From Transaction Advisory Services to Investment Banking: How to Use a Top-Tier MBA Degree to Break In
So let’s say you got interested in consulting in undergrad…
And then you were “sold” on joining a boutique consulting firm right after graduation…
But then you realized you wanted to move into finance and move to another country.
What would you do?
Network a lot?
Move to a more finance-related role first?
Apply to top-tier business schools?
“All of the above” might be the best answer here, as you’ll see from one reader who made this exact transition.
In addition to all that, you’ll also discover:
- What MBA-level recruiting at a top business school is like, and what separates successful candidates from unsuccessful ones.
- How to defy the odds and work in the finance industry in China as a foreigner.
- Whether or not you need a steppingstone job if you’re using an MBA to transition into investment banking.
- Whether or not IB recruiting is easier now that tech is attracting more MBA candidates.
Boutique Consulting to TAS in China: Lost in Translation?
Q: So take us back to the beginning.
How did you end up working in China right out of undergrad?
A: I studied economics during my time in undergrad in the US, did a few finance-related internships, and one summer I had the chance to study abroad in various Asian countries.
That sparked my interest in East Asia, so when I came home I went to networking events and met someone at a boutique strategy consulting firm in Beijing – a firm with a job opening at that time.
It was a 1-year commitment at first, and I had nothing to lose, so I joined his company and moved there right after graduating.
Q: But you had almost no background in the country.
Did you even know the language?
A: No, but it wasn’t required for the role. We were working with a lot of foreign firms interested in investments in mainland China, so I spent most of my time interacting with them.
I began studying the language before I moved there, but I wasn’t at a high level when I first arrived; I picked up quite a bit during my year of working there, however.
A: Since my role at the consulting firm was investment-related, I became more interested in working on large transactions and I networked with a Partner in Transaction Advisory Services at a Big 4 firm here.
I went through the interview process and won an offer in the TAS group, where I stayed and worked for a few years.
Q: This flies in the face of previous articles where interviewees said, “Firms in China don’t want to hire foreigners at all.”
How was this possible?
A: Because once again, they hired me to work with foreign companies and investors, not local Chinese companies. The cultural gap is still wider than most people know.
Specifically, I had to do a lot of work creating executive summaries and due diligence reports for foreign firms acquiring companies and doing deals in mainland China.
So they needed a native English speaker with an understanding of both cultures.
A secondary part of my role was to liaise with the client directly rather than forcing them to rely on a complicated network of local firms and other sources on the ground.
Local knowledge is critical here, so serving as a single point of contact on the ground helps foreign companies a lot.
Around 80% of my deals were foreign companies looking at Chinese investments, but by the end of my time there it was 80% Chinese companies looking at investments in the US and Europe.
I ended up doing more field work in that new role, and the close contact with firms in Western countries made me more interested in investment banking, which in turn led me to apply to business school.
Q: Right, but going back to the original question: it still seems pretty improbable to find this kind of role.
A: It is. At my firm, there were 10,000+ professionals and only a few dozen were foreign.
You need a niche to succeed as a foreigner in the finance / investment industry in China: almost all the foreigners there did something similar to me and helped foreign acquirers and investors navigate the local landscape.
Q: OK, I’ll drop that line of questioning…
One quick thing before we move on, though: what advice would you give to other consultants looking to move into TAS or other IB-related groups at Big 4 firms?
A: People will be very skeptical of your accounting and finance knowledge, so you need to prove you’ve mastered those skills first.
You also need to prove that your consulting experience has value beyond “I was a consultant, of course my skills are valuable.”
You usually want to say, “The most important part of due diligence is asking the right questions, which I’ve been trained to do in consulting. Also, since I’ve advised companies on operational issues, I may be able to help you sell and deliver post-merger and integration services on top of the advisory services you provide.”
You also need a good sense of the key challenges clients are facing.
You should be able to say, “From clients A and B, I know the top operational challenges are X, Y, and Z. I could pinpoint those in my due diligence reports and ask all the right questions, whereas someone with a traditional audit / accounting background might not do that as well.”
