“The difficulty is in coming up with a credible excuse or rather, a set of excuses, when you need to do follow on interviews in a short period of time.  Let’s face it, three doctors’ appointments, two visits to the dentist and a broken boiler, fridge and blocked sink in the course of the two week period for you to meet every single member of the team at Goldman who is looking to hire you, is not an option.”

-Failsafe Interviewing Techniques For Investment Bankers, The All Nighter

Continuing this week’s theme of “assessing strategic alternatives for your career,” or “how to survive and interview for other jobs, even in a bad market,” I wanted to cover one other question I’ve seen lately: how to find time to interview with 2 full-time jobs (welcome to the life of the investment banking analyst).

Even if you’re not in investment banking, but rather another professional field like accounting, consulting, or corporate law, finding time and making up the appropriate excuses will always be an issue.

While it’s easy (easier perhaps) to do phone interviews, you’ll never get an actual offer unless you do at least a few rounds of in-person interviews, and sometimes many more than that.

There are 2 approaches you can take when it comes to being out of the office interviewing for other jobs: deception and honesty.

Deception

The classic example here is the doctor appointment.  I’ve used this one before - probably too many times in fact.

Dentist is a little better, but still rather conventional.

“Family emergencies” can also work, but it’s even more unbelievable to have 5 family emergencies in one week than to have 5 doctor visits, so be careful with your usage there.

The main problem with using this strategy is that eventually you run out of excuses or you have 10 “doctor appointments” in one week, so it stops being believable.

And if you want to get a little more exotic, don’t even think about it.  Saying your pet giraffe needs to go to the vet is a sure sign you have multiple interviews coming up.  Variations on the ordinary are far better.

In general, though, I would recommend making up excuses in only 2 situations:

1. It’s very early into your time on the job - if you just started at an investment bank in the summer, think January or February - and you are even more on top of recruiting than the average person.  You don’t solicit meetings; the headhunters come to you.
2. You work at a firm/office where talk of recruiting is taboo and no one is open about it.  Or you’re in an industry where it’s not expected that people move on after a few years (surprisingly, there are other industries out there besides finance).

A lot of investment banking analysts think deception is always the best route, but I think this line of thinking is somewhat flawed.  If you just have 1 or 2 interviews, sure, it’s easy to write them off as dentist appointments, weddings or broken sinks.

But when you actually find a lead worth pursuing and you have multiple rounds of interviews, it’s pretty obvious to everyone what you’re doing.  And even if you don’t say anything directly, they’ll put the pieces together.

If you’re not in investment banking but are trying to break in from another field like accounting or consulting, you will probably have to use some made-up excuses to avoid raising red flags.

My recommendation: rotate among different excuses or come up with a series of events around one excuse.  If you go the family emergency route, you can always string together a more detailed account and relay the basics to anyone who asks.

If you’re not in New York or London and you actually drive to work, car accidents (real or imagined) can be another good source of multiple absences within a week or two.  You have to go to the hospital… go to the doctor for a follow-up exam… get your car fixed… find out it can’t be fixed… locate a new car.

It’s a gold mine.

Honesty

Honesty can be the best policy here - as long as your firm and office are reasonable.  I was upfront when I went to interview elsewhere and specifically told everyone on my team what I was doing (no, not where I was interviewing, just that I would be out for “private equity interviews“).

No one ever made an issue out of it.  The most I ever got was, “Ok, make sure someone else is covering your deals.”

(Forget about “good luck.”  This is finance.)

There are some offices where interviewing (or interviewing very frequently) is looked down upon; this actually happens more at boutiques and smaller firms than at bulge brackets, where most Analysts do in fact move on after 2 years.

Again, if you’re not an investment banking analyst, honesty may not in fact be the best policy.  Friends switching into private equity or banking from related fields like equity research or accounting have had to jump through some crazy hoops to get in their interviews without arousing suspicion.

Telling Co-Workers: Trust No One

If you are going the “deception” route, you need to be 100% committed to it.  You may think that telling fellow Analysts will be fine… that no one would leak what you’re actually doing.

But you would be wrong.

Somehow, it always gets out.  I remember once I had people from a completely different office asking me about my trip when I got back.  I had only told a few trusted co-workers so I was pretty surprised at first.

And then I realized that word about what you’re doing always leaks if even one person other than you knows.

