by Brian DeChesare Comments (77)

Why You Can’t Break Into Private Equity as a Foreigner in China

China Private EquityDespite my repeated warnings that emerging markets don’t care about you – only people who know the language, have connections, and are qualified to work there – this question won’t go away:

“I really want to work in China! How can I break into finance there? I’ve studied Mandarin for 5 years and I can read faster than Chinese people now! Show me how to get into PE!”

I’ve gotten tired of answering that one, so today you’ll hear from someone much better qualified to answer it than me: a reader who works in private equity in China.

He’ll tell you all about:

  • How to network your way into the industry and how it’s different from PE in the US/Europe.
  • Why foreigners are getting pushed out of the industry and why you’d have to be “crazy” to go work there these days.
  • What you should do instead if you want to do business in China.
  • How the pay and work culture differ from other parts of the world.

How It All Began

Q: Can you walk us through your background and how you broke into private equity in China?

A: Sure. I was a newly minted MBA, and back in 2005-2006, China’s PE market was much less developed.

I went to AVCJ’s annual conference in Hong Kong, networked like mad there, and got an internship helping a small fund with a capital raise. That fund later went on to become the #1 PE fund in China, and I rode their coattails to success.

I still believe that conference, among others, is the best way to break in but today it would be almost impossible to follow the same path if you’re a foreigner.

There are way too many local Chinese who work or study abroad and then return home, and too many bankers eager to move into PE.

And even though I’ve been here for years, even I have been getting pushed out of the industry – just like all other foreigners.

To be frank, I wish I had heeded the warnings of others and had spent the time breaking in to PE in the US/EU instead. Now, nearly six years later, I don’t think I’ve had the experience and training I would have had in the more developed markets.

So, if you’re a foreigner, be kind to yourself – don’t try to get into PE in China. If you absolutely must have your China experience, feel free to come over, but focus more on “bridging” roles, like investment banking, sales & trading, and so on.

PE is a local market, and in China, it is hyper-local. Five years of Mandarin won’t cut it; heck, near-native-fluent Chinese won’t cut it.

Even foreign-born Chinese, Taiwanese, Singaporeans, and people from Hong Kong have a tough time finding roles here because they’re also too foreign. You were either born and raised here, or you weren’t – and if you weren’t, you’ll always be an outsider no matter how much baijiu you can drink.

Now, if you are from mainland China, then there’s still a lot of opportunity.

I would recommend coming here in that case, because there’s more going on and if you can hack the local game you can get some great deal exposure and you might even make a fortune in the process.

Q: OK, let me stop you right there because I want to return to that topic of how you actually break in at the end.

So most foreigners would face a near-impossible battle to get in, but what is the private equity industry in China like?

What types of deals and companies do you focus on, and is it mostly local firms or international ones that make investments?

A: The industries themselves are diversified – you see manufacturing, state-owned-enterprise commercialization, consumer/retail, clean-tech, software and IT, energy, construction, infrastructure, healthcare and so on.

Many firms are still generalists with certain sectors of expertise / focus, but a few sector funds have sprung up as the market has matured – there are a few healthcare funds, a few clean-tech funds, a few technology funds, and a few consumer / retail funds.

Local funds and international funds are completely, 100% different animals.

The local funds staff huge teams – sometimes up to 100 investment professionals in a firm – and the pay therefore is lower, there’s often little formal training. You may struggle to get noticed and find a mentor, and it’s tough to navigate the political environment.

But the local firms do most of the deals, whereas international firms are having trouble closing anything.

Some of the regional funds (such as Barings, HSBCPE, Actis, etc.) are able to get some good deals done, but PE firms such as Carlyle, TPG, and so on, don’t see much action here.

In short:

  • Local PE Firm: More deal exposure, but no structured training, and lower compensation.
  • International PE Firm: Brand, better pay and training, but lower chance of closing deals – which will hurt your CV.

Friends here have been frustrated at both types of firms – those at local firms feel underpaid and under-appreciated, and those at international firms complain about never closing deals.

Q: Right, so you’re stuck between a rock and a hard place there.

What’s your average day like in terms of responsibilities and work? Is it mostly due diligence and modeling, or do you get more “random” tasks?

A: So far I’ve focused more on fundraising and investor relations than anything else. When I first joined this firm I started out as a deal guy, but once there were more skilled locals in the market, my role was shifted to fundraising.

