by Brian DeChesare Comments (81)

Investment Banking Recruiting in Europe: London vs. Frankfurt vs. Milan

Investment Banking Recruiting EuropeWhile you’ve learned all about recruiting in Europe before in places like the UK, Germany, and Italy, we’ve never done a direct comparison of what to expect in each region.

Will you really have to go through assessment centers and similar interviews in each place?

Are they only looking for locals or can you break in as a foreigner? What about language requirements and that all-important summer internship to full-time offer conversion rate?

Today a reader who has recruited across Europe – and won 2 internship offers – will share his experiences and answer all those questions, plus a whole lot more.

Introductions

Q: Can you walk us through your background and how you first got interested in finance?

A: Sure. I was born and raised in Italy, and after high school I studied business administration and completed a BSc in Finance from a non-target Italian university.

During my 3rd year there, I took a few classes in corporate banking and first learned about investment banking, M&A, PE, and VC.

The professor was great and we had several financiers as guest speakers – I was most interested in private equity and how they look for small and mid-sized enterprises (SMEs) to invest in. There are so many SMEs here that I knew there would be a lot of opportunity if I could break into PE.

Q: So you tried to get into PE coming from a non-target university with no full-time experience?

A: No, not yet. I looked for information online and spoke with the guest speakers in our class and learned that most people in PE had MBAs, that you had to know accounting very well, and that you had to do investment banking, consulting, or auditing first to break in.

I knew I needed better access to recruiters and more accounting knowledge, so I looked for a 2-year MSc program in Accounting and applied to the only “target” university in Italy.

I moved to Milan to complete the MSc program and then found out about summer internships in investment banking – but my chances weren’t good since I was from a non-target university, hadn’t studied abroad, had no relevant work experience, and didn’t speak a 3rd language.

But I applied to all the banks anyway and ended up getting several interviews and assessment centers, and then won a back office internship in London – which I accepted, since I had no better options. I also figured that having a bulge bracket name on my CV would at least help me with recruiting in the future.

After finishing that internship, I applied to both full-time jobs and internships (internships work a bit differently here) in investment banking in the UK and continental Europe, and went through recruiting in London, Milan, and Frankfurt, finally winning 2 internship offers.

M&I Note: The audit to PE path is more common in Europe. It does happen in the US and other regions as well, but your chances are not as good unless you’ve done something like audit to Big 4 TAS first.

M&I Note 2: While I’ve been critical of the back office in the past, it’s not the end of the world if you accept a back office internship. It’s more difficult to move from the back office to the front office if you’ve already accepted a full-time offer.

Q: That’s quite a story – you must have had a great strategy for winning those offers, or at least something that made you stand out.

A: In high school I wanted to play football full-time at first, and I had also worked as a sports journalist for a local newspaper before.

That wasn’t prestigious, but it did give me something to talk about in interviews for my “interesting fact” – and I could reference that when they asked about leadership, managing stressful situations, and so on.

This story helped me get my first back office internship – I think the 2 IB internship offers were more about solid technical preparation, since I had focused on my corporate finance studies over the past year.

Recruiting

Q: That’s a good one – much better than those interviewees who tell you that their “hobbies” are learning Excel or doing statistical analysis.

So what was the recruiting process in these different cities like?

A: I always started by applying to London first – usually applications from continental Europe are checked by local offices first, even if you apply to London. Sometimes they’ll even call you and say, “There are no spots left in London – are you interested in Milan?”

Then, if you pass the initial CV / cover letter / competency question screen, you’ll get a first round in the local office (Milan in this case) and then the 2nd round in London, or maybe a phone interview and then the AC in London.

With one bank I did the 1st and 2nd rounds in London and was then sent to Milan for the 3rd round since they ran out of spots in London, but that was the exception and not the rule.

