“A recruitment consultant.  A headhunter.  Are you free to speak for a few moments?”

A headhunter! Wow. Ok. Sure you have time to speak!

“Um, er… yes” you mumble in a whispery voice as you stand up and walk away to find a little privacy. Like it isn’t suspicious enough that an unknown caller rings and after they introduce themselves you get all secretive and hide, but you obviously don’t realize this as it’s your FIRST HEADHUNTER CALL!!!!!

“Um, er… yes… I can speak now”

“Great,” says Rebecca, “Mike, I’m calling because you’ve been recommended to me and I would like to see if you’ll be interested in coming in to see a private equity firm for an interview.”

-The Kruelberg Kretin Saga - Episode VI: The Headhunter Call, The All-Nighter

With everyone on Wall Street getting fired and those who haven’t been fired looking at other opportunities, I’ve seen lots of discussion lately around headhunters.

There are many misconceptions out there about what headhunters actually do, how they get paid (hint: by the firms they work for), and who they work for (hint: not you).

I know there are some Mergers & Inquisitions subscribers who work at well-known financial services recruiting firms, so I’ll try to write this post without stepping on anyone’s toes too much.

What Headhunters Do

You might recall back when I explained what investment bankers actually do that I likened us all to Ari Gold.  We don’t create; we’re not there for the long-term; we just sell.

But if there’s anyone more deserving of the “Ari Gold” title than investment bankers, it’s headhunters.

Recruiters are hired by investment banks, private equity firms and hedge funds to find potential candidates for hire.  A lot of junior investment bankers get this wrong and think that the recruiter works for them.

I’ve seen questions like “Should I get a headhunter on retainer?” asked on forums and via email.

But unless you’re willing to pay them 20% of your base salary upon placement (what the firm retaining the headhunter typically pays), you will never have a headhunter “on retainer” so you might want to forget about that one.

Since they are paid on commission and the firm that retains them pays them, their loyalty is to the firm - not to you.

This is not necessarily a bad thing, but you should keep it in mind when making decisions about where to go next.

The Recruiting Process

Generally the headhunter either contacts you directly by phone or email and introduces himself/herself, then assesses your interest in the opportunities he/she has available.

If you can do so, I would strongly recommend meeting in person so you can present your “story” and so they can do a better job bringing you the appropriate jobs.  Meeting in person can also help to overcome a weaker finance background or a lesser “brand name.”

After that, they will pass your resume onto firms that hire them and will effectively act as the first screen in the recruiting process.

After your first interview, the role of the headhunter varies depending on which firm and which recruiter you’re dealing with.  Sometimes they will back off and let you continue discussions on your own, and other times they will talk to both sides throughout the entire process and try to make a “deal” happen.

Why They’re So Prevalent In Financial Services

Recruiters exist in every field, but they’re most prevalent and most influential in financial services for 2 reasons:

1. The highest salaries of any industry out there.  And since headhunters get paid based on base salary, it doesn’t matter that hourly wages might only be marginally better than those of McDonald’s. Even junior-level employees make over $100,000, and mid-level hires will get between $500,000 and $1,000,000.  Try finding that in manufacturing.
2. Incredibly high turnover at all levels.  Just look at what happened to UBS LA last year with Moelis’ departure.  Out of all the Analysts I started with 2 years ago, only around 10% remain in their original positions.  Some have switched firms multiple times in the past 2 years.

If you get paid a percentage of base salary whenever people switch firms and you work in the industry with the highest salaries and highest turnover rates, that translates into a lot of money for those who facilitate the moves - the headhunters.

Also, the world of finance is very small, both in terms of number of major firms and number of employees - even the largest private equity firms have only a few hundred employees.  Just look at Blackstone’s latest 10-K:

“As of December 31, 2007, we employed approximately 1,020 people, including our 65 senior managing directors and approximately 395 other investment and advisory professionals.”

Less than 500 “investment professionals” at the largest and most well-known PE firm out there.

Thus it’s easy for a few well-known recruiting firms to “own” all the relationships with buyside institutions and be responsible for all their new hires - you have an industry with high turnover rates and high salaries but very few people.

