by Brian DeChesare Comments (42)

How to Break Into Investment Banking as a Big 4 Accountant in South Africa

South Africa Investment BankingIf there’s one profession that bankers don’t respect, it’s the poor accountant.

Sure, consultants also get a lot of hate … but hey, at least top management consulting firms recruit at the same universities and MBA programs that bankers flock to.

For some reason, though, accountants always seem to attract skepticism and scorn from financiers.

But one exception to this rule is in South Africa – where the Chartered Accountant (CA) qualification is highly regarded and where many people who get into investment banking actually have it.

Our interviewee today did just that and leveraged his CA background, plus several years of work experience at a Big 4 firm in South Africa, to move into a full-time analyst role at a bulge bracket investment bank there.

Here’s how he did it, how recruiting in South Africa works, and how you can make the same transition from accounting to investment banking:

Storytelling 101

Q: I was surprised how positive you were about the CA qualification when you contacted me… but let’s go back to the beginning first.

Maybe you could start by walking us through your background and how you went from accounting to investment banking?

A: Sure. Unlike in the US and some developed markets, where bankers tend to gloss over accounting backgrounds and the CPA, the CA qualification is highly regarded in South Africa.

Many senior bankers do the CA and work at an accounting firm initially, and that was the exact route I wanted to take.

Back in university, I attended a lot of investment banking/finance-related events and got interested in the field.

But in South Africa it’s rare for investment banks to recruit entry-level hires for permanent positions in M&A and industry teams straight out of university, even from the top schools.

They do offer 2-3 year rotational positions, but you need to wait to get placed in a team permanently.

So I saw accounting as the most viable path to getting there.

I majored in it and joined a Big 4 firm after graduation, doing large multi-national audits as well as valuation and purchase price allocation (PPA) work.

I really enjoyed that, and I knew I could use it as my “spark” in recruiting and interviews when answering the “Walk me through your resume” question.

After 3 years working at the firm (the time required for the qualification), I started networking with friends and family and using your interview guide to get in the right mindset.

My “break” came when a friend who had worked at a large international firm in London mentioned me to one of his contacts – the head of the M&A team at the bank I eventually joined – and personally recommended me.

It took close to a year of networking and interviewing off-and-on before I caught a lucky break via this contact.

After that, I went through a few more rounds of interviews with the firm and eventually won an offer there.

Recruiting, South African-Style

Q: Awesome, thanks for that summary.

So it sounds like recruiting is quite a bit different in South Africa – can you break it down and walk us through the process?

A: Sure. One of the most common “paths” here is to finish university, go through 3-year compulsory training with one of the Big 4 firms, pass the Board Exams, and then qualify as a CA – after which you then move into investment banking.

The overall process is a lot less formal than other markets; unlike London, for example, there are no real assessment centers or group case study exercises here, although they occasionally give psychometric tests.

Since banks don’t proactively recruit very much, they’ve switched to targeting individuals recommended by others at the firm – so networking and crafting a bullet-proof “story” are even more essential than in other markets.

Some banks here still use recruiters for middle-office and back-office roles and sometimes even equity research roles, but they do not rely on them for traditional front-office IB analyst/associate positions, at least at large banks.

Some smaller boutiques may use recruiters, especially if they don’t have a queue of people lining up to interview there.

Here’s what my overall process looked like:

  • Step 1: Introduction to Head of M&A Team – I had a face-to-face interview with him, where he mostly focused on “fit” questions (why IB rather than accounting, etc.) and asked a bit about my valuation and financial modeling skills.
  • Step 2: “Mini-Superday” – After that, I met the other team members in this group and went for a 1.5 hour-long “panel interview” where multiple team members took turns interviewing me.

This second round got more technical, and they focused on valuation, how to calculate cost of capital in emerging markets, and current events related to M&A deals in the region.

They asked a lot of questions on my views of the most likely future deals in South Africa and the rest of Africa – they do this because sourcing can be very important here, even at the junior levels.

