From Big 4 Restructuring to Investment Banking: How to Make the Leap
“Help! I hate my accounting job and want to move into banking, what do I do?”
“What group should I transfer to if I want to get into finance?”
“My Big 4 salary doesn’t give me enough cash for bottles!”
If you’re at a Big 4 firm right now, you’ve had one of the thoughts above before – maybe multiple times.
We covered how to move from accounting to investment banking before, but this time around there’s a different twist – an interview with a reader who moved from a Big 4 restructuring group to investment banking.
Here’s how he made the leap, and how you can do the same:
Background & Culture
Q: Let’s start with your background – how’d you end up at the Big 4 firm, and what did you do before that?
A: Sure. I actually started out as an athlete, and played at the college level for a few years before I got a serious injury that ended my career.
Then, I transferred to a smaller and lesser-known school in the Midwest, and got more interested in finance once I knew that being a professional athlete was no longer an option.
The investment banking industry is smaller in the Midwest, but there are still a few local banks there and they were doing a lot of distressed M&A deals for the auto industry, so I started contacting them and asking about internships each week.
After a ton of networking, one bank finally caved in and decided that they needed an intern – so I joined and got to help out with a few live deals there.
As graduation approached, I continued networking and found a few guys who used to work at a very well-known PE firm.
They had just started a lower middle-market fund just for family/small-business investments, and they needed some analysis done on Project Finance-type investments (power plants and such). I volunteered to do the modeling for that, and they were impressed with my work and turned it into a full-time internship.
Since I had so much experience in restructuring, I went to a restructuring group at a Big 4 firm after my internship at the middle-market PE fund. I stayed there for around a year, and then recently moved to a bulge bracket bank.
Q: That’s a great story – before we jump into it in more detail, I think a lot of readers might wonder what it’s like working at a Big 4 firm in their restructuring group.
We’ve covered the work and culture in IB and PE before, so how would you say the Big 4 firm compared to those?
A: There was definitely a skill set overlap – we did lots of cash flow modeling, presentations to lenders, and distressed M&A deals where we advised the company on selling, restructuring, or bankruptcy options. We also worked with the big auto companies, so you got good exposure to their finance teams.
The financial modeling and deal skills were similar, but there was a big cultural difference because we only worked on 1-2 projects at once and the hours were very, very tame. I only worked on one weekend, and a “late night” was staying to 8 or 9 PM.
Q: Why do you think there’s that cultural difference? Deals are still deals, so I don’t understand how you could “choose” to be less busy if you’re working with Fortune 500 clients all the time.
A: It’s mostly because financial advisory services were a very small part of what the firm did. At an M&A boutique bank, 100% of revenue comes from advisory, but at this Big 4 firm advisory accounted for maybe 2% of revenue.
Their focus was accounting/audit and consulting – they had investment banking and restructuring services, but they were an afterthought next to everything else there.
Q: OK, so it sounds like they consciously chose not to take on as much business as they could have since it wasn’t their core focus.
Obviously you did well moving into banking from restructuring, but what other groups would be good if you wanted to make the Big 4 to IB move?
A: As you’ve mentioned before, Transaction Advisory Services (TAS) can be good since you get exposed to bankers in some scenarios.
But I don’t think it’s necessarily the best group all the time because many TAS groups focus on accounting and due diligence, and you may not get exposed to valuation, financial modeling, or other aspects of the deal. They may also spend a lot of time on tasks that bankers don’t care about, such as making sure that working capital requirements are met when a deal closes.
So I would recommend looking at the internal middle-market banks that all Big 4 firms have – they do mostly sell-side advisory, and while it’s not comparable to the experience you’d get at a real bank, it’s closer than most other groups at the Big 4. Here are links to each firm’s internal bank:
- Deloitte – Corporate Finance
- KPMG – Corporate Finance
- PricewaterhouseCoopers – Corporate Finance & Investment Banking Services
- Ernst & Young – Transactions
And then anything transaction-related – like the restructuring group I was in – could work as well.
Networking & Interviews
Q: Can you talk about the networking you did to get the bulge bracket offer? What was the best source for finding contacts and meeting bankers?
A: Keep in mind that I had been networking all along, ever since I got my original internship via aggressive cold-calling.
So it was just continuing what I had already started – I took the Big 4 offer knowing that I still wanted to move into banking and would have to continue networking.
It was difficult to find bankers at first because few alumni worked in finance, I didn’t have co-workers I could reliably ask, and headhunters were useless unless you had at least some full-time work experience.
Q: So where did you find bankers if not through the usual sources like your alumni database?
A: A couple ways:
- High School Contacts – Even though my university had few alumni in finance, there were quite a lot from my high school who worked in the industry.
- Random Online Contact – I would just go through LinkedIn and look up bankers in the Midwest and start reaching out them like that.
- Cold-Calling/Emailing – This is how I got my first internship. It’s time-consuming and has a low hit rate, but it does work.
- Upscale Gyms – I joined a few higher-end gyms in my area and ran into a bunch of financiers there. I met a few bankers, people in private wealth management, management and turnaround consultants, and even a PE Partner like that.
All of that helped, but the most helpful thing for me was always asking, “I’m interviewing with this group / interested in this area – do you know anyone else I could speak with?”
I got tons of referrals with that line at the end of each call or meeting. It sounds very simple, but you’d be surprised at how many people are too afraid to make simple requests in a conversation.
