A day in the life of an investment banking research analyst intern

The following is an outline in the day in the life of Ammon Baldomero, an investment banking intern at InvestmentBank.com. His experience as an intern is non-traditional. Just like many of today’s jobs that allow for remote and flexible work schedules, internships are also following suit. Ammon works part-time on analyst, research, reporting and writing projects while maintaining a hefty school schedule.

As a student, days filled with work, networking, homework, internships, and social life entirely depend on class schedule. For example my Mondays, Wednesdays, and Fridays encompass completely different tasks compared to Tuesdays and Thursdays; on those three days I have no class and therefore dedicate more time to work, internships, and school work. On a Tuesday or Thursday, classes begin 8 AM and end 3:15 PM with half an hour breaks scattered throughout the day then late afternoon through evening are usually dedicated to networking, club meetings, and more school work. To be more specific, following is a run through this past Monday, February 22, and Tuesday, February 23.

Monday: 6:50 AM, wake up, get ready for the day, and get out the door by 7:15 AM. 7:25 AM, arrive at the library. Respond to emails, brief through the main articles on WSJ, Bloomberg, Business Insider, and check the latest soccer news and highlights on ESPN FC. 8:00 AM, begin Finite Math assignments 4.3 and 5.1 early because later in the week I have a religion exam. 10:00 AM, catch bus 830 to work in Orem at Sergio Centro Latino, specializing in tax, payroll, and wealth management for Latino clientele.  10:43 AM, arrive at work, input information from forms W-2, W-4, 1040, 1098, 1099, various expenses, and verify dependents of over 15 clients. During my 20 minute break, eat a granola bar from the jar in the break room, read a little on DealBook about current M&A deals. 4:00 PM, leave work, catch the bus back to campus. 4:30 PM, conduct an informational interview call with a fellow high school alumni working for Merrill Lynch Wealth Management in Honolulu. 5 PM, meet with five other team members for an internship underwriting properties for Peak Capital Partners, Utah real estate developer. 6:15 PM, conduct another in person informational interview with a junior heading to Morgan Stanley Real Estate Investment Group in New York. 7 PM, head to a group Church activity right across the street from campus. We made root beer floats and watched Mulan to celebrate the Chinese New Year. 8:45 PM, head back to the library, finish the Finite Math assignments started in the morning, study the role of pricing in marketing products and services then finish the ten question topic quiz. 11:35 PM, head home, eat dinner, read, and catch up with roommates. 12:35 PM, go to sleep.                        

Tuesday/Thursday: the day begins again at 6:50 AM, wake up, get ready for the day, and get out the door by 7:15 AM. 7:25 AM, arrive at the library. Respond to emails, brief through the main articles on WSJ, Bloomberg, Business Insider, and check the latest soccer news and highlights on ESPN FC. 8:00 AM, learn how to compute the costs of equity and debt then aggregate them to find the WACC of a company or project. 9:15 AM, go back to the library to work on finite math homework touching calculating the least squares line in given data points. 10:00 AM, take detailed notes in religion class about prophets in the Book of Mormon. 11:00 AM, conduct an informational interview with a junior heading to real estate firm, Hines Interests Limited Partnership, in Houston to learn about the different types of real estate markets in the United States. 12:30 PM, head to marketing class covering methods of marketing intangible services. 2:00 PM, attend the last class of the day, Finite Math, how to solve linear systems using the echelon method is taught. 3:15 PM, take the elevator up to the "Quiet Zone" of the library to take the ten question quiz on calculating the cost of debt, internal and external equity, and WACC. 6:15, conduct an informational interview with an Investment Banking incoming Summer Analyst headed to Wells Fargo's Leverage Finance and M&A Group in New York City. 7 PM, participate in a Investment Banking Club Underclassmen Academy 15 minute mock interviews covering my "story," high-level technicals, why banking, and resume. 8 PM, meet with my five member team responsible for launching the LunchBox app, a platform for University clubs and local restaurants to promote themselves through free food offerings, at Utah Valley University in Orem. 9 PM, return to the library to complete more homework. 11:35 PM, head home, eat dinner, read, and catch up with roommates. 12:35 PM, go to sleep.

Everyday varies but the general schedule is the same depending on whether it’s a Monday, Wednesday, Friday or Tuesday, Thursday. Most activities, where most my time is dedicated, are directed towards the furthering of my career ambitions in investment banking and private equity. That is not to say I know or can do a lot in the respective fields, however it gives my life direction, organization, and structure.

Banking vs. Consulting: Which is Right For You?

This post was co-authored with Steve Sears who writes on how students can prepare for management consulting interviews.

As a competitive college student, you are thinking about what will launch your career best and are considering this important question.

