If you’ve already tried applying for an investment banking job, then you will know first hand that breaking in is a battle. Investment bankers earn substantially more than other professionals except sportsman, rock stars and celebrities. It’s no wonder that banks are spoilt for choice when it comes to taking a call on which applications to short list for interview and which to ding.
Presumably if you’re reading this blog, then you’re among the many bright young candidates looking to get their foot in the door. If you aspire to make a career in Investment Banking, you’ve come to the right place. Wall Street has always been notoriously difficult to break into.
Even if the big Wall Street firms announce jobs cuts or reduce their pace of hiring, keep in mind that there are plenty of investment banking boutiques, private equity shops, asset managers and hedge funds that offer an exceptional launch pad and are regularly looking to hire analysts and associates. Having said that, getting your foot in the door is not about to get any easier.
In part one below, we will outline an action plan which if executed well will get you short listed for an interview. Post that, we shed some light on the key technical skills you need to give yourself the best chance to convert that interview into a job offer.
1. THAT ELUSIVE INTERVIEW CALL
The hardest bit in the quest for an investment banking job is being shortlisted for an interview. Till you’re not shortlisted, there is no way you can even begin to get your coveted job. So don’t let a coin flip or serendipity decide whether you get to come in or not. Instead make an application that ticks all the boxes and screams “interview me” every step of the way. Focus on the action points here and you will be leaps and bounds ahead of the herd. The items below are in no particular order, are interconnected and you should be executing some of these simultaneously.
GET FAMILIAR: You can enter investment banking either as an Analyst or as an Associate. Analysts are hired straight out of undergrad and are responsible for the day to day work ranging from preparing company profiles, pitch books, running valuation numbers, financial modeling, research etc. In the words of John Rolfe & Peter Troob, from their cult novel Monkey Business, “Finally, there are the analysts. Monkeys. Tons and tons of little monkeys. Not humans, just monkeys crawling all over each other and pulling lice out of each other’s fur. Those are the analysts”.
Associates typically get hired straight out of top MBA programs or get promoted after an Analyst role. Associates manage the Analysts and work closely with clients and senior bankers. As Monkey Business puts it, “The associates’ lives suck. The vice presidents take out their aggressions on the associates all day and all night. It doesn’t end until the associate either becomes a vice president, leaves or commits suicide”. FYI, these are not our words J.
Do it for the right reasons. The wrong ones first:
- The money is good. But it’s not what it used to be. In return you will be giving up your life
- There will be no private jets and super models. Never.
Now the right reasons:
- You will be on a huge learning curve and in a couple of years, the value addition to you will be substantially higher compared to other career paths
- You find the idea of working on company valuations, financial modeling, advising companies on strategic acquisitions enjoyable and stimulating
GOOD DEGREE: Investment banks are quite rigid about hiring and prefer to stick to tried and tested strategies. If you have an Ivy League, Oxbridge or a degree from another target college, your path is somewhat easier. This certainly does not mean that there is no hope for candidates who are not from target colleges or universities. But you will need to work harder, be hungrier, better organised and execute your plans to perfection in order to give shape to your ambition. Ultimately, if you have what it takes, then nothing can stop you.
INTERNSHIP: Getting an investment banking internship goes a long way in making your CV stand out when you apply for full time roles. It doesn’t matter whether the internship is at a bulge bracket firm or a smaller boutique. It’s the experience that counts. Try to do an investment banking internship as early as possible and as many as possible. If you have completed an internship at the end of your second year, do another one at the end of the third year. If you’ve graduated, do another internship while you may still be scouting for full time Investment Banking analyst roles. Whatever your situation, doing an internship while you are executing your playbook will only help you. There is no downside here whatsoever.
Internships add to your profile and make your resume or CV stand out from the crowd, if you think of the proverbial pile of CVs on the screening desk. Whilst the bulge bracket firms have structured internship programs, there are plenty of small to mid sized buy side and sell side firms that welcome additional support all year round.
Don’t get too hung up on whether the internship is paid or unpaid. Your real pay off will come when you apply for full time investment banking analyst or associate roles. Even if you have to P*** yourself (for lack of a better word) and work for free, don’t lose sight of the big picture. Remember, getting that elusive interview call is the hardest bit. That should be your focus, first and foremost.
SMART APPLICATION: Keep in mind that whoever screens your application is crunched for time and has a pile of applications to get through. Therefore, give them what they are looking for in 30 seconds. Hit the nail on the head. Don’t beat around the bush. Keep it short.
Leverage any relevant internships to the fullest. If you have more than one, even better. They go a long way in showing genuine intent v/s a passing interest. Focus on the key learnings and how they have ignited your fire for investment banking even more.
If you don’t have any relevant internships, focus on why you’ve chosen to major in Finance keeping the long term goal in mind. Outside of regular education, highlight how and why you’ve pursued certain interests that are connected to your ultimate goal. As an example, if you’ve opted for select finance courses on business valuation methods, financial modeling etc., include them and be ready to be grilled.