They also asked about the types of clients I would focus on, what I knew about the deals they had done, and so on.

  • Step 3: Meet with HR – Unlike with many banks in the US and Europe, meeting with HR was the LAST step of the process here. They asked about my tolerance for long hours, what I knew about the culture, and similar types of “fit” questions.
  • Step 4: Psychometric Assessment Test – Fairly standard questions that you can find on many of the assessment center practice sites.

There were no case studies or modeling tests, even though I was an experienced candidate.

I think they were happy with my technical skills since I had done so much valuation work at the Big 4 firm; without that background, you might get more technical questions and case studies.

Q: Great. And what types of candidates are they looking for?

Any thoughts on how easy/difficult it is to get in?

A: It does vary based on the bank; for example, one local bank here has a graduate program specifically for people without any finance experience.

They hire the best and brightest from engineering, liberal arts, and other fields, although your story has to be exceptional to get in from one of those backgrounds.

There are very, very few spots available at most banks here. In some years it might just be 1-2 full-time positions per bank depending on deal flow and team size.

So some banks actually recruit graduates for middle-office roles and rotate them around before bringing them to the front office.

Besides the CA qualification, knowing a language that’s useful in the rest of Africa can also give you an advantage.

Oddly enough, these days Mandarin Chinese helps you in South Africa, of all places, because Chinese firms have been so acquisitive in Africa and some banks here even have Chinese investors.

One person on my team even joined from Hong Kong recently.

M&A activity in South Africa is not spectacular, so lots of banks are looking north of the border to drive growth.

Nigeria, for example, is a super-hot market with a rapidly expanding middle-class and lots of consumer goods, industrials, and manufacturing deal activity.

They have a lot of natural resources as well, but infrastructure constraints limit activity – so most natural resource deals are sales of existing mines.

Most people who get into IB are still native South Africans. Laws and employment codes here make it quite difficult to hire non-South Africans since the local unemployment rate is so high.

So you’ll need some type of added bonus (e.g., language skills) to stand out over everyone else – otherwise, it’s highly unusual for bankers to leave the US or Europe to come work here.

Occasionally, people do get in from unrelated fields such as engineering.

It’s less common to move from other finance-related roles into investment banking since the CA to banking path is so common.

Q: Thanks for explaining all that. Did you want to add anything else on your networking strategy?

A: I mostly relied on personal contacts and alumni/co-worker networking. I did speak with a few recruiters, but they weren’t particularly helpful despite being well-connected.

I won a few interviews through them, but ultimately my contact who knew the Head of M&A made a recommendation that carried far more weight.

I know you’ve mentioned in-person networking events and information sessions before; I’m sure those could work as well, but I didn’t take full advantage of them since I had a decent existing network here.

To give you an idea of the numbers, I went through 17 interviews over a 10-month period (and networked with dozens of bankers in that period) before winning my offer.

The Investment Banking Landscape in South Africa

Q: Thanks – that’s officially the most detailed description of IB recruiting in South Africa that I’ve ever seen.

Can you tell us about the industry landscape there?

A: Sure. You see a mix of local banks and the global bulge bracket firms competing for deals here.

The local banks still win a majority of M&A deals in terms of value and quantity, but sometimes the global banks compete on the mega-deals. Just as in other markets, you’ll almost always see multiple large banks advising on the biggest deals here.

However, whenever the M&A space goes through a downturn, deal sizes often fall below the threshold that the international banks are targeting (i.e. they’re “below the bar“).

A lot of corporates here also bank with local South African banks, which gives those local banks a “relationship advantage” in winning deals; local banks also trump internationals in local currency lending.

In terms of deal types, M&A is quite common but you also see restructuring deals, ECM, rights issues, bond issues, and refinancings (especially in the years following an LBO bubble, when troubled companies need to fix their capital structure).

A fair number of private equity funds operate here, but there’s a dearth of high-quality assets to purchase in Africa.

