Bank on Banking

I’ve received a lot of repeat questions, so I figured it was time for my first installment of Readers’ Questions. Future posts will cover more questions, but since an IB analyst that I know (who prefers to be left anonymous) completed a brief interview I asked him to fill out, I decided to include that in this article as well. More banker interviews are on their way as are more Readers Question posts and fresh articles so stay tuned! For now, read on…

Networking

Is it rude to call someone out of the blue from my alumni database without first sending an introductory email? I feel that setting up a time to speak is better, but if I send an email first, I will get fewer responses, right?

If they don’t respond to your email, they are not going to want to talk to on the phone. Respect their schedule, and send the email first. Of course you will get many people that ignore you or blow you off, but that is part of the game. Stay with it, and stay persistent – you will get plenty of quality responses to offset the blow-offs.

I have a pretty large alumni base to use and it doesn’t seem worthwhile to try to reach out to everyone. Who are the best levels to network with (analysts/associates/MD’s/etc)? Should I contact a few levels at each firm or not even bother with certain ones? Also, since many alumni don’t list their position or division (they can be banking, back office or anything in between), is it better to tailor the emails with “I am really interested in a career at ‘firm name’ instead of ‘investment banking?’”

You’re kind of looking at this in the wrong way. While you definitely don’t want to send out some blanket mass email to 100 people at once, you definitely want to reach out to a decent number of people – remember you are not going to get a response from many people, and out of those who respond, many will only give you a generic answer that tries to help, but doesn’t offer to go any further. When it comes to networking it’s about being patient, taking the time, and casting a wide net – if you’re treating it as a chore and something to do for the hell of it, those are the types of responses you will probably get back.

I would first target those people who work at the firms that you have the greatest interest in, if you don’t know their division, etc, then its fine to send out an email touching base to learn more about the firm, more about which division they are in, how they were able to break in from your school, etc – it’s fine to say that you have an interest in a few areas and are trying to learn more about them if you don’t know which division the person is in so that the door is left open, instead of “hi, if you’re not in banking, then pretend I never sent this email to you.”

Interview/On the Job

I’m about to start an IB internship with a boutique shop, and since you’ve done both boutique and BB, I was wondering what to expect in a boutique environment?

In terms of what to expect, boutiques are all very different – some will work you like a dog, and others much more relaxed. Generally, with a boutique, if you can hit the ground running and know your technicals you will definitely impress them. If you are ready to contribute and can stay on top of your tasks, you should leave a very good impression as boutiques often rely on their interns to a greater degree. That said, boutiques are, as I said before, quite different from shop to shop and just as some will rely on you, others will have you doing mainly admin work. Within your first 1-2 weeks, you should have a real handle on the type of workload and responsibilities that will be expected of you. Regardless of the task, be ready to make the most of it with a smile on your face. Good luck!

I have an interview coming up with a MM shop soon, and I spoke with one of my contacts who told me that I should know the deals that I worked on very well. All I have been doing, however, is just preparing industry reports, DCF, Comps, and pitches for my 2 active deals. Do I really know the transactions that I am working on well given my role, and how can I prepare for those questions?

To answer your question, yes you should absolutely know the deals that you are working on, and know them well. If they are on your resume, they are completely fair game. Keep in mind, however, that no one is expecting you to be a 3rd year analyst with the deals on your interview, but you should absolutely know all of the basics, the outcome, what went into the project, etc. Running DCFs, spreading comps, constructing pitch books, etc, are all very valuable deal tools. If I were you, I would learn the comps well, what distinguishes your deals from them and how they are in fact comparable, review the pitch books for current market conditions governing the project, other groups associated with the project, your group’s recommendations and supporting reasons, review the DCF models and deal models in general to see what assumptions were used in coming to your (the group’s) conclusions and decisions as it relates to financing, timing, strategy, etc. Finally, I would absolutely review the credit memos/investor memos associated with the deals to learn more about the industry, the company, the market background, the financing strategy, why the deal is good, what were some of transactions risks to your firm and how they were mitigated, etc. I know this is a lot of information and sort of high level, but you’ve definitely got the tools and means to learn the deals well and rock the interview. Good luck!

