Bank on Banking

After days…weeks…months of preparation, studying, practicing, and rehearsing, you are left with little more than some interview experience to show for it as you, like many others, unfortunately come up short in your pursuit of the bulge bracket investment banking summer analyst position. I’m sorry to be the one that says this (and coming from someone who sells interview and resume preparation services and offices advice on breaking into banking it might sound a bit weird), but not all of you will break into bulge bracket, elite boutique, or even solid middle market investment banking as a summer analyst – it’s just not possible. There are X number of positions at any given time and at least multiple X number of capable and qualified applicants (yes, coming from different schools, backgrounds, some better than others, etc – but still – all capable). Therefore, as much as I’d love to say that all of you will land your dream internships, many of you have already realized (with more to come) that a backup plan is necessary. Rather than just fly dark, panic, and potentially end up with nothing, I’ve put together a list of common backup options, in order of appeal to BB IB to enhance your marketability next year, when it counts most, for FT recruiting.

Boutique IB/Advisory

Before anyone attacks me for listing IB as my top option when I just got finished bracing everyone for being prepared to not get into IB, I am not talking about BB, or even MM IB, I am talking about smaller and no-name investment banking and advisory shops (typically focusing on deals <$500mm, often less than $250mm). While these shops don’t carry the prestige or hallmark of far more reputable and larger shops, it is still investment banking and regardless of deal size, the work will be the same, and skill set you acquire can be very strong. These boutiques often allow their interns and junior analysts to play larger roles on transactions and delve into a lot of modeling and analysis considering the absence of experiences resources and necessity for every member of the team to be involved. As a result of this, you will often find yourself gaining solid resume-building/enhancing experience particularly with regards to modeling and active transaction involvement. Therefore, while your shop might not be impressive by name alone, the experience that you can gain (if you work for it, of course), can definitely help your resume to be impressive.

Additionally, unlike when you strictly focus on the top shops, you are now targeting a far wider array of employers and giving yourself many new avenues to pursue – the trick is in how you pursue them. Although there are many shops of this caliber out there, unlike the BB, top boutiques and MM shops, most of these firms won’t actively post for interns on college boards, or, for that matter, even actively search for interns in general. Therefore, you will need to do your own homework and actively pursue them. In other words, get online and start hunting down these shops. Go through their websites, find contact information, recent deals, conversation points and points of interest about the shop. Additionally, you will have to be ready to showcase your talents and your skill set – essentially sell yourself with each conversation. Don’t expect it to be easy and be prepared to be told “no” many times before finding a bit of interest. With internships especially, you will need to be persistent as interns are often seen as an extravagance, or, worse, as a burden – considering they often need to teach interns everything and just when they start to be useful, they go back to school and pursue a better shop with their new skill set and experience – show them that you won’t be a burden and that you are ready to hit the ground running and interested in contributing to the team, while learning about the business. Finally, be prepared to take a hit in salary as opposed to the prorated BB SA salaries you all probably know about – remember, it’s just a few months, but the payoff can be huge for the next few years – plus, some money and strong experience is better than no money or relevant experience if you end up finding nothing of quality.

Boutique P/E

So, you weren’t able to find a solid internship opportunity anywhere in IB – where to go now. While many people assume that finding something in P/E would be harder than landing anything in IB, that’s not always the case. You need to explore all of your options and I know of at least a few people that found P/E internships, but couldn’t land IB internships. It’s all about finding the opportunities, and since P/E is often the next step after IB, the skill set you will acquire as a P/E intern will definitely be applicable to IB – so don’t simply jump to back office opportunities just yet.

Consulting and Corporate Development

While IB and P/E go hand-in-hand, there are other opportunities that call on the same skill sets, are very competitive, and will definitely help to enhance your resume ahead of FT IB recruiting. Among these opportunities you will find two very solid avenues in consulting and corporate development. Both of these opportunities are seen as front office roles and are quite competitive in nature. Furthermore, the analytical aspects of the position and attention to detail required definitely stand out as interesting and relevant to investment bankers. With either of these positions, the biggest challenge here will be in convincing IB interviewers (next year, when applying for FT positions) that you are indeed interested in IB and not one of the other two fields (whichever field you land the internship in, that is). Essentially, you will be undoubtedly faced with the “why banking and not consulting/corp development” question during your interview and will be expected to have an answer that highlights your interest in banking without: 1) disparaging the previous position or 2) stating that you pretty much had no other options.

Sales and Trading

On a similar level to Consulting and Corporate Development (as it relates to the level of appeal the position has to bankers) is Sales and Trading. By sales and trading I am not referring to dime-a-dozen prop shops in NYC, but rather S&T internships with BBs and the like – often rotational programs and opportunities to work on S&T desks generally running some simple modeling and working on pitch books. Since S&T requires an analytical skill set, interest in the markets, attention to detail and is highly competitive in terms of earning an opportunity, S&T is often the internship chosen among students who do not land IB internships their junior year, and those who ultimately pursue IB FT the following year. Furthermore, although IB and S&T are quite different, many people often see them as quite similar (for a variety of reasons) and pursue S&T as an intern to test the waters, only to decide that IB is indeed the path for them (or at least that S&T is not the path for them).

The BIG issue here will be in convincing interviewers next year, when applying for FT IB, that you are interested in IB only, or at least much more so than S&T. Since S&T and IB go hand-in-hand (at least in terms of eager and aspiring student BB applications), it is essential that you are prepared to answer not only why IB, but also why not S&T – again, without attacking S&T in the process. If you can do this and do it well, S&T can definitely be a solid internship to keep you on the competitive footing for FT IB recruiting. That said, S&T is also very competitive, so don’t assume that you will be able to walk in an S&T interview and land the job much easier than an IB internship position – in short, always bring your “A” game.

Operations/Mid Office

While mid and back office often get the short end of the stuck and take a fair share of abuse, the opportunities can still be very solid and can definitely offer resume-building experience (especially when the alternative is no experience at all – being a waiter or salesperson at a shopping mall doesn’t count as relevant experience). Depending on whether you are working back office at a BB or at an independent corporation (a F500 company, for example), will determine what kind of experience you get. One of my first internships was a back office role with a F500 company and although I spent a lot of my time doing accounting work, checking budgets, etc, I also spent some time on more interesting projects including a few cannibalization studies and promotional event analyses – not earth-shattering by any means, but definitely looked decent on the resume, gave me an opportunity to work in both excel and powerpoint and was more interesting than most of my other work. In short – don’t assume that a BO position will be completely useless and that you will not learn anything or do anything even remotely interesting. There are definitely worse opportunities to take on than an operations/control position for a summer. Any internship is what you make of it, and just as with any other opportunity, work towards taking on as much responsibility and interesting projects as you can and try to meet as many people as possible – especially if working in a BB.

The one caveat, just as with S&T and consulting, is that you will need to prove that you are interested in operations (or at least fake it well). Although back office isn’t as competitive as front office, back office as a whole is known to have a bit of a chip on their shoulder when it comes to very talented young individuals who do have exposure to IB and S&T opportunities. They know that they are often the back-up and don’t like it. So while you might know that IB is for you, you definitely don’t want the interviewers to get that same impression. Learn about the position and sell your interest in it – again, an operations internship is definitely better than nothing.

Stay tuned for future posts on not breaking into IB, what an analyst really does and more! As always, comments go below and questions can be sent Here!