I actually don’t mind that since I enjoy fundraising more than deals – analysis and due diligence can get repetitive, and you see companies at such a high-level that everything starts to look the same after awhile.

The good part about fundraising is that I get a lot more exposure to Limited Partners than if I were in the US or EU – there’s a lot of potential there for future networking since they all know who I am now.

Sometimes it does get repetitive telling the same story to potential investors, but that’s true of any sales job or even if you’re the CEO of a company.

Q: So they’re pretty much limiting the investment/deal work to locals?

A: Yes. Again, I would actively discourage foreigners from trying, unless you really have native-level Mandarin (beyond just “fluency”).

The nature of the job for locals or returnees, however, is compelling.

The deal professionals get to explore very interesting companies across a whole spectrum of industries, and the work includes due diligence and business analysis, which involves researching an industry by speaking with experts, interviewing the company’s management, and speaking with competitors.

You do some financial modeling, but it’s not really meaningful – at least not in the traditional sense.

Most businesses are growing so quickly that standard models are meaningless. With 50-100% revenue growth rates, analyses like the DCF break down and even valuation multiples don’t tell you much if the company is growing at that rate.

Private equity here is more like venture capital in developed countries.

Investors spend their time on industry and management team analysis, and most of their time is spent deciding which industry is best to invest in, whether the target company can become a market leader, and whether or not they can trust the management team.

Trust is still a major issue in China, and you can’t depend on legal documents to be truly binding – they are a framework, but interpretation and enforceability are questionable.

So half of your due diligence time might be spent understanding the psychology of the management team – particularly the founder. If you’re depending on your closing documents to protect you, then you’re already in trouble before the ink is dry.

Q: Interesting – and that foots with one of the previous interviews here from a reader who completed a PE internship in China.

What about the pay and work culture there? I’m assuming that pay is lower on an absolute basis, but higher relative to the cost of living?

A: Pay varies greatly between local and international firms. Foreign firms here pay about average global pay for PE – so between $150K and $250K USD all-in for associates.

Local PE firms pay less – maybe around $90K USD for new associates.

In 1990 or 2000 those figures might have been a ton of money in China, but over the past 10 years the cost of living here has skyrocketed and places like Beijing and Shanghai aren’t as cheap as they used to be.

They are still less expensive than New York, and so you won’t starve on $90k per year. But it just isn’t the bargain it used to be. The tax rate is also higher than in Hong Kong – up to 30-40% vs. about 15% in HK – so that also eats up a good chunk of your pay.

Bottom-line: you will make less in PE here compared to the US / Europe, and you’ll make significantly less working at a local firm. You have to decide if it’s worth it, and that trade-off makes little sense unless you’re truly committed to staying in this market for the long-term.

Q: What about carry? Since the market is less developed do they give that to associates or anyone less senior than MDs?

A: Carry is almost always restricted to the senior MDs here.

There is a very patriarchal/monarchical feeling at many of the firms – you’re either a rain-making MD who brings in deals, or you’re commoditized execution.

This may sound just like the US and EU, and to a certain extent it is – just a more extreme version of the usual hierarchy in the investment banking career path.

It’s not unheard of for just a few guys at the top to get all the carry and for everyone else to get nothing. That creates a situation where the guys at the top are making literally millions (or billions) and everyone else below them is making base pay, keeping their fingers crossed for bonuses, and hoping to climb up the pyramid for a shot at some equity… hopefully… someday… maybe.

That said, those who did manage to get a slice of the carry are probably looking at returns that could easily fund a comfortable retirement in just a few years’ time. Many of the funds have returned 3-5x, and have had IRRs of over 100%, so the carry really is making some people incredibly wealthy.

Again though, carry is not awarded to the non-MD investment professionals. Yes, it can be similarly lopsided in the US/Europe, but at least as you move up you’ll earn progressively closer to what MDs and Partners make, and eventually you will get carry even if you’re not the top person at the firm. In China, carry is just shared among a small number of hands.

Foreigners, Abandon All Hope?

Q: Let’s go back to why it’s so tough for foreigners in the China PE market. Do you have any foreign co-workers, or are they all locals from mainland China who worked or studied abroad and returned home?

A: There are fewer than 10-15 foreigners working full-time in the entire PE industry in China, and we all know each other.

Most of us have been pushed out from deal work and, like me, focus more on fundraising and investor relations.

