Investment Banking Internships - Interviewing Time Again

Investment banking summer internship interviews are in full swing. Now is the time to finalize your interview schedule and get out to Wall Street. Hopefully you have been networking for months now and have all your interviews lined up.

For a quick interview refresher take a look at the blog post 'First Things First: The BIG 5'. Remember to have your story prepared, not memorized, know why you want to do banking, why you want to work at each bank, different types of valuation, and how to walk through a DCF.

Good luck and make it happen this year!

Inside Job: New documentary movie written and directed by Charles Ferguson

The documentary film Inside Job by Charles Ferguson highlights the financial crisis that has enthralled the United States over the past several years and brought down with it the likes of Bear Stearns and Lehman Brothers. It is a very interesting documentary and one that I highly recommend.

Here are two movie clips from Inside Job via MovieClips.com. This is a great website that I highly recommend that provides free legal movie clips users can share via Facebook and other social networks, as well as embed in PowerPoint presentations. Very cool website and one that will have you wasting a lot of time! I will be using their website more often with my posts.

Movie Videos & Movie Scenes at MOVIECLIPS.com

Movie Videos & Movie Scenes at MOVIECLIPS.com

Can I Move From Back Office to Front Office at an Investment Bank?

I read this article from the Wall Street Journal today titled 'Breaking Into the Finance Field' by Elizabeth Garone (http://online.wsj.com/article/SB10001424052702304023804575566080808274148.html?mod=WSJ_Careers_CareerJournal_4) and I thought it was a great reminder about the difficulty candidates face in trying to make the jump from back office to front office work at an investment bank. It also should be a great reminder to start planning your career path now. This is extremely important at investment banks because of the polarized stigma of back office versus front office work.

A KEY TO REMEMBER: If you want to do M&A, LBOs, etc....do not take a job in IT, Compliance, or any other department at the investment bank because you think that is how you are going to get your foot in the door.

It just does not work that way at an investment bank, whether you agree with it or not or it does not seem to make sense, it's just the way it is. It is not as simple as other industries in many respects because it is extremely competitive and investment banks are looking for the cream of the crop. If a candidate accepts a position in back office, MDs, VPs, Associates and HR interprets this to mean that the candidate is indeed not the cream of the crop and it will hurt the candidates chances. Instead plan on going in directly as an analyst or an associate to an investment bank. This is how you start off in an investment bank.

The key is to get a job as an analyst right after undergrad or as an associate after an MBA. Remember that as an undergrad the process starts in the sophomore and junior years depending on which college and region you are living in and it starts the first week of graduate school as an MBA.

REMEMBER THE 7 P's:

1. Prior
2. Proper
3. Planning
4. Prevents
5. Piss
6. Poor
7. Performance

Happy Holidays!

The Sell Side

So it has been a while since I have written a post. It is good to be back and add another update to the blog. Today I want to write about the 'Buy Side'. During many investment banking interviews, especially as a college junior looking for a summer internship, expect to be asked if you want to work on the 'buy side' or the 'sell side'. This is considered a very basic question and one that if you get wrong will demolish your chances of getting an internship. It will show that you are not prepared and do not understand the fundamentals of what an investment bankers spend a 100+ hours a week doing. The answer to the question is you want to work on the 'sell side'!

Let's take a look at why investment banking is considered to be on the sell side. The job of an investment banker can easily be compared to that of a real estate agent with a major difference in one aspect being that investment bankers are brokering the buying and selling of businesses and real estate agents are brokering the buying and selling of homes. Businesses and companies around the world are constantly looking to buy and sell other businesses and want a market 'expert(s)' to help them know how much to pay for the company, if they are buying, or how much they should sell for if they are selling.

Just as home owners need a list of potential buyers to come 'walk through' the home and place bids on the property, so do companies need potential buyers to 'tour' their business. Investment bankers help to bring both parties together. To be as effective and efficient as possible, bankers specialize in many different areas. Thus bankers with a big book of contacts that specialize in different areas are constantly being recruited by other banks and are regularly on the move from bank to bank over the course of their career.