So if you do have to be confidential for whatever reason, pretend it’s the mid-90’s and the X-Files is still the best show out there and trust no one.

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Tags: co-workers, finance interviews, Hedge Funds, investment banking, Private Equity, private equity jobs, understanding investment banking

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Career Change, Getting A Job, Interview Tips, Recruiting | 2 Comments »

“My name is Rebecca Nicholson. I’m a recruitment consultant at Assbury Moron.”  This HR chick has obviously mis-dialed and has no idea that this is not Assbury Moron, or wherever else she’s looking for.

“A recruitment consultant.  A headhunter.  Are you free to speak for a few moments?”

A headhunter! Wow. Ok. Sure you have time to speak!

“Um, er… yes” you mumble in a whispery voice as you stand up and walk away to find a little privacy. Like it isn’t suspicious enough that an unknown caller rings and after they introduce themselves you get all secretive and hide, but you obviously don’t realize this as it’s your FIRST HEADHUNTER CALL!!!!!

“Um, er… yes… I can speak now”

“Great,” says Rebecca, “Mike, I’m calling because you’ve been recommended to me and I would like to see if you’ll be interested in coming in to see a private equity firm for an interview.”

-The Kruelberg Kretin Saga - Episode VI: The Headhunter Call, The All-Nighter

With everyone on Wall Street getting fired and those who haven’t been fired looking at other opportunities, I’ve seen lots of discussion lately around headhunters.

There are many misconceptions out there about what headhunters actually do, how they get paid (hint: by the firms they work for), and who they work for (hint: not you).

I know there are some Mergers & Inquisitions subscribers who work at well-known financial services recruiting firms, so I’ll try to write this post without stepping on anyone’s toes too much.

What Headhunters Do

You might recall back when I explained what investment bankers actually do that I likened us all to Ari Gold.  We don’t create; we’re not there for the long-term; we just sell.

But if there’s anyone more deserving of the “Ari Gold” title than investment bankers, it’s headhunters.

Recruiters are hired by investment banks, private equity firms and hedge funds to find potential candidates for hire.  A lot of junior investment bankers get this wrong and think that the recruiter works for them.

I’ve seen questions like “Should I get a headhunter on retainer?” asked on forums and via email.

But unless you’re willing to pay them 20% of your base salary upon placement (what the firm retaining the headhunter typically pays), you will never have a headhunter “on retainer” so you might want to forget about that one.

Since they are paid on commission and the firm that retains them pays them, their loyalty is to the firm - not to you.

This is not necessarily a bad thing, but you should keep it in mind when making decisions about where to go next.

The Recruiting Process

Generally the headhunter either contacts you directly by phone or email and introduces himself/herself, then assesses your interest in the opportunities he/she has available.

If you can do so, I would strongly recommend meeting in person so you can present your “story” and so they can do a better job bringing you the appropriate jobs.  Meeting in person can also help to overcome a weaker finance background or a lesser “brand name.”

After that, they will pass your resume onto firms that hire them and will effectively act as the first screen in the recruiting process.

After your first interview, the role of the headhunter varies depending on which firm and which recruiter you’re dealing with.  Sometimes they will back off and let you continue discussions on your own, and other times they will talk to both sides throughout the entire process and try to make a “deal” happen.

Why They’re So Prevalent In Financial Services

Recruiters exist in every field, but they’re most prevalent and most influential in financial services for 2 reasons:

1. The highest salaries of any industry out there.  And since headhunters get paid based on base salary, it doesn’t matter that hourly wages might only be marginally better than those of McDonald’s. Even junior-level employees make over $100,000, and mid-level hires will get between $500,000 and $1,000,000.  Try finding that in manufacturing.
2. Incredibly high turnover at all levels.  Just look at what happened to UBS LA last year with Moelis’ departure.  Out of all the Analysts I started with 2 years ago, only around 10% remain in their original positions.  Some have switched firms multiple times in the past 2 years.

If you get paid a percentage of base salary whenever people switch firms and you work in the industry with the highest salaries and highest turnover rates, that translates into a lot of money for those who facilitate the moves - the headhunters.

Also, the world of finance is very small, both in terms of number of major firms and number of employees - even the largest private equity firms have only a few hundred employees.  Just look at Blackstone’s latest 10-K:

“As of December 31, 2007, we employed approximately 1,020 people, including our 65 senior managing directors and approximately 395 other investment and advisory professionals.”

