In this week’s edition of Mergers & Inquisitions Reader Q&A, the investment banking summer internship theme continues to run strong. Offers have already been handed out at most bulge bracket banks, while middle-market and boutique banks will continue recruiting year-round.
I continue to receive many questions on breaking into banking from other industries, so I feature one recent question on that topic here as well.
Breaking Into Investment Banking With A Ph.D.
“I am a Ph.D. scientist actively exploring a different career path. Do you think getting a CFA degree would help me break into investment banking? Also, you recommend going to a bulge bracket on your site, but would such firms even consider hiring me? I’ve gotten consulting interviews but have had trouble with finance interviews. Should I focus on smaller banks?”
A CFA may be helpful for you, but I think there are probably better ways you can spend your time to get an investment banking job. A CFA requires lots of studying, time, and preparation and your time would be better spent reading up on stocks, learning financial modeling, speaking to people in the industry and networking, etc.
I would strongly recommend going for boutique and middle-market banks with your background. It is very difficult to get into bulge brackets with an unusual history, and with the current market environment it’s even tougher, especially without an internship.
Smaller banks, by contrast, still hire even during downturns, and will be more accepting of someone like you.
In terms of other ways to stand out, some friends have worked at “finance-related” firms that are not necessarily banks – companies that provide valuation services, industry research or buyside research, for example.
These firms may be good stepping stones into investment banking.
Boutique vs. Bulge Bracket Summer Internship
“I have 2 investment banking summer internship offers – one from a top boutique in their M&A group and one at a bulge bracket that is not group-specific. I like the people at both equally and am very concerned over exit opportunities. Which one do you think is better for me?”
I don’t think you can go wrong with either choice, as both will have very good exit opportunities and prestige. For a summer internship especially, the specific bank you’re at doesn’t matter too much. Having a banking internship at all puts you at an extreme advantage in full-time recruiting.
I would consider the deal flow and banking culture at both when making your decision. Getting to work on good deals is critical to good exit opportunities, as deals are the centerpiece of your private equity resume and will be crucial in buyside interviews.
Personally I would lean toward the M&A-focused boutique. Since it has not relied as much on its lending capabilities to win M&A deals, the boutique will have good deal flow even in the face of the credit crunch.
[Note: "Top boutique" here refers to the likes of Evercore, Greenhill, Lazard, etc. which are basically comparable to bulge brackets in prestige. The bulge bracket in question suffered a lot of writedowns in the credit crunch.]
Investment Banking Informational Interviews
“I have an informational interview with a Managing Director coming up. Other than his career, is there anything else that I should ask him? Obviously, things about the firm – but what really makes MD’s like candidates and what do they like to see in candidates?”
Besides the typical career questions, I would talk to him about your school, activities, campus happenings, and classes and see if you have anything in common. Alumni connections can be very powerful so you should definitely take advantage of them.
MDs like to make personal connections with candidates and will focus on fit questions rather than going into details on accounting and finance. Make sure you have a really good story about why you want to do investment banking and M&A specifically.
I would also try to come up with a few insightful questions – more than just career goals and background. Maybe ask him how the business has personally affected him, what he learned over the years that he did not expect going into it, and anything else tailored specifically to his own background.