Q: OK, but I’m sure there must be a few foreigners there in high-up positions? One of our other interviewees mentioned that the MD at her firm was foreign.

A: There are some exceptions. For example, a few foreigners got in 5-10 years ago as founding MDs of their firms, so they have unique positions.

But the rest of us – other investment professionals – have been mostly pushed out. There was one other guy who was relocated to Asia by a major international PE shop, but he was then axed to free up the position so that a local could be brought in instead. And he was a senior officer with 10 years+ of PE experience and fluent Mandarin.

Q: OK, point taken – but wouldn’t knowing the language give you a big advantage and let you compete more effectively with people from mainland China?

A: No.

Becoming 100% fluent in written and spoken Mandarin has about a 1% chance of helping you break into private equity here.

These “exceptions” I’ve referenced were already 100% fluent in the language and could read and write extremely well, and they were still pushed out.

Most of the foreigners here are now in fundraising roles, even if they worked at bulge bracket investment banks before and earned MBAs from top schools.

No one is interested in foreign professionals anymore, and it’s not even about the language – it’s that the work culture and deal environment here are so local.

It’s not like some countries (the US and UK) where anyone who can learn the language can advance to the top. They heavily favor locals and will tolerate foreigners, but will never fully accept them.

That’s why I’m making such a strong recommendation against coming here to work in PE – it’s just not realistic with the current state of the market.

You could spend years studying and learning the language, then more years struggling to break in, only to find yourself sidelined and underutilized because they don’t care how good you are or how much experience you have, only that you’re not a mainland Chinese who can bring in deals and charm the local entrepreneur.

Q: Not exactly the rosiest picture there…

Let’s say that someone is really interested in doing business in China – would you tell them to just give up altogether, or just to forget about PE?

A: If you’re from here originally, have family/connections, and want to go back home, China is great. There are opportunities in PE, banking, consulting, and entrepreneurship – you name it. The rapid growth engenders opportunity.

But if you’re a foreigner, and you absolutely, positively can’t get China out of your mind, then you can take your best shot.

However, if you want to make the leap I would steer clear of PE and focus on other areas like investment banking, investor relations, consulting, or being the CFO of a company.

In those areas, international experience/exposure is more valued and you don’t actually have to be Chinese to fulfill the role.

Oh, yes, and make sure you get to 100% fluency in Chinese – reading, writing, speaking, and listening; obviously reading and writing are the hardest parts and will consume 95% of your time.

Q: Out of curiosity, why do you think there is such a strong bias against foreigners in PE?

A: Similar to venture capital in the US, Europe, and other markets, private equity is a hyper-local business here. You need to be here on the ground communicating directly with management teams to have any chance of winning good deals.

They favor locals because they know that they have connections and are better able to reach local businesses; plus, they understand the culture implicitly and won’t get “rejected” by entrepreneurs nearly as much as foreigners.

Also, both the local and international firms must project an image of being local from a marketing standpoint – whether they are showing their local chops to entrepreneurs, the government, and especially their own LP investors.

Q: So we’ve established why you don’t want to work in PE as a foreigner in China.

But let’s say that someone reading this is from mainland China, has studied or worked abroad, and is returning home – how would he or she go about breaking into private equity?

A: It’s all about networking and conferences here. You need to go to the AVCJ conference in Hong Kong and the SuperReturn China conference, and then do a lot of networking with people you meet there. Bring 300 or so business cards, meet everyone, and try to set up side-line meetings in advance.

You should also connect with friends who work at the firm you’re interested in and who can help you get in touch with the senior staff (MDs or CEOs). Business school classmates and alumni can also help.

Some of the larger domestic firms have also been going to business schools lately to recruit there, so that’s another option as well.

If you’re returning home and want to be here long-term it’s still a great time to get into the industry, since you can join a fast-growing firm and rise to leadership. The competition is tough, but it’s possible to break in and advance, and the rewards are certainly there.

It definitely gets more competitive each year, but since most PE firms are looking for people with very specific profiles you have a much better shot of getting into PE here than you would by competing with the broader market in the US or Europe.

Q: Are there any differences they should be aware of with recruiting, CVs/resumes, and interviews?

A: The main difference is that you don’t need investment banking experience to get into private equity here.

Technically this is not true in developed countries, either, but let’s be honest: the majority of people who break into PE have done banking or something similar like management consulting or Big 4 Transaction Advisory Services.

