Q&A On Investment Banking Topics
Continuing this week’s theme of other people generating content, today I’ll post a few of the questions I’ve received so far from readers. Hopefully these will be applicable to many of you out there looking for answers on investment banking, getting into finance, or changing careers. More original content next week when I (hopefully) don’t have to work 120 hours… that would be a pretty bad Christmas.
Interview Questions For Prospective Senior Hires
“Do you know what types of questions are asked of Senior Associates or Vice Presidents when they are interviewing for lateral positions? I am quite certain that the bulk of questions are focused on deal experience, however, what do you think the most commonly asked questions are? I ask because I am wondering how much I need to focus on the details of my previous deals and if I should review all the documents or look over the Definitive Agreements… I want to be well-prepared but don’t want to waste time on irrelevant material.”
Inquisitor:
First, let me caveat this by saying that I am not super familiar with the interview process for people who are more senior than Associates - I generally only interview Analyst/Associate candidates, basically people with no banking experience. That said, I can offer some insight into what the investment banking interview process is like for these candidates based on what I’ve seen.
In general interviewers focus more on the story around your deals rather than specifics like the terms of the purchase agreement. I would be highly surprised if you even received questions around something basic to M&A like typical escrow %’s or baskets/caps (prospective bankers - read up on these terms and be really ahead of the game when you start!). They might ask these details just to verify that you know your stuff, but they will focus more on how well you ran the process and what the results were. I would not try to memorize all the specifics of the deals - maybe have 3-4 that you can tell a good story around. Obviously know the valuation at a high level and the multiples but I don’t think they’re going to go super-technical on you.
At the Senior Associate/VP level, beyond just the deal experience they are really going to test for leadership abilities and how well you manage Associates/Analysts since that is a large part of your responsibility. Prepare some good examples/stories of conflicts you resolved, how you effectively managed Analysts before and anything else that might be relevant… the key is to be very specific.
The other big theme will likely be your ability to source deals, since the Senior Associate/VP role is a transition into that part of the business. This depends greatly on the bank and group and not all people at this level will necessarily be expected to develop client relationships. But you should emphasize it even if they don’t explicitly ask you: you reinforce that you will be a good long-term hire.
If you haven’t done this before, this point may be difficult to highlight - perhaps consider speaking to your client management skills and any other jobs you’ve had where you had to generate leads or develop relationships.
Cover Letters
“How long do you feel a cover letter should be? 2-3 paragraphs? Would you ever ding someone for it being a little too long or too short?”
Inquisitor:
We very rarely even read cover letters. Typically we decide on someone within 1-3 minutes of looking at an investment banking resume, if not less. That said, if you do want to write a cover letter, 2-3 paragraphs is fine. Two pages would be too long. I don’t know if I’d ever ding someone for having a cover letter that’s too long but we definitely ding people for having resumes over a page (unless there’s a really good reason for making it so long).
If you need further assistance with resumes, check out our investment banking resume review service.
Career Change And Age
“Is 34 too old to be a first-year banking Associate? I’m very interested in the industry but I don’t want to be behind my peers and be older than everyone.”
Inquisitor:
It depends on the type of firm you’re joining and your tolerance for pain. At a bulge bracket, being a first-year Associate is really no different from being a first-year Analyst. If you are married or have a family, this is going to be a problem.
The other issue is that this will last at least a few years; it will get better over time but you’ll be worked pretty hard for at least 2-3 years. So you have to ask yourself if you want to sacrifice a few years with your family or significant other to move up the ladder.
If you don’t want to give up your life, you may want to consider smaller firms or boutique investment banks, which will not work you as hard. It will also be easier to switch into these firms coming from an unconventional background. Don’t go somewhere hardcore like UBS LA without earnest consideration.
I have seen people older than 34 actually go into banking, but these were all fairly special situations; one had significant consulting experience in Asia (kind of a big deal these days) and one had held high-level positions at a corporation and actually came in as a Senior Associate.
In the long-term entering at an older age won’t matter too much; you’ll be a few years behind MDs who did banking their entire lives and never went to business school, but hey they never had fun until they were over 30 either so it’s a trade-off.
Questions On Banking? Finance? Resumes? Life?
Email The Inquisitor and be featured in upcoming Q&A posts.
Like this article? Subscribe via RSS and start understanding investment banking.Get into Investment Banking via Email:
Tags: bulge bracket, changing careers, investment banking, investment banking analyst, investment banking associate, investment banking cover letters, investment banking interviews
Coming Soon: Breaking Into Wall StreetRelated Articles:
- Weekly Reader Q&A: The Age Factor, Finance Internships Abroad, And Fall Analyst Recruiting (And More Summer Internship Tips)
- Weekly Reader Q&A: Summer Internships vs. Study Abroad, Low GPAs, Going International AND Local
- Investment Banking Exit Opportunities: The Myth Of The Buyside Job
- How To Pick Your Team At An Investment Bank
No comments yet.