Getting Ready For An Interview

For undergrads and MBA students, the news that they have been selected for an interview at an investment bank comes with both excitement and dread. A position as an analyst or associate in corporate finance can be the first step towards a highly successful and highly lucrative career. Investment banking interviews, however, can be some of the most intimidating interviews out there, so let’s take a look at how to get prepared.

Before we jump into interview practice mode, we should take a step back and think about how we want to come across in the interview. In short, investment banking candidates should come off as bright, confident and likable.

In the final cut of selecting a hire, investment banks have already determined which candidates are smart and capable, so the decision comes down to who they like the best. So in addition to knowing a thing or two, candidates must remember to come across as a fun person to work with as well.

Know Your Story

Like any interview, candidates should have stories prepared about their lives that discuss their past, present and future. These are great answers for the standard questions:

“Tell me about yourself.” Or “Walk me through your résumé.”
“Why are you interested in investment banking or this firm?”
“Where do you see yourself in five to ten years?”

Candidates are highly likely to receive these or similar questions in any interview, and having succinct, practiced answers to them will give the impression of a polished candidate.

Your past story should highlight events that have qualified you for or gotten you interested in investment banking. Your present story should demonstrate why you want the particular position, how it is a logical step from where you are coming from and perhaps touch on where you hope the position will lead.

Your future story should discuss how investment banking will lead to where you want to go. Good future ambitions might be a managing director position in investment banking, a principle at a private equity firm, a CFO or perhaps and entrepreneur. In any case, you should communicate that those are long-term ambitions and you look forward to the experiences you’ll have in the position you’re interviewing for.

Know the Industry and Firm

Where investment banking interviews begin to get trickier is that firms will expect you to know what you’re getting into. If you confuse an equity analyst position with an analyst position in corporate finance, for example, you will not make it any further in the process.

You should understand the major divisions within an investment bank – sales & trading, corporate finance, research, etc. You should understand the hierarchy of positions within corporate finance – analyst, associate, vice president, managing director – and what each position does.

At the macro level, you need to understand the major differences between bulge bracket investment banks, middle market and boutique investment banks. You should also have a good answer for why you would prefer one type over another (and be sure that you prefer the type you’re interviewing with).

You should also understand the particular expertise that your firm has – transaction types or business sectors where it is active. Find some recent transactions that the firm has completed and be able ask smart questions about some of them.

You may be asked if there are any other firms or companies that you are interviewing with. If you are interviewing with other investment banks, you can be honest and say that you’re taking the opportunity to get to know the investment banking landscape. You want to communicate that you’re most interested in the firm you are speaking with and be able to give good reasons why.

Most banks will see it as a plus that you are interviewing elsewhere and may be more inclined to try to hire you. If you don’t have other interviews with banks, be sure to network and talk to people at other banks. If you can respond that you’ve at least been doing some networking in the industry, you’ll come across as a stronger candidate.

Know Your Financial Models

Candidates should also know what they’ll be working on when they come to investment banking. Having a basic understanding of pitches, deal execution and the ebb and flow of the corporate finance office is important.

To that point, you should also be familiar with some of the financial models you will likely be using – discounted cash flow, comparable companies analysis, precedent transactions analysis (sometimes called M&A comps) and LBO analysis.

Understanding how these models work and the theory behind them will help you to answer a lot of the technical questions that might get thrown at you in an interview. Know the capital asset pricing model (CAPM) and how to calculate the weighted average cost of capital (WACC). Know how to un-lever a beta.

Know the Marketplace

Be sure to get up to speed on financial markets. If you can read financial news regularly and follow the reports of an economist or two, you’ll be prepared to answer questions that might get thrown at you about the markets:

“Where do you see interest rates headed over the next six months and why?”
“Where did the Dow close yesterday?”
“Do you have any stocks that you follow? Tell me about them.”

Brain Teasers

Another type of question you may encounter in an investment banking interview is a brain teaser. These questions are meant to catch you off guard and see how your mind works.

“How many golf balls will fit inside Yankee Stadium?”

You should be able walk through your thought process and come to a logical answer, even if it’s not the right one. You could say:

A golf ball is a little over two inches in diameter, so you could fit about five across in one foot of space or 125 in a cubic foot. It’s about 400 feet from home plate to center field, so Yankee Stadium is about one thousand feet long.

It’s shape is like a half sphere, so you could use the formula for the volume of a sphere – four thirds pie r cubed – divided by two to calculate the volume in feet. Then you multiply by 125 to figure out how many golf balls would fit.

That would be an adequate answer to a brain teaser. If any of your assumptions are wrong, it doesn’t matter as much as your logic. Get out a piece of paper during the interview and write out your assumptions if you need to. Get a hold of a list of brain teaser questions and have someone practice with you.

Ask Good Questions

Before the interview is over, you should always ask some good questions. There has been a lot of change in the investment banking landscape, so there are lots of great questions to ask:

“How has the merger with such-and-such firm gone?”
“How has the role of private equity changed since the financial crisis?”
“Do you foresee a surge in M&A activity in any of the industries you work with?”

There are many more questions out there. You will usually be given an opportunity to ask questions, and this is your chance to take control and show that you’re prepared. Write some smart questions out before the interview and take them with you. No matter what questions get thrown at you, you can at least demonstrate that you can ask smart questions – a valuable skill in investment banking.

