How to Get into Investment Banking

Investment banker, one of the most prestigious jobs in the field of finance. If you are working towards a degree in finance, you have probably heard a lot about investment banking, and maybe even saw a few top-tier students doing an internship at one of the local investment banks. Thereby, a lot of rumors go round about the working hours and social sacrifices you have to make to land a job in investment banking. Why are people making these sacrifices and how do you land a job in investment banking?

First of all, investment banking is all about excellence. Top-tier students “may” have a chance to be hired as an investment banker. Exceptional academic results and/or outstanding sport performance is a must. But why should you want to be an investment banker?

Investment banking is the top-tier industry within finance. This means, besides getting paid a lot of money, that you will work for the biggest and most important clients all over the world. It is an international experience. Thereby, when you climb up the ladder, you will have to make meaningful decisions which have a huge impact on the worldwide economy. For example: the economic crisis in Greece. If you think that the Greek government has decided all by themselves how to save the Greek economy and how to issue its debt, you are wrong. Huge investment banking teams have assisted and advised the Greek government in all those decisions. In this case, the investment banker has a huge stake in the success or failure of a rescue plan of a whole country.

Now you may have an idea on why you want (or not want) a job in investment banking. If you have decided you want to work in investment banking, you have to form a strategy that maps out your way in. This article might help you a little bit.

There are five steps to breaking in into investment banking:

  • Understand the industry;
  • Strategy;
  • Craft your story;
  • Networking;
  • Interviews

Understanding the industry is one of the most important steps and is linked to almost all of the others. If you have an interview and you get asked a question about whether you want to be in Mergers & Acquisitions or Debt Advisory, you have to know the difference in extreme detail to explain your choice. Also, to make a proper choice yourself, you have to understand that banks are extremely rigid with recruiting. An investment bank is a conservative, traditional organization that sticks to what has worked for the past twenty to thirty years. Therefore, they know exactly what they are looking for in candidates. You should take this into account when submitting your application. Next, realize that there are two entry-level positions in investment banking: Analysts and Associates. An analyst is recruited straight out of undergraduate or Master’s programs. They are at the bottom of the food chain and do all the work. In most organizations, you will be an analyst for around two or three years after which you will be promoted to associate or you move out to, most of the times, private equity boutiques, hedge funds, or venture capital firms. Associates are either recruited out of MBA programs or are promoted directly from the analyst pool. They manage analysts, work more directly with clients and senior bankers (Vice Presidents and Managing Directors), and put out fires. They are expected to stay for the long-term, and therefore, moving to private equity, hedge funds, or venture capital is significantly more difficult.

Secondly, you have to set up a strategy on how to break in. First of all, you have to determine which of the two entry positions you are aiming for, and contemplate on how you can get in. For this part, I will focus on undergraduates or Master’s program candidates: you have to aim for the Analyst position. One of the main strategies on how to do this, is to get an investment banking internship and land a full-time offer out of that one. Cold-call or network like crazy until you get to know the right person. Meet up with them to explain your story and ask about investment banking. Here are two advantages that this will bring: you will get to know more of the industry and what the work will be like, and you will get to know another banker who you can contact for a job interview. Then, practice full-time job interviews. You can do this with current bankers, or a lot of study associations are offering interview trainings like Sefa does.

Craft your story to convince bankers that you will excel in investment banking and that you are much better for the job than anyone else. You do that by structuring your story around four key points:

  1. The beginning;
  2