I would encourage you to take a step back and define your values and your career goals over the next five years before considering the question. You won’t be able to make the right decision unless you understand what you value and what makes you happy in the long-term. I highly recommend that you read the first two sections of Ray Dalios’s principles to help you through the decision making process. His thoughts on achieving goals are brilliant.

Once you know what you want out of life the rest is relatively easier. You only need to collect the information and weigh how it will help you get what you want. For me, knowing what I want, consulting was a better fit because of the variety of engagements and that I would actually have some ability to experience various types of projects and companies before actually deciding on a career.

Instead of defining the basics of each job, you can find that just about anywhere else, I’ll address six difference for you to consider.

Salary—Bankers make 50% to 100% more money than consultants and the difference increases with seniority. Consulting attempts to compensate with a few perks in terms of a higher, more stable salary, better healthcare, and travel bonuses from all the consulting miles. However it just doesn’t compare to a banker who makes a similar base salary to a consultant and can make 50% of her total compensation in a bonus. Many people leave consulting because there are opportunities to do similar work and get paid more, especially in private equity and hedge funds.

Overall Lifestyle—Most bankers have a terrible lifestyle and are in the office all hours of the day and night. You can expect to work all of your waking hours and then a few more when you would want to be sleeping. It is common for a first year banker to have 14-16 hour days or more. The second year in banking is better, usually 12+ hours, but it can be unpredictable and could have sustained periods in the 14-16 hour range. Bankers spend most of their time in the office and rarely travel at junior levels. Banking tends to be hierarchical and more competitive amongst peers and while you will likely have an in-the-trenches friendship with your class there is a lot of competition and less job security.

Consultants have a bad, unpredictable, but not universally unmanageable lifestyle. The typical consultant averages 12 hours a day, where the hours are highly dependent on staffing and the stage of the project. The partner, the client, or the type of case could all lead to long hours. The predictability isn’t much better in consulting than banking; though you may have more opportunity to manage up. Consultants travel frequently with most firms being on the road several days every week. With the largest firms you can expect to be on the road 50% to 75% of the time. Most firms have a helpful at times academic atmosphere, where the focus is on getting the work done but also ensuring your professional success. Managers rarely yell, co-workers try to help you whenever possible, and the companies that consultants hire are usually organized to provide the support to execute on the project.

Skill Development—Investment banking teaches mastery of excel, some PowerPoint, and a deep understanding of the product or industry group in which you work from knowing how to execute a finance process to how to value a company. You’ll also learn how to develop incredible stamina from working 100+ hour weeks

Consulting teaches PowerPoint / slide development, you have to make the slides in order to have the meeting; some level of excel and modeling, which generally includes using data, analysis, and in some cases market size or financial projections as support in making a decision; and knowledge of different businesses and business functions as you experience different cases doing different types of work. You will also master the ability to speak with clients, present and lead meetings, interact regularly in a team, and project manage a piece of analysis. All of this is of course geared to give the more senior team members leverage as the more you are able and trusted to do independently, the less day-to-day work the senior members have to do.

Networking—Bankers develop a deep network in finance and depending on the firm may have a supportive alumni network. Consultants develop a large network inside the consulting firm and the companies they work with. Networking is an essential part of what consultants do and it is a required part of the job.

Prestige—Banking has more press and coverage and more easily point to the results of their actions. If you work at a bank you will likely be able to point to something you work on that is published in the Wall Street Journal. Certain consulting firms carry prestige, but the projects they work are rarely if ever discussed.

Exit Opportunities—If you want to continue a career in finance Banking generally provides a broader array of exit opportunities, especially into Hedge Funds and Private Equity. If you are looking for a breadth of career options consulting is the clear leader as you will have relationships across companies, academia, and alumni are generally willing to help. More consultants apply to and are accepted to MBA programs. In both cases the headhunters, alumni, and senior firm members you develop relationships with will have a significant impact on your options.

About Steve Sears

Steve is the founder of collegetoconsulting.com. He is a classic example of a management consulting lateral hire. After two years working for Aon Hewitt's Global Strategy Group Steve transitioned to the Monitor Group and spent two years working on a variety of corporate strategy and marketing projects across the luxury goods, health care, telecommunications, and auto manufacturing industries. After two years in consulting, Steve left to work for the hedge fund Bridgewater Associates. Most recently he joined HubSpot to help disrupt traditional marketing and promote the inbound marketing movement.

About Dave Bonnemort

Dave is the founder of Investment Banking Interview Prep. While attending a non-recruited university in the US, he learned the ins and outs of recruiting, applications, resumes, interviewing, and networking in the world of investment banking, which culminated with accepting an offer to work for Bear Stearns in New York City. During this process Dave found that many of the resources available to students were lack luster and he decided to start a blog and give students the information that he wished he had available to him during his interviewing and application period. Since founding this blog he has helped countless students across the globe towards their goal of working in investment banking.

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!

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:
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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:

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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.