Breaking And Entering Into Finance, Part I: The Engineer
“It’s something very personal, a very important thing. Hell! It’s a family motto. Are you ready Jerry? I wanna make sure you’re ready, brother. Here it is: Show me the money. SHOW! ME! THE! MONEY! Jerry, it is such a pleasure to say that! Say it with me one time, Jerry.”
-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:
- 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.
- 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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Tags: finance interviews, Hedge Funds, investment banking, investment banking jobs, investment banking resume, technology investment banking, Technology Media & Telecom, TMT
Coming Soon: Breaking Into Wall StreetRelated Articles:
- Weekly Reader Q&A: Diluted Shares Outstanding In A DCF, IT To Investment Banking And Fortune 500 Corporate Finance
- Revealed: The True Story of How I Got Into Investment Banking and What You Can Learn From It
- Breaking And Entering Into Finance, Part II: The Lawyer
- Why You Should Stop Reading BusinessWeek and Start Using Common Sense Instead: What the Mainstream Media is Missing About Recession Recruiting
Actually, in my interviews I was often asked “how you would you value a company?” even though I had a technical background, so that is really important, but as you’ve said on this site, there are plenty of other resources that prep you for that question.
Why do IBD sites such as GS and MS have little to no profiles of people from engineering backgrounds? It’s even more rare to see an MD with an engineering degree. Is it simply because they aren’t profiled on the website? Or is it because they are low in number?
Also are engineers in IBD disadvantaged (promotion wise) because of their irrelevant background? My perception is that work in IBD does not require the high level of quantitative skills that are earned through an engineering degree.
JWJ - a couple reasons I can think of. First, most MDs now come from very traditional backgrounds and got their start in the 1980s or early 1990s when banking was much less diverse. I think they’re just low in number. Far more common to see people with engineering backgrounds become partners at VCs, for obvious reasons.
Engineers are not at all disadvantaged in IBD in terms of promotions. Once you’re there, you’re judged on your work, period. Background prior to banking is irrelevant.
I am an electrical engineering graduate working at an engineering consulting firm. I am working in the ’strategic’ team - our focus is not the technical/design side of engineering but more of a high-level advisory nature. We do alot of financial modelling for various clients and perform technical due diligence on engineering companies that are takeover targets (with the acquirers often being investment banks/financial firms).
Over the past year or so I have developed a burning ambition to get into investment banking, with an aim to leverage my background and knowledge of the engineering sector to add value to an invesment bank; hopefully giving me an edge on someone who has come from a straight commerce background.
Do you think my aims and ideology are reasonable? Or have I missed the mark somewhere? (As you can probably gauge - my experience has not been the typical quantitative based engineering background that you alluded to in your article that would shape someone for a quant/trading/hedge fund type role - a role that I am not so much interested in anyway).
I intend to stick with my current job for a few years to build up my knowledge of the sector whilst I study for a postgrad degree (in finance) part time. I was considering a master of applied finance; however some people have recommended a CFA course or a straight MBA. I am curious to your thoughts on the most appropriate choice for me? And do you think that with my background and an appropriate post grad finance-based degree, I will be marketable to an investment bank?
Cheers, and thanks for your interesting and informative articles!
Hi there,
That seems like a reasonable goal. I think you’re definitely marketable to an investment bank; I would suggest 1 of 2 routes to take if you want to get in:
1) Apply to smaller/middle-market firms that have good tech practices after you’ve finished 1-2 years at your current job.
2) Go back and get an MBA and come in as an Associate. I would recommend at least 3 years work experience before doing this, though, otherwise it looks too thin. Most Associates we get actually have more like 5-10 years work experience.
If you want to get in ASAP I would recommend #1 and if it’s more of a long-term goal I would suggest #2.
Good afternoon and congratulations for the good advice and info one can find on this site.
I am mechanical engineer, 29 years old, with a 4 years experience in (international) sales, working for a mining company (my experience involves budgeting,knowledge of metal products and the metal industry, market analysis, and defining commercial policy as well as assisting development of new products).
I would like to change careers and shift towards finance but I have no experience in the sector. I am in fond of analysing companies and investing.
I am considering applying for an MBA in a top school as a mean to make the transition. I am nevertheless worried about my age together with the “compatibility” of my background and prof. experience in the eyes of potential recruiters.
What advice could you give me ?
Is an MBA a good and practical way to make the transition ?
Thank you very much
Hi there - I wouldn’t be too worried about your age. If you get into a top MBA program (which definitely sounds likely with your experience), it should not be nearly as difficult to get into investment banking.
An MBA is definitely the right way to move in for you. Age will not be a factor unless you were, say, over 40 or so, in which case working long hours may be more difficult.
Hi… I’m a 22 year old Electronics and Telecommunication Engineering fresher and would like to get into Investment Banking. Could you advise me as to how to go about it? Should I get experience my respective field before I make the career change? Should I take up an MBA in Finance first? I am very interested in the stock market and though I don’t trade, I follow it on a daily basis. Please help, I am quite confused.
Thank You and congratulations on doing such a wonderful job.
Fresher,
If you’re already out and working it’s quite difficult to get into banking from your current field unless you do 1 of 2 things:
1) Go for smaller firms that hire more people from varied backgrounds. I’ve had many engineering friends who have gotten in by going to regional boutiques.
2) Go back to business school - probably not a great option if you haven’t been working at least 5+ years.
