This is just a blanket statement for all businesses that manage money!
Commercial banking is the backbone of the industry, and is what you think of when you think of finance (big firms = bulge brackets: Goldman Sachs, Morgan Stanley, JP Morgan, Deutsche Bank, Credit Suisse, Bank of America Merrill Lynch (BAML); smaller firms are middle-market/boutique).
Investment banking: typically only works with deal makers and high-net-worth clients, not the general public.
Investment banks underwrite deals (raising investment capital from investors on behalf of corporations/governments that are issuing equity or debt securities), advise companies on mergers & acquisitions (M&As), help in the sale of securities, advise issuers with regard to issue/placement of stock. It can be helpful to think of IB as advisatory -- they assist in complex financial transactions.
Sales & Trading (S&T/Securities): the buying and selling of securities or other financial instruments.
This is a part of an investment bank.
Can trade anything really -- investment instruments include equities, fixed income securities, futures, commodities, and currencies
Sales: refers to the sellers whose job is to call on institutional and high-net-worth investors to suggest trading ideas and take orders. Sales desks will then go to the appropriate traders Sellers often have very general knowledge of markets (think: a mile wide, inch deep).
Traders: traders get orders from sellers and then price and execute trades or structure new products .Traders often are incredibly knowledgeable on one product (think: a mile deep, inch wide).
Private Equity: capital that is not public (not on a public exchange); firms will raise funds (often from high net-worth individuals, institutional investors, accredited investors) and directly invest that money in private companies or buy-out public companies (leveraged buyouts)
PE investments provide capital that will fund new technology for a firm, help a firm acquire another, expand a firm’s working capital, and bolster/solidify the balance sheet of a firm (its assets/liabilities/equity) Often PE firms will invest in a firm, hold it for anywhere between 5-10 years, then sell it for a high multiple, take it public (Initial Public Offering = IPO), or sell to a bigger (public) company.
Leveraged Buyout (LBO): huge funds are raised to take a company that is public and make it private again.
Attempt to improve the prospect/profits and overall financial health of the company → end goal: a resale of the company to a different firm or cashing out through an IPO (taking it public again)
The fund for an LBO is often mostly debt (borrowed money//leverage) in order to acquire the company → companies like LBOs because it allows them to acquire a firm without committing a lot of their own capital to the deal
Advising companies to solve problems, suggest ways to improve efficiency, cut costs -- whatever the firm needs.
Consulting Big Three: McKinsey, Bain, BCG -- there are many other consulting firms (PWC, EY, Oliver Wyman, Deloitte -- but the big three are talked about the most)
Main job of a consultant is to improve how a company does business.
Consultants are put on cases that can be anywhere -- lifestyle often involves traveling for the week (Monday-Thursday/Friday), but it really depends on the firm
Consulting provides a broad exposure to every facet of a business, providing analysts with a breadth of knowledge