Q: And what about the industry focus?

A: There’s a big emphasis on infrastructure and project finance here simply because so many countries in Africa are in dire need of infrastructure.

It’s difficult to run a great mining operation or distribute consumer products, for example, without solid infrastructure in place – so those needs drive many other sectors.

Mining also draws a lot of interest, but outside of South Africa the infrastructure is too poor for successfully extracting resources in many otherwise promising areas.

Big international mining companies also tend to be reluctant to buy African assets due to the high cost of setting up infrastructure.

South Africa itself is a different story, of course, and you know all about the diamond industry here.

Consumer retail is also huge in some countries, like Nigeria, where the GDP per capita is growing rapidly and the middle class is expanding.

It’s struggling more in South Africa since inflation is high and consumer disposable income has been falling due to rising fuel and utility costs.

Retailers tend to set up their own brands and leverage established distribution networks rather than building everything from scratch.

One underdeveloped industry is technology. You see some big multi-nationals like IBM and MSFT, but most local South African tech companies are not that big.

The government dropped the ball on developing the technology sector, but there is opportunity as local companies grow and the regulatory environment supports more and more tech (see: there are a few promising signs from public officials as well).

Q: You’ve been mentioning how many banks are looking north of South Africa for growth – do they typically have dedicated teams in those countries or do they still do deals out of Johannesburg?

A: Some banks have teams in Nigeria, Kenya, Tanzania, and other countries, and they may even offer retail banking there. Being able to lend in the local currency helps those firms win deals.

Others are a bit behind and don’t have retail banking operations in those countries – if they don’t have that kind of footprint in place, they’re more likely to originate and run deals from Johannesburg instead.

Q: Great, thanks for that information dump.

I know you’ve just started working fairly recently, but any thoughts or impression of the culture so far?

A: There’s a big divide between the international firms and local banks here.

My impression is that local banks are more relaxed, the hierarchy of the investment banking career path is not as strictly enforced, and junior bankers have to wear more hats (more “random” work and more responsibility, plus smaller teams).

Q: But I’m assuming that the pay is also lower at the local banks?

A: To give you a rough idea of compensation, most banks here pay up to 100% of your annual salary as your bonus if you’re a junior banker.

The exact percentage varies but it’s usually in the 50-100% range, based on conversations I’ve had.

Now, your base salary is significantly lower than it would be in the US or UK, but the cost of living here is also vastly lower.

On a PPP basis, you come out far ahead.

You see junior bankers here buying new houses, new cars, etc. whereas all of that would be quite rare in developed markets.

In terms of pay at local banks vs. international ones, it’s more variable at the local firms. As an example, one local bank here actually paid over 200% of junior bankers’ annual salaries in bonuses recently.

So, bottom-line: you will be living a very, very good life here even if, in absolute USD/GBP terms, the pay is less than in other places.

And before you ask: the hours at local banks tend to be more tolerable than those at international firms.

It’s not unreasonable to leave at around 8-9 PM in “less busy” periods, but when a deal heats up, expect all-nighters, long hours, and the usual craziness.

I’ve been quite busy lately, but I rarely leave past 11 PM.

Q: Awesome, thanks for sharing all that.

So I’m assuming you’re going to stay in IB for quite some time?

A: For the next few years, sure. I’m a fairly recent hire so I still have quite a bit to learn and I want to explore as much as possible first.

I’m interested in working in another team here, such as Leveraged Finance, and then getting into private equity or principal investing after that. M&A or Leveraged Finance are great ways to get there.

While local banks have an advantage in sell-side deal flow, the international PE firms from the US and Europe actually have a bigger presence on the buy-side in South Africa and the rest of Africa – so I would probably aim for one of them in the future.

Q: Great. Thanks for your time, and for giving us the full run-down on finance in South Africa!