My overall experience looked like this:

  • Bank A: Applied for the graduate program in London, did a phone interview, and then an assessment center in London (group work, then 3 interviews with 4 VPs).
  • Bank B: Applied for the graduate program in London, did a 1st round interview there with 2 associates, and then also did the AC in London (business case and presentation to Director, then another 2 interviews with 2 other Directors). But then I was sent to Milan for 3 interviews with the local Directors there and also had to complete an Excel test as well.
  • Bank C: Applied for summer internship in London and was then called and asked if I was interested in Milan – I did the 1st round in Milan with 1 analyst and 1 associate and then the 2nd round in Milan with 2 associates.
  • Bank D: Applied for a 3-month internship in Frankfurt via email – they responded shortly after that, and I then completed 3 interviews in Frankfurt on the same day (with 2 associates and 1 analyst).

Q: Awesome, thanks for sharing that information – I’m sure everyone’s recruiting experience is different but it’s good to have data on what to expect in different places.

So it sounds like you didn’t do much networking to get any of these interviews?

A: That’s correct – I did not do much networking. I already knew one of the VPs that interviewed me at Bank A because I met him during my previous summer internship, so I spoke with him in advance and asked about recruiting, how to best position myself, and so on.

But then another guy won the offer from Bank A, so it wasn’t too effective for me.

Q: What about CV differences? Is there anything that banks in Milan and Frankfurt care about but which offices in London do not?

A: The overall structure of CVs is not that much different, but in local offices they tend to care more about your grades.

In Milan and Frankfurt they asked me specifically for my GPA, while in London HR just scanned it quickly when screening CVs.

Another difference is that for full-time recruiting, they pretty much expect you to have had a previous internship in investment banking – whereas for internships you can get in just by having strong technical knowledge and some kind of previous experience even if it isn’t directly related.

All the candidates that received full-time offers in my final round interviews were former summer interns who had worked in IB at other banks.

Q: Right, so standards tend to be higher for full-time interviews, and it’s tougher to break in if you haven’t had that IB internship before.

What about the type of people who recruit in each place? How is that different, and what are the language requirements in those cities?

A: Overall there’s the least amount of diversity in Milan because you must be fluent in Italian. So it’s mostly Italian students who end up there – either voluntarily or because they didn’t get into the London office.

Most of these students are coming from schools such as Bocconi University, LUISS, Politecnico, or ESCP.

In Frankfurt, they didn’t care about language abilities for internships. I don’t speak German but still won the offer there – but for full-time positions it’s different and I was told that you must be fluent in German to do investment banking there.

In London you see the most diversity – people from all countries throughout Europe, Asia, and North/South America.

Obviously there’s no language requirement there except for English, but language skills are still viewed very highly and you’d be at a disadvantage if you don’t speak other European languages.

Q: What about differences with interviews? Did you find a different ratio of “fit” to technical questions, or were the questions themselves any different?

A: Overall, I had the most technical interviews in Frankfurt. They asked pretty much everything you could ask: standard questions about EPS, accretion/dilution, synergies, the control premium, the liquidity discount, what happens post-merger, how to value startup and bio-tech firms, how to adjust for pension plans, leasing and IAS 17, stock options, derivatives, and more.

They asked me to explain how a PE firm works, what the average debt-to-equity ratio in LBOs was, how to value a company, and then how to write down and change all the main items of a P&L, balance sheet, and cash flow statement.

In Milan they also asked a fair amount of technical questions (Beta, WACC, DCF, multiples, etc.) but they didn’t go nearly as in-depth as they did in Frankfurt. They also asked a lot of questions about consolidated statements – what the financial statements for a parent company plus its subsidiaries look like and how to combine them.

In London, the technical questions were the easiest – everything was pretty standard and consisted of questions you can find in most interview guides. They focused more on your background and how well you fit in with the rest of the team there.

Q: Interesting – I’m sure we’ll get a lot of comments from readers there who experienced slightly different (or maybe significantly different?) interviews.

Earlier you mentioned that you won several internship offers even though you’re set to graduate shortly and you said that internships in Italy are “a bit different.” How does that work exactly?

A: In Italy we don’t have structured summer internships like you see in other countries.

You might find them at a bulge bracket bank with local offices in Italy, but local banks here don’t have such programs.

So 6 months before you graduate, when you’re writing your thesis and exams are over, you can apply for off-cycle internships. If you’re good enough to get in and do well there, they’ll just ask you to keep working after the internship, effectively turning it into a full-time offer.