I recently started an IB internship with a boutique and am generally working 8-10 hours per day. However, I have friends in other investment banks (regional and BB) who are pulling 60-90 hours/week. I know that it’s early in the internship, but I am kind of worried that I am not putting as many hours as my peers. Is that OK or am I going to be at a big disadvantage?

A lot of people ask me a question similar to this and it always makes me laugh. I know analysts who have accumulated very strong experiences and solid deal exposure working just 55-65 hours per week (in general – as some weeks require the 90-hour marathon). At the same time, there are other analysts who work 80-100 hours per week more often than they care to (or probably can) remember, and don’t have that same quality of experience to show for it. Remember, many bankers (especially junior-level – interns, first-years) are “hour whores,” as in they almost brag about how many hours per day or per week they work as if it were some sort of measure of worth. It’s complete BS – it is far more important to get quality experience, than quantity experience. Many bankers that talk about their 80 or 90 hour work-weeks have very little more than dozens of pitches and a lot of frustration to show for it. Get the most out of the position through as much quality work exposure as you can earn – if you can get solid work experience in much less hours, then that’s great for you – live life, volunteer, study for the GMAT, whatever it is that you want to do (hopefully it’ll be productive, haha) since, if you pursue banking full time, the freedom will probably not last.

A Brief Interview with a Banker

What made you want to get into investment banking and what group do you work in?

I work in Debt Capital Markets (bond underwriting and bank loans). I wanted to be in banking for the accelerated real-world business experience and corresponding pay.

What do you see yourself doing next in your career?

I’m happy where I am for now. I feel that I’m gaining valuable experience in my current position and that my work is paying off – both monetarily and in terms of my professional development. In terms of next steps – time will tell – a lot will be based on whether I am given an offer to stay on or not.

What is a “typical day” in your group, if there is such a thing?

No such thing. Every day is different, and that is part of the fun of the business.

What do you wish someone would have told you about this job before starting? Would it have changed your mind about accepting the position?

I wish I had known that what I learned in school would not be sufficient for accomplishing my everyday tasks. The amount that you have to learn on the job is tremendous, but very rewarding. Don’t expect to know everything going in – it’s a whole different world once you’re outside of the classroom.

Generally speaking, what do you think are the key skills necessary to succeed in investment banking as an analyst (besides Excel and PowerPoint)?

The biggest thing is to try to make your boss’s job easier –this is why we’re there. Besides that, learn as much as you can as quickly as you can, ask intelligent questions, work hard and be cooperative.

[Note: This is definitely a key point – one of the most important responsibilities of an analyst is to make your superiors’ jobs easier – their lives easier. So if that involves grabbing lunch, go for it, dialing into a call and taking notes, do it, running a model for a dozen scenarios and then drafting slides around each case, get on it. This is one of those points that is often swept under the rug or forgotten about late at night, but the senior bankers never forget it.]

Do you have any advice that you can offer them in terms of interviewing or preparing for the job (academically, socially, etc)?

Network with your school’s alumni; in my case, I found our school’s alumni network was very supportive of jobseekers in my class. Your business professors may be in touch with banker alumni, so having an academic mentor is valuable as well. Don’t be afraid to reach out to friends who graduated and got jobs before you. Often, investment banks rely heavily on their current analyst class to help recruit the new analyst class, so your friends who are only a year or two older can be valuable allies. If you are in a fraternity, obviously, this too can be a valuable networking tool.

[Note: No big surprises here, I’ve been saying it for a while. Nevertheless, the point is worth repeating]

Stay tuned for future articles on networking, business school essays tactics part 2, fresh banker interviews and much more!

Also, new product alert! I am getting ready to release my first of a series of Bank on Banking Survival Guides; this first guide will cover the top interview questions and the tips and strategies necessary to nail them every time. More information coming soon!

As always, leave comments below, and feel free to send me any feedback or questions here.