Final Touches

When you finish the interview, be sure to smile and thank the firm for talking with you. Try to get a hold of business cards and send thank you emails when you get home.

For on-site interviews, be sure to treat everyone you encounter with respect including administrative assistants, analysts and associates. Even analysts may have the opportunity to comment in the hiring process of associates, so it’s important to make a good impression on everyone.

Be patient with the hiring process. Ask about the firm’s hiring timeline and respect it. Don’t follow up until after their deadline has past.

Investment banking interviews can be some of the toughest you will come across in your career, so be sure to take preparation seriously. Focus on coming across as a bright, confident and likable candidate, and you will put yourself in the best position to get hired.

The Ins And Outs Of Private Banking

When you have a certain level of wealth, you really need a professional who understands your unique needs and offers customized advice accordingly. If you are also on the lookout for something similar, you may want to use some services offered in private banking.

Private banking is actually a combination of different high quality services. For instance, a private bank can offer investment advice. They make use of different methods to manage your investments and finances in a much better way. They sometimes make use of discretionary management and sometimes help you with advisory mandates. Whatever the method, they always offer regular reports to help you get information about the current value of your investment.

Today, financial markets fluctuate on a great speed. It is due to this particular reason that you need to react to the situation almost immediately, or else you will lose a lot. You can expect great success by making use of the services like discretionary asset management. Here, your personal relationship manager sits down with you and determines your specific investment goals and expectations. While doing so, they always consider your investment horizon, risk tolerance, anticipated cash flows, and income needs. Once done, an investment strategy is defined for you, which is often adjusted according to the ever-changing marketing conditions. Usually, the investors who opt for this type of service come with long term investment point-of-view and ask a banker to take care of their investment portfolio.

On the other hand, you can find some people who prefer to make their decisions on their own. For these clients, a private banker comes up with active advisory services. When you have fixed objectives, you can make use of some private banking to get tailor-made solutions. These advisory services are usually available for a variety of instruments, including bonds, equities, commodities, investment funds, foreign exchange, and structured products. Here, you are free to make your own investment decisions, but your banker provides you with all essential details and info. Since several private banks manage teams of professionals all over the world, they let you know when they think the time is right to buy, sell, or hold.

What sets a private banker apart from others is that they always keep your personal and professional situation in mind. This puts them in the best position to find a right strategy to help you manage your portfolio. Not only this, some of these institutions can actually help you with private financing, which is much better than mainstream finance options.

The fact of the matter is that private banking is something much more than traditional banking services. It’s all about getting services that are exclusively designed keeping your unique circumstances in mind. It doesn’t matter if you have short-term investment goals or you need to manage your portfolio over a longer period of time, you can always get in touch with a private banker to find out more about the best strategies for yourself.

All About Being an Analyst In The Investment Banking Field

Investment Banking Analyst roles are in demand. As we have seen in my article on Equity Research Career, the career in Investment Banking and Equity Research is rewarding if you plan it well and have a long-term approach towards it.

If you are a fresher or have 1 year of experience in a bank, you can apply for such positions in Boutique brokerage and Investment Banking firms. You should have a graduate or post-graduate qualification (MBA,CFA,CFP,CPA) in business or management. You can apply for the posts in the area of M&A, Operations, Quant, and Business Analysis.

The job profile varies as per the areas, for instance, a New Jersey job in Investment BankingBusiness Analystposition comes with the responsibilities of identifying project scope, defining project plan and workload, following up and reporting regularly to projects sponsors, escalate issues related to this. Whereas, Investment Banking Analyst-Quant in New York will have the duties like: research, deal processing and strategic business development, researching and evaluating healthcare businesses under the supervision of senior bankers, contributing to the development of information memorandums, management presentations, pitch books and marketing materials and doing financial Projections. While an Investment Banking Analyst -M&A working in New York with a globally diversified financial services firm will have to work on: Analytical, due diligence and transactional support on workout, restructuring, acquisition and new business opportunities, developing financial models, pitch book materials and conducting company research, analyzing data to help advise our current or prospective corporate clients on actual or prospective transactions.

The skill sets required to complete the above duties are:

· Strong quantitative / analytical skills

· Superior attention to detail

· Solid work ethic

· Excellent verbal and written communication skills

· Ability to effectively manage multiple simultaneous project deadlines

· Proficiency in Excel and PowerPoint

· Solid understanding of capital markets and spreadsheet modeling

· Strong written and oral communication skills.

· Previous experience in M&A sector is highly desired

· Highly motivated with demonstrated ability to manage conflicting priorities and requests

· Excellent interpersonal skills with ability to maintain relationships at all level in organization

· Ability to take initiative and function independently balanced with strong teaming skills

· Maintain high standards of professional and ethical conduct

The salary comparison of 3 cities, New York, Mumbai and London, for the Investment Banking Analyst post is here:

A person with Certifications like Chartered Financial Analyst (CFA) and 1-year experience can earn U.S. $50,000-$70,000 in New York. In Mumbai, the same person may earn in the range of INR 3,00,000-10,00,000. In London, the person with the same qualification and experience may earn in the range of GBP 20,000-50,000. These are the entry level packages for people with above mentioned qualifications, skill sets and job responsibilities in 3 different geographic locations.