That’s much different from London, where you usually do the internship just before your final year and then you start full-time one year later.

I don’t know what the exact “conversion rate” is in these 2 places, but your chances might actually be higher in Milan since pretty much all full-time bankers at local banks started out by completing post-graduation internships first.

Another difference here is that some banks only want students who have already graduated when they search for interns – and the internships themselves last 6 months rather than 10-12 weeks.

Since banks don’t have structured programs, they just post job openings on their website or on the business school careers page and you submit your CV and cover letter without completing competency questions or numerical tests or anything like that.

You also see that for some international boutiques with offices in Milan, but it’s more common at local banks.

Next Steps

Q: You mentioned before that you applied to both full-time jobs and internships but ended up with the 2 internship offers – do you think it’s harder to get full-time offers in Europe?

A: I think in general it’s more difficult to get full-time offers because people with previous IB internships have a huge advantage, so Europe is no different in that respect.

Q: I see; it’s definitely getting more competitive every year. 10 years ago the people applying to banks for full-time roles had far less internship experience.

So what’s next for you? When do your internships start?

A: Originally I was planning to complete one of my internships over the summer and then start the next one in September, before graduating in December or May.

Recently, though, some personal problems arose and because of those I couldn’t join one of the banks in the summer – so I’m going to focus on my thesis for now.

That would at least give me the option to move back into academia if I decide that I don’t want to do investment banking or can’t stand the hours.

Q: Great. Thanks for sharing your story – I learned a lot!

A: No problem, hope you enjoyed it.

For Even More Practice…

For even more practice with numerical, verbal and logical aptitude tests and assessment centers in general, check out Job Test Prep and all their test prep offerings.

They have our highest recommendation for online tests and assessment center prep – and their courses are the single best way around to prepare for EMEA recruiting.

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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Investment Banking Recruiting in the UK: All About Competency Questions, Assessment Centers and More

Assessment Centers and Competency QuestionsWhile we’ve had some good stories from readers in London recently, there hasn’t been a solid overview of recruiting in the UK – until now.

It would be easy to dismiss this and say, “Banking recruiting and interviews are the same everywhere!” – but that’s just not true.

There are huge differences in Europe and Australia compared to the US (Asia, the Middle East, South Africa, and so on are somewhere in between), and you’re going to learn how to approach everything from competency questions to assessment centers and numerical tests in this interview with a reader who just won an IB offer in London.

Background

Q: Can you tell us about your background and how you broke into the industry?

A: Sure. I went to high school in a North African country, then graduated from a top undergraduate business school in Canada, and then earned an MSc in Finance at a top university in London.

I was 100% certain I would do investment banking, but I was never able to get an internship in the industry due to personal reasons. But while I was in school I did a lot of extracurricular activities and got exposed to financial modeling through my involvement in one of the biggest student funds in Canada.

Even though I hadn’t completed an internship, I did a lot of research beforehand and was well-prepared for the full-time recruiting process at my school.

I also speak 4 languages, which is very helpful in London as language skills are more highly valued here than in North America.

Your online courses also helped me a lot and allowed me to talk about M&A deals and LBOs nearly as well as someone who had completed many M&A internships.

UK Recruiting

Q: Great, glad to hear it. You’ve lived in so many different places that you must know how recruiting differs everywhere. Can you walk us through how recruiting in the UK differs from what you see in North America?

A: Sure. Here’s how I would summarize the process:

  1. You apply online by submitting your CV, cover letter, and competency questions, and then get selected for first-round interviews based on the strength of your application.
  2. If you do well, you advance to an assessment center (rather than the Superday interviews you see in the US) and you participate in group exercises, tests, interviews, and presentations there. If you do well, you receive an offer.
  3. In addition, you also have to complete aptitude tests (numerical, verbal, and reasoning) somewhere along the way in this application process.

You might have to take them before you apply (Barclays and Credit Suisse), after your online application is screened (Deutsche Bank and UBS), or after you pass the first round of interviews (Macquarie).

