The Investment Banking Interview Selection Process
“Life all comes down to a few moments. This is one of them.”
-Bud Fox, “Wall Street” (1987)
Heading into an investment banking interview? Make sure you read this post carefully, since your life will depend on it.
One of my most frequently asked questions is how exactly investment bankers decide who gets an offer following a round of Superday interviews. Sure, maybe you did everything right to close your interview offer, but ultimately it’s up to those who interviewed you.
[youtube:http://youtube.com/watch?v=Pxsn5Mm6fzA;autoplay=1 400 400]
Although it may be tempting, I would not be like Bud Fox here and use inside information to get an investment banking job.
Who Calls The Shots
Unlike the investment banking resume review process, Managing Directors are actually involved in handing out offers. HR, by contrast, does essentially nothing aside from the logistics. They don’t review resumes or make any calls themselves, aside from possibly how many Analysts to give offers to. But usually the MDs tell them how many they need.
Typically everyone from Analyst level to the Managing Director will interview candidates. It’s ultimately the MD’s decision who gets hired and who does not, but everyone does have a say in the process.
The Selection Process
After the first round of interviews, the interviewers decide among themselves who they want to invite back for final round interviews. We don’t “rank” people but generally have in mind the best few people we saw that day.
Sometimes there are too many people and not enough slots, in which case we will give slots to the best few and then decide who among the rest should get an interview. This part of the process can be unfair because not everyone has interviewed all the candidates and different people have different standards.
During Superday, each interviewer will evaluate different qualities (leadership, drive, technical skills, etc.) for each candidate. There is no “ranking” most of the time unless there are a ton of great people and not enough slots. I’ve never seen that happen as there are generally very few outstanding people.
Afterward, HR will gather everyone up for a debrief and see what people thought. Usually consensus emerges pretty quickly on who we give offers to, who we say no to and who we put “on hold.” The MDs have final say, but very rarely do people disagree. And needless to say, if an Analyst is pushing for someone but no one else liked him/her, the investment banking analyst is overruled.
How Many Get Selected
The absolute number depends on the office, group, and specific bank so it’s meaningless to list that here. In general, we will receive 500-1000 investment banking resumes for 30-50 spots, then give Superday interviews to 10 of those 30-50. Then we will pick 2-3 of those to actually receive offers, or maybe even fewer depending on how interviews go.
On a strict percentage basis, your odds aren’t great here. However, most people we interview do not stand out much and you can greatly improve your chances just by following a few simple interview tips.
Investment banks repeat this process at different schools until enough Analysts are hired. If there’s attrition mid-year or people back out of offers, we might look for lateral hires.
What We Look For In Candidates
School/GPA is almost irrelevant after the interview. It’s only relevant for getting your foot in the door.
Generally I look for people who really, really want an investment banking job and will do anything to get it.
Some interviewees are doing it just to test the waters and don’t really know what they’re getting into. Bankers can spot people like this from a mile away.
You don’t want to be one of them. Prove that you can work hard on very little sleep, learn quickly, play well in teams and are hungry to get experience and you will get offers.
Does The Interview Selection Process Change From Year To Year?
Not really, no. This is one area where banks could improve their interview processes – see who does well in the job vs. how they came across in interviews, and look for more of the qualities that result in good Analysts.
It’s very easy to discern a good interviewee from a bad one, but it’s much harder to tell good bankers from bad bankers before they actually do the job. I know of people who interview very well but are actually bad employees and I know of great investment banking analysts who are terrible at interviewing.
It’s never a perfect process but reviewing past interviews and hires may definitely be a good way to re-calibrate things.
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Great post about the intricacies of recruiting.
Thanks Justin, glad you found it useful.
Just went through this process and received an offer. Wow totally didn’t realize that this was going on in the background. Sounds very much like what our fraternity does during rush and giving bids to the new pledges. I DEFINITELY don’t want to hear what the MDs had to say about me then haha
Bobby: it’s definitely like a frat rush and nearly as random as well. Lots of talking crap about people, people trying to push for those they like, etc. Congrats on getting an offer!
Hello – UK reader – 2 questions..
1..is a superday interview, the same as an assessment day (otherwise known as an assessment centre, or USA version assessment center!)?
2..is every graduate hire position referer to as an analyst position or does this vary from department to department (e.g. sales, trading, investment research, etc, etc.. see this article on investment banking to see what I mean.
Cheers!
1) Yes.
2) Varies from department to department. Sometimes it’s called Associate (Equity Research for example), sometimes Analyst.