A: My pleasure.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Hi Brian

    Thanks for the informative article. I have just completed my Masters in Finance degree and I am left feeling despondent after getting consistently rejected for most online applications (overseas and in South Africa), sometimes purely on my CV alone. I studied my honours in Business Science Finance in Cape Town, and not to totally shift the blame, being the naïve young teenager I was totally unaware of the importance of internships and my University did little to highlight this importance of gaining experience. I considered studying for my CA degree but didn’t want to work/study for an additional 4 years purely for ‘job security’ and instead decided to do my Masters in Finance as it was a career in asset management I wanted to focus on. I am now back in South Africa, seemingly overqualified with no experience and unemployed. I have little in the way of contacts in the finance industry and I am finding it extremely difficult to come up with innovative new ways of trying to find a lead or make new contacts. Any advice would be helpful!

    1. Avatar
      M&I - Nicole

      What about moving to London or focusing on EMEA markets? That maybe a good start. Try to find firms with offices with an African and UK presence.

  2. Brian,

    I was pretty excited to read this today, particularly because I work in Finance in Africa and it was about time. As a note though, while your title here accurately describes the story of investment banking in South Africa, your email title- IB in Africa- was misinformed. It is true that South Africa is in Africa…It is also true that South Africa is the most likely destination for bulge brackets to set up shop in Africa, but the reality on the ground: South Africa is not considered the benchmark of Africa!Thus when you label South Africa as “the place to do it
    ” it is an injustice to the other opportunities available to the rest of the continent and a misalignment with the reality on the ground.

    Without too much contradiction from the story above I shall give a feel of what I have experienced in the rest of Africa. The African continent is only now realizing the different opportunities in service sectors. with few locals well trained to compete, the opportunities for people with study/experience from outside the continent are intense. with the growth in consumer industry, and the extractives, more opportunities are coming up for structured/ complex financial services than witnessed in the continent before. That M&A is ‘what’s happening’ in South Africa- Apt, but for the rest of the continent, there are growth opps in capital raising than M&A- Debt financing, equity, balance sheet restructuring…etc. We have seen bulge bracket come through on the mega state deals (government eurobonds) recently than ever before.This are but a few illustrations of the different dynamics at play on the rest of Africa.

    The South African representation was good. but let it not be a generalization of IB in Africa. There is more to Africa than South Africa.

    1. Thanks for your feedback. Regarding the titles of my emails, they often do not represent literally what the article is about – I agree with your point that in this case it should have been titled something different and I understand why you’re offended, so we’ll try to cover other parts of the continent in the future.

      1. I wasn’t really offended, more like trying to illustrate that there are more financial opportunities on the ground than perhaps articulated. Especially for the Africans who’d like to come back home… To borrow from you, the continent could be the final frontier.

        Always a pleasurable read, M&I

  3. Hello,

    Just got a mining equity research interview coming up – in which I would expect stock pitching is a must. Can I pitch non-mining stocks to the interviewers?

    Also, what kind of follow-up questions would they normally ask for?(Financial-related/operational/management/competitors?)


    1. Avatar
      M&I - Nicole

      Yes you can if you know the stock inside and out and are more comfortable talking about it vs. a mining stock. And it is less likely they’ll know too much about the company you chose which maybe better. You can pitch a mining stock to them (this demonstrates your interest in the industry) though a potential risk is that they’ll know a lot about the stock and may ask you lots of questions. I think the ones you listed are all fair game. It depends on the interviewer.

  4. Hi Brian. I cold emailed an analyst at a small boutique bank who replied: “Thanks for reaching out. Let’s try to touch base after thanksgiving and then we can try and schedule a time to talk.”

    Does this mean that I should wait till after thanksgiving to offer potential times to speak? Or should I just schedule potential meeting times for after thanksgiving?

    If I should wait to email him back with specific times to talk, should I send him an email just saying “have a great thanksgiving” or something along those lines?

    Also, I had previously spoken to an associate and a secretary at the same firm who both told me that the don’t offer internships for individuals of my age. But, I know for a fact that a family friend was able to intern their after his freshman year at Wharton. Do you think there is hope of being able to pull an internship out of this?