The bulge bracket investment banks typically specialize in many different industries, regions, and products. The following information is taken from Morgan Stanley's website (http://www.morganstanley.com/institutional/invest_bank/index.html)

Industry Coverage

• Basic Materials
• Consumer Goods
• Communications
• Energy
• Financial Institutions
• Financial Sponsors
• Healthcare
• Industrials
• Power and Utilities
• Real Estate
• Retail
• Technology
• Transportation

Products

• Mergers and Acquisitions (Includes acquisitions, divestitures, mergers, joint ventures, corporate restructurings, recapitalizations, spin-offs, exchange offers, leveraged buyouts and takeover defenses as well as shareholder relations)
  
• Global Capital Markets (Includes IPOs, debt offering, leveraged buyout; originate, structure and execute public and private placement of a variety of securities: equities, investment-grade and non-investment-grade debt and related products)
  
• Securitized Products Group (Includes structuring, underwriting, and trading collateralized securities across the globe)
  

Regional Coverage

• The Americas
• Asia Pacific
• Europe
• Africa

As you can see by the many different industries, products, and regions, it is very easy for investment banking teams to begin to specialize in any number of specific areas. As an incoming analyst you will not be expected to know what you want to do in life, but you should have areas of interest. For example, you should know and have a reason for being more interested in healthcare versus power and utilities or if you are more interested in M&A versus leveraged buyouts. This could be because your dad or grandpa was a surgeon and your grew up around healthcare or you have always been interested in science and physics and find utilities to be fascinating.

Here is a link to a pdf of four case studies on RBC Bank's website (The link works when you copy and paste it in a new window): www.rbcbankusa.com/corporate/file-156518.pdf

These case studies should give you a good idea of how an investment bank tries to sell their services to potential CEOs and management teams. A key to note here is that even though investment banking is considered to be the 'buy side' from a high level, within the buy side bankers represent both buyers and sellers, thus creating buy side and sell side relationships depending on their client's objectives. Don't let this confuse you.

Hopefully this post provides a high level of understanding and perspective about what investment bankers do. If you have additional questions please send me an email at info@ibdprep.com.

Scoopbooks: The Recruiting Guide to Investment Banking

As an objective source of information on investment banking interviews and the associated recruiting process, we endeavor to provide our audience with the information necessary to excel in interviews and land jobs as analysts and associates. After reading Scoopbooks' guide to interviews and the recruiting process, cover-to-cover, I can honestly recommend this guide to every junior-banker hopeful that dreams of working in the investment banking division of any bulge bracket, middle market, or boutique investment bank.

Those of us with siblings, parents, relatives or close friends who have worked in banking naturally have a leg up on the competition because we are privy to the insiders take on the entire recruiting process. The first two parts of the book (The Recruiting Season and Life For A Junior Banker) completely level the playing field because the pages in these sections embody what your brother, dad, friend or relative might tell you. You still need this book even if someone close to you is willing to give you the low-down on the recruiting process; you will be THAT much more prepared.

Part 3 of the book is a nice refresher for the technical aspects of interviews. It breaks things down into the fundamentals and would probably be helpful for non-finance majors (like myself once upon a time). Let me be clear, there are lots of resources that provide this sort of information; Part 1 and Part 2 of the book is the reason for buying it. The book costs $29.95 U.S. and is worth every dime. There might be a few copies available on Amazon for cheaper but buying through Scoopbooks' direct site will probably be more fruitful: http://www.scoopbooks.com/

Next post update:
After lots of questions about the "best" financial modeling training program, IBDPrep is formally recognizing Wall Street Prep as the most comprehensive and well-rounded training program in the marketplace.

After personally participating in and reviewing the training programs of three most popular financial modeling courses (Training the Street, Dealmaven, and Wall Street Prep) we declare Wall Street Prep the winner. We've reached-out to Wall Street Prep and they have offered to give a 15% discount to our readership! We will be publishing a complete review of Wall Street Prep's Premium Package self-study course in the next couple of weeks so stay tuned. You can start your training program in the meantime by using these codes for a discount:

Code for live seminars: ibdpreplive

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Investment Banks that are Hiring

I wanted to post this after coming across it this morning. I've taken it from The Deal:

Usually we tell you about the layoffs in the finance industry, but it looks like large and midsize financial services institutions are hiring again. Here are the latest reports and rumors.

