by Brian DeChesare Comments (24)

MBA Investment Banking Recruiting: How to Use Business School to Break In

MBA Investment Banking Recruiting

A long time ago, people argued that MBA programs would decline in popularity as students and career changers switched away from finance and consulting and moved into tech.

There has been a movement toward tech, and business school admissions have trended downward – but it hasn’t been the “collapse” that many predicted.

The main difference is that students now use MBA programs to find jobs in a wider variety of industries.

This guide, though, is all about how to use an MBA degree to get into investment banking at the Associate level.

The most important question here is also the most obvious one: Can you do this?

As you’ll see, the MBA is not always a viable path into the finance industry:

The MBA Investment Banking Path: Can You Do It?

If you’re thinking about this path, you probably fall into one of these categories:

  • You got started late with undergraduate internships and had no chance to recruit for IB roles.
  • You changed your career midway through university or after graduating.
  • You knew little to nothing about investment banking until you were already working full-time but then became interested in it.

As a result, your work experience is too far removed for you to break in as a lateral hire, or you’re overqualified for Analyst roles.

So, you decide to attend an MBA program to get into the industry as a “career changer.”

It sounds like a simple and effective plan – but only if you do it correctly.

The recruiting process for Associate roles in investment banking is the most developed, by far, in the U.S.

There is some MBA-level recruiting in Europe, but direct promotions fill a higher percentage of roles.

In other regions, MBA-level recruiting ranges from “nonexistent” (Australia) to “quite different” (such as in India, where banks recruit Analysts out of the top IIMs) to “it’s there, but relatively small” (Canada, Hong Kong, others?).

Besides your region, you also need to consider the quality of the schools you can get into.

Breaking into investment banking from a “non-target” MBA program (i.e., one that banks do not recruit at) is an uphill battle that’s even more difficult than breaking in from a non-target university.

Why?

First, there are many fewer spots at the Associate level.

Second, a certain percentage of these spots are reserved for students from target schools and Analyst to Associate promotions.

Finally, many senior bankers want to show “loyalty” to their MBA alma maters (primarily the top schools) by hiring students from those schools.

So, if you want to maximize your chances, you should attend an M7 business school in the U.S. or a similar, top program that sends many students into IB (e.g., Stern), or one of the top programs in Europe (LBS, HEC, INSEAD, etc.).

After region and school quality, you also need the right type of work experience to recruit effectively.

Ideally, you’ll have around 2-3 years of full-time work experience in a field that’s somewhat related to investment banking (e.g., consulting, Big 4 transaction services, corporate banking, corporate finance, etc.).

If you don’t, it is possible to “fix” this or make it less of a problem if you complete a pre-MBA internship or if you can win a more relevant job before starting the program.

It’s a bigger problem if you have no full-time work experience, as banks will not take you seriously for Associate roles in that case.

Finally, if you have too much pre-MBA experience, such as 10+ years in a mid-level management role at a normal company, you might be perceived as “too experienced,” though there are ways around this.

In short, to maximize your chances of success in MBA investment banking recruiting, you should:

  1. Plan to work in the U.S. after graduating, with Europe as the next-best option.
  2. Apply for and win admissions to a top program that sends many students into investment banking each year.
  3. Have the right type of full-time work experience (2-3 years up to ~5-6 years in a somewhat related field).

MBA Investment Banking Recruiting: What If You Don’t Meet All These Requirements?

It depends on which requirement(s) you don’t meet.

For example, if you have no chance of getting into the top programs based on your GMAT scores, grades, recommendations, and work experience, it’s best to drop the idea and pursue other paths into the finance industry.

On the other hand, if you can get into the top programs, but your experience isn’t closely related (engineering, marketing, healthcare, etc.), the pre-MBA internship is a potential fix.

Before the program begins, you can cold email boutique PE and VC firms and banks and ask about completing an informal internship there.

If it’s not possible to do this, you could also aim for a “steppingstone role” that serves the same function but in the format of a full-time job for a year or two before business school.

And if you want to use an MBA degree to break into banking in a region with no MBA-level recruiting, sorry, but you’ll have to move or reconsider your plans.

How Do You Get Into Top MBA Programs?