Less than 500 “investment professionals” at the largest and most well-known PE firm out there.

Thus it’s easy for a few well-known recruiting firms to “own” all the relationships with buyside institutions and be responsible for all their new hires - you have an industry with high turnover rates and high salaries but very few people.

This would be much more difficult in a field like technology, where there are tens of thousands of employees at brand-name firms.

So, Should You Use Them?

Almost certainly.  In fact, if you ever want to work at a private equity firm or hedge fund, you don’t have much choice in the matter.

Since the firms are so small, they almost have to rely on headhunters to find candidates.  No matter how well-connected the investors are, you’ll never have a very wide reach within incoming investment banking analysts with only 10 employees.

You should definitely reach out to firms you’re interested in and see what develops as well.  But you probably won’t know people at every firm you might want to work at.

And that’s where headhunters come in: they provide the introductions that get you in the door and alert you to opportunities you might not otherwise know about.

I’ve had friends who have gotten interviews via connections and networking, without going through headhunters.  But very few have actually received offers at legitimate firms without going through them.

Buyer Beware

As I alluded to above, there are a few points to watch out for when doing your recruiting through headhunters.

Introductions, Not Decisions

Never rely on a recruiter to make a decision on whether or not to accept an offer.  As you can imagine, they will almost always urge you to accept it.  Unless there’s something else that would generate a higher commission.

When I was recruiting last year I had several opportunities that I wasn’t crazy about, but were there for the taking if I wanted them.  Needless to say, the recruiters I dealt with pressed me to take one of these even though I just wasn’t enthusiastic about them.

Recruiters are great for initial introductions and availing yourself of new opportunities, but do not fall into the trap of letting headhunters “sell” you on certain positions.  You should do your own diligence when interviewing and decide for yourself what makes sense.

The Tough Market

As you might have noticed if you’ve been alive lately, the market has completely tanked in the last year and hiring has slowed down everywhere.  In case you missed it, Bear Stearns even collapsed. So anyone looking to get into finance is suffering a lot - but guess who else is going through hard times?

That’s right, the headhunters.  When hiring slows down and the number of people being laid off exceeds the number hopping between firms, headhunters lose their main source of revenue.

So you have to be even more careful these days with how you approach the recruiting process.  When hiring slows down, headhunters will be even more persistent in getting you to accept offers that may or may not be right for you.

Coming From Non-Bulge-Bracket Banks

Some headhunters will ignore you or pay less attention to you if you’re not from a bulge bracket bank.  It’s just a matter of return on time for them - they are more likely to place candidates who come from “better” names, so that’s where they spend most of their time and energy.

Sometimes you can get around this by making a great impression during your interviews.  But from what I’ve seen, this is rather difficult and you’ll be at a disadvantage no matter what you do.

The solution here is to either network and contact firms directly, or to spend your time with headhunters who do focus on smaller firms.

Closing Thoughts

If you want to work in finance for the long-term, you’re going to have to work with headhunters, regardless of whether you’re jumping between firms or decide to start your own one day and need to find employees.

It’s fine to rely on headhunters for sourcing - either finding opportunities or employees that you would not have otherwise known about - they are quite good at this, and you probably should use them for sourcing.

Just don’t rely on them to make decisions for you.

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Tags: Ari Gold, financial services recruiting, headhunters, Hedge Funds, investment banking, investment banking analyst, Private Equity, private equity firms, understanding investment banking

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Getting A Job, Hedge Funds, Private Equity, Recruiting | 14 Comments »

Another crazy week at work (pending deals and, you, know, everyone getting laid off and leaving me with all their work to finish) and another weekly reader Q&A while I find time to write more 3,000 word articles…

Elite Boutiques

“I had multiple full-time bulge bracket offers but instead opted to go to a recently founded “elite” boutique with a very well-known founder. I thought the experience, exposure and overall environment would be much better.

I had assumed that my exit opportunities would be at least as good as those of most bulge bracket analysts, given the prestige and selectivity of this firm. However, after reading about how well-recruited bulge bracket analysts are, I found myself wondering whether this will work out as I had initially thought.

Moelis hasn’t even graduated its first analyst class yet, and some of the other newly founded boutiques have only had a few years of analysts in their ranks. Given the very “young” status of my firm, will my access to recruiters, private equity firms and hedge funds be as good as I had initially thought?”