Some people underestimate these tests, but they’re extremely important – banks screen candidates based on the results, and often you get rejected not because of your CV, but rather because of your test results.

If you pass the tests, recruiters will review your entire application once again and then decide whether or not they’ll invite you to interviews – the one exception is Macquarie, where you need to be successful in the first round to be invited to the exams in the first place.

Q: Awesome, thanks for the overview and for mentioning the importance of these tests. I want to jump back into that, but one other question on recruiting at a high-level: it seems there are mixed opinions on whether or not you can just apply online in Europe and get interviews without networking.

What do you think? Does that only work if you go to a top school or you get lucky?

A: Networking is important, but not as important as it is in North America – in London students apply from all over Europe and also from other places like Asia. Networking at information sessions is incredibly difficult because 20+ students surround each banker and it’s almost impossible for them to remember each student.

Unlike presentations in the US, information sessions here are aimed at students applying to full-time, internship, and spring programs (which allow 1st year students to spend 1 week at a specific bank) – since everyone goes to the presentations, the applicant pool is very large and it’s hard to stand out via networking.

It’s still important to attend the sessions because some banks ask students who came to fill in an online form – that way they can see who’s serious about working at the bank.

Q: You mentioned “competency questions” before – I’m sure UK readers are familiar with them, but for everyone else reading, what are they and how important are they?

A: Essentially they are written versions of the standard “fit” questions you receive in all interviews, but they have a word limit and you must complete them along with your online application, CV, and cover letter. Examples of competency questions for banks:

  • “What is the personal achievement you are most proud of? What did you learn from this experience and how does it set you apart from others? Please do not exceed 200 words in your answer.”
  • “One of our core values is client focus. If you were to win a new client for our firm, who would they be and how would our bank help them achieve their goals? Please do not exceed 200 words in your answer.”
  • “Describe a recent situation where you had to set extremely high standards for yourself. What did you do to achieve these standards and exceed expectations? Please do not exceed 250 words.”

An individual bank might ask between 5 and 10 of these questions and the total word count for your answers might be around 1,000 words (perhaps more if they ask more questions).

Sometimes the word count limits are much shorter as well – 50-75 words – which actually makes the questions more difficult because you must be concise.

The questions themselves are as important as the rest of your application. Since the applicant pool in London is larger and more diverse than in the US, recruiters are more selective – or at least more willing to reject someone because of small problems in their application.

Q: Do you have any tips on successfully answering competency questions? Let’s say you get a question on how well you’ve performed under pressure or with a strict deadline. How would you answer it concisely?

A: I’ve always used the techniques you recommended when answering these questions – they’re the same as normal “fit” interview questions, but in written form instead. Normally I use the STAR (Situation, Task, Action, Result) approach:

  • Situation: We only had a few weeks left in our internship to deliver the project that the client wanted, and we were well-behind schedule.
  • Task: Finish the remaining 50% of the project, when we only had 2 weeks left and the first 50% of the project took us 8 weeks.
  • Action: I spoke to the rest of our team and decided which features were the most important to include and which ones would be time-consuming but not as useful to the client; we also leveraged the company’s resources and we found a lot of what we needed via contacts in other departments, saving us time and reducing the need to add more members to our team at the last minute.
  • Result: Despite being behind schedule, we delivered 90% of what the client wanted by the end of the internship – it wasn’t the 100% we had set out to deliver, but they were very happy with the end result and ended up giving more business to the company.

That’s just an example – in real-life you might add more details for the type of work you did, the company you worked at, and so on. But you must be concise or they won’t read your answer.

The #1 mistake applicants make is trying to sound “creative” or original when answering these questions.

Just be honest and give a genuine answer, based on a structure like the one I recommended above – they’re not testing your creativity with these questions, but rather how much you’ve learned from your experiences over time and how well you can articulate the key points.

Q: Right, so it sounds like these competency questions are not much different from the normal “fit” questions you would get in an interview. What about the aptitude tests you mentioned earlier? Any tips on what you might see on those and how to prepare?

A: They’re very similar to what you see on standardized tests such as the GMAT – the key is to practice as much as possible beforehand so that nothing surprises you.