But in China, most PE professionals are not from an investment banking background, so they don’t expect you to have that experience either.

It’s really about networking, meeting the right people at conferences, following up with them and being persistent until they give you interviews.

CVs/resumes are not much different, and in interviews they’ll ask similar questions though there’s obviously less focus on modeling and deal experience; it’s more about “fit” and your general knowledge of how to analyze businesses.

Q: Great, thanks for your time. And I hope your situation improves and that you can find a better role in the future.

A: No problem – enjoyed sharing my story even if it sounded a bit pessimistic at times. And yes, I’m working on other roles right now….

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.
by Brian DeChesare Comments (81)

The 4-Hour Investment Banking Body: How to Keep Off the First Year 15 and Get In Shape While Sitting In a Cubicle Staring at Excel All Day

Fitness Investment BankingIt’s midway through your first year as a banker.

You just got back from the holiday party, and after taking a day off to recover from your hangover, you’re ready to rock and roll.

You pull out your favorite pair of slacks from the closet, fumbling to put them on…

…and as you do so, they split in half – far too small for your waist, which has gained 4 inches (10 cm) in the past 6 months.

You’re fat.

And now you’re naked from the waist down, too, but that’s a smaller issue.

Here’s what went wrong, and how you can lose all that weight you just gained – with only 4 hours of free time (or less) per week.

Got Corpulence?

Back in school, you were an athlete – a powerlifter, a marathon runner, or even Michael Phelps.

Or maybe you weren’t, but at least you were in decent shape and had clothes that fit.

Now, you’re just a sleep-deprived, borderline-alcoholic, overweight banker – though you have gotten better at Excel.

You gained 25 pounds (~11 kg) in the past 6 months, but it’s not your fault – the universe has been conspiring against you to make it near-impossible to stay in shape as a banker.

The Demons of Fat Gain

You have a lot going against you and very little working for you as a banker:

  • You sit motionless for extended periods – and might even have bad posture when doing so.
  • You’re addicted to SeamlessWeb and eat horrible takeout food all the time.
  • Too many bottles, not enough models.
  • You never do any exercise because you’re busy fixing pitch books when you should be going to the gym.
  • Your co-workers will ridicule you if you don’t drink every single day.

Taken alone, any of these would make you fatter – but altogether they create a deadly cocktail of fat gain and will result in multiple trips to the “plus size” store.

Oh, and remember: no amount of money or fame will save you from health problems. Bill Clinton, former leader of the free world, earned over $100 million USD since he left office and that didn’t save him from quadruple bypass surgery.

How to Vanquish the Demons and Lose Fat

You need to combine diet and exercise and modify habits like drinking and how long you sit in your chair.

That seems simple, and if you’re not an investment banker, it is – but as a banker, you have a lot of problems that the average dieter never faces.

Most fitness advice online assumes that you can work out whenever you want for as long as you want, and that you have infinite time to cook food for yourself.

Rather than repeating those unrealistic suggestions, we’re going to focus on specifically what you must do to stay in shape as a banker.

The most common problem is fat gain, so that will be the main goal – but the advice here goes beyond that and will address issues like lower back pain, high blood pressure, diabetes, and your overall energy level.

Assumptions and Sources & Uses

I’m assuming that you:

  • Have very little free time (< 4 hours per week) and no flexibility in your schedule.
  • Cannot cook because of this lack of free time.
  • Are often in social situations where you’re pressured to eat junk food and drink alcohol.
  • Care more about losing fat or not gaining fat in the first place than you do about gaining muscle or building endurance (there’s nothing wrong with those, but they’re much harder to pull off as a banker).
  • Have an inkling of common sense. If you think that donuts are better for you than vegetables, please press Alt + F4 right now.

We’re not going to get into a debate over different diet plans, like Atkins vs. South Beach vs. Paleo vs. Slow-Carb – the specific details matter far less than following the high-level ideas, which are similar in different plans.

I’m also not going to turn this into science class and get into a technical explanation of everything, because that’s off-topic and you can read all about the science elsewhere.

The focus here will be how to avoid getting fat as a banker – through diet, reduction of social pressure, exercise, Starbucks (the lifeblood of any banker), the right kind of bottles, and some secret ingredients.

Diet

As a banker, the usual habit is to skip breakfast altogether, get takeout for lunch, and then eat a huge dinner with 2 desserts from SeamlessWeb.