This would be much more difficult in a field like technology, where there are tens of thousands of employees at brand-name firms.

So, Should You Use Them?

Almost certainly.  In fact, if you ever want to work at a private equity firm or hedge fund, you don’t have much choice in the matter.

Since the firms are so small, they almost have to rely on headhunters to find candidates.  No matter how well-connected the investors are, you’ll never have a very wide reach within incoming investment banking analysts with only 10 employees.

You should definitely reach out to firms you’re interested in and see what develops as well.  But you probably won’t know people at every firm you might want to work at.

And that’s where headhunters come in: they provide the introductions that get you in the door and alert you to opportunities you might not otherwise know about.

I’ve had friends who have gotten interviews via connections and networking, without going through headhunters.  But very few have actually received offers at legitimate firms without going through them.

Buyer Beware

As I alluded to above, there are a few points to watch out for when doing your recruiting through headhunters.

Introductions, Not Decisions

Never rely on a recruiter to make a decision on whether or not to accept an offer.  As you can imagine, they will almost always urge you to accept it.  Unless there’s something else that would generate a higher commission.

When I was recruiting last year I had several opportunities that I wasn’t crazy about, but were there for the taking if I wanted them.  Needless to say, the recruiters I dealt with pressed me to take one of these even though I just wasn’t enthusiastic about them.

Recruiters are great for initial introductions and availing yourself of new opportunities, but do not fall into the trap of letting headhunters “sell” you on certain positions.  You should do your own diligence when interviewing and decide for yourself what makes sense.

The Tough Market

As you might have noticed if you’ve been alive lately, the market has completely tanked in the last year and hiring has slowed down everywhere.  In case you missed it, Bear Stearns even collapsed. So anyone looking to get into finance is suffering a lot - but guess who else is going through hard times?

That’s right, the headhunters.  When hiring slows down and the number of people being laid off exceeds the number hopping between firms, headhunters lose their main source of revenue.

So you have to be even more careful these days with how you approach the recruiting process.  When hiring slows down, headhunters will be even more persistent in getting you to accept offers that may or may not be right for you.

Coming From Non-Bulge-Bracket Banks

Some headhunters will ignore you or pay less attention to you if you’re not from a bulge bracket bank.  It’s just a matter of return on time for them - they are more likely to place candidates who come from “better” names, so that’s where they spend most of their time and energy.

Sometimes you can get around this by making a great impression during your interviews.  But from what I’ve seen, this is rather difficult and you’ll be at a disadvantage no matter what you do.

The solution here is to either network and contact firms directly, or to spend your time with headhunters who do focus on smaller firms.

Closing Thoughts

If you want to work in finance for the long-term, you’re going to have to work with headhunters, regardless of whether you’re jumping between firms or decide to start your own one day and need to find employees.

It’s fine to rely on headhunters for sourcing - either finding opportunities or employees that you would not have otherwise known about - they are quite good at this, and you probably should use them for sourcing.

Just don’t rely on them to make decisions for you.

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-Hicks Musings, The Leveraged Sellout

One common question I’ve been getting lately goes something like this:

“Inquisitor, I just started as a freshman at Harvard.  I am majoring in economics and finance and I’m in the stock market club, the investment banking club, and I even borrowed $500,000 of my Dad’s money to invest in my personal accounts.  So far I’ve earned a 50% return in 6 months.

How can I make sure that I work at Blackstone by the time I’m 25?“

Another variant of this same question:

“I am only doing investment banking so that I can pay off all my student loans in 2 years, but I have no interest in ever doing it again.  What are the exit opportunities like for Associates at boutique banks who want to get into hedge funds?”

For those breaking into investment banking, the exit opportunities are always a big motivation.

It makes sense on paper: you go from working 90-100 hours a week and doing mindless work to working 60 hours a week and doing meaningful work 100% of the time, right?  Right?

The Hours

Lifestyle is a common reason for switching from investment banking into private equity or hedge funds.  Specifically, people assume that they will actually be able to have lives for once rather than sitting in front of a computer for 18 hours a day.

