A Week In The Life Of An Investment Banking Analyst: Sunday & Monday
One interesting bit of feedback I received from my survey the other week was that my “Day In The Life” posts were among your favorites. Whether it’s the worst day or best day, everyone’s interested in… what bankers actually do.
In the spirit of those previous posts, this week I’m posting an entire Week In The Life Of An Investment Banker. Today I’ll cover Sunday and Monday (what, you thought we had weekends off?) and each day I’ll cover another day of the same week.
Sunday
12 PM - Wake up late. Was up late the night before at a friend’s birthday (fun, but no models and bottles). Find food and get ready for the day.
1 PM - Head to gym. While there, run into another friend at a different bank and talk about plans for next year (one of the most popular discussion topics among Analysts) and why neither of us is at the office currently.
3 PM - Relaxing near the pool post-workout when the dreaded email arrives. Client A, a sell-side M&A client, has reviewed a presentation we sent yesterday and has changes. I have to run to the office at 4 to discuss the changes and then revise the presentation.
4 PM - While on a call going over the changes, I get bored and begin internet surfing in the background. Most of the edits involve wording and font sizes on graphs through 100 or so slides. This is going to take some time to finish because of the sheer volume of changes.
10 PM - I finish up with the revisions and the Associate sends out to client. Meanwhile, Client B, a public company being sold to a larger public company, has sent over revised projections and we need to update our merger model.
A merger model (also called accretion / dilution model or combo model) is used to analyze the impact of an acquisition. The output is generally the change in EPS (Earnings Per Share) - how much the acquisition raises or lowers it by - and the most important inputs are purchase price, form of consideration (cash, stock, or debt), and the buyer and seller’s financial profiles.
11 PM - Finish updates and head home.
This was a fairly standard Sunday - some time for fun, some work, and being in the office for at least part of the day.
Monday
9 AM - Arrive at work and chaos is unfolding. A standard Monday morning.
We’re working on further revisions to the presentation for Client A, and the Director in charge of the deal is quite persistent with the “Are you done yet?” questions.
At the same time, we’re also multi-tasking between that and getting NDAs (Non-Disclosure Agreements) executed for Client C, a large public company we are selling to several private equity firms.
(Yes, this was back in the day when Leveraged Buyouts were actually happening)
Getting NDAs (also called Confidentiality Agreements (CAs), among other terms) executed involves sending the document back and forth between legal representatives of the buyer and seller until they reach agreement. It’s somewhat of a joke because there’s no way to enforce an NDA, but both parties want protection so that their secrets and employees won’t be stolen if nothing comes of the discussions.
In this case the Associate is handling most of the work.
2 PM - CFO of Client C (the private equity deal) sends updated financials and other information that we need to incorporate into our own models and into the materials we’re sending to the buyer(s). VP informs me this is needed “ASAP.”
5 PM - Finish up updated model and the VP sends it to Client C’s CFO so he can review it and “sign off” on it. Just as I’m finishing, learn that I am being staffed on an upcoming Fairness Opinion for an M&A deal that is set to be announced soon.
A Fairness Opinion is just an extremely rigorous valuation that is prepared by a bank for legal reasons (to “prove” that a deal price is “fair”). It’s a bit silly because no bank is ever going to say that a price is not fair, and they’ve become formalities.
A perfect example is the controversy caused by the Bear Stearns deal back in March 2008. Lazard, its financial adviser, issued 2 Fairness Opinions, one for the original purchase price of $2.00 per share and one for the revised $10.00 per share price. Both prices were deemed “fair,” raising questions over what exactly these Opinions prove.
8 PM - Head to the Conference Room to eat dinner quickly with other Analysts and then go back and try to wrap up an Offering Memorandum and presentation for Client A. The Associate is side-tracked on other projects all night so I have to handle this work.
An Offering Memorandum (or Information Memorandum (IM) or Confidential Information Memorandum (CIM) ) is a long document with an overview of a company, including its products/services, customers, management, history, and financial profile that “sells” it to potential buyers. As an Analyst or Associate you spend a lot of time working on these.
12 AM - Head home.
This was a typical Monday - 15 or so hours of work, some chaos in the morning and a decent amount of actual work at night.
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Tags: investment banker lifestyle, investment banking, investment banking analyst, M&A deals, understanding investment banking
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Dosk,
Great post, once again…definitely one of my favorite kind of posts, very informative stuff that no book will ever teach you, especially the little informational excerpts.
It’s also good to see that I’m doing a lot of the same kind of work that full time analysts perform at my boutique internship.
Thanks Zee - glad you enjoyed. Just wait for the rest of the week.
BTW I got your email but will need some time to respond, hopefully in the next few days.
That’s pretty crazy Inquisitor…
I’d be very appreciative if you could answer these three questions:
I’m an applied math major with a concen. in prob. and stat. Also, I’m doubling up in the quant. fin. program which incorporates fin., acc., econ, and comp. programing. Would that look good for an undergrad?
The catch is that I’m going to University of Colorado main campus. Will that hurt me compared to the New England Brahim Ivy-Leaguers?
If I’m done with my undergrad with all those supplementary classes by the age of 26, is that too old to get into the game?
Thanks bro, really appreciate it!
1) Yes but emphasize finance more than math, especially if you want to do banking rather than hedge fund / quant stuff.
2) Yes you will be at a significant disadvantage and will have to network / cold-call a lot more.
3) No, 26 is definitely not too old. Know lots of older people who have done it.
Hey,
So, I just started to read your stuff. Your awesome man. After reading all your stuff, you just put a smile on my face.
So, I did not get into IBD after trying for three longs years (started sophomore year). I was very upset but I had been interning for a the #1 BB bank and they ranked me top 5% and gave me a full time offer in the middle office during some very sensitive and important stuff for senior managment. Very impressive offer at the bank but I hate what I do. I did not imagine life to be this way. I am not an idiot, I just dont know where things went wrong. I did all the networking, all the cold-calling, called most of my schools Alumni, still did not get banking. I’m in two in about two weeks after training on the job and I hate it. I want to start applying elsewhere for a banking job. I have seen a few openings but I am scared to apply. What am I scared to apply? B/c where I work, I do not want to be blacklisted for working here for a few weeks and then quitting. Its the most powerful bank currently and hopefully would like to return here in the IBD and do not want to burn bridges.
Would you recommend applying to other places, or should I stick out the 18 month minimum here. Please help. I am miserable currently but you sure did make my day today.
Thanks,
NeverGivingUp
If you hate your life as much as you say I would just apply anyway. It might be tough to get in with no work experience but if you truly hate it, it’s not worth ruining 18 months of your life.