At a high level, you need good grades from university, good GMAT scores, solid work experience at brand-name companies (or a unique activity that makes you stand out), good recommendations, and personalized applications and essays.

The top schools are all extremely competitive, so if you don’t measure up in one or more of those areas, you need to be realistic about your options.

For example, if you don’t perform well on standardized tests, that’s fixable with enough practice.

But if you’ve already been working for 3-4 years in an “average” job (e.g., IT consulting at Accenture), you probably can’t fix that at the last minute.

You can get into *a* business school with that type of experience, but your chances may not be great at the top programs unless you have something unique outside of work.

If you look at your profile and cannot tell where you’d have a good chance, I would recommend contacting an MBA admissions consultant for a reality check.

One final bit of advice: apply as early as possible.

You have a big advantage if you apply and win admission in the first round because:

  1. There’s less competition, so your chances are higher – especially at the top schools.
  2. If you get in, you’ll have more time to network with alumni.
  3. You’ll also have more time to find a pre-MBA internship (if you need one), and you’ll get higher response rates due to the school’s brand name.

What’s the Recruiting and Networking Process Once You Get In?

Many schools will tell you that “recruiting starts after you arrive on campus” or that networking with alumni beforehand offers no advantages.

Do not believe them. Recruiting for MBA investment banking roles starts the minute you confirm your attendance at a specific business school.

You need to do the following once you confirm your plans:

  1. Decide whether or not you need a pre-MBA internship, and if you do, start reaching out to nearby firms to set one up.
  2. Start preparing for interviews and technical questions at least several months in advance.
  3. Figure out your focus in terms of industry/product group and geography. If you float around too much, you will not come away with offers.
  4. Determine your weaknesses and bankers’ likely objections to your candidacy and figure out how to address them.
  5. Network with alumni – if your school doesn’t allow this before the term begins, at least research alumni, make a list, and start contacting them once you arrive on campus.

You should start with the pre-MBA internship point because it’s best to set it up early.

Next, you should do some “basic” technical preparation, especially if you have limited accounting and finance knowledge.

For example, learn or review what the three financial statements are, how they link together, and how to build a 3-statement model and basic DCF model.

You don’t need to go all-out because you only need to know enough to sound well-informed when networking.

Once you’ve done that, figure out your industry/product group and geographic focus and your key weaknesses.

At the MBA level, you can’t afford to spread yourself thin by applying to 5-10 different groups in different cities.

All your communications with recruiters and bankers should be consistent, and focus is the best way to ensure consistency.

Your industry or product group should ideally match your pre-MBA background (e.g., enterprise software sales to technology investment banking or commercial real estate brokerage to real estate investment banking).

Once you’ve finished, you can start networking with alumni via informational interviews and complete more in-depth technical preparation.

How Much Preparation and Networking Time is Required?

It depends on your profile and how much you already know.

For example, if you already have a strong accounting and finance background, you might just need to spend 1-2 months reviewing and completing a few practice case studies and modeling tests.

But if you’re entering business school from a completely different career, you might need closer to 6-9 months of study to absorb the concepts.

With networking, the appropriate start date varies based on the timing of on-campus recruiting at your school, but some approximate guidelines would be:

  • # of Informational Interviews: You’ll likely need 50+ networking calls across all the banks to get a significant boost.
  • Time Required: Expect 3-4 months because you have to research alumni, reach out, follow up, send thank-you notes, etc., while working or studying full-time.

When conducting this outreach, you should focus on Associates and VPs initially and get referrals to the senior bankers above them once you’ve spoken.

MBA Investment Banking Interviews: What to Expect for Associate Candidates

The question categories do not differ in MBA-level interviews, so everything in the investment banking interview questions article still applies.

The main differences are:

  1. Deals – Deal knowledge is more important, so you need to know at least one of the bank’s recent deals quite well. This doesn’t mean “memorize all the multiples and financial stats” but rather “Understand and be able to explain the rationale.”
  2. Ethics – You’re also more likely to get “ethical dilemma” questions about how you would respond to clients and teammates in certain situations.
  3. Case Studies – Finally, “verbal case studies” are more common at this level. They might also give you an on-site or take-home test, but many interviews turn into informal case studies where you discuss a specific company.

As with Analyst-level interviews, technical questions tend to be easier at the bulge bracket banks and more difficult at the elite boutiques.