When you first start, this seems great: you’ve gone from being a starving student to eating steak and tiramisu every day.

The only problem is that you’re also getting fatter every day.

Modify this routine by:

  • Eating smaller meals at least 4 times per day – and more if possible. It helps your metabolism.
  • Avoiding SeamlessWeb and similar takeout and going for healthier options.
  • Always eating immediately after you wake up.

What do you eat, and how can you possibly have time for 4 meals per day?

First, each meal should have protein, fat, carbohydrates (optional – keep reading), and vegetables, with about half as much fat as the others (since it has twice the calories).

Examples that you can easily get at restaurants or from stores like Trader Joe’s or Whole Foods, with minimal prep time:

  • Sashimi with salad
  • Chicken salad with olive oil and vinegar
  • Tofu, beans, and vegetables (the vegetarian option)
  • Egg whites with avocado, cheese, whole wheat bread, and spinach
  • Low-fat cottage cheese with nuts and fruit
  • Sardines and whole wheat crackers

The last 2 are missing vegetables, so you can just add in a mixed salad there.

In keeping with the “no science class” rule above, I’m not going to spell out the mix of protein/fat/carbohydrates in each of these but feel free to look up the facts yourself if you’re curious.

Use your $20-30 dinner allowance to buy these, and try to get pre-made meals as much as possible – otherwise you’ll be pressed for time.

To take care of breakfast and your snack in between lunch and dinner, you can order extra the night before and save it for the next day, you can run to a store close to your building during a break, or you can use one of my ninja tricks below.

If you do it properly, eating 4x per day takes no more time than eating just 2x because you’re at your desk anyway, and you’re eating food you already have.

Wait, Aren’t Carbs Bad? / What Should I Avoid?

Ever since the Atkins diet became popular there has been a crusade against carbohydrates: “Don’t eat them,” critics say, “or you’ll turn into the Pillsbury Dough Boy.”

There is some truth to that, and cutting out foods with a lot of carbohydrates – especially simple ones like white rice – will help you. But as a banker, it’s probably not viable to completely cut out carbs because you need the energy for all those all-nighters.

So if you can do so, reduce carbs, especially when it’s late at night. But rather than obsessing over that, make sure you avoid anything with sugar – that’s the absolute worst thing you can eat if you want to stay slim.

You’ll be pressured into ordering dessert all the time, going to Starbucks constantly, and harvesting as much junk food as possible from your office’s kitchen, so avoiding sugar is easier said than done.

The easiest solution is to use artificial sweeteners, such as stevia, if you need your fix of sweets. These are not great to have in huge quantities either, but in small doses they are much better than real sugar.

Social Pressure

As a banker, your co-workers will pressure you into ordering more food than you can possibly eat just to use up your entire dinner allowance.

There are 2 ways to deal with this: avoidance and limited acceptance.

Avoidance

You could tell them you’re slammed and have no time to take a break and eat – but you don’t want to do that all the time or you’ll end up with no friends.

Maybe try this one 2-3x per week, but don’t rely on it every day or you’ll be excluded from group outings.

Limited Acceptance

For the times when you do have to go eat together, just follow the guidelines above: make sure your meal has a mix of protein, fat, carbs (optional), and vegetables.

So if you go out and they say you have to order a steak or they’ll laugh at you, go ahead and do it – just make sure it’s not massive (because you’re eating 3 other times throughout the day) and that it has vegetables on the side.

When it comes time for dessert and drinks, say you need to finish a few more things at work so you can’t drink much, and that you’re too full for dessert because you ate a few hours ago.

Exercise

Just like the controversy over carbs and whether or not they’ll turn you into the Pillsbury Dough Boy, another debate rages between cardio (running, swimming, etc.) and strength-training exercises.

We’re going to ignore that completely for one simple reason: you do not have time for extended cardio workouts as an investment banker.

You might be called back to the office at any time, on any day of the week, for any reason, so you need to think in 15-minute increments rather than hour-long or multi-hour-long sessions.

So the only option is strength training, for 3 reasons:

  1. As mentioned above, you need to get intense exercise in a very short amount of time.
  2. Unlike the equivalent amount of cardio, even a short and intense weight lifting workout will help you burn more calories for over a day if you do it properly.
  3. Doing resistance training will help your body absorb more calories and carbs immediately afterward, so you can loosen your dietary restrictions a bit.

