From the monthly archives:

December 2010

It’s tough enough getting your foot in the door of an investment bank for your first interview out of business school. You want to be prepared for the big moment when it arrives. As BusinessInsider recently revealed, you need to do more than prove you’ve got the skills and work ethic. You need to show them you’d be an “upbeat” person to be around at 3 in the morning, putting together pitch books.

Rule number one: better know exactly why you want the investment banking job. Recruiter Barbara Hewitt says you’d better understand the position thoroughly and be prepared to explain why you want it. And not just why you want investment banking in general, but what specific areas of the job turn you on. The more specific you are, the more determined and focused you appear to the interviewer.

We’re going to assume you’ve got your technical skills down cold. Chances are you’re going to have to solve a case study as part of the interview process, with all the financial statements, P&L’s, cash flow statements and valuation methods that go along with that. Better familiarize yourself with financial terms such as cost of capital, cash flow discounting, multiples, accretion and dilution, LBO, CAPM, WACC and Beta.

Other good things to have in your back pocket: be up-to-speed on current events, the economy, and what’s happening in financial markets around the world. You should also have done your due diligence on the firm where you’re interviewing, and Googled the person interviewing you, if possible.

You’ve got to look the part, too, says Hewitt. Polished and well-groomed and dressed in “business formal”, which means tailored suits with neutral colored shirts and no ornate or flashy jewelry or accessories. Women can choose pants or a skirt suit, she says, but be sure to wear stockings or pantyhose with the suit. Oh, and yes, this might be a good time to remove any visible body piercings.

We’ve written before about the importance of adding a personal touch to your presentation. So be prepared to talk about any hobbies or active pastimes you might have. They add to the impression that you are energetic, active individual and possibly a team player. The interviewer may share the same interests, too, creating an opportunity to build rapport.

Hewitt (and many other career experts) recommend that you conduct mock interviews with friends or family to practice your pitch. Mock interviews can help you smooth out your answers to typical questions and sound more natural in the actual interview.

Finally, the BusinessInsider article has a separate section on what NOT to do in your investment banking job interview, to avoid blowing all your hard work and preparation.

What’s the best piece of advice you would give someone about to face an investment banking interview? Add your comments below.

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Matt Koppenheffer at Motley Fool recently offered an entertaining look at the major trends we might expect next year in the investment banking industry. After a hammering in 2008-2009 and robust recovery in 2010, next year is shaping up as a transitional year, he says. Some trends we can look forward to include:

– China rising: equity capital raising in the whole Asia Pacific region (excluding Japan) was up 36% year over year, to a total of $184 billion. Compare that to the $144 billion raised in the Americas and $86 billion in Europe. Asian M&A still trails the West but is catching up fast.

Given the unique cultural complexities of the region, it’s no surprise that home-grown talent is getting snapped up for investment banking jobs in the region. Goldman Sachs and JPMorgan Chase top the list of big players in the Asia region.

– Shifting profit centers: As Koppenheffer points out, “when one door closes, another opens.” Investment bankers are quick to look for new revenue sources when markets dry up or government regulations put the squeeze on profits. Traditional investment banking, such as raising equity capital and M&A advisory, will continue to make a contribution to the bottom line, but a relatively small one. However, the big money-maker for investment banks, trading activity, both for a bank’s own accounts as well as for clients, is poised for the biggest change.

Regulatory changes are forcing banks to scale back considerably in this activity, which will have a major impact on the bottom line. To fill the gap, many banks are turning to wealth management. Bloomberg reported that major banks such as JPMorgan, Deutsche Bank and Citigroup are snapping up bankers to cater to high-net-worth individuals. It’s a fee-based, less risky approach to padding their profits.

However, Koppenheffer says it could just be a temporary lull. Investment bankers excel at coming up with new and complex schemes for bringing in big profits. The industry is definitely in a state of flux. We could be just months away from the “next big thing.”

What’s your take? What area of investment banking do you think can take over in generating revenues as trading revenues decline? Add your comments below.

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People gravitate to investment banking jobs from all sorts of backgrounds, and not just the traditional undergrad B-school internship approach. The Financial Times recently profiled an ambitious naval officer who wanted to make the journey into investment banking.

Mind you, besides from spending five years at sea, this candidate had solid financial experience as an accountant for the ship’s personnel and preparing audits for customs and immigration. He was an economics undergrad, had a summer banking internship under his belt, and is finishing up an MBA at Southampton Solent University in the UK.

Career coach Zena Everett noted that while he has a lot of good things in his background, he needs to be more focused on his target – exactly where he wants to end up. What type of job and where. She points out that the job market today is hungry for specialists. Today’s job market is about “seeing where the skills gap lies (in an organization or market) and establishing yourself as an expert who can fill that gap.”

Thus, this candidate should carefully and precisely identify his target position, decide on an angle, then tailor his resume and online profiles to support that angle. He must answer the key question: why is your background better and different from other MBAs or CFAs?

Chris Jackson of Royal Bank of Scotland’s global banking and graduate recruitment division had more suggestions. The time in the navy clearly demonstrates international experience and the ability to work as part of a team. Jackson suggested that this candidate aim for roles as an analyst in corporate finance or equity or debt capital markets or a client-facing role in sales.

But since he’s not exactly sporting an MBA from a “name brand” university, he’ll have to show more flexibility in his job hunt. He can’t expect to be invited in through the normal channels. The key will be networking, finding someone in a bank and finding a way to convince executives at the bank that he can do the job. He may have to get a foot in the door of an investment bank through a more junior level position. Or work for a smaller, boutique bank. Overall, the advice was to take a longer-term, stepping stone approach to getting into investment banking.

What’s the most unusual career path you’ve ever heard of or encountered for an investment banker? Add your comments below.

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Differentiating Your Investment Banking Job Resume

December 6, 2010

We’ve talked about how important it is to add a personal touch to your investment banking job resume to demonstrate your best qualities. But one enterprising young woman has raised the bar with her approach. Instead of the usual ho-hum CV and cover letter, she prepared an 11-slide PowerPoint presentation on “9 Reasons Why You […]

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