You want to come across as “informed but humble” in interviews.

For example, if they ask whether you can build a certain type of model, don’t immediately say, “Yes” or “I’ve practiced that one a lot.”

Instead, be slightly self-deprecating and try something like, “I can try.”

If they want to probe your skills further, answer the questions you can, but don’t get in arguments or appear too confident.

Overall, about 30-40% of candidates in the top MBA programs who apply for investment banking roles will win at least one IB summer internship offer, and 10-15% of candidates will win an offer at their top choice.

So, it’s reasonably competitive and requires a good amount of time and effort, but it’s also not impossibly difficult.

Performing Well in Associate Summer Internships and Receiving the Return Offer

If you win a summer internship offer, the key strategies for performing well and receiving a full-time return offer are similar to those at the undergraduate / Analyst level.

In other words, be reliable, win at least one strong advocate, make a positive first impression, and fix your flaws over time.

Even if you’re an Associate-level intern, your day-to-day work won’t necessarily be much different from an Analyst intern’s.

You’re still there to make bankers’ lives easier by saving them time and completing repetitive or annoying tasks they don’t want to think about.

And since you’re also new, you probably won’t be “supervising” the other interns or Analysts.

People like to obsess about which banks have the highest full-time offer conversion rates, but winning a full-time return offer is mostly about common sense.

You could always get unlucky if there’s a hiring freeze or the group shuts down, but if you are reliable and make bankers’ lives easier without annoying people, you will probably win the return offer.

MBA Investment Banking Recruiting: Special Cases and Plan B Options

And now we arrive at the fun part: exceptions, special cases, and “Plan B” options if you don’t get into a top MBA program:

Non-Target MBA Programs

In this case, your best bet is to focus on boutique banks that hire Associates.

By “boutique bank,” I’m referring to regional boutique banks that advise on smaller deals and have fewer than 5 offices – not the elite boutiques.

At these firms, sales skills matter a lot more, and you’ll get better hours and more responsibility but also highly variable compensation and reduced exit opportunities.

If you don’t want to do this, you could still win offers at the large banks if you have great work experience before the MBA, all your other stats are in-line, and you network like crazy.

Of course, if that’s you, you could have gotten into a top MBA program, so…

Part-Time / Evening MBA Programs

If the overall quality of your MBA program is high, completing the part-time / evening / weekend version rather than the full-time one shouldn’t make a huge difference.

You just need to make your timing clear to recruiters and bankers (e.g., 3 years to finish the degree with internship availability in Year X).

As much as possible, you want to “act like a full-timer” and still participate in the same events and activities.

The biggest problem might be winning permission to complete an IB internship from your current company.

It’s best to say that you’re doing it to gain directly relevant experience and bring new skills to the table.

You could even frame it as you wanting to work in banking and then return to this company in the future (whether or not that’s true…).

You Have No Full-Time Work Experience Before the MBA

This one is tricky because even boutique banks are unlikely to hire you if you’ve somehow gotten into a legitimate MBA program without any full-time work experience.

Your best bet might be to target industries that are willing to hire candidates without full-time work experience (e.g., corporate finance or commercial real estate) and use one of them to move into IB later on.

You Have Too Much Full-Time Work Experience Before the MBA

With this one, it depends on what you mean by “too much.”

If you have 20+ years of work experience, you’re not going to win post-MBA Associate roles anywhere because you’re overqualified, so the answer is “target other industries.”

But if you have, say, 10 years of work experience, and other candidates have only 3-5 years, there are options.

Once again, you could target boutique firms where sales and client skills matter more than the number of hours you can grind away.

Another idea might be to try “side paths” into the industry, such as working at PE or VC portfolio companies and moving in from there.

For more ideas, see our article on How to Break into the Finance Industry as an Older Candidate.

You’re in a 1-Year MBA Program

With 1-year programs, you need to start the program at the right time so you can complete a summer internship (which is critical to winning a full-time offer in IB).

For a place like INSEAD, that means “start in January.”

The problem is that you’ll need to network and do all the other prep before the term even begins because applications are due within the first month or so.

That’s a bit inconvenient, but it’s still better than the alternative of not being able to complete an internship.

You’re In a 100% Online or Distance MBA Program

This one is another tricky case, and it mostly depends on the reputation of the program.

