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?

What IBD Groups Are Hiring?

The biannual Association for Corporate Growth and Thomson Reuters DealMakers Survey Results were published yesterday. The survey was conducted in April and represents the views of 703 dealmakers around the globe. Most interestingly, the survey presents current market sentiments and forecasts deal activity by industry -- an indication of the likely scope and location of job expansion in investment banking.

The three most interesting slides for investment banking job seekers fell consecutively between 9-11.

Slide 9 presents a broad M&A forecast for the next six months. 52% of respondents believe that the number of M&A transactions during the next six months will increase moderately compared with today while another 34% believe that things will remain the same. If deal activity remains unchanged we will likely see more layoffs. Each bank has forecasted employment to meet the demands of the current environment. If deal activity increases beyond forecasts we will start to see hiring across the associated industry and product groups.



Slide 10 illustrates the overarching belief that distressed deals will play a major role in total deal activity during the next six months. I dare say that this trend will last at least for the next year. If you are looking for a job in banking, I recommend you look to groups and shops that have recently advised on distressed deals. There will probably be hiring room in these groups as well as restructuring groups.



Finally, slide 11 illustrates the market's belief that deals in Healthcare/Life sciences, Manufacturing and distribution, Financial services, and Business services will happen. Look to industry coverage groups that cover these sectors for job opportunities. If you start networking today with bankers in these groups, they'll be thinking about bringing you on when they get overloaded in six months.



As a recap: The ACG-Thomson Reuters Dealmakers Survey Results indicate that hiring in groups doing distressed deals and restructing alongside the industries touched on above will be the first the expand. For a list of banks see my last post.

List of Investment Banks

In this difficult economic environment, job seekers must be willing to reach out to every potential employer. Below is a comprehensive list of investment banks and links to their home pages. If you're looking for an internship or full time employment, I recommend you contact human resources and recruiting at as many of these banks as possible.

• A.G. Edwards
• ABN Amro
• Alex. Brown & Sons
• Allen & Company
• AllianceBernstein
• Allianz
• Ambrian
• Babcock & Brown
• Bank of America
• Bank of Nova Scotia
• Barclays
• Barings
• Bear Stearns
• BMO
• BNP Paribas
• Boenning & Scattergood
• Brown Brothers Harriman
• Brown, Shipley & Co.
• C.E. Unterberg, Towbin
• Calyon
• Canaccord Adams
• Cantor Fitzgerald
• Carnegie, Wylie & Company
• Cazenove
• CIBC
• Citigroup
• Close Brothers Group
• Commodities Corporation
• Cowen Group, Inc.
• Credit Suisse
• D.A. Davidson & Co.
• Deal Strategy
• Dean Witter
• Deka Bank
• Deutsche Bank
• Dillon, Read & Company
• Donaldson, Lufkin & Jenrette
• Dresner Partners
• Drexel Burnham Lambert
• E. F. Hutton
• Evercore Partners
• Financo, Inc.
• First Boston
• Fortis Bank
• Fox-Pitt, Kelton
• Friedman Billings Ramsey
• G.H. Walker & Co.
• Genuity Capital Markets
• Gerard Klauer Mattison
• Goldman Sachs
• Grace Matthews
• Greenhill & Company
• Greif & Co.
• Grupo Santander
• H. B. Hollins & Co.
• Halsey, Stuart & Co.
• Hambrecht & Quist
• Hambros Bank
• Harris Williams & Company
• Harris, Forbes & Co.
• Hilco Corporate Finance, LLC
• Houlihan Lokey Howard & Zukin
• HSBC
• Imperial Capital, LLC
• ING Group
• Investec
• Investment Technology Group
• J. & W. Seligman & Co.
• Janney Montgomery Scott
• Jefferies & Co.
• Jordan, Knauff & Company
• JPMorgan Chase
• Kaupthing Bank
• KBC Bank
• Keefe, Bruyette & Woods
• KeyCorp
• Kidder, Peabody & Co.
• Kleinwort Benson
• Kuhn, Loeb & Co.
• L.F. Rothschild
• Ladenburg Thalmann
• Lazard
• Lazard Capital Markets
• Lee, Higginson & Co.
• Legg Mason
• Lehman Brothers
• Macquarie Bank
• Merrill Lynch
• Miller Buckfire
• Mizuho Financial Group
• Monte dei Paschi di Siena
• Montgomery & Co.
• Montgomery Securities
• Morgan Grenfell
• Morgan Stanley
• N M Rothschild & Sons
• Needham & Company
• Neuberger Berman, LLC
• Newbury Piret
• Newsouth Capital Management inc.
• NIBC
• NIBC
• Noble Bank
• Nomura
• Nomura Securities Co., Ltd
• Oppenheimer
• Paine Webber
• Park Lane - Investment Banking Services
• Perella Weinberg Partners
• Peter J. Solomon Company
• Petrie Parkman & Co.
• Piper Jaffray
• Prudential Securities
• Putnam Lovell
• Rabobank
• Raymond James
• Robert Fleming & Co.
• Robert W. Baird & Company
• Robertson, Stephens
• Royal Bank of Canada
• Royal Bank of Scotland
• Rutberg & Co.
• Ryan Beck & Co.
• S.G. Warburg & Co
• Sagent Advisors
• Salman Partners Inc.
• Salomon Brothers
• Sandler O'Neill + Partners
• Saxo Bank
• Schroders
• Smith Barney
• Societe Generale
• Soundview Technology Group
• Stephens Inc.
• Stifel Nicolaus
• SVB Alliant
• T. Rowe Price
• ThinkEquity Partners, LLC
• Thomas Weisel Partners
• Toronto-Dominion Bank
• Transparent Value
• TSG Partners, LLC
• UBS AG
• Unicredit
• Wachovia
• Wasserstein Perella
• Wells Fargo
• White Weld & Co.
• William Blair & Company
• WIT Capital
• WR Hambrecht+ Co

I hope this list is helpful in your efforts to land a job in investment banking.