    1. Avatar
      M&I - Nicole

      Yes, I think you may want to wait till after Thanksgiving and contact him then.
      You can write him a Happy Thanksgiving email and tell him you’ll touch base after or you can wait till after Thanksgiving and reach out to him after.
      You can try if you have connections

      1. Do you think I should wait till the end of thanksgiving weekend to contact him again. Or should I email him back on Friday?

        Thanks again for all of the help!

        1. I would just contact him on Monday following the holiday

  5. Brian,

    Is there any chance that you guys would publish an article regarding IB in mainland China specifically? (Culture,pay,exit opps etc.)

    1. Yes, there is one on IB/PE in mainland China coming up soon actually.

  6. Hi Brian,

    Thank you for such an insightful post.

    I am a native Mandarin speaker working in M&A in South Africa having studied in the UK and US.

    Looking forward to more such amazing stories



  7. Interesting and informative article. I actually am South African and have gone through the application process with a number of banks and financial firms since I am graduating from University this year, so I thought I should give something back in the form of an idea of the basic process since I used this site extensively for guidance during my applications.
    For almost all the institutions the first step was to send in a CV and a cover letter, plus enter basic details and occasionally give responses to questions like “What is your greatest achievement?” or “Describe a situation where you had to work in a team” and other standard stuff. This is all done through the respective companies career portals on their websites, and the deadlines for this first step differ between companies with some as early as June and others only in late September. If you get past that initial screening the next step was usually a series of timed online tests, which could consist of psychometric, basic numeracy, comprehension and logic tests. This was the most common approach, but some skipped this step and others required you to actually travel to their offices to complete these assessments. I received many rejections after this stage and so did fellow students, the standard is high. After you pass this step the interview process begins, which could consist of one on one interviews,a panel of interviewers or straight to the “Superday” situation. This website helped alot for those days, and you can expect exactly the same as what would happen in a developed country, with “Speed dating” and one on one interviews, group and individual case studies, group presentations, numeracy tests(sometimes with, sometimes without a calculator). I only got to this stage with a couple of firms but the people interviewing with me usually had a degree in Business Science/Corporate Finance, Engineering, Accounting (CA), Computer Science, Actuarial Science or any other quantitative background. I did eventually get an offer as a graduate trainee after 20 or so applications, like I mentioned before the standard is high and opportunities are scarce for graduates. I have not joined the working world yet so I may be incorrect but as far as I know English is the language of the financial industry in SA.
    In South Africa the weather is obviously stunning and the cost of living is much cheaper than in developed countries, with a decent salary you really can live like a rich man. On a more cynical side though, I would like to warn that you need a bit of a “Wild West” mentality to survive in Johannesburg, crime is rampant, the norm is for houses to have high walls, alarm systems and electric fences. You need to be more aware and on your guard than in a developed country. Also, because of our sordid history and in order to address the imbalances of the past, affirmative action plays a big role in the application process. This has developed into a bit of a rant but I hope this helps and I would like to thank the website for all the help. Regards

    1. Thanks for adding all that!

    2. Thats great info.With all the history of apartheid , adjusting to social life would be different.

  8. Nice one Brian! Will wait on the Australian one, Thanks again.

  9. “If there’s one profession that bankers don’t respect, it’s the poor accountant.

    Sure, consultants also get a lot of hate … but hey, at least top management consulting firms recruit at the same universities and MBA programs that bankers flock to.

    For some reason, though, accountants always seem to attract skepticism and scorn from financiers.’

    Why so? Unless most work as forensic accountants who investigate the mad risks taken by the top banks , i dont see many reasons for the hate
    Mind you accounting is useful to get into IB , i think the article ‘which major to take’ backs me up

    1. I honestly have no idea. It’s not really “hate” – it’s just more a lack of respect, maybe because on the surface accountants do not work hours that are as long as those in IB.