If you have extra time, sure, go for a run, a bike ride, or go swimming whenever you can.

But if you’re a banker with an unpredictable schedule and almost no free time, you need to do quick but high-intensity strength-training workouts each week for the highest ROI.

What to Do At the Gym

Ideally, you will go to the gym 3 times per week for very quick workouts: I suggest Friday night, early in the day Sunday, and then once more whenever you have time during the week.

You are more likely to have free time on Friday night because senior bankers leave earlier – and you’re less likely to be called into the office early on Sunday.

A simple plan would be chest and triceps on one day, back and biceps on the next day, and then lower body on your final workout day.

Before the powerlifters reading pick apart this plan, remember that I’m assuming no knowledge or previous experience and extremely limited time – so please resist the temptation to argue for something more complicated.

If you’re pressed for time, you can condense this to 2 workouts instead and do upper body all on one day and lower body all on the other day – but if you do that, you should leave at least a few rest days in between workouts.

Finding Time to Go to the Gym

This can be tricky, and it depends on how your group operates: you’re best off asking if it’s OK to leave for 30 minutes in the early evening, and then getting in the habit of always going at that time.

Don’t ask for permission when you first start working – you should use the first month or two to prove yourself as reliable, and then “make the ask” once the senior bankers know you’re good.

If your group is not open enough to discuss non-work issues, then you’ll have to follow my suggestion above and go on Friday and Sunday, and then whenever else you have time in between.

That might be 2 AM on a Tuesday – not an ideal time to work out, but far better than doing nothing at all.

Oh, and if you’re a female banker you still need to do everything above and focus on strength training: you’re not going to turn into the Incredible Hulk, since male and female bodies react much differently to working out.

In fact, arguably females need strength-training more than males due to the threat of osteoporosis.

Trips to Starbucks

This is yet another problem if you’re a banker who wants to stay in shape – you’ll be called to Starbucks and pressured into ordering that grande chocolate frappuccino all the time.

Fortunately, there’s an easy solution: avoid anything with sugar or milk in it. That means you have only 2 options at Starbucks: americano or espresso.

But you could turn this restriction into your advantage by ordering triple espressos all the time to make yourself look hardcore and then say that you need the caffeine for yet another all-nighter.

Critics will say that this results in too much caffeine, but that’s far better than having too much sugar: as a banker you must pick the lesser of two evils.

Outside of coffee, you should only drink water (ideally liters per day), tea, and yerba mate (the loose-leaf variety, anything else is too weak).

Sugar-free Red Bull and other drinks with artificial sweeteners are fine in small quantities, but try to shift over to tea for your caffeine fix as much as possible.

What about alcohol? I’m glad you asked…

Bottles and Bottles

Most hardcore fitness buffs will tell you that alcohol, like sugar and carbs, will instantly turn you into the Pillsbury Dough Boy.

That’s not far from the truth: alcohol (especially beer) has a lot of calories and even if it doesn’t, it prevents your body from burning off calories until the alcohol is processed.

As a banker, though, you can’t completely cut out alcohol because you’ll be pressured into drinking with your co-workers, with clients, and at events like holiday parties.

So follow these guidelines instead:

  1. Avoid beer and anything with a lot of sugar, like soju or sugary cocktails, at all costs.
  2. Stick to whiskey shots and other hard alcohol when you must drink – it’s not ideal, but it’s “less bad” for you than beer because the calorie count is lower.
  3. Red wine in limited quantities (1-2 glasses per day) is arguably OK as well, or at least “less bad” than beer.
  4. Try to drink no more than once a week if you can help it – just say you’re busy the rest of the time.

I can’t help much with the models, but that’s how to handle the bottles side of the equation.

The Cherry On Top

Those are the key principles, and if you follow everything above you’ll be better off than 99% of incoming bankers who haven’t even thought about how they’ll stay in shape as cubicle monkeys.

You’re supposed to avoid dessert, but just this once as a cherry on the top of the rest of this advice, here are a few tips and tricks to take it to the next level:

Think Thin Bars

As you can tell, I’m borderline obsessive-compulsive about fitness and nutrition – and I’ve searched far and wide for the best way to eat decently with no free time.

The best solution I’ve found is the Think Thin bar: each one is 240 calories and has a mix of protein, fat, and “limited” carbs (the sugar alcohols in the bar are not fully absorbed by your body), and you can easily pack them for consumption whenever you want.