Private Equity Hours

If you go to a large private equity firm, like Blackstone, KKR, TPG or Bain, this assumption is false.  You will be working banking hours for another 2-3 years - bet you can’t wait for that.

I’m amazed at how many people don’t realize this until they get to interviews with these places or until (gasp) they actually start working there.

If you go to a smaller PE or growth equity firm like Summit Partners or TA Associates, then you won’t be working 100 hours a week.  But you will still be doing 60-70 - significantly more than a normal job - and on top of that you will have to travel quite a bit, so forget about a consistent schedule.

And when a deal heats up and you’re close to acquiring a company, your hours may remind you of what it was like to be an investment banking analyst: weekend work and sleeping under your desk for a few nights each week.

Hedge Fund Hours

Hedge funds tend to be better than private equity in terms of consistent schedules.  You work market hours, and weekend work is not required unless you work at a PE-like fund that acquires companies.

However, some travel can still be required for doing “channel checks” (e.g., checking to make sure that the toy retailer you’re acquiring still has Wii stockpiles even in its Minnesota office).

And if you’re at a West Coast hedge fund, you now get to wake up at 5 AM every day so that you’re at work before the market opens on the East Coast.

Bottom Line

Some exit opportunities can indeed offer a better lifestyle, but you’ll never be working 40 hours a week in any of these industries.  And you’ll almost always have a difficult time getting a consistent lifestyle with anything in finance.

Before diving into your next job, figure out what the lifestyle is really like so that you aren’t surprised by the mandatory weekly visits to the Yukon Territory in the middle of winter while doing diligence on an oil company.

The Pay

Yes, private equity and hedge fund pay tends to be higher than those investment banking salaries you always hear about… but that’s not the whole story.

Private Equity Pay

At private equity firms, you will make about as much per year as post-MBA Associates at banks make (e.g. significantly more than you made as an Analyst).  At smaller places and growth equity firms, the difference in pay is not as huge, but it does tend to be higher than banking at the equivalent levels.  At bigger places, it can be much higher than entry-level banking Associates; some even guarantee $500,000 or so per year.

However, the pay difference is much greater at the Managing Director/Partner level than it is at the more junior levels of private equity and investment banks.

So it would not be rational to want to switch into private equity solely because of higher pay, unless you are a very senior hire.

Hedge Fund Pay

Hedge fund pay can vary wildly between different funds.  The standard seems to be a base salary of $100,000 for those coming in directly from banking, plus a bonus that will take you to the $200,000 - $300,000 total compensation level (very similar to private equity Associates).

This is much higher than what you could get as a 3rd year investment banking analyst, and is about on par with what post-MBA Associates at investment banks make.

Depending on the fund, their performance, and your performance, the bonus could be significantly more or less than this; if you have really bad luck, you might just get nothing as the fund collapses before your eyes! (ok, this is unlikely)  And if you do really well, you might make closer to $500,000 total.  That scenario is unlikely except for the largest funds.

However, as with private equity pay, there is a significantly greater difference at the Partner level, where top hedge fund managers can pull in over $1 billion in cash per year.  That is more than private equity Partners make and far, far more than even the CEO of Goldman Sachs made last year.

It should also be noted that hedge fund managers making $1 billion are exceptions rather than the norm and most managers don’t make anything close to that, though in general they still make more than investment banking Managing Directors.

Exceptions Apply

One exception to all these salary figures is prop trading and certain small hedge funds / prop trading firms that could potentially pay you an unlimited bonus.  I know of at least one place that actually pays you 50% of what you earn from trading, and there are several recent college graduates earning millions of dollars per year there.

But most people going into buyside jobs are not going to suddenly be earning millions of dollars at age 24.  Your salary will almost certainly increase, but the really substantial increases over investment banking salaries come at the more senior levels.

The Work Itself

This is where people have some of the most incorrect ideas about private equity and hedge fund jobs.

Yes, there is a lot of stupid grunt work in investment banking that everyone hates doing… changing periods and commas in presentations, editing text in documents 500 times… formatting PowerPoint graphs.

The amount of stupid work you do certainly decreases when you move onto private equity or hedge fund jobs.

But guess what?

