It's graduate recruitment season in investment banks. While the vast majority of front office roles go to summer analysts who have converted their internship, most investment banks will shortly close their full-time programmes to applications and embark on the interview process. Assuming you've made it through the psychometric tests, and successfully beaten the Hirevue digital interviews, now is the time that you'll be quizzed by real people.
Do you really know what it takes to impress those people? Mark Hatz worked for four years in banking at firms like Goldman Sachs and Perella Weinberg Partners in London, Paris and Dubai. During this time he was involved in the recruitment of investment banking analysts and associates, interviewing scores of applicants alongside senior executives. He’s now author of the Investment Banking Interview Preparation Pack, designed to help undergraduate and MBA students secure analyst or associate positions in M&A. In his own words, these are his top ten tips:
Attitude is 70% of your overall assessment. Think about it; juniors work the longest hours. Associates in the recruiting team will essentially look for flexible, enjoyable personalities; people who will be willing to continuously be loaded with work and who they will enjoy being around for 15 hours a day. Contrary to what you may have heard, they do not look for over-confident people with great intelligence, particularly if you cannot fit in a team.
By comparison, answering fit questions correctly is secondary. You can be weak at answering these types of questions and still be successful, but never, ever show the wrong personality.
However, as well as a positive attitude you need to demonstrate technical skills. This job is all about reputation, and a solid financial knowledge is the best way to gain respect. A combination of the two is almost guaranteed to get you an offer.
You would be surprised at how many candidates, because of stress, forget to smile. Speaking as someone on the other side of the table, this is one thing I really want to see. Smile genuinely and enjoy the moment - this is nothing more than an exercise.
Firstly, remove any mark of over-confidence. Show respect, and never give the impression you know more than your interviewer – investment banking remains a very hierarchical industry, so don’t let your motivation or ambition make your interviewer feel uncomfortable. Secondly, be as short and concise as possible in your answers - always summarize and let the interviewer ask for the details they need. The interview is a short exercise, so show maturity by understanding that juniors, given their workload and lack of sleep, always need to get to the point quickly. Thirdly, speak slowly and clearly. And finally, listen to the interviewer – definitely do not interrupt them.
You can be confident about what you are saying without tipping over into arrogance. I encourage you to say what you really think. Successful candidates are those who are honest about what they think, regardless of what opinion the interviewer might have (this, done in an intelligent way, will make you stand out as honest and mature).
Your interviewers are also not more talented than you are. They are just older, with more experience.
And finally, as an analyst candidate, you do not need to know everything about the job (forget trying to show financial modelling skills during the interview, for example). Once you have start interviewing with several banks, you will realise investment banking interviews are generally the same. The same questions come up every time: your preparation of the fit and technical questions, as well as brainteasers, is key.
Think elevator pitch – a short story (three minutes, as if you were in a lift with the interviewer) that sums up your application in four points: why the industry, why the firm, why the region, and why, specifically, you. That is really 'all' they need to hear from you in the fit interview.
In your preparation, ask yourself the four questions above, try to be honest in your answers, but still include the reasons why they will hire you. The points below are what you need to include.
Anyone already in the business assumes that junior investment bankers bring little to the table. Instead, they’re essentially blank slates who have been drafted in to learn the ropes. So, when asked about your motivation to join the industry, remember that banks will be particularly sensitive to your appetite to learn. The learning curve is steep, hours are long, and exposure to senior management comes early.
The top-10 banks in the field you have applied to are all the same. They advise on the same type of transactions, all have the same culture and the same type of people, no matter what other impression they attempt to convey. Never mention league tables, transaction size, corporate culture or the intelligence of its people as an argument to the ‘why our firm?’ question; they are irrelevant. The best answer is to say you have spoken with a few people from the firm and you are eager to learn from their experience and work alongside them. Speak with professionals from the firm through your school alumni network, through social media or in recruiting forums. If you have not had a chance to speak with any, talk about the people from the firm you have already had interviews with.
When large investment banks ask ‘why specifically you?’, they don’t want you to demonstrate your technical prowess. There are two primary qualities that investment banks want to see in their junior recruits – that you interact well with a team and that you have a strong work ethic. Show evidence of this during an interview or you can forget your chances.
However, boutique investment banks do not have the resources to train new recruits, and are more interested in juniors that have had prior experience in investment banking and that could start on projects immediately. If that is the case, you should also make this clear during the interview.
The M&A technical interview is not only about valuation (discounted cash flows, multiples or LBO), a large part is also based on accountancy principles (essentially the interaction between the three primary financial statements). It’s important to understand these – getting any answers wrong will ruin your chances, primarily because accounting is at the core of any modelling exercise.
If during the interview you struggle with brainteasers and mental math (this can easily happen under stress), no matter how strong you have been at fit and technical questions, you will be out.
Brainteasers can be role plays (‘What would you do in XXXX situation?’), market sizing questions (‘How many marriages are there every year in China?’), logical problems or mental math. Practice makes perfect.
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