Think of specific examples of when you were on full stretch, multi tasking with various deadlines, prioritised, pushed yourself and succeeded. Investment banking is a high pressure job where you will be pushed beyond what you think are your own limits. There is no limit to hard work and you will be expected to burn the midnight oil on a regular basis. Sometimes, weekends will be more hectic than weekdays. We prefer straight talk.
Your aim should be to convince the recruiter that you have done your home work well and understand that a career in investment banking is not a nine to five. You are making an informed career choice and have got it takes to deliver for your team, whatever time of night or day, consistently.
YOUR PLAYBOOK: Start planning early. If you are from a target school, some of the larger investment banks will be hiring from campus so your task is somewhat easier. But you still need to do a fair amount of networking with alumni and bankers. Get them to like you enough that they are willing to stick their neck out and put in a good word for you. This will seal the deal. FYI, sealing the deal here still means getting shortlisted for interview.
If you’re not from a target school, you need to work harder. The action plan for you involves networking, cold calling and cold emailing. Too shy or feel awkward to cold call? Get over it and keep in mind that your best chance is to keep at it. If you give up or let doubt creep in, it’s game over. The worst outcome possible from cold calling or cold emailing is that someone says no. That’s not so bad. Cold calling needs time, patience, persistence and a lot of hard work. But it works. Make a list of your target firms and identify senior personnel there.
Networking and building relationships with bankers or recruiters takes time. Try to attend industry events that are close to you, leverage your student ID so you can get in for cheap if not free. If some senior bankers are speaking at the event, you may have an opportunity to speak to them during a break or post the event. Keep your 2 minute pitch ready and make a good impression. Follow up with an email within a day or two so they don’t forget about you. Stay in touch. Build a relationship. Dating practice?
If you’re a recent graduate with a couple of years of experience, then networking and cold calling are the main tools available to you.
Truth & Nothing but the Truth
- Do not over rely on your university’s careers service. They mean well but can provide little help other than generic information
- Do not rely on head hunters either. It is difficult to ever know if a head hunter is working for you at all. This is a passive approach, you never know where you stand and it would be silly to depend on it
- Responding to online job adverts will not do it either. Vacancies at the entry level are rarely advertised online as there are always plenty of CVs awaiting their day in the sun from target schools
- With an active approach, you know where you stand. You’re in charge of your dream
- This industry is for younger professionals. If you are older, then the odds of gaining access are stacked against you
In order to get maximum results from your networking and cold calling efforts, you should perfect your pitch. Call it your proverbial elevator pitch (we don’t recommend you pitch in an elevator) or whatever you will, but you need to communicate in under 2 mins
- Your name and where you grew up
- Where are you studying? Or where did you study? Major?
- How did you get interested in investment banking?
- Any evidence to back up your interest with concrete action?
- What are you looking for?
- What are you offering?
Practice it over and over again till you perfect it. There is a lot riding on it.
2. CONVERT YOUR INTERVIEWS INTO A JOB OFFER
Investment banking and mainstream finance are different to other industries. Even at the entry level, a candidate is expected to know everything about the industry including the technical stuff related to company valuation techniques and financial modeling. It’s a Catch 22. But it’s possible to educate and prepare yourself if you have initiative and drive.
Investment banking interviews are meant to put you under pressure. The interviewer wants to know if you can you keep it together when your back is against the wall? Can you still process, hold your own and fight back?
If you are from a business or finance background, then you should expect to be grilled on:
Valuation – Trading Comparables: See Top 3 Business Valuation Methods : Trading Multiples or Comparables
Valuation – Transaction Comparables: See Transaction Comparables
Valuation – Discounted Cash Flow: See Discounted Cash Flow
If you’re from a non finance or business background, you can expect some leniency but not too much. You should get familiar with some of these topics and be able to talk about them like a finance professional. Your interviewer may or may not expect you to know about these topics. But if you can answer related questions, the interviewer will be blown away.
3. TO SUM UP
This is a numbers game. The more applications you make, the better the odds. Don’t be disappointed with initial setbacks. Very few rock stars get their dream job on their first interview, and respect to them. Most mortals learn through trial and error. Good things take time. So keep the dream alive, learn from mistakes, keep fighting and one day you will win. It has to happen. Execute the steps outlined here and it will happen sooner than you think. And when it does, we will be applauding you – LOUDLY. Happy hunting and congratulations in advance!
ABOUT THE AUTHOR
Founded in 2007, by a former banker from Lehman Brothers, School of Investment Banking is a unique and one of a kind Investment Banking training institute. What sets us apart is the fact that we leverage our deep contacts with recruiters to secure world class placement opportunities for candidates. That’s why SIB alumni are pursuing their career ambitions as Investment Banking Analysts with major recruiters such as JP Morgan, Goldman Sachs, Citi, Deutsche Bank, Bank of America, HSBC, Nomura, PwC, Ernst & Young, KPMG, Deloitte and Grant Thornton among others across the world. With an average placement record of 90% since inception, we know more than a thing or two about getting your foot in the door!
Team SIB: Took notes? Started executing your play? We’re here to see you win, so how can we help?