If you don’t like Excel or you think analyzing companies, doing valuations, or modeling are boring, you’re not going to like the buyside very much.

The work is just not that different.

You still do financial modeling… you still do diligence, and you still have to do some annoying grunt work.  When private equity firms acquire companies and work with banks, for example, the Associate will be tasked with writing “bid letters” and working with banks on financing, which can often require a lot of number scrubbing and attention to detail.

Sourcing

Not only is the work fairly similar to what you do in investment banking, there is also a new type of work that most people despise: sourcing.

“Sourcing” is a euphemism for cold-calling.  This is more prevalent at growth equity places (Summit is notorious for making its Associates cold-call companies all day) than at large private equity firms.

It may sound impressive at first to say that you’re in charge of bringing in deals.  You may even think to make it part of your private equity resume.

But actually, you’re just in charge of cold-calling; the Partner still owns the deal, even if you “sourced it.”  Some private equity firms do pay their Associates a bonus for closing deals they generated, but it’s paltry compared to what the Partners will make off it.

Managing Directors in finance source deals via their long-standing relationships and through regular communication with prospects.  They don’t cold-call every company on the Inc. 5000 list until someone says, “yes.”

You, by contrast, will be doing this, or at least some form of it.  And it’s one of the most common reasons why people don’t go into private equity or at least avoid the firms with a “sourcing model.”

The Social Aspect

This is one of the most overlooked aspects of investment banking vs. buyside jobs.  With banking, you have a group of other Analysts working alongside you and you chat with them in your downtime, go to Starbucks together and enjoy models and bottles with them outside work.  It’s almost like living in a dorm in college all over again.

With buyside jobs, this disappears.

You might be the only Associate; you might even be the only person under 30 in your office, depending on the firm.

Private equity firms and hedge funds tend to be much smaller than banks and don’t have as much of a need for an army of Analysts and Associates to do work… there simply isn’t as much work to be done.

This may sound less significant than the other factors I list above, but don’t underestimate it.

I actually know of some 2nd and 3rd year Analysts who were reluctant to leave for this very reason - yes, the pay and upside might be better, but not having any close friends in the workplace can make for a bad experience.

The Bottom Line

I don’t agree with those who think investment banking is only a stepping stone to working in private equity or at a hedge fund.

Doing the job only because you think those options are going to be completely different experiences is a bit absurd.  They’ll be better in some ways, but they can also be worse in some respects as well.  No one in banking ever yelled at you for not cold-calling enough companies.

If you want to work in private equity or at a hedge fund, it’s better to go there directly; if that is not possible, just do banking for a year and switch over (harder to do now with the market downturn).

But What About Venture Capital And Other Jobs?

I know someone is going to bring this up unless I discuss it here.

Venture capital and corporate development jobs can indeed offer a significantly better lifestyle than either private equity or hedge funds.

However, you will likely take a pay cut compared to what you were making as an investment banking analyst.  You could actually be as senior as a VP in banking and make less than a 3rd year Analyst!

Plus, you still have the issue of the work not being that much different and the social aspects referenced above.

Don’t get me wrong: if you want to still have a good salary and a much better lifestyle, venture capital or corporate development could be right for you.

But do recognize that, as with any other choice you make, there are tradeoffs between all these options and nothing is “the best.”

Feedback

What has your experience been with buyside jobs?  Am I off on anything here?  I’m curious to know what others think about these issues.

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How To Get Into Investment Banking With A Low GPA

“Thanks for providing such a quality resource for free! I would love to get some more advice regarding investment banking. In the next month, as a junior, I will be applying for the summer analyst positions at all the bulge bracket banks. However, my GPA is a 2.8. What are some ways that I can get my foot in the door to land an interview?”