The biggest mistake you can make with these is “dramatizing” and over-thinking the answers – on timed standardized tests that is a blunder you can’t afford to make.

They’re just like any other standardized exam: move as quickly as you can, skip anything you don’t know, and come back later to answer anything you skipped the first time. And make sure you go through at least a few practice tests before the real exam, as it’s easy to forget how to take standardized exams well if you haven’t practiced since high school.

If you want the best practice around, sign up for the online aptitude tests and package deals offered on Job Test Prep.

They have a bunch of free tests and their full courses are top-notch, with full score reports and detailed explanations.

Interviews and Assessment Centers

Q: How do you think interviews themselves in the UK differ? Do you still start by walking through your CV and answering the usual “fit” and technical questions?

A: Yes, 99% of the time interviews still start with the famous “Walk me through your CV” question. But many of the interviews here are more “fit”-focused and do not go as in-depth on the technical side. Unlike the US or Canada, most of the interview questions in London are competency-based.

In addition to your guides, I also went through every single behavioral question on this list and made sure that I could answer everything reasonably well.

M&I Note: Before someone leaves a comment saying that you received a plethora of technical questions, your experiences may vary – I’m sure that some offices and groups ask more technical questions than others, and you’ll certainly have to demonstrate technical knowledge at assessment centers (see below).

Q: So let’s say you get past the first round of interviews – what’s a typical assessment center like? How long does it last, how many people are there, and what types of exercises do you complete?

A: I thought assessment centers were more “fun” and diverse than the standard interviews you go through. Usually everything is conducted in small groups (10-20 people) and the assessment center itself lasts an entire day, similar to a Superday in the US.

You might get asked to participate in the following activities:

  • Aptitude Tests (numerical, verbal, and reasoning): They do this to see whether or not applicants cheated in the first round with these tests – since they’re online many people get friends to help or look for answers on the Internet, which are both bad ideas.
  • Individual Case Study: Sometimes you’re given a case study and are asked to analyze it and make a recommendation or decision within a fixed timeframe. Afterward you’ll have to discuss it with the recruiters.
  • Group Presentations: Here, you’re split into groups of 4-6 people and the entire group gets a case study to complete. Recruiters observe you while you work on it, and then you must present your recommendations to bankers at the end.
  • Interviews: Generally you go through 3-5 interviews, one of which is related to the group presentations and the individual case study – the other interviews are a mix of competency-based and technical questions.

Some banks like to be more creative and will ask applicants to “role-play” – for example, interviewees might be asked to act as investment bankers representing the bank, while the interviewers pretend to be potential clients.

Banks use assessment centers because traditional 1-on-1 interviews are not the best way to assess candidates – many people can sound impressive in a 30-minute interview, but fail to perform once they actually receive an offer.

The exercises at an assessment center let them assess how well you’d work in a team, present to clients, and complete other tasks as a banker.

You can read more about them on WikiJob right here.

M&I Note: I think assessment centers are a great idea and that banks in the US should use them as well. Many senior bankers wish they could give candidates a 1-week trial on the job before giving them an offer, and assessment centers would be a good proxy for that.

Q: That sounds more fun than standard final round interviews, though I can see how it could also turn into a bad reality TV show. What mistakes do candidates make at assessment centers that prevent them from getting offers?

A: The main mistake is to act like a “leader” during group work and presentations. You might assume that banks only give offers to leaders, or at least to people who are giving orders – but that’s completely wrong.

In fact, it can backfire and hurt everyone else if you try to do that.

Recruiters notice this and won’t give out offers to anyone who keeps giving orders and trying to “show off” – that means you lack leadership skills.

Meanwhile, other applicants try to talk a lot to stand out – but they don’t say anything meaningful or relevant. Rather than trying to dominate the group presentation and discussion, you should respect everyone else, listen to contributions from others, make good suggestions, and come up with solid solutions.

You also want to show that you’re having fun and enjoying the experience rather than being extremely serious.

I’ve seen applicants who have remained more quiet receive offers because they’ve respected everyone else and made solid contributions when needed – those who attempt to “show off” or do all the talking generally do not receive offers.