Hello – UK reader – question..
1..is a superday interview, the same as an assessment day (otherwise known as an assessment centre, or USA version assessment center!)?
2..is every graduate hire position referer to as an analyst position or does this vary from department to department (e.g. sales, trading, investment research, etc, etc.. see this article on investment banking to see what I mean.
Cheers!
Hi im from UK too nd i wonder that if the selection process in the USA is different from in UK.
i am a first year biochemistry student in Uni and i want to do summer interns in my second year in Uni. before i kept biotech jobs as my future career path in mind, however recently im quite passionate about banking. biochemistry isnt a very math based course although it does require analytical and some numeracy skills like all sciences do. so im currently self learning some further maths such as engineering maths. my question is that if im applying for positions outside of quant how much maths should i know??
my second question is that since i dont have finance background, how much knowledge on finance should i know especially when dealing with interviews? i look up what investment banks do on wiki and tried to learn some concepts and technical terms in finance but found out that this isnt a very specific way to learn. could u advise me on what to read to prepare for interviews etc ??
im sorry to bother you for these long questions but im lookin forward to ur replies. thanks….
You don’t need to know much math… the math used in finance is very simple.
The interview guide on this site is good preparation for interviews, also read the Financial Times or WSJ each week to start picking up the lingo and learning more about the industry. You don’t need to know everything but the basics are essential for interviews.
oh rite…thank you very much. i before thought when it comes to investment banking all people do are like building complex models using Matlab and solving complex calculus that must be solved by using computers. so now i get it those things are only for quant am i correct ?? thx again
Uh you never do anything “complex” it’s just addition/subtraction and sometimes multiplication if you get really fancy.
hi.. i read that guide again. however for those technical questions like valuation and modelling or accounting, considering im from somewhere totally outside of finance nd never took finance lessons will i also be asked on them as well ? or is it just asking me my thoughts on some financial news and movement?
You will still get those questions, because if you don’t know that stuff they take it as a sign that you’re not that interested in the field… so you need to know your stuff regardless of your background.
hi … im now thinking to have a try for IBD in my internship. so i will just have to make sure that the stuff i must know are the following: some knowlegde on modeling in M&A, business valuation, some knowledge on balance sheet, some knowledge on derivatives (but not knowing the detail like option pricing using black schole equations) . Am i correct with the stuff i said above ?? what else shud i know ??? thank you
You don’t need to know anything about derivatives other than options and TSM maybe. See all the articles here on interviews and the interview guide… already wrote about this topic many times.
I have just gone through the superday interview of Barclays Capital, Hong Kong. It was specially designed for all the Global Markets candidates(20 in total). Two days have passed and I still didn’t hear from Barcap, neither offer nor declining letter. I heard some of the candidates who apply for sales have received phone calls from Barcap sales department right after the interview, saying that they have got the offer. I am worried about my situation and I guess maybe it is because I apply for trading and different departments have different approaches. Is it possible? Or does it mean that I have been put on the declining list…
It could be anything – I would just call them and check ASAP.
Thanks for your suggestion. Now I have got the offer from Barcap, trading department, summer intern (this coming summer), Hong Kong. What do you think the trading of Barcap in Asia? And do you know whether the retention rate of intern in Barcap is high or low? Thanks!
I don’t know much about Barcap in Asia but I would definitely take it unless you have an offer at GS/MS lined up.
Hi.
I was wondering as to who the person is who skims the resumes and selects the people for the 1st round interview. Is it the analyst or associate? I ask this because we need to know who to network with i.e there is not too much point networking with an analyst if its the associate who picks the interviewees for the 1st round.
Usually the analyst for analyst-level resumes
Just a quick question? How do I make sure I get on the short list of people being interviewed at our school. I started networking a while ago, and was able to set up a few informational interviews and get my name out there. However, my efforts have not been as successful as I had hoped. I am at a target where there are tons of kids who have great GPAs and fancy-sounding, albeit laughable, “extra-curricular” activities on their respective resumes. History shows that I can do well during an interview, I just need the interview. Any suggestions?
Also, I purchased the interview guide and the networking guide. Good stuff for anyone interested.
It’s a matter of asking bankers directly as possible for an interview at their firm… if you look at some of the case studies on the site (example: http://www.mergersandinquisitions.com/investment-banking-engineer-no-finance-background/) you’ll get a sense of the numbers and what you have to do to get noticed. The bottom-line is that you need to follow up and ask people repeatedly – otherwise they will forget, “not have time” and so on.