Inquisitor:

First, I should clarify one point here: back when I wrote my article on boutiques vs. bulge brackets, I was referring to regional boutiques and small firms that are not widely known.

Places like Lazard and Evercore, though technically “boutiques,” are a completely different ball game and you would get nearly the same access to recruiters there as you would at bulge brackets.

As for your own situation, it’s hard to say since your firm is new and doesn’t have a track record. I would guess that your recruiter access will probably be better than it would be at a middle-market or regional boutique, but not as good as what you would get at a bulge bracket or “prestigious” boutique.

If I were in your situation I would not even rely on recruiters. Since the firm is smaller and the founders are widely known, I would leverage their connections and have them make personal introductions. That will be a much more powerful way to get private equity interviews and get in front of other buyside firms.

Moving To The Buyside Early

“One thing you haven’t talked about in detail on the site is moving to private equity or hedge funds early. You mention briefly that you can/should move to buyside after a year if you know that this is where you want to be, but you don’t say how to go about it, if it is realistic, and what downsides there are. Is it worth applying to large-cap private equity firm after a year on the job or do you just not have a chance?”

Inquisitor:

While it’s possible to move to a large private equity firm after a year in banking, it’s not exactly easy, especially with current market conditions. I had a few friends who did this; the main downside is that you won’t work less at these places (you might actually work more, believe it or not).

If you like private equity more than investment banking, that’s one thing, but you shouldn’t jump over to private equity after a year-long analyst stint because you want better hours - you won’t get them.

If your goal is to work in finance while working less, it’s more rational to go to a hedge fund after a year. It’s also much easier to make this sort of transition, as hedge funds tend to be less structured in recruiting; as an added benefit, you also work a lot less since you’re only there when the markets are open.

“Reputation damage,” or looking bad because you leave a year early, is much less of a concern than you probably think. People hop around so much on Wall Street and turnover is so high that no one is going to care much if you do this.

You probably can’t get a recommendation or reference from your bank if you leave early, but this type of move is not going to ruin your career or anything.

How To Dress For Success As A Summer Intern

“Help! I have a bulge bracket internship coming up and I don’t know what to wear! How many suits should I buy? Is 10 enough?! Should I buy 20?

Is spending $10,000 on clothes enough or should I allot $20,000? How many shoes/pants/shirts do I need?”

Inquisitor:

Summer intern attire seems to be a hot topic (in that I’ve received multiple emails/messages similar to the above over the past week), so before the summer starts I will write a full-length post on this topic.

For now, though, let’s get the basics out of the way.

DO NOT SPEND $10,000 ON CLOTHES FOR A SUMMER INTERNSHIP.

You shouldn’t even spend that much on clothes for a full-time job unless it’s absolutely required.

You don’t need 10 suits, let alone 20. In my experience you don’t even need to wear a suit at most banks, at least as an intern.

Even if you do need to wear a suit each day, 2 or 3 is probably enough. And if you don’t need to wear suits every day, 1 will suffice.

I would suggest enough shirts to last 1-2 weeks and maybe a few pairs of pants. 2-3 pairs of shoes is probably fine. Keep in mind that 1) you will not have a ton of time for laundry/dry cleaning and 2) you don’t actually need a new suit/new pants /new shoes for each day of the week.

I know some people may disagree with me, but I would recommend going to outlets (there are a bunch in the NYC area) or buying clothes on sale to save money - do not spend hundreds of dollars on a single shirt, or even $100 on a single shirt.

Why?

1. Fashion matters less in banking than most people think. Yes, you have to look presentable, but you don’t need to go out and buy a $5,000 suit to get a full-time offer. In fact people might make fun of you for doing this.
2. This is just a summer internship and you don’t even know whether you want to be a full-time banker yet. Why spend $10,000 on clothes that you don’t end up wearing ever again?

I can offer these suggestions because I’ve overspent on clothes for both internships and my full-time job and looking back on it now, wish I hadn’t spent so much.

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Tags: boutique investment banks, bulge bracket, changing careers, Fashion, Hedge Funds, investment banking summer internship, middle-market, Private Equity

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Boutiques, Fashion, Investment Banking Internships, Investment Banking Lifestyle, Recruiting | 10 Comments »