Inquisitor:

This is a tough one, and I don’t have an easy answer for you. Many banks have a strict cutoff they use to weed out people with low GPAs, and it’s difficult to get past this if you’re put in the same applicant pool as everyone else. Here are some tips on getting around this:

• If you have any special circumstances, e.g. being a Varsity Athlete or having a highly unusual background, you need to make these extremely prominent on your resume. Although banks may still use a GPA cutoff, you at least stand a better chance if your special circumstances are immediately clear and humans are reading your resume.
• Network extensively and use your school’s alumni network - contact alumni, ask them about themselves, briefly introduce yourself and they can help you get past the gatekeepers. GPA only matters for getting your foot in the door; if you are persistent enough you can leverage the alumni network to do the same, and often a recommendation from someone very high up is more useful than a high GPA.
• Keep your options open and consider middle-market and boutique investment banks as well. You can easily leverage this experience into full-time interviews at bulge brackets (seen many people do this and get offers), and they may be easier to get into with a lower GPA.

I wish I had a magic answer that solved your problem here, but this is about the best you can do given how banks run their recruiting processes. The good news is that once you get to superday interviews, it’s all about performance rather than GPA or school background.

Finance Internships For Freshmen

“I have found your blog very helpful and was wondering if you could guide me in the right direction regarding summer opportunities. I’m a freshman and realize that there are very limited finance-related opportunities for me. However, I have found two opportunities at bulge brackets that encourage freshmen to apply - how competitive are these programs? Do you know of any other such opportunities on Wall Street?”

Inquisitor:

It’s very impressive that you’re looking for internship opportunities in finance as a freshman - I don’t think I even knew what banking was until my junior year.

You can apply to the programs you have found, but I think the chances of getting them and getting meaningful work to do as a freshman are fairly low. Most banks only seriously look at juniors and occasionally sophomores for certain programs.

I don’t know of any good opportunities for freshmen offhand. Cold-calling may work, but I would suggest networking with alumni is the better tactic here. To actually get meaningful work experience, you should probably focus on smaller firms and ones where you know people already - as a freshman, the work experience you get is much more valuable than the brand name. Take actual financial analysis at a start-up hedge fund over serving coffee at Goldman Sachs any day of the week.

When contacting alumni, you should introduce yourself as being very eager to learn finance and have a short 3-5 minute pitch in either email or verbal form that gets this point across. Make sure you show an interest in them; most of the conversation should focus on their background/history and at the end you can briefly ask if they know of any opportunities or could pass your name/resume along to friends who might.

And make sure your investment banking resume is perfect before sending out your materials to these alumni.

Saving As An Analyst

“How much can you really save as an Analyst? This past year bonuses were $90K and with a base salary of $60K, I imagine you’d be able to save quite a lot, right?”

Inquisitor:

As an Analyst, your main expense will be apartment rent so it depends greatly on whether you live in New York City or some other high-cost area or somewhere cheaper. If you’re in New York, it’s going to be difficult to pay less than $1500 for rent each month even with a roommate. That immediately uses up $18K per year right there, and with only $35-40K of after tax income, represents nearly half of what you’ll make prior to bonus.

Other places like San Francisco are also more expensive than the middle of nowhere obviously, but at the same time it’s easier to find good deals on apartments. If you can reduce your rent to $1000 or less a month then the numbers are easier… $35K after taxes, $12K spent on rent, maybe $5K or so in other expenses (your bank will cover all food, cell phone bills, etc.).

All in all, you can probably save $15-20K in your first year as an analyst prior to bonuses if you live a frugal lifestyle. If you get bottle service every single weekend obviously this will go down by quite a bit, but it’s do-able if you don’t live in New York.

Although investment banking salaries are high, this amount reflects that base salaries, specifically the investment banking analyst salary, are only average until bonuses are received.

The $15-20K is a nice sum for a 23-year old to have saved up, but I wouldn’t worry too much about being super-frugal, especially if you plan to work in finance for a few years. Saving your bonus and not spending the money on a new car will make far more of a difference than cutting smaller costs here and there.

Questions On Banking? Finance? Resumes? Life?

Email The Inquisitor and be featured in upcoming Q&A posts.

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-Jim Young, “Boiler Room” (2000)

Christmas Eve, and what an appropriate topic. If you’re in your cubicle reading this, my condolences: I was actually in that same position last year as well. But most bankers, believe it or not, are actually on vacation right about now.

Vacation? Yes. It does exist, even in this job. What else are you going to spend those investment banking bonuses on? Beyond just the typical “What are investment banking hours like?” questions, this is another common one I hear. Can you actually take a vacation as an Analyst? Do you ever get any time off? Can you go home for the holidays?