Qualities of a Successful Analyst and Associate

Recently I contacted an MD in M&A at a bulge bracket investment bank and asked, "What are the qualities of a successful analyst?" He responded with the following short, concise list.

1. Attitude

2. Attention to Detail

3. Team Player

While interviewing for a position as an analyst or associate, it is essential for you to demonstrate a great attitude, exceeding attention to detail, and your commitment to being a team player.

Attitude

As you know, analysts and associates are expected to work hard, long, and late hours. Although it may be very, very difficult at times, having a positive attitude toward superiors, peers, and the work in general is critical to educe the communal morale needed to survive the workload, as well as to indicate your eagerness to be assigned to interesting, challenging projects.

You can show a great attitude in your interviews by being outgoing and excited. Moreover, when asked about past experiences, you need to describe situations that show your ability to be positive and optimistic in the face of adversity.

Attention to Detail

Have you ever wondered why having an error-free resume is so heavily emphasized when applying at an investment bank? Your resume is a demonstration of your ability to pay attention to detail. Attention to detail is vital in investment banking because it is indicative of a bank’s quality and level of professionalism, and thus, evidence of a bank’s good reputation. A lack thereof destroys the institution’s credibility.

While interviewing you can show your ability to pay attention to the slightest detail not only through your “perfect” resume, but also by your ability to answer questions precisely. For example, you should be able to quickly and flawlessly describe the various valuation models mentioned in previous postings.

Team Player

All of the work performed at an investment bank is conducted in teams. Therefore, teams are very important to the success of the organization as a whole. Being a team player is imperative because the distribution of work on a team is not usually equal. Thus, when one of your teammates needs a hand to complete a project, you must be willing to help. (I’m sure you will hope for the same reaction from your team members when you find yourself in a bind.)

You can demonstrate your ability of being a team player in your interviews by discussing past experience on a team, the lessons you learned in those circumstances, and your commitment to occasionally “taking one for the team” in the future.

Must Read: Investment Banking: Valuation, LBOs and M&A

I just got my copy of Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions-- For anybody and everybody trying to break into investment banking: this is a must read!!!



Joshua Rosenbaum and Joshua Pearl, two seasoned bankers, have written this new book as the nuts and bolts instruction guide to valuation, deal making, and deal execution. The authors break down comparable companies analysis, precedent transaction analysis, and discounted cash flow analysis into a step by step process. Next, they dissect the leveraged buyout by explaining the key participants in an LBO and their respective roles as well as discussing LBO financing sources and structure. Finally, they reveal the M&A sale process from the first auction to the negotiated sale.

The best part of the book is free access to four completed valuation models. If you haven't gotten your hands dirty with comps models, DCF models, or LBO models, this is your chance. In my own experience, working with models was enormously useful during the interviewing process.

I'm confident, after reading this book, you will ace your technical questions. I'm recommending this volume to everyone who comes to me with banking questions. The book is on special discount at Amazon.comfor $50; I would make the purchase before the discount is gone.

How Much Do Investment Bankers Make?

During the history of this blog we have never discussed investment banking salaries in detail. We have alluded to the fact that bankers are well compensated but how well?

There is no easy formula for determining banker compensation. At the analyst and associate level, for whom this blog is targeted, compensation is relatively similar across the board. Boutiques and bulge bracket investment banks pay their analysts and associates similarly; variations exist but compensation figures end up in the same ballpark. The largest discrepancies in compensation stem from the difference in bonuses which are derived from the combination of firm performance, group performance, and personal performance.

Banker compensation is down from its heights of a few years ago. Most young bankers understand that banking at the analyst level is not about compensation, rather its about establishing a career trajectory. There are other jobs for maximizing wage per hour.

The table below is a fair representation of banker compensation at different levels of seniority.

Salaries in Investment Banking (with bonus)
Job Level	Salary Range	Typical Comp	Prerequisite
1st Year Analyst	$60K - 150K	$90K	Bachelor's
3rd Year Analyst	$120K - 300K	$150K	Bachelor's
1st Year Associate	$150K - 250K	$170K	MBA
3rd Year Associate	$250K - 450K	$300K	MBA
Vice President	$350K - 1MM	$500K	3-6 years
Director / Principal	$400K - 1.5MM	$700K	5-10 years
Managing Director	$500K - 20MM	$800K	7-10 years
Department head	$800K - 70MM	$2MM	10+ years

Demystifying your MD's compensation is next to impossible but he (or she) rakes in on average a couple million bucks per year. Not a bad salary for a 9-5 job.