Understanding Industry Groups


Investment banking services span a wide breadth of industries, responsibilities, and deal types. It is difficult for an individual banker to retain robust and up-to-date knowledge about each individual functional area, which can have many sub-groups as well. To optimize their provided services, investment banks usually consist of three main groups:

· Origination Groups: primarily responsible for client acquisition

· Advisory Groups: provide advisory services for considering/executing deals (ex. an IPO)

· Coverage Groups: perform origination and advisory work for a particular industry sector

Coverage groups practically equate to the term ‘industry groups,’ as bankers on these teams will be deeply knowledgeable about that one sector’s specific intricacies and details.

Differences from Product Groups

An important distinction to make is the difference between industry groups and ‘product groups,’ another common term in investment banking. Product groups specialize in a particular deal type, regardless of which industry the deal covers. These groups know the specific nuances of each transaction, considering elements like modeling practices, market concerns, and regulatory requirements. For example, a banker on an Equity Capital Markets product team can construct IPOs for a diverse set of companies ranging from tech to industrial sectors. The most well-known product groups are:

· Debt Capital Markets (DCM)

· Equity Capital Markets (ECM)

· Mergers and Acquisitions (M&A)

· Leveraged Finance

· Restructuring

In contrast, industry groups specialize in a particular market, while working on a wide variety of deals within that sector. Thus, a member of a healthcare group can work on a restructuring or debt financing deal with different healthcare companies. While regarded as less technical than product groups, members of industry groups still have the same standard set of modeling skills but are more knowledgeable about sector nuances, rather than complex product competencies. The core coverage groups at most investment banks include:

· Consumer & Retail

· Energy & Utilities

· Healthcare

· Real Estate

· Technology, Media and Telecommunications (TMT)

The industry groups present at each bank can vary, often being lumped together or further split into sub-groups. For example, a bank may split its healthcare coverage team into biotech and pharmaceuticals sub-groups. In some cases, one coverage group will dominate the bank’s focus and will be seen as the most prestigious, with expanded roles or specialized modeling/product experience (e.g. Goldman TMT). Some boutique banks may further promote just a few core industries and offer even more sector-driven advice, while others may concentrate on a generalist product group (e.g. M&A).

Roles of an Industry Group

A standard industry group will need to be familiar with the intricacies of their respective sector or sub-sector. Bankers must be informed on industry trends and tendencies, along with understanding specific regulations that may affect companies. Groups will also have the best familiarity with industry benchmarks and comparable companies, which expedites the deal process.

These groups will usually have well-developed relationships with senior management of sector companies, which will influence origination and advisory work. This will involve pitching potential deals to clients or advising management of transactional opportunities. A pitch generally equates to the process of carefully analyzing a firm and understanding how a deal can increase the value of that firm’s operations, before finally marketing the recommendation to management.

Deal Segmentation

At a large firm, product and industry groups usually collaborate on sourcing and executing deals. In a potential scenario, an M&A product group and a consumer retail coverage group may coordinate a merger between two large retail chains. Each team brings specialized skills to the table. An M&A banker may be more knowledgeable about the opportunities to structure the deal, while the retail group has experience in valuing historically similar deals within the industry and their outcomes.

By collaborating, product and industry groups can apply their respective skills to facilitate the transaction. The retail team may develop the initial pitch after heavy research and analysis, communicating it to senior management due to their familiarity and prior relationship. In turn, the M&A group will orchestrate the development of financial models and the progression of the transaction.


While industry/coverage groups possess most of the same core technical skills as product groups, they possess deeper knowledge of a specific industry or sub-industry than their generalist contemporaries. Their work extends to advisory and origination functions as well, cultivating relationships within the industry. Bankers in industry groups are indispensable in deal flow, and by collaborating with product groups, expedite successful transactions for both companies and banks.