Q: So let’s say you get a group exercise where you’re asked to analyze a company’s options – sell, acquire another company, or continue to operate as-is – and make a recommendation on what they should do. You have a few hours to prepare, and 30 minutes to present your findings.

How would you approach that question at an assessment center?

A: I had to work on a similar individual case study at an assessment center, but it was a bit shorter and they gave me the numbers, valuation, and a few DCF models.

I started by giving a brief presentation of the company – their industry, history, and most well-known products – and then I walked the recruiters through the company’s past and current strategies. I mentioned a few relevant figures such as the EBITDA and P/E multiples as well.

They had already given me the valuation and important figures such as the P/E multiple of the combined company post-acquisition, so all I had to do was show that the acquisitions in question were accretive.

I concluded by benchmarking the strategies of each potential target company against those of the acquirer – in my case each acquisition was accretive, so it was more about the strategic fit with the acquirer and which one would produce the best combined company.

The key factors in handling these exercises:

  1. Be logical – There are no correct answers most of the time, as the recruiters are just assessing how well you think and analyze problems. Focus on explaining your reasoning in detail rather than finding the “right” answer.
  2. Do not overcomplicate your presentation – Forget about fancy formatting, going through hypothetical scenarios, or adding complexities to the question. You are under extreme time pressure and do not have time to go into unnecessary detail.
  3. Be extremely structured in your response – Again, it’s better to be “boring” and follow a structure rather than showing off your creativity and confusing your interviewers. See the articles here on case studies and private equity case studies for examples.

Overall, relax and don’t dwell on every little detail – they’re also testing your ability to improvise and discuss topics you’ve recently learned about because you do that all the time as a banker.

Q: Great, thanks for all these tips and for sharing your experiences!

A: No problem – happy to contribute.

For Even More Practice…

For even more practice with numerical, verbal and logical aptitude tests and assessment centers in general, check out Job Test Prep and all their test prep offerings.

They have our highest recommendation for online tests and assessment center prep – and their courses are the single best way around to prepare for EMEA recruiting.

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

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by Brian DeChesare Comments (130)

Investment Banking: Australia Edition

Investment Banking: Australia EditionNOTE: Please click here for an updated and more detailed overview of investment banking in Australia.

I get a lot of questions on investment banking in different parts of the world. Since I based this site on my experience working in the US, there has been a North American bias in most of the articles so far.

As I traveled through Asia, though, I met readers who have worked in different regions of the world and I learned more about their experiences elsewhere.

Australia might not be the first place that pops into your mind when you think of finance, but I heard some very interesting insights from a reader recently, and figured they would be worth sharing – especially since some of these points apply to other countries in the Asia-Pacific region.

Here’s an informal “interview” I conducted with one reader who works at a boutique/middle-market firm in Australia.

Q: We all know about the hours and culture of banking, especially in places like New York – what’s it like in Australia?

Keep in mind that I’m at a smaller firm so it’s different from working at a bulge bracket down here. That said, the culture is definitely more relaxed and laid back than what you’d find in the US and Europe.

Bankers may be a bit older on average, and that may explain part of it – they’re not as interested in killing you with work all the time.

Sometimes we have holidays where everything just shuts down as well – I don’t think that’s too common in other regions.

At the junior level, it’s definitely not a 9-5 job but it’s also not 100+ hours per week like bigger firms are known for.

I’ve heard some horror stories about bulge brackets down here so it might just be specific to my firm, but overall I’d say the hours are better on average.

Q: In terms of culture, does everyone get along with everyone else? Do people hang out outside of work?

Our office is split between people with families / in serious relationships and the young, single people. A lot of Analysts and younger Associates hang out with each other, but outside of work you might only see the older bankers at holiday parties and other company events. It’s unlikely that you’d go for drinks with your MD out of the blue.

Q: What about the types of deals you work on? Is there a focus on any particular industry?

Most companies we work with are in the Asia-Pac region, so there’s definitely a geography bias. We do a fair bit of work with China as well, or at least we did before the meltdown – but we liaise with the closest office for cross-border deals.