Q: I really like the tip about upscale gyms; it reminds me of Gordon Gekko playing racquetball.
How did you spin your resume when you were applying, since the Big 4 firm was your only full-time experience?
A: I actually downplayed the Big 4 experience, because I felt my banking internship and my work at the middle-market PE fund were both more relevant. So I focused on those and described my transaction experience using the template you’ve suggested before.
For my Big 4 experience, I focused on the valuation and modeling work and left out anything that was closer to accounting/audit.
Even though I had worked in restructuring there, I was interested in moving to industry or M&A groups in investment banking, so I didn’t want to make myself look too specialized by writing 100% about restructuring or distressed deals.
Q: That makes sense, and it’s great advice for anyone who has worked in a more specialized group and wants to move elsewhere.
What about the interviews themselves? Were they mostly technical or deal experience-focused?
A: They focused a lot on my deal experience – and more my experience at the bank and PE firm rather than in my restructuring group.
There were technical questions, but they were more curious about why certain deals happened, potential complications, and what I thought of the valuation and the process for different companies.
For some of the industry groups, a key question was “Why this industry?” They get a lot of people who don’t know why they want to work with financial institutions or industrial companies or whatever they cover.
Q: We covered a few possible answers to that one before, but what did you say?
A: In my final year of university I had completed a finance course where we valued companies in different industries, so I used that as my “spark” to show them how I got interested at first.
It didn’t work for every industry group, but by using that I could at least talk about my interest in the more common ones, like energy, financial institutions, and industrials.
I also used a few of your industry-specific modeling courses to demonstrate my interest and they were really impressed with that, since hardly anyone else had gone to the effort of completing entire case studies on these companies.
Q: I’m surprised by that one, because we generally tell customers that the industry-specific courses are more helpful once you’re already working – but you found them useful for interviews as well?
And these were lateral interviews at the top bulge bracket banks – even there most other interviewees still hadn’t done as much as preparation as you might expect.
Q: Well, glad to hear the courses were helpful!
It seems like the interview process was straightforward for you, but I’m sure bankers had at least a few “objections” to your background. What were the key issues, and how did you overcome them?
A: Their main concern was that my academic experience looked very spotty.
I had taken a year off after I got my injury back in college, and then had to enroll in another school and ended up missing another semester, so it looked like I had taken forever to graduate and had been to school twice.
Some bankers just focused on that for 100% of the interview – they asked about all my gaps in education and why I had gone to schools they never heard of.
I answered those questions by explaining that for my first 2 years in university, I was practicing constantly, still doing well in school, and working 1-2 part-time jobs at the same time. So I spun a negative into a positive, and pointed out that I was working crazy hours a good portion of the time and could therefore handle the hours of a bulge bracket bank.
And then I also had my previous IB and PE internships, so they weren’t too concerned by the end.
What If? And the Future
Q: Since you had those internships, you had 100% relevant experience when applying to larger banks.
But what advice would you give someone who’s at a Big 4 firm in some other role, like audit? What should they do if they have no transaction experience and want to get into IB?
A: First, get out of audit immediately. Do something – anything – more stimulating.
People make fun of investment banking for being mindless work, but in my opinion audit is even worse because it’s so mundane.
At least with deals, you witness drama as different buyers and sellers express interest, back out, make different proposals, and negotiate. In audit you’re staring at numbers all day unless you happen to uncover the next Enron.
Most Big 4 firms are fine with internal transfers – it’s often easier than it is at a bank. Sometimes the Partner you’re working for may take it personally, but that depends on your group.
You should reach out to the other group you’re interested in first, contact people there, and make sure they know what you’re interested in doing before you even run the idea by your current boss.
The Big 4 firms all have lots of events and internal mixers where professionals in different areas can meet each other, so it’s easier to get to know other groups than it would be in IB – most people don’t work more than 50-60 hours per week, so they have the time to help you.
You really have no excuse not to move to a group that’s more closely related to banking – I would recommend restructuring, valuation, internal M&A, and TAS as your best options.
Q: It’s interesting to hear that the internal transfer may be easier at Big 4 firms, but I guess the culture is just more relaxed across the board.
So now that you’ve won this bulge bracket offer, what’s next for you? Will you stay at your new bank for some time, or are you thinking about moving to the buy-side?
A: Unlike most other bankers, I’m actually interested in staying in IB for the long-term.
Back when I was interviewing for this role, a number of distressed investment funds also approached me, but I wasn’t interested in PE back then and I’m not interested now, either.
My key issue is that you must put your own money to work to progress in PE.
It’s not just Partners investing the fund’s capital – they also put in their own funds, so a poor investment could wipe out a good chunk of your personal savings.
Yes, the pay ceiling is higher and you could make mind-boggling money – but let’s be honest, at the MD/Partner-level, the average is about the same in both industries. The outliers in PE make far more, but for me the risk isn’t worth it.
The other issue is that private equity is much less of a team environment than banking, and coming from an athletic background I enjoy working in teams more than the solo work that you see in PE.
Q: That makes a lot of sense, and that point you raised about putting your own money to work is a great one that often goes overlooked. Thanks again for taking the time out to chat, I learned a lot!
A: You’re welcome, it was my pleasure.
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Investment Banking Recruiting in Europe: London vs. Frankfurt vs. Milan
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.
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.
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.
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.
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