insider guide BEAT THE STREET® INVESTMENT BANKING INTERVIEWS 4th edition ★ WHERE TO FIND THE BEST OPPORTUNITIES ★ RECRUITING TIPS FROM I-BANKING INSIDERS ★ THE A-TO-Z OF INTERVIEW PREP >> The WetFeet Methodology You hold in your hands a copy of the highest-quality research available for job seekers. We’ve designed the WetFeet Insider Guides to help cut down on the time you spend doing job research by doing some of the work for you. Hopefully we can make your job search as painless as possible. Each WetFeet Insider Guide is the product of hundreds of hours of in-depth research, critical analysis, and precise writing. We survey massive amounts of publicly available information and conduct dozens of in-depth interviews of rank-and-file employees who work for the companies and industries we cover. (We keep our company contacts anonymous to encourage candor.) 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Don’t hesitate to contact us at [email protected]. >>The WetFeet Guarantee You’ve got enough on your mind with your job search in full swing. So, if you don’t like this Insider Guide, send it back within 15 days of purchase and we’ll refund your money. Contact us at 215-546-4900 or [email protected] INSIDER GUIDE Beat the Street®: Investment Banking Interviews 2011 edition Beat the Street®: Investment Banking Interviews WETFEET 1518 Walnut St. Suite 1800 Philadelphia, PA 19102 Phone: (215) 546-4900 Fax: (215) 546-9921 Website: www.wetfeet.com BEAT THE STREET®: INVESTMENT BANKING INTERVIEWS 4th Edition ISBN: 978-1-58207-949-3 PHOTOCOPYING IS PROHIBITED Copyright 2011 WetFeet. All rights reserved. This publication is protected by the copyright laws of the United States of America. No copying in any form is permitted. 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All illustrations by mckibillo Beat the Street®: Investment Banking Interviews CHAPTER 1 2 3 1 I-BANKING 5 THE INTERVIEW 15 THE INTERVIEW INTERVIEWS PROCESS UNPLUGGED AT A GLANCE 6 Overview 16 Preparing Yourself for the Beauty Contest 6 The Bottom Line 16 Research 7 The Process 17 Rehearse 12 Alternatives to “The Process” 18 Review 26 Investment Banker Lingo Beat the Street®: Investment Banking Interviews 4 5 6 31 INTERVIEW 55 INTERVIEW 77 a Student’S PREP GUIDE WORKBOOK PERSPECTIVE 32 The Judge’s 56 Sample Q&A 78 Note to the Reader Scorecard 71 I-Banking vs 78 First and 36 Acing the Interview Management Foremost: Things Consulting You Should Know 38 Round One: First Interview 72 Never Let Down 79 Getting the Your Guard Interview 41 The Airplane Test 73 Q&A Thought 81 Before the 42 Round Two Balloons Interview and Beyond 82 At the 44 Your Final Interview Interview 84 After the 47 A Few Words Interview on the Stress Interview 84 Concluding Remarks 48 Your Turn to Ask Beat the Street®: the Questions Investment Banking 49 Denouement Interviews 51 The Offer 52 Salary Negotiations contents I-Banking Interviews At A Glance 1 Beat the Street®: Investment Banking Interviews 1 TER P I-BANKING CHA A GLANCE AT INTERVIEWS AT A GLANCE Investment Banking Breakdown Each of the following areas will typically have 2 a different interview process (you must know TER P which you are applying for!): • Corporate Finance (CorpFin) CHA THE INTERVIEW PROCESS • Sales • Trading • Research 3 The Three Rs to Prepare for Your Interview Research TER • —know the industry and P the company inside out. CHA THE INTERVIEW UNPLUGGED • Rehearse—practice for the questions you know you’ll get. • Review—make sure that you know your finance and accounting tools. 