The one flaw is that they have relatively high saturated fat, so you shouldn’t go overboard: use them as a backup plan when you need to eat but don’t have anything else.

You can easily sneak these in and avoid drawing suspicion to yourself while you’re at your desk since they’re so quick to eat.

NEPA

NEPA stands for Non-Exercise Physical Activity, and it’s one of the most important – and easiest – things you can do as a banker to stay in shape.

If you’re staring at the monitor without moving all day, you’ll quickly develop lower back problems, carpal tunnel syndrome, and slow down your metabolism.

But if you take quick breaks to walk around for a few minutes every hour, you can avoid much of that, or at least reduce its impact.

Unless you walk for hours and hours a day you won’t lose much weight doing this, but taking these breaks is more about preventing back problems, eye strain, and carpal tunnel syndrome than burning fat.

So use all those trips to Starbucks with other analysts/associates as a way to get NEPA, socialize, and get your caffeine fix.

It’s easier to take breaks late at night when senior bankers are not around to watch everything you do, but even during the day you can take breaks during your downtime and do something as simple as walking to the bathroom or pretending that you have to go talk to someone else.

Does Any of This Actually Work?

Like most bankers, I got out of shape in my first year and then lost around 40 pounds (~18 kg) in the last 6 months of my second year by following the plan above.

Other friends in banking have followed this plan to similar success.

I’m not a doctor and this tutorial does not represent a scientifically controlled experiment – like everything else on the site, it is advice that has worked well for others.

This plan is admittedly more difficult to follow in countries outside the US and even in cities outside NY/SF/LA because there are not as many options for food, and many places don’t have 24-hour gyms.

So you may not be able to follow everything precisely, but as long as you avoid the most common mistakes you’ll still be in better shape than most bankers.

What Now?

First, find a 24-hour gym close to your office, and then locate several restaurants and grocery stores nearby that have the food you need.

When you first start working, go to the gym whenever you have a chance. After 1-2 months, ask the senior banker you work most closely with if it’s OK to go for 30 minutes 3x per week around dinner time.

Rather than ordering takeout on SeamlessWeb all the time, use your dinner allowance to get the proper food at places like Trader Joe’s and Whole Foods, and save some so that you can eat immediately when you wake up the next day – and if you run out, keep Think Thin bars on hand as your backup plan.

Do all that, and hopefully when you reach the midway point of your first year all those Brooks Brothers clothes you bought before training started will still fit you.

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.
by Brian DeChesare Comments (33)

The Don Draper Guide to Investment Banking

The Don Draper Guide to Investment BankingA few years ago some banker friends and I were thinking about creating a TV show.

Entourage meets The Office: all the glamor of movie stars and the celebrity lifestyle, but in cubicles rather than Hollywood.

But the outside world has never hated Wall Street more, and post-financial crisis there’s no way a drama like this could ever take off.

Plus, there’s another small problem: it would be impossible to make a show more awesome than Mad Men.

Don’t believe me?

Here are all the lessons you could learn from Don Draper himself:

1. Have a Great Name

You cannot underestimate the importance of having a name that rolls off the tongue: “Don Draper” is 100x better than “Dick Whitman,” so it’s no wonder that Don assumed someone else’s identity.

You’re judged on your name just like you’re judged on your appearance: so if your name sucks, change it or come up with a nickname or shortened version that’s easier to pronounce (just make sure it’s done officially so you can handle those pesky background checks).

Some people succeed without great names, but why take the chance?

2. Don’t Hook Up with Co-Workers

While Don has had dozens of affairs, up until season 4 he never crossed the hook-up-with-co-workers line.

And when he finally did cross the line, he hit rock-bottom and found himself more adrift than ever before.

You’re required to have affairs and random flings if you’re in finance – just make sure they’re not with co-workers or things will head south very quickly once it ends.

3. If You Do Hook Up With Co-Workers, Don’t Take the Marriage Seriously

So you just had a random fling with your secretary, suddenly decided that you’re in love, and proposed during a trip to California?

If Don can do it, you can too.

Remember that you cycle through wives or husbands approximately every 2 years in finance, so it’s perfectly fine.

With the amount of money you’ll make, alimony is almost an afterthought anyway.

4. Don’t Take Your Employment Contract Seriously, Either

Don didn’t even have a contract with Sterling Cooper until everyone realized he needed one, midway through season 3.

