“Help! I have an offer but now I don’t know which group to list as my top choice! Should I go with M&A, LevFin, or pick an industry group instead?”
“I have offers at the M&A group of a lesser-known bank and the Consumer Retail group of a better-known bank – which one do I pick?”
So, how do you pick your group as an investment banking summer analyst (or associate)?
CAN You Even Pick Your Group?
Assuming that you’ve won at least 1 investment banking offer, there are 3 possibilities:
- You have multiple offers, and they’re with different groups and possibly different banks.
- You have 1 offer with 1 bank, and they’re letting you select your group.
- You have 1 offer with 1 bank, but you will be assigned to a group or you’ve already been assigned.
Case #3 is easy: you can’t do much. You could appeal to anyone you know well or anyone you got to know via recruiting, but large banks are rigid.
Case #1 is also easy: pick the best-known bank. No matter what group you’re placed in as a summer intern, the chances of you getting “real” work are slim – so go for brand name instead.
It’s Case #2 – when you get to pick your group – where things become more interesting.
The Usual Process
- Bank gives you a list of possible groups and a deadline – a few weeks to a month – to rank your preferences.
- You give your preferences and rank different groups.
- Then, you hear back from the bank with your group assignment.
Except for figuring out which ranking is best and what you can do to affect the outcome.
Let’s talk about how to rank the groups first before getting into how you can manipulate the process to your own ends.
1. The People
You want to be working with as few Sycophants as possible and as many full-time Analysts / Associates who take one for the team as you can.
Some groups are relaxed and chill, while others make you want to gouge out your eyeballs with bicycle spokes and then jump into an alligator-filled acidic lake.
You’ll be working most closely with full-time Analysts and Associates, so those 2 groups matter the most – but it’s also worth considering VPs and up because they will determine your fate as a full-timer.
Wait, but don’t most investment banks have extremely high turnover? Why does this matter if the people will be completely different when you start?
Turnover rates are high, but you’ll see much less of a change over 3-4 months vs. 1 year.
2. Deal Flow / “Real” Work
Everyone hates pitch books and fixing printers, right?
You always want to be doing as much models and models as you can, right?
In theory this is true, and in an ideal world you would base your group selection on how much modeling / client work you’d be doing.
3. Full-Time Offer Conversion Rate
Judging by the amount of email I get on which groups “have the best full-time offer conversion rates,” you’d have to assume that this is another important criterion for group selection.
Even if you want to move to another group or bank for full-time recruiting, you still want as many backup plans as possible – especially if the unemployment rate happens to be over 10%.
4. “Game Theory”
Not if everyone else ranks those as their #1 or #2 choices.
Your chances are slim if all 20 summer interns say that M&A is their #1 choice but the M&A group only needs 5 interns.
So you need to keep in mind what other interns are likely to pick as well.
5. Regional / Industry Experience or Expertise
This one can also factor into your decisions – but at the summer intern level you probably won’t have much specific expertise.
If you do happen to be the former CEO of the largest energy company in Russia or you just happen to speak 10 languages fluently, sure, leverage that and go to the group that’s most compatible with you.
What You Think Matters
Faced with this criteria, you might think the following:
“Well, deal experience and technical skills matter a lot – so I definitely want to be in M&A or Leveraged Finance. But I know everyone else will pick those as their #1 or #2 choices, so I’ll put a random industry group first, and THEN I’ll list M&A or LevFin on the off chance that not everyone will pick them.”
As an intern – at any level – you’re unlikely to get much “real” work, even if you’re working in the busiest M&A group in New York.
Yes, there are exceptions and sometimes interns at bulge bracket banks get to run deals by themselves – but those are Black Swans.
So forget about predictability.
Any banks looking at you for full-time recruiting won’t expect you to have run a deal by yourself or to be a finance guru from a summer internship, though they will expect you to know something.
What Actually Matters
The 2 most important factors are the people and the full-time offer conversion rate.
They’re inter-related: a more relaxed group / bank will give out more full-time offers, while a more anal retentive group will give fewer full-time offers.
If these are the most important factors, 2 questions now arise:
- How can you find out which groups have the best people?
- How can you figure out which groups give out the most full-time offers?
What NOT to Do
The most common mistake here is to do Google searches for the best groups, send me dozens of emails, leave comments asking about different groups, or spend hours looking for the information on message boards.
These are the “lazy intern’s solution” and not a good idea for a couple reasons:
- Any information you find online is likely to be hearsay, flat-out wrong, or out-of-date.
- If you spend all your time “researching” groups like this, you prevent yourself from doing more important tasks – like picking up the phone and talking to real people.
You might now be wondering, “Wait a minute, so are you saying that your entire website is hearsay, flat-out-wrong, or out-of-date? Why should I believe anything on this site?!”
It’s not that everything you read online is wrong – it’s just that anonymous people on the Internet come up short when you need information on specific, proprietary information that changes frequently.
Like the full-time offer conversion rate for Morgan Stanley M&A in Hong Kong.
You’re always better off going straight to the source.
How to Gather Intel & Influence Your Assignment
You’ve probably guessed it by now: networking.
Contact alumni at the bank – or even better yet, in the specific groups you’re choosing between – or find anyone with a history in those banks or groups.
Anyone you met during the recruiting process is also a good bet: now that you have the offer, you have more power than they do and you can use that to find out a lot of information.
Yes, it may be out-of-date but it’s still better than the Interwebs because:
- Real, live people are more reliable than Google searches anyway.
- You can use your summer offer to 1) Give them proof that you’re capable; and 2) Use it as an excuse to stay in touch or to reach out to new people. Both of which are very useful when you want to move elsewhere full-time.
Tips & Tactics
This is pretty simple – casually email your contacts and say:
“Hi ______, I hope all is well. I just received an offer at ______ and have a choice on different groups there. I wanted to reach out to you and see if you had any quick thoughts on what might be the best option between ______, ______, and ______ since you work / worked there / had some experience in those groups before.”
Remember, brevity is your friend.
If you’ve already spoken on the phone or you know them decently well you can suggest a quick call as well.
It’s not worth killing yourself and contacting hundreds of people just to find out which group is friendlier or gives more full-time offers; just go for the lowest-hanging fruit.
Group Selection… Check
That’s all there is to it: if you’re deciding between different groups at the same bank, spend some time networking, figure out which groups have the best people and full-time offer conversion rates, and select accordingly.
And if you can’t get that information, just pick whatever industry groups you’re interested in, or whip out your dartboard and label each square with a different group’s name.
Everyone else is doing it, right?