4 The First-Round Interview TER P • Treat it as a conversation. • Prepare examples from your past that highlight CHA INTERVIEW PREP GUIDE your skills. • Show enthusiasm for the company and the industry. The Second-Round Interview and Beyond • If you can, get tips from your 5 first-round interviewer. TER P • Act conservatively at social events. CHA INTERVIEW WORKBOOK • Be polite, courteous, and humble. Final Interviews • Model your behavior on that of the people you’ve met from the firm. 6 • Convey why you want to work at the firm, TER and only that firm. P • Make everything in your past relate to I-banking. CHA A STUDENT’S PERSPECTIVE 2 WETFEET INSIDER GUIDE CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 1 THE INTERVIEW THE INTERVIEW INTERVIEW INTERVIEW A STUDENT’S AT A GLANCE PROCESS UNPLUGGED PREP GUIDE WORKBOOK PERSPECTIVE 33 WETFEET INSIDER GUIDE The Interview Process Overview .......................................6 The Bottom Line ...........................6 The Process ...................................7 2 Alternatives to “The Process” ...... 12 Beat the Street®: Investment Banking Interviews 1 TER OVERVIEW In this guide we will try to explain the process and P › CONGRATULATIONS. YOU’RE ABOUT to grad- help you prepare to face the situations you’re likely to CHA A GLANCE AT uate with honors from a top-tier undergraduate or encounter. MBA program. You were president of the debate soci- Our number one recommendation? Get ready to ety, have played the stock market since age three, and sell yourself! Much of banking is about old-fashioned read The Wall Street Journal cover to cover every morn- selling, and it starts during the interview process. It ing (starting with the section “Money & Investing,” doesn’t matter which area of banking or position you’re 2 your favorite). You desperately want to be an invest- pursuing. Interviewers tell us that they will be looking TER P ment banker and consider yourself an ideal candidate. at your enthusiasm for the profession and their firm Your GPA never once dipped below a 3.6 and you aced plus evidence of your desire to work hard, embrace CHA THE INTERVIEW PROCESS every standardized test thrown your way without so challenges, and learn quickly. They want to see self- much as a single prep course. You are a natural-born confidence, proof that you can juggle multiple complex leader. You are well-groomed and have never been projects, and a can-do attitude. rejected from anything you have ever applied to. You Positions vary significantly in investment banking. 3 are a shoo-in at any firm. Right? The candidate who’s the perfect fit for one job doesn’t necessarily have the makeup for other ones. Therefore, TER Wrong. Unfortunately (or fortunately, if this doesn’t P quite describe your accomplishments to date), for the it’s critical that you know the position you want before CHA THE INTERVIEW UNPLUGGED first time in your life, all this is not enough. Have you you start interviewing. given thought to how your hand feels when someone Firms have different cultures, too. You should know shakes it? Or how you would react if an interviewer which one is right for you. To determine this, you’ll started to read the paper at the exact moment you need to take an honest look at yourself. Where do you entered the room? Can you do a back-of-the-envelope excel? What are your weaknesses? What’s your preferred 4 valuation of a company? Do you know what an work environment and management style? If you can TER P investment banker does and why you want to become answer these questions, you’re more likely to make one? Do you know how to sell your biggest weakness as a wise career decision; walk in blindly and you risk CHA INTERVIEW PREP GUIDE a strength? Can you differentiate one investment bank making the wrong choice. from another? If you hesitated and had to think about any of those questions, then you’re not ready for your investment banking interview. The key word here is preparation. THE BOTTOM LINE 5 That’s where WetFeet comes in. This Insider Guide › INVESTMENT BANKING INTERVIEWS are TER P is designed to help you understand and prepare for the highly competitive. In the end, what will likely set CHA INTERVIEW WORKBOOK investment banking interview process. In researching you apart from the rest of the field is your ability to this guide, we interviewed recruiters at most of the convince interviewers that you are fully committed to leading investment banking firms, including Credit this career and that you have the right skills and per- Suisse, Goldman Sachs, JPMorgan Chase, Merrill sonality to succeed.