If you’ve already been out and working for a year or two, I would strongly advise switching over ASAP… if not, you may want to wait for at least a year to pass first.
Good morning Inquisitor,
1. Does an investment banking firm prefer an MBA grad. or someone with a financial background and work experience in the field ? Being a sales engineer, what should i emphasize to the MBA admission committee for wanting to switch careers towards invsest.banking ?
2. From your experience which personal qualities do you consider most valuable to break in and succeed into investment banking ?
Thank you very much again for your help and valuable advice
Hi there,im really impressed by your responses, ive earned a foreign degree in economics 2yrs back and its being quite difficult breaking into the finance industry especially due to lack of experience. I plan to commence a Pgd degree but do you think a finance proffessional qualification which would be more effective in breaking into the sector. And which ones are most recognised. thank you.
ola: In general those professional qualifications do not help much in terms of breaking into investment banking/private equity/hedge funds… the CFA and such are more helpful for portfolio management and related fields.
Work experience helps the most and really sets you apart - I would advise you to start small and even look at unpaid or part-time opportunities, and then expand from there.
Hello Inquisitor,
Is “project finance” part of investment banking ? Which banks are the best in the field and how complicate is to target this sector as a future career goal ?
thank you
Not really, it’s more similar to private equity because you’re financing infrastructure projects… I am not too familiar with it but I would assume the banks with strong energy/infrastructure groups (CS, Lehman, UBS) also do the debt financing for Project Finance.
Hard to answer how best to approach it as a future goal without knowing more of your background, but I’d say it’s do-able if you have good, relevant experience in both finance/business and engineering.
I currently work at an investment firm as a Fund Administrator. I have a Bachelors of Science degree in Financial Economics. Currently, I am taking math courses that are prerequisites for financial engineering programs and studying for CFA (taking level 1 in December). Is there anything else I can do to break into the hedge fund world? I can’t even get taken seriously when I interview for portfolio positions at my own mutual fund firm! Can you provide me any insight or advice? Oh and by the way, I am that guy that trades stock(sucessfully)/mutual funds(successfully)/plays poker online at lunch(successfuly). More specifically, when everyone was selling financials the day the bear stearns news came out, I was buying. I still can’t get anyone to take me seriously…
What kind of engineering would be best to break into IB? Electrical, mechanical? I’ve done a lot of statistical and orgo/phys types of classes - so I am not sure what would be best.
What type of engineering would you recommend?
I would not recommend engineering at all. Maybe CS if you want to trading / hedge funds
Well…I am en route to an engineering degree. It’s a little late to switch that - but I still have moderate control over what type of engineering. So I was wondering what type of engineering would be considered the best…
It seems like engineering is not a very likely way of breaking into finance. Some of your previous statements mentioned that almost always they are placed into the back office (IT, etc.)
What are your thoughts?
Thanks
Yeah it’s not ideal because it’s a ton of work and you don’t gain much of an advantage.
Personally, I’d pick the major that minimizes the work required and go with that - then you can get plenty of time to do other things that do help you.
Hi Inquisitor
The information that you have been providing has been really inspritational. Congratulations and thanks!
I am a Bachelor of Computer Science (Honors) undergrad who has worked for 5 yrs now (3 yrs hard core coding and 2 yrs managing) and now I moved to US and I have planning to move to finance/banking/management industry for a long time.
I am willing to start from the scratch but I am very lost as to where to start, where to go and how to learn/advance myself.
I have done PMP (not sure if that would help at all). I am not looking at doing MBA but I have been looking at options like some short term financing courses, if it makes any difference.
I would really like to get some advice as to how to get a break and I am willing to put in long hours and give my best.
Can you help me here?
Thanks!
You need to do a top-tier MBA program if you’ve been out that long, will be very difficult to network your way in.
You can do other courses and such but really MBA will be your best option… with 5 years of experience it’s very difficult to re-brand yourself.
Thanks for the reply.
Since you have mentioned, MBA is the only option for me. I am trying to look at it. Initially I had mentioned I cannot do MBA, is because I am strapped financially and personally to pursue further education. Although I will somehow manage the personal front, financial wise I need some advice from you.
Are there any universities at all in US where I can get some financial aid or something of that sort? Or any University where fees are relatively more affordable?
Not sure if I am asking the right queries here.
Thanks much!
I’m not sure offhand how it works for international students - for a top school you’re easily looking at $100K+, though, and I don’t think they give too much in aid except in special cases.
There might be less expensive schools but banks won’t recruit there as much… so it’s a tradeoff.
Thanks Inquisitor! I shall see what I can do.
Inquisitor,
Great commentary! I am a 36 yr old civil/environmental engineer with both BS and MS in engineering but have been seriously debating the MBA route. I am interested in IB or other financial analyst positions to gain entry in the field but already make >$100K salary as an operations mgr/eng. Thus I want to switch partly for job satisfaction but also for greater money opp.
If I go MBA it will have to be at local college (which is top 50 accredited) for various reasons (not top 10). Is this a realistic path/pipe dream? Other industry sectors you might recommend?
It’s going to be very, very difficult to get in from a non-top 10 MBA program, especially since you will be older than most post-MBA candidates.
If you are serious about banking you pretty much need to go to a top 10 program - or if you just want to do finance more generically, consider hedge funds and other quantitative roles that care more about your skills vs. your degree/age.