The answer is “yes” to all 3. Pretty much every Analyst I know has taken a vacation at some point, but very few have done so before their first year ended. At some banks it’s actually customary for all Analysts to take a vacation after first year ends (UBS LA, despite its intense reputation, actually did this for awhile). Obviously they can’t all do this at the same time, but there’s usually a lull in August when the Finance Industry itself goes on vacation that makes it an opportune time to go.

For your first 6 months on the job it’s difficult to get any substantial time off because you have to “prove yourself” first. It’s kind of like hazing in a fraternity, except now you’re in an office instead of a frat house. You can take scattered days here and there for personal reasons or weddings, but it’s generally not accepted to take much more time than that.

Toward the start of your second year, it gets more acceptable to take vacations. Once you have first years working under you and have a private equity job (or anything else) lined up, you also stop caring as much about pleasing everyone above you.

And needless to say, in investment banking summer internships, vacations do not exist.

Length Of Time

One week is the standard amount of time people usually take for their vacations. I’ve seen up to two weeks but rarely beyond that - otherwise it seems like you’ve quit without telling anyone. One reason to take more time, beyond just the benefit of being gone longer, is that people almost forget you work there and transfer your work to other Analysts. Even after you get back it takes awhile to sink in, so in effect you’re almost on vacation for a month or longer.

How To Get Permission

This is the easy part. If people like you and you’ve been working hard, no one will question you taking a vacation. The only exception would be if you’re working on a live deal or series of live deals and not enough other Analysts are available to cover for you. This is unlikely to happen at a bulge bracket, but might be the case at a boutique investment bank.

Generally work comes in waves; as long as you time your vacation with the trough of the wave rather than the crest, you should be fine.

Timing is the most important factor when asking for a vacation. Aside from getting this right, I would also recommend framing your request correctly: don’t say “Can I take these days off?” but rather say, “I was planning to use my vacation days on these dates and wanted to make sure we have proper coverage while I’m gone.” Beg for forgiveness rather than asking for permission.

Holidays

You generally don’t need to get permission to not show up on Thanksgiving or Christmas Day. The assumption is that no one will be there unless something earth-shaking is going on and you need to be there for the biggest deal of the century.

The entire week at the end of December through New Year’s is thought of as a vacation as well, but you should still let people know you’re going to be out and make sure enough Analysts are in the office at all times in case anything comes up. Usually you’ll either be super busy with a live deal and have to be there most of the week, or won’t have anything at all and can be gone most of the time.

Aside from Thanksgiving/Christmas Day, nothing really qualifies as a bona fide holiday where no one is expected to be working. As Ari Gold would say, “This stuff’s 24/7!”

Vacation In Other Fields Of Finance

Private Equity is not all that much different from Investment Banking when it comes to vacations: take them if there’s time and you deserve it, but there’s no such thing as a holiday other than Thanksgiving/Christmas. For Hedge Funds, it’s a bit different because no work can be done if the market is closed. This means weekends are essentially free and that market holidays are holidays for you too.

Corporate jobs will have a much more laid back attitude about vacations than any of the three industries above - people are generally in it for lifestyle and other reasons, not to make a lot of money - otherwise they would be at a Hedge Fund.

Happy Holidays

So there you have it, one more post in the maintaining your sanity column. Happy holidays everyone, and look for a weekly Q&A later this week and more new posts when the New Year starts!

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-Rod Tidwell, “Jerry Maguire” (1996)

If you’re anything like Rod here, you’ve come to the right place. Welcome to Part I of “Breaking And Entering Into Finance”, a series on how to get into finance from a non-finance background. I find myself answering this question a lot, possibly because I’m from a non-finance background myself. Or maybe just because everyone wants to get into finance.

Today I’m going to focus on the engineer. How you can leverage your technical background to land the job of your dreams as a monkey in the jungle of finance and secure those awesome investment banker salaries? As a technical person right out of school, you have two ways of breaking in:

1. Get an investment banking analyst position in the technology or TMT (Technology, Media & Telecom) group of a bank. You will use none of your quantitative/analytical background (in the interview and in the job) and instead use your interest in the industry/work ethic to get in.
2. Get a highly quantitative job at a hedge fund or doing trading/fixed income at a bank. You will leverage your quantitative and probability skills to get in.

