Picking An Investment Banking Summer Internship: Equity Research Vs. Trading

One common question I’ve been getting lately is how to decide on a summer internship when you have multiple offers. For those lucky enough to be in this position, how do you pick which internship to accept and which to turn down?

Since this varies quite a bit for each person, I’ve anonymized and listed below several of the questions I’ve received and responses I’ve written thus far.

Equity Research vs. Trading

“Thanks for the site and all your help. I’ve received an offer from a bulge bracket equity research division, as well as a trading offer from a well-known international investment bank that is somewhat less prestigious.

I’m not sure which to take, as the bulge bracket offer is more ‘prestigious’ but I am personally more interested in trading. However, I am still considering the research offer because I think it might be easier to leverage into other opportunities and because I might be able to switch into trading at the bulge bracket at the end of the internship.

I’m afraid of burning bridges and not sure what to do here.”

Congrats on both offers – sounds like you have some very good options this summer.

Personally I would go with whatever you’re more interested in (sound like trading from this). Equity research on the whole is in somewhat of a decline due to Elliot Spitzer’s reforms and the diminishing role of equity research relative to banking. So I would lean toward doing trading instead.

The bulge bracket offer is definitely more prestigious, but I feel it would actually be easier to leverage a trading job into better full-time offers and exit opportunities vs. a research job. In general it is easier to switch across different banks in the same industry vs. switching into different groups at the same bank, believe it or not.

That said, you can’t go wrong with either one. I would go with your gut and pick the one you’re most excited over, as that is usually the right approach to take.

Bulge Bracket vs. Bulge Bracket In Asia

“I recently received summer internship offers at 2 bulge bracket banks in Asia. Could you give me some input on these two banks to help with my decision? I’m concerned because one of these banks has suffered writedowns and been in the news a lot recently, even though its Asia division still appears to be strong. Any opinions that you have on those two banks would be greatly appreciated!”

Great news on the offers – congrats! Unfortunately I know relatively little about the Asian offices of these banks – personally, I would err on the side of picking the one with a stronger business that has been less affected by the credit crunch and writedowns.

Even if the Asian branch of a particular bank is strong, if its overall business has suffered greatly there’s no telling what will happen in terms of layoffs or future opportunities.

That said, I think you should base your decision on more than the strength of each bank’s overall business. As I’ve written about before, your investment banking team and the people you work with are more important than the “prestige” of the group. Figure out which group has the best dealflow, the best opportunities and the best people to work with and go there.

Other Thoughts

I feel I should also point out that “prestige” for summer internships does not matter nearly as much as it does for full-time banking jobs. Yes, working at Goldman or Morgan will put you in a better position, but I’ve seen people leverage internships at boutiques or middle-market banks still wind up with bulge bracket full-time offers in the fall.

For summer internships at least, doing investment banking vs. not doing investment banking matters more than Goldman vs. JP Morgan.

Tags: bulge bracket, investment banking summer internship

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