My group focuses primarily on M&A, so that’s what I’ve spent most of my time on. Since natural resources and energy are huge industries in Australia, we do a lot of deals in those markets.

However, we are a smaller firm so we tend to be generalists and have exposure to a variety of industries and even at the higher levels we don’t specialize too much. While MDs have their niches, they tend to work across industries quite often and leverage our global offices for more targeted industry expertise.

Q: In the US, the recruitment process is focused squarely on resumes, first-round interviews and then final rounds / Superdays, at least if you’re applying through on-campus recruiting at a “target” school.

In Europe and Asia there’s more emphasis on assessment centers, case studies, online tests, and sometimes written competency questions.

What is the process like in Australia?

Similar to Asia and Europe, most banks do all of the above here. You have to go through online tests on written and quantitative subjects, and there are assessment days where you have to present case studies on transactions and hypothetical scenarios to bankers.

And then you also have to go through standard interviews as well – overall the process is more rigorous.

Q: That sounds intense. Any tips for case studies or presentations at assessment centers? I get a lot of questions on that, but I’m not an expert since most US offices do not require it.

Keep it simple and don’t over-think the questions. More importantly, be honest! If you don’t know something, don’t waste bankers’ time by trying to ‘fake’ your way through it. They’ll see through it and you’ll lose all respect.

You have a very limited amount of time to read up on the scenario, get together your materials, and present – so focus on 3-4 key points and don’t waste time creating complicated models or doing lots of math.

First and foremost, the bankers listening to your presentation are interested in your communication abilities – not whether you can build a perfect LBO model. Presenting a succinct case without over-complicating it helps you the most.

Q: If the recruiting process is so much more rigorous, how do people typically break into the industry? Is the “path” more structured than in other regions?

Most people in banking in Australia have been in finance for a long time, and have studied it in university as well. It’s less common to be a “career changer” here, and you rarely see people from other backgrounds jump into the field. This becomes more pronounced as you move away from bulge bracket firms and into boutiques.

Partially, this is because the industry is just much smaller compared to other regions, but it’s also just a cultural point in Australia/Asia, where you tend to follow more of a set path.

Q: Ok, so the industry is smaller and recruiting sounds like it’s more intense as well. How many people are actually interested in investment banking in Australia?

There’s less interest overall. Outside the top few universities, most students don’t even think about formal internships during the summer.

The general culture is far different from the US where students are almost expected to do internships during their summers.

This doesn’t mean that it’s easier to get in, though – the industry is smaller overall and recruiting is more rigorous.

Q: What about exit opportunities? Does everyone jump to private equity or hedge funds after 2 years?

It’s less common to make the jump to the buy-side – the notion of only staying for 2 years and using it as a steppingstone is not as prevalent here. It’s more likely for an analyst to switch to another bank due to fit/pay considerations as opposed to moving into private equity / hedge funds.

That’s because it’s less common to change careers in Australian culture, but it’s also a function of how small the PE / HF industry is here – even compared to banking.

Q: Right, that makes sense. But what about moving outside Australia to other regions? Have any of your friends done that?

You can do it, but it’s more difficult than starting in New York or London and then moving to different regions. Experience in a region like Australia doesn’t translate quite as well to other parts of the world, and if you want to move to the US or Europe, you may not get “full credit” for the work you did here.

The opportunity to move outside Australia is probably better if you make the move within your firm through an internal transfer. Another possibility would be to move into Southeast Asia, although knowledge of a local language would definitely be a plus.

Q: What about the pay / bonuses as compared to the US and other regions?

Is anyone actually getting a bonus this year?

You’ll have to ask me again when I finish up my first year – I’m not 100% certain, but I imagine they’d be a bit lower than New York / London bonuses. Again, this depends on where you’re at – boutiques tend to start with a higher base and a lower bonus while the bulge bracket firms start with lower bases and higher bonuses.

Q: Great, thanks for your time.

Sure thing – just don’t post this with a photo of a kangaroo or anything!

 

NOTE: Please click here for an updated and more detailed overview of investment banking in Australia.

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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