(And yes, I realize that the distinction between “traditional” and “online” programs has blurred in the current environment.)

The problem with most of these programs is that the large banks do not recruit from them, so the alumni base is very small, and there’s no established recruiting funnel.

Effectively, the “non-target” part matters more than the “online” part.

So, once again, you’ll probably have to target other industries or smaller banks.

MBA Investment Banking Recruiting: What Else?

These are the most important points about investment banking recruiting at the MBA level.

The biggest mistake, by far, is assuming that you can use an MBA degree to “explore your career options” or “figure out your life.”

If you’re interested in other industries or you are not using the degree to earn more money, that might work to some extent.

But if you want to do investment banking, you need to be laser-focused on your goal before the program even begins.

Do that, and the degree will pay for itself within your first few years on the job.

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.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

We respect your privacy. Please refer to our full privacy policy.

Comments

Read below or Add a comment

  1. Avatar
    ASHWANEE CHOUDHARY

    HEY BRIAN
    I’VE COMPLETED MY UNDERGRAD IN BCOM (HONS) FINANCE AND ACCOUNTANCY, AND I WANT TO MAKE A CAREER IN INVESTMENT BANKING, AND I AM PLANING TO DO MBA IN INVESTMENT BANKING FROM JAIN COLLEGE, BESIDE THATA I DO NOT HAVE ANY EXPERIENCE IN BANKING /FINANCE IN ANY OF O THE CORPORATE FINACE RELATED JOBS , SO MY QUESTION TO YOU IS ….. IS MY IDEA OF DOING MBA IN IB WILL BE A PRUDENT IDEA, OR WHAT DO YOU SUGGEST WITH REGARDS TO THIS .
    THANK YOU…

    1. I would recommend reading about IB in India first so you understand the requirements, as it’s quite different from other regions: https://www.mergersandinquisitions.com/investment-banking-india/

  2. Hello there, I’m a 22 year old recent graduate(2021)1 of Bachelor of Business Administration (BBA) degree in distance education from India. I’m a professional racing driver, but now decided to switch paths and go find a stable career, which is when I discovered a liking towards Investment Banking. I have planned to do 2 years diploma in finance in Canada, reason for diploma is to brush up what I learnt in undergrad thoroughly since I slacked off working on my other career but now decided to focus towards IB in the future. So, will get 2 summers to utilise for internship, how different do you think my path is going to be considering I’m doing a diploma instead of an MBA and gunning for IB jobs, also do you think my undergrad degree in distance education will be a hurdle in terms of finding jobs or should I do my undergrad full time in a decent college all over again rather than a diploma. What do you think about my planned career path and what advice would you give me for the situation? You seem to be quite knowledgeable at this, sorry for the long query. Thanks in advance.

    1. So, Canada is really not the ideal place to do an MBA and then get into banking because the IB industry is much smaller there, and there’s far less MBA-level hiring. Also, who knows if/when the country will ever open up again…

      If you want to follow this type of plan:

      1) You should get at least 3-5 years of full-time work experience before doing an MBA.

      2) You should do the MBA in the U.K or U.S. since the hiring market for MBA grads at banks is bigger there.

      3) And yes, the undergrad degree in distance education may hurt you a bit, but it’s not worth redoing undergrad just to overcome that hurdle… assuming you can get into a top MBA program based on your full-time work experience and other credentials.

  3. What happened to your phenomenal article on health & fitness in IB? Is there any way you could share?

  4. I’m at 1.5 years program from M7 (to be specific, Columbia Business School). I wont be able to take structured internship program during summer. Any tips for recruiting directly for full-time associate without any internship experience(I have consulting and a bit of finance background) ? I heard in the US will be tough to recruit directly for full-time associate without any IB internship.

    1. Hmm… yeah, if you can’t do an IB summer internship, it will be extremely difficult to win full-time Associate roles. I don’t know, maybe try to win a full-time offer in corporate development at a normal company and then recruit into IB from there? It’s still difficult, but that might be your best/only option if you can’t do the summer internship.

      1. Got it, thanks for the advice! Though I still saw several vacancies for full time associate, do you think even if there are vacancies it will be still very hard to get in?