Of the two, the second is easiest for most engineers. Wall Street has never been more quantitative, and it’s only getting more and more quant-focused each day. Even with some recent problems this is a trend that won’t stop anytime soon.

Hedge Fund And Related Jobs

On-campus recruiting for these positions is less common than it is for banking analysts, but it’s there if you seek it out. Citadel, one of the largest hedge funds in the world, does undergraduate recruiting for its rotational program. Another one I know of that recruits at the undergraduate level is Jump Trading.

The good news is that if you’re an engineering major at a top university, you have a very good chance of landing one of these jobs, even with no previous finance experience. If you’re in this position and go through on-campus recruiting, you need to emphasize your interest in finance because this is basically how they select candidates. Here’s a direct quote from a Citadel recruiter:

“To be honest, we know you’re all pretty good quantitatively… after all you got an engineering degree at one of the top programs in the country. You need to show us that you’re interested in finance and why specifically you want to do this job, because that’s what differentiates you.”

During interviews they will ask you quantitative questions but it’s crucial that you show them you want to be Gordon Gekko. Have some good stories prepared, especially on personal investing and why you’re particularly well-suited to be a trader. For more, see our guide to getting a banking job - although I say banking, many of the tips in there apply to finance jobs in general.

For trading jobs the “fit” part of the interview is even more important than it is for banking. If you don’t trade stocks in between classes and wake up early each morning to read financial news, gambling is a good hobby to mention. I was actually asked if I played video poker/online poker and other casino games when interviewing for hedge fund jobs. You want to emphasize hobbies/interests that show you can think about risk vs. reward.

No Thanks, I Really Want To Be A Banker

Full disclosure: you can do this, but the hours are going to be far worse than the options above, the pay won’t be much better and you’ll have to do truly menial, low-value-add work. The advantage is you do have a wider variety of exit options - doing engineering and then banking sets you up very well for venture capital, for example. And the perks are nice.

“Anything I wanted was a phone call away. Free cars. The keys to a dozen hideout flats all over the city. I bet twenty, thirty grand over a weekend and then I’d either blow the winnings in a week or go to the sharks to pay back the bookies.”

-Henry Hill, “Goodfellas” (1990)

You may not get free keys to a dozen hideouts all over the city like Henry Hill here, but you do get some pretty nice perks as a banker that you wouldn’t get a tech company other than Google. Like free rides home, free $30 dinners each night, free cell phone subscriptions and the ability to be very creative with what you expense (not that I’m recommending this or anything).

As a technical person, you have several things going for you right away: no one will question your intelligence, and they probably won’t ask you brain teasers or math questions. If you can get a degree in Electrical Engineering, you can do Excel calculations in your sleep. And no one will question your attention to detail (or at least not as much as if you were an English major). If you can make an operating system work correctly there’s no way footnotes in a presentation will be wrong.

What you will need to focus on in recruiting and interviewing is demonstrating your 1) interest in finance and 2) ability to handle the hours/stress of the job, which are considerably worse than those of an engineering/tech company. For both these take a look at our guide to getting investment banking jobs.

A few more specific tips: when you discuss your interest in finance you need to mention tech companies if you’re applying to a tech group in a bank. And don’t just mention Google or Facebook. These are the most visible tech companies by far, but anyone can learn about them by reading TechCrunch or by listening to friends.

You need to show real interest in the sector, which means taking the initiative and talking about less well-known companies. Before my superday interviews at tech groups in banks I made a list of less well-known startups/other companies I found interesting and had a story prepared around each of them. You should do the same.

As far as the second point about handling the stress/hours, as an engineering major you should have had many extended project classes… these are all good to mention, as are any internships where you launched a product that required “crunch time” at the end.

But What If I’m Not A Student Or Engineer?

Coming up later this week: getting in when you’re not a student and getting into investment banking from law, accounting, and other backgrounds. Stay tuned.

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