In the U.S.:

* Goldman Sachs Group Inc. (NYSE:GS), Barclays plc's (NYSE:BCS) Barclays Capital, Credit Suisse Group (NYSE:CS), Nomura Holdings Inc. (NYSE:NMR), Standard Chartered plc (LON:STAN), HSBC Holdings plc (NYSE:HBC), Lloyds Banking Group plc (NYSE:LYG), Royal Bank of Scotland Group plc (NYSE:RBS) and UBS (NYSE:UBS) are seeking senior staff, according to eFinancial Careers.

* Wells Fargo & Co. (NYSE:WFC), J.P. Morgan Chase & Co. (NYSE:JPM) and TIAA-Cref are hiring private bankers, credit managers, financial advisers and financial analysts on WallStJobs.com, according to The Wall Street Journal.

* Westwood Capital has added co-heads of fixed-income advisory and trading, according to PRNewswire.

* Macquarie Group is hiring new bankers in its industrial and energy practices, according to DealBook.

In Europe:

* Greenhill & Co. (NYSE:GHL) is hiring consumer and retail bankers in London as part of an expansion, according to DealBook.

* Barclays is hiring in its European and Asian share trading operation and will expand its equities trading business by 300 by year's end, according to The Guardian.

In Australia:

* Caliburn Partnership, J.P Morgan, UBS and Credit Suisse are looking to hire. Chris Knoblanche, head of global banking at Citigroup Inc. (NYSE:C) in Australia and New Zealand, told The Guardian, "We are looking to build the team. We have recently hired two new managing directors within global banking."

According to The Economic Times in India:

* Morgan Stanley is hiring "very selectively in highly-specialised fields," including securities.
* Goldman Sachs is hiring eight to 10 senior positions.
* Bank of America Corp. (NYSE:BAC) is hiring in its private client and capital market business.
* RBS is making two senior-level and a few midlevel hires in its corporate investment banking business and in treasury.
* Nomura is looking for people for its capital market division.
* Barclays Wealth wants to increase "headcount by 20% every year for the next five years."

It looks like there's some opportunity out there. Good luck!

Keeping Current: Key to Interview Success

My brother was in New York last week and picked up the most recent edition of the Bark Street Journal for our Dachshund Frankie. As you can see he is getting his fill of all the recent news.

In the past we have mentioned the importance of keeping up to date with economic and financial news. The three most salient reasons for this, which relate to investment banking interviews, are 1) it will help continually develop your business knowledge and acumen, 2) you will have a better background from which to ask questions during interviews, and 3) you will be prepared for interview questions such as: "Do you read the Wall Street Journal? What was your favorite article yesterday?" I don't think I have to convince many people that this is a good idea.

The real point of this post is to tell you which newspaper and magazine will be the most helpful for you to read as you pursue a career in finance. The first is the The Wall Street Journal. My university gave out the Financial Times for free while I was a student but I still didn't give up my subscription to the Journal. This is the #1 American finance newspaper. If you don't have a subscription, you should get one today.

The second newspaper I recommend to you is The Economist. This well-written and practical magazine offers solid economic analysis for our evermore complex world-economy. In Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets nearly every top trader interviewed recommends The Economist. Jim Leitner of Falcon Management says, "I read The Economist religiously. If somebody asked me how to get involved in global macro investing, I would say start with a subscription to The Economist, read it every week, and think about what you learned this week that you didn't know the week before" (p. 43). This magazine will help give you a better understanding of the world as well as better investing ideas.

There are other good newspapers and magazines but as students or junior professionals you don't have the time or energy to read them all. By reading The Wall Street Journal and The Economist you will get the most bang for your time and money. If Frankie can keep current on today's markets, so can you.

100,000 Hits and Counting

As a blog and organization we have recently passed an important milestone: 100,000 page views. This blog was initially created as a bouncing board for our own thoughts and ideas about finding jobs and successful interviewing skills in investment banking. As students from a non-target recruiting school we endeavored to help uncover this highly esoteric world for ourselves and everyone else that was seeking to breakthrough and start a career on Wall Street. Now, as professionals in the industry, our input and ideas continue to be more and more relevant for you as you begin your journey to land a job in investment banking.



We would like to thank all of our readers for your support and hope that in some way we have helped you achieve your employment goals. Hopefully one day we all will drive bright red Porsches -- isn't that the dream of all investment bankers?