      1. I think CA is respected in England and can be useful to get into IB.Arent CPA’s valued in USA?
        Accountants perspectives can be useful since they can offer additional insights into the financial statements

        1. Yes, but most bankers do not care about or value the CPA even though it is useful. The CFA is more useful.

  10. Awesome article Brian! I’ve noticed there are articles relating infrastructure investment/PE on the website – are you guys gotta publish an article about infrastructure finance anytime soon?

    1. Thanks! Yes. There is one on Project Finance and one on Infrastructure IB coming up.

  11. Hey Brian, I am a student at a top public business school (think UCB- Haas or Michigan Ross- or UVA McIntire). I cold called a specialty boutique bank and talked to the secretary who gave me her email and told me to email her my resume and cover letter. Will they actually consider a resume received this way, or should I rather try to contact an analyst/associate and try and get it to them? I also live in the NJ Area and will be home over thanksgiving break, do you think it would be wise to set up an informational during this time?

    Finally, the secretary said to apply online as well. However, they do not have an application portal but rather have a “send us a message” page linked from the “careers” section of the website. Should I just upload my resume onto that?

    Thank you so much for the help!

    1. It’s better to send it to an actual analyst/associate there. Otherwise the secretary may never pass along your documents. Yes, try to set up a meeting for when you’re home. You can upload your resume online but don’t expect much unless you talk to a real person.

      1. If I just found their emails online should I just email them and straight up ask to meet up and talk? Or should I rather send a few questions and then after getting a reply ask to meet up

        1. I would just ask for a few minutes to speak on the phone. The shorter the email, the better.

  12. Great article,

    I’m actually from Ghana, West Africa and plan on moving back to Africa after my undergrad in June 2015. The professional mentioned that an applicant needs to have certain skills e.g. languages to be hired in SA since local unemployment rate is high. I understand that a US Degree is viewed valuable in developing countries, but what I want to know is if it is valuable in SA?


    1. Thanks! The degree is still valued in SA – I think what the interviewee meant is that if you’re not from South Africa originally, it’s relatively tough to get hired there. However, being from another part of Africa may help with that since you’re still closer to the market than someone who has only worked in the US or Europe.

  13. Thanks Brian.
    I’m a big 4 guy with a Master of Accounting degree, and I can speak very good Mandarin.
    But, where’s the door to South Africa? The idea sounds sexy to me but my school’s alumni seldom work at SA. So I can’t get in touch w anyone there. Please show me the rope


    1. Well, you’d have to find professionals who work there or find events focused on Africa / South Africa first… if there are no alumni, try finding people in IB in South Africa via LinkedIn, adding them, and contacting them directly like that. Flying there just to look for jobs is probably overkill until you’ve networked and have at least a few contacts you can meet with.

      1. So I should start w those big banks like JPM and GS? Or I should start w more local banks? I found Standard Bank have a big biz there, and what else?

        Thanks for replying me

        1. I would go for both, because you don’t know who will be most responsive. Local banks tend to hire more SA citizens, but sometimes it’s also easier to get in via networking.

          1. Got it, thanks for these great insights!

  14. Nice one, Brian.

    Could we, perhaps, have another, albeit, more comprehensive Australian article soon?

    From what I hear, the culture is pretty unique over here too, compared to UK/USA.

    I’ve read multiple times that networking does not work and is actually unheard of/frowned upon down here, amongst other things that make it a curious subject.

    I would really appreciate it if you could shed some light on us down here, if at all possible. I’m aware that your ability to release articles is dependent on volunteers from the region.

    Keep up the great work mate.

    1. Thanks! Yes, Australia is on the list. I wouldn’t say networking “doesn’t work” exactly, but there are some differences.

    2. Personally I’ve found name-dropping can go a long way in interviews when asked why that bank over others, but haven’t heard of anyone getting a position in IBDs here without jumping through the regular hoops.

  15. Thank you very much for the insightful article

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