Applying to Business School: The Fast Track into Investment Banking?
Q: Thanks for adding that.
So your role had shifted after a few years in TAS, you became more interested in IB, and then you applied to business school.
What was your logic for applying, and how did you pitch yourself?
A: I knew I would need a summer internship to make the transition to banking, and I knew a top business school was my best chance of winning one.
Also, I wanted to gain/confirm my fundamental understanding of accounting and finance and make sure I knew both the practical and the academic side.
When I applied, it was important to pitch myself as being able to make a seamless transition to the Associate level based on my experience.
However, it was equally important to stand out from the crowd to some degree. In this respect, I could play up my experience in Asia and position myself as “the Westerner who can facilitate cross-border deals between China and the US / Europe.”
Most people coming in from a TAS background appear “boring” on their applications because they write about too many different activities and work experience entries instead of focusing on just one.
I strongly recommend playing up one specific aspect of yourself, so that you become “the automotive turnaround expert” or “the Indonesian natural resources expert” or something else like that.
Just be careful not to come off as weird.
Q: You won admission to several top schools so that strategy worked quite well for you.
Did you feel a pre-MBA internship was necessary to move into banking?
A: For me, no.
I was also out of the country and couldn’t stop working early, so it wasn’t even possible to complete one.
But several of my classmates did pre-MBA internships at banks and PE firms and made themselves more attractive in the process.
The first 2 questions banks will ask MBAs at information sessions are:
- What are you recruiting for?
- Do you have any banking experience?
If you say anything other than “investment banking” for the first question, they will immediately write you off.
Pre-MBA internships help a lot with the second question, especially when you’re making a big career change, and you can’t answer it with a “No, but I have something close…” response.
Q: So it sounds like you weren’t starting super-early, but you were also quite successful in winning IB internship offers at the MBA level.
What was your secret?
A: To clarify: I didn’t do a pre-MBA internship, but I did start preparing long in advance, in large part through your courses and guides.
You need to start at least several months in advance because the pace gets crazy once school begins.
You have to balance homework, midterms, classes, and networking / socializing with a super-competitive recruiting process that begins the moment you set foot on campus.
So you do not have time to “reinvent yourself” at business school, like so many of these programs promise – at least not if you’re applying to finance or consulting jobs.
My approach was to learn and review the technical material in the months before my first semester, and then to spend my time on-campus networking with alumni.
I used the months before business school to answer the “What am I missing?” and “What are my biggest flaws or risk factors to bankers?” questions.
In networking and interviews, I was also very specific, much more so than other classmates. Whenever they asked what group or location I wanted to work in, I said one city and one industry group in every interview.
Giving a list of 2-3 options for geographies and industry groups puts you at an immediate disadvantage.
Q: And I’m assuming this specific industry group matched the types of companies you worked with in China.
A: Yes. They’ll understand if you want to switch industries, but they will be disappointed.
So I strongly recommend maintaining an industry focus that matches your background; you can’t just take a “generalist” approach at the MBA level.
And if you do want to change industries, you better have some other unique skill or experience to make up for it.
Q: Are there any other challenges you faced getting into banking from TAS?
A: There is a small chance you’ll come across a banker with TAS / CFA / CA / accounting experience, in which case you may receive more detailed technical questions.
But the bigger challenge is finding the right fit and proving that you’re personable.
The stereotype is that many candidates with TAS backgrounds are capable, but “boring,” so you need to overcome that.
No one asked me if I could handle the hours or the technical work.
Reflections on the MBA-Level Recruiting Process
Q: You’ve described the MBA-level recruiting process as still being very rigorous.
But don’t you think it’s easier to win IB jobs now that tech is the hot sector?
A: No, not at all.
More MBAs are applying to tech companies, but that doesn’t necessarily make it easier to get into investment banking because:
- Banks are also hiring fewer people, and they’re more cautious with their hires – they’re not going to hire ten summer interns if they’re only planning to give out three full-time offers. Their goal is to get 100% of the qualified summer interns to accept full-time return offers.
