This is what he told us.
What does a structurer in an investment bank do? Can you explain the kinds of structures you assemble?
Structuring teams at investments banks exist to provide bespoke solutions for clients’ needs.
If you look at global financial markets today, you have equity and bond markets where companies and governments can issue debt or shares. You also have conventional borrowing markets where companies and governments can borrow from banks or from syndicates of lenders.
Structurers work outside these areas. We work with clients whose needs are more complex – for whom there’s no readily available product on the market.
The transactions we work on and the solutions they provide typically fall into one of two categories: they’re either focused on risk management, or they are designed to provide financing.
For example, in terms of risk management we might try to find a solution that will help an exporter to manage its currency risk (the risk that currencies will change in price), or we might help a company that has borrowed significant sums to manage its interest rate risk (the risk that interest rates will rise). In terms of financing, we might help the founders of a public company finance a deal to buy back some shares.
The job of a structurer is to design a transaction that satisfies a client’s needs, puts that transaction into effect, and also ensures that the concerns of all our stakeholders are met.