        1. It is always difficult to win a lateral offer in the U.S. at the Associate level. Vacancies may improve your chances, but in a lot of cases, they just want to hire bankers who are already working at other firms. You could try applying to full-time roles without an internship, but you should be prepared with some type of back-up job such as corporate development.

  5. I successfully recruited this past year for MBA Associate roles. I couldn’t agree more with the sentiment that you need to be laser focused. Those of us that started the year prepared had substantially better results than those who didn’t.

    1. Thanks for adding that.

  6. Brian,
    I am currently a Software Engineer with around 1 year experience with a pretty well known fintech startup. That being said I don’t wanna stay a developer for too long despite making a decent amount. I also don’t see myself suitable right now for a “finance type” gig as the paycut would almost halve my earnings.Assuming I stay in the dev route and get a Top 15 MBA what are my options after graduation if I wanna move into finance? I was thinking about tech desks at a bank or VC funds .What do you think?

    1. It’s possible to win an IB summer internship at a top MBA program if you have an engineering background, but often you’ll need something more relevant than pure engineering experience to have a good chance (pre-MBA internship, full-time job closer to business/sales/strategy/finance, etc.). You could probably win a VC role without this experience more easily than an IB role.

      I’m sure that someone will now reply and say that they know of people who went from pure software/engineering full-time jobs into top MBA programs and won IB offers despite not having any relevant experience, but those cases are the exceptions and not the rule. You need to be able to tell a story that moves you closer to IB/finance *before* you even start the MBA program.

  7. Notes from M7 recruiting in 2021-
    -networking is quite a bit more structured. you don’t really need to research alumni at all, because all the banks you have a shot at come to campus and the alumni recruiting team presents to the IB club. you ask the bankers presenting for their emails, and then email to follow up for coffee chats. typically the alumni will continue to refer you for more chats if you do well.
    -from what i saw, 5 years experience was actually the sweet spot. most successful people had 5 years experience as e.g. a financial analyst-> finance manager at a large corporate, then went into the industry group for their previous industry – i.e. pfizer finance -> healthcare IB
    -offer rate is about 50%. many people are misled to believe it is much higher than this, not sure why

    1. Thanks for adding all that. Yes, networking is definitely more structured at the M7. But at other schools, that’s not necessarily the case, so more networking in advance is required.

      The offer rate of 50% at the M7 sounds about right. I used a lower figure here to account for lower-ranked schools, where the offer rate is likely lower (but it also depends on your definition of a “candidate” and how serious the person has to be).

  8. Hi Brian, as a first-year analyst in a European In-Between-A-Bank (think of RBS, SocGen and Macquarie) in Hong Kong, I plan to work in London in investment banking in the near future. Do you think applying for a top London-based MBA program or directly applying to the banks in London is better for me?

    1. It’s easier to apply for a direct transfer. I don’t think an MBA is very useful if you’re already in the IB industry and want to stay in it. It might become more difficult to get a work visa in the UK, but it’s still easier and cheaper than transferring via an MBA program.

  9. Thanks for all of the great information once again. Wanted to get your thoughts on online programs from “top 20” schools such as USC and UNC?

    1. Thanks. Those are both good schools, but not ideal if you want to work at one of the largest banks. USC does send around 9% into IB, but given the class size, that’s not that many people each year. With UNC, some banks do recruit on-campus, and they say around 11% of students go into IB (but I believe it’s more slanted toward roles in the southeast of the US rather than NY).

      In short: they’re both decent options, and it’s possible to get into IB from them, but your chances are lower than they would be at the top few schools. If these are your main options, and you’re 100% set on IB, I’d say go for it.

      1. Current UNC MBA here – I just wanted to add that the vast majority of IB students go to NYC from both undergrad and full-time MBA level. However, I am not aware of any “online program” MBA students going into IB at all.

        1. Thanks for adding that.

  10. How do you arrive at the 30-40% number of candidates who get internships? Most top MBA programs claim that the majority of students who apply for IB get those positions. Is this not the case?

    1. Past interviewees have said that it’s under 50%. If you use a very broad definition for “investment banking,” it may be higher. Also, some people will apply to multiple industries, not take IB that seriously, and end up going elsewhere. You should not take marketing claims from schools at face value…

Leave a Reply

Your email address will not be published. Required fields are marked *