- The overall difficulty of interview questions, especially technical questions, has increased dramatically. They expect you to understand very fundamental problems in finance, and they gravitate to more difficult questions that don’t even have “correct” answers.
With all that said, your point about not overestimating the competition still holds true.
Just as one example: in one interview at a top bulge bracket bank, my interviewer mentioned that a candidate with perfect grades from Wharton could not walk through the “Depreciation increases by $10” question.
They will ask you questions up to your point of failure, so you need to be prepared for that and push that “point of failure” as far up the difficulty curve as you can.
Q: You did very well in the recruiting process, and you mentioned that your school as a whole had a good placement rate into IB internships.
But I’m sure some students there did not perform as well.
What separated the students with the best results from those with less-than-stellar results?
A: The top 3 mistakes were:
1) Lack of Fit / Poor Targeting – For example, one classmate was very technical and could have easily won offers in the M&A product group if he had focused on M&A at all the banks.
But then he “floated around” too much and told different groups different stories about what he was interested in. No one knew what he wanted to do, and he didn’t end up receiving the offer he wanted.
2) Too Much “Exploration” – Repeat after me: you do NOT have time to “explore” what you’re interested in during business school.
The process moves too quickly, and at the MBA level banks expect you to commit to a long-term career in banking and to have your pitch well-prepared.
3) Lack of Preparation for the Technical Questions – The sky is the limit for technical questions and case study-based questions.
You’ve said before that the “more advanced” sections of your guides are unlikely to come up in interviews, but I received some of those exact questions in interviews.
So you need to start preparing months in advance. You can’t possibly cram and learn all of this in a weekend because questions test far more than your ability to memorize information.
Q: Thanks for sharing all that.
Any other thoughts or tips?
A: Banks, especially large, highly-regulated banks, are very risk-averse.
They would prefer to hire someone with relative competence in many areas and no major flaws than someone who is exceptional in one area, but who also has a major flaw.
So you should take an honest look at your weakest area and fix it, instead of trying to get even better in areas where you’re already strong.
If you’re a liberal arts major, this might be your accounting/finance knowledge.
If you’re an international student, it might be your spoken English skills.
If you’re an engineer, it might be your writing skills.
Q: How important is it to have a “steppingstone” like the TAS role you held for several years?
A: It depends on where you’ve worked and the brand value of your companies.
If you’re a consultant at MBB or you’ve been an analyst at some other top-tier firm, you can probably skip the steppingstone and apply to top MBA programs directly and still get into IB.
But if you’re at a boutique consulting firm, or any other lesser-known or non-traditional firm, it’s very helpful.
Working in a Big 4 role, in particular, is helpful because of how risk-averse banks are.
By working there, you prove that you have the technical skills and the client interaction skills, which immediately removes two major risk factors.
You can use this test to decide: can you give a convincing 30-second pitch to explain why you’re moving into banking, without referencing your MBA program at all?
If not, think about a steppingstone role.
Banks don’t care about how you’re using the MBA program to “make a change” – they only care about what you previously did, and how it relates to investment banking.
Q: Thanks for clarifying that one.
And what are your plans? And any additional advice for readers?
A: Well, I’m excited to be joining an industry group in which I’ve already had some experience.
But I don’t make super-long-term plans; five years ago, I hadn’t imagined that I would be here today, and I don’t know exactly where I’ll be ten years from now.
Go out, lead an interesting life, be spontaneous, and let things develop from there.
If you go to business school, you should NOT think of it as “an escape” or “a reprieve” or you’ll be very disappointed.
The funny thing here is that everyone wants everyone else’s former job; we might as well have all called each other beforehand, switched jobs, and skipped the degree.
So you should take an honest look at what you want, see if an MBA will really get you there, and only pull the trigger if it makes sense.
Q: Great, thanks for your time!
A: My pleasure.
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