And even when he “signed” it, he didn’t use his real name and then broke the contract to leave and start his own firm anyway.

The role of contracts in investment banking is similar: they’re just a formality.

You could be fired at any time, or you could quit as soon as you find a better offer elsewhere – so have fun playing the field.

5. Take 4-Hour, 3-Martini Lunches

Has Don ever not gotten a hotel room with his mistress-of-the-moment after a 3-martini lunch?

You think you have to be available for clients and senior bankers 24/7, and that’s usually true…

…except for when you get that buy-side offer and are on your way out the door anyway.

Remember that no one cares about you at a bank: especially when you’re about to move on anyway, do the bare minimum to get paid and slack off as much as possible.

4 hours may seem like a long time for lunch, but if you’re leaving anyway and all the senior bankers are gone, who would notice?

6. If Conrad Hilton Calls You at 11 PM, Do Whatever He Says

And no, not just because his great-granddaughter is Paris Hilton.

If you have a high-maintenance client who’s worth millions of dollars and demands to speak to you 24/7, you better do whatever he says.

That includes getting his dry cleaning, dressing up as a clown at his kid’s birthday party, redecorating his house, and meeting him in the middle of the night just because he’s bored.

Remember, clients and work come before everything else – even if your wife is about to divorce you and your kids don’t remember who you are.

7. Exploit Loopholes for Personal Gain

So you just found out that your own firm is being acquired by a much larger company and you’d never want to work there.

Simple solution: just do what Don did and gather up everyone important and fire yourselves before the transaction goes through.

If your bank is actually getting acquired, the acquiring bank is smart enough to prevent that specific scenario with the reps and warranties in the definitive agreement

…But there are always other loopholes you can exploit.

Send out emails late at night to feign busyness, work hard during your first and last month and slack off the rest of the time – do whatever it takes to get top-tier bonus.

8. Keep Stacks of Alcohol in Your Cubicle

Bankers may not drink alcohol out in the open anymore like advertising guys did in the 60s, but if you work 100 hours a week you’re going to need alcohol and drugs – ideally cocaine – at some point.

Rather than running out to buy overpriced bottles constantly, keep a stash hidden away in your cubicle.

Once the support staff and senior bankers are gone, you have free reign to do whatever you want.

So if it’s 3 AM and your balance sheet isn’t balancing, just pull out your Jack, take a swig, and hope for a moment of clarity.

9. Don’t Lie on Background Check Forms

Don gets away with assuming someone else’s identity for years, but it finally catches up with him in season 4 as North American Aviation, a new client, demands background checks on everyone so they can receive security clearances.

And if you’ve been lying about your identity for years, background checks are the last thing you want to think about – so Don forces his company to drop the client.

You might think that’s bad – but if you lie on your own background check forms, something much worse will happen: you’ll get your offer rescinded and you might even have your career destroyed with the right chain reaction of forwarded emails.

10. Think on Your Feet

So the government has started telling everyone that cigarettes kill you – and your top client is Lucky Strike.

They put you on the spot in front of everyone else and ask you how to address these claims and market the product.

Simple solution: avoid the issue altogether. “It’s toasted.” – everyone else’s tobacco is poisonous, but yours is special.

Remember that investment banking is a sales job: it’s less about analysis and more about selling, relationships, and thinking quickly.

Even as an analyst, you’ll be put on the spot all the time when your MD or VP ask about your work or for specific numbers – so you better be prepared.

11. If You Get Arrested for Drunk Driving, Get Your Most Trusted Friend to Bail You Out

After indulging in alcohol yet again, Don finds himself in a wrecked car and in police custody along with his “female companion” of the moment.

So he does what any reasonable businessman would do: he calls Peggy, the one person he can trust to bail him out without telling anyone else at Sterling Cooper.

You should also have a “designated friend” to bail you out, because you’ll probably be arrested for drugs or alcohol at least a few times.

Just make sure it happens after you’ve already gone through background checks.

Got Don?

While you don’t want to follow everything Don does (e.g. sending a major announcement about your firm to the NY Times without consulting anyone else first), you can pick up a lot from him.

Advertising in the 1960s was just like finance in the 2000s: the most prestigious and highest-paying industry.

And if Don were in business today, he’d surely be a Partner at a bank or PE firm – so watch Mad Men and take notes the whole time.

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.