Investment Banking… from Vancouver to Korea to Everywhere In Between
Some of the previous articles / interviews here on finance in Canada haven’t exactly generated a positive response…
But what fun would it be if we just gave up?
Especially when there are interesting stories from readers who have bounced around between different regions.
This interview is hard to put in a specific category, but here’s what you’ll learn:
- What the finance scene is like in Vancouver (to be clear, this is only for that specific city, not Canada as a whole) and some tips for breaking in.
- What it’s like to work in private equity in… Korea.
- Why working overseas can give you a big advantage in winning internships and offers back home.
- How to leverage this seemingly random background into trading.
And hey, maybe at least part of this story will apply to you, so let’s jump right in:
The Story So Far
Q: I’m still not sure I understand your background, so could you explain it one more time?
A: Sure. I’m from Vancouver and attended one of the top schools in Canada here… but the problem is that we’re not known for finance compared to some of the universities in the east, like McGill and Ivey.
Plus, I didn’t exactly have stellar grades.
The competition here is also insane because lots of people want to get into finance, but there are very, very few roles available since it’s a small industry in general, and even smaller in the western part of Canada. Most people actually end up going east if they want to work in finance.
Anyway, I started out as a science/math major, and then transferred into business and finance specifically.
But I fell behind because lots of other people here have well-connected families in Asia, and got internships like that or simply moved elsewhere to land internships.
Q: So what was your approach? Couldn’t you also just go somewhere else to find an internship?
A: I didn’t want to leave the region. So I started looking for unpaid internships at tiny places by cold calling, cold emailing, and so on, and eventually found one boutique bank that offered me a part-time internship working under an investment advisor.
It was a combination of investment banking and private wealth management, and I did a lot of Excel work, analytics, and probably more on the wealth management side than anything else.
Q: Ok, great. So before we move on, I wanted to take a step back and talk more about the finance scene in Vancouver because we’ve actually gotten a lot of questions on that. What can you tell us?
A: Sure… so as I said before, it’s extremely competitive here because there are so few positions.
There are fewer deals than in the central or eastern parts of Canada, and many of the banks here are so small that they do investment banking, structured finance, and equity research all in one office on one floor.
The industry focus is definitely mining, especially mining deals on the west coast, and lots of mining companies are actually headquartered in Vancouver (e.g. Gold Corp). You also see some technology deals and other natural resources as well.
Q: So what types of banks do you see? Is it mostly the Big 5 Canadian banks?
A: It’s a mix. The Big 5 are here, but there are also bulge bracket banks from other countries – note, however, that they may or may not be focused on IB specifically, they might be doing something completely different, and that some banks are not even here at all.
Of the Big 5, RBC and CIBC have the biggest presences here.
And then there are quite a few boutiques in the region, especially in the form independent equity research firms, and more have been opening recently.
The driving factor there is how Asian investors are flocking to British Columbia looking to invest in North America.
Q: You’ve been mentioning how competitive it is – any sense of the numbers?
A: I’d say there might be 5-10 people total hired here each year, at the analyst and/or intern levels; maybe 1 or 2 per investment bank.
That’s why so many people move to other locations if they want to work in finance – there just aren’t that many spots open here.
On the other hand, you could argue that the hours are better on the west coast (similar to west coast hours in the US being a bit better) so the lifestyle factor may add in points.
Q: Yeah, I’m not sure how true that one is in practice.
How did you get this unpaid boutique internship? Any tips for readers who are in a similar position?
A: I didn’t use a particular advanced strategy or anything like that – it came down to finding names, setting up tons of informational interviews, and following up aggressively.
Here’s what I used to find names:
- The alumni directory
- Linked In
- The school’s career website (I used this to find companies that might be hiring)
I was pretty bold about it and just emailed bunches of people and asked them to meet for coffee.
There are lots of alumni from my school here, so I generally got good responses when I contacted them. My response rate (i.e. the percentage that said something rather than just ignoring me) was around 50%, though obviously not all of those turned into actual meetings or interviews.
The interview process was pretty relaxed since I wasn’t doing hardcore technical / modeling work – it was definitely more fit-oriented.
Moving to… Korea?
Q: Great, thanks for sharing. And then for the next part of your story, if I understanding this correctly, you somehow went to Korea and worked in private equity?
That almost reminds me of how I left the country and moved to Korea years ago, but at least you had an actual reason for doing so (I dreamed of becoming an actor, only to discover I’d have to wear a rabbit suit and hop around on TV all day).
A: Yeah, so my family is from there originally and we were all heading back for the summer.
I had a few friends from school interning at bulge bracket banks in Seoul, so I contacted them, asked if they knew anyone, and networked around until I got in touch with a Partner who had started a clean-tech private equity fund there.
He had room for a summer intern and I figured I had nothing to lose by joining him – what else was I going to do over the summer, anyway? And I knew I would need some type of internship to compete with people who had actually worked at large banks that summer.
It was a mix between traditional private equity and consulting: we did lots of efficiency consulting and helped hotel chains and the like improve their operations.
But on the private equity side, we did a lot of work / investing with MBS (mortgage-backed securities) and also with some leading insurance companies in the region.
And then I got to work on a renewable energy investment deal and assess whether or not projects were feasible. Overall I learned a lot about how the financial markets there worked and how deals got done.
Q: OK, great… so let’s take a step back and go into some of that in more detail.
Can you talk about the recruiting process and how you landed the internship?
A: Sure. Cold calling and cold emailing are basically non-existent in Korea, and more broadly in Asia they are definitely less common. Yes, as you’ve pointed out before, “networking still works…”
…But it’s all done through connections here.
As I said, I got lots of referrals from friends who worked at banks here, and even went through family friends occasionally. Every time I met someone I got their business card and tried to follow up in some way.
You definitely need a starting point.
It’s easier to go into places like North America and Europe without knowing many people and just start talking your way in. But it doesn’t work as well in Asia, at least from what I saw.
Q: What about the recruiting process? Were interviews technical?
A: They were a bit more technical than the interviews I went through in Vancouver, but they still asked lots of qualitative questions: why I was interested in renewably energy, what I could offer to them immediately, what I had learned in my past internships, and so on.
As you’ve pointed out before, even “large” private equity firms are effectively still small businesses, so “fit” is critical.
Q: Yeah, that’s not surprising. You’d probably get a lot more technical questions and case studies if you had been going for a full-time role after doing banking.
Can you talk about the finance / deal market in general in Korea? I’ve gotten questions on it but haven’t covered it in detail before.
A: Sure. Deal-wise, there are lots of IPOs here – I’d say they’re more common than M&A or debt financing deals by a longshot.
But part of the reason for that is that the success rate for deals is also much lower. Many times companies want to go public, but something falls apart at the last minute… or sometimes the government blocks a deal and is very restrictive with what they allow.
Industry-wise, there are tons of tech start-up companies here, so there’s lots of money flowing into that sector. Clean-tech and mining are also popular, but they tend to be dominated by conglomerates like Samsung and LG.
The stock market here is quite volatile compared to other indices, and there’s always a lot of speculation; you see that especially with the KOSDAQ (sort of the equivalent of the NASDAQ here).
One final point on deals: since conglomerates dominate many parts of the economy here, often companies will spin off or IPO specific divisions of the company. Samsung, for example, has around 10 publicly traded stocks (or maybe more?) for all its divisions.
That’s actually great news for bankers because it means the potential fees from each client are higher: just convince them to spin off a division, then buy it back, then merge it with something else… and repeat that for all 10-20 of their divisions.
I’m joking a bit there, but you really do see companies shifting around their businesses all the time, and banks can earn high fees from all that shuffling around.
Q: Thanks for describing the market there… so obviously this was just a summer internship, but could you see yourself heading back there in the future?
A: I could see myself spending a few years there in the future, but I don’t think I’d want to stay for the long-term or raise a family there or anything.
The job itself was quite intense – around 12-13 hours per day of work on average. Not investment banking hours, but more than what you would work at a normal company.
And it’s very fast-paced because everyone else there is working hard and wants to advance, so you end up staying late just to out-work / out-perform others.
The biggest adjustment, actually, was that I had to learn the drinking culture very well because that’s a huge part of business, not only in Korea, but in most Asian countries.
I’m not into that aspect, so that’s part of the reason I wouldn’t want to be here long-term.
Act 3: Moving Back Home?
Q: Thanks for explaining that one. Yeah, if you don’t like to drink you’ll have trouble doing business in quite a few countries there.
So after this internship finished up, you moved back home… and got a trading internship?! That seems a bit random.
A: Yeah, but I genuinely didn’t know what I wanted to do long-term, so I figured there was no harm in exploring a couple different internship options in these different areas.
I networked around some more and ended up interviewing with the Treasury Department of a central bank for local credit unions. They manage liquidity deposits for the credit unions and sometimes make their own investment decisions on bonds.
Interviews were fairly technical – they asked about yield curves, how swaps work, and more S&T-type questions. It wasn’t rocket science but they definitely expected me to know something about fixed income.
Q: And what do you actually do there?
A: Well, it has the same problem that any other trading-type role on the west coast has: you have to be in early because you’re 3 hours being the east coast.
So I usually get in around 6 AM, before anyone in Toronto / elsewhere arrives.
Our team is pretty small (6 people), so I do basically whatever they need me to do – everything from calculating security prices to inputting and reconciling trades.
It’s much different from doing trading at a bulge bracket bank: you don’t need to make split-second decisions and watch the markets 24/7… because it’s not a large bank.
Q: Yeah, it seems like it’s much faster-paced and higher stress on the prop trading and banking sides, but less so at a place like that.
So what are your future plans? You’ve completed 3 very different internships in different regions.
A: Long-term I am still interested in going into private equity, but it’s almost impossible to get into that in Vancouver because there are so few firms here.
So I’m planning to stay here for the time being, but eventually move to a bigger center such as New York or Toronto, and maybe even go to Asia for a few years.
I’m also aiming to pass the CFA at some point.
Q: You know that I’m about to smack you right now, right?
A: I’m prepared to dodge any attack. But yeah, I know it’s not terribly useful for PE but I want to leave my options open in case I get more interested in asset management in the future.
Q: Ok. Well, as long as we’re clear on that, thanks for the chat! Very random but I learned a lot.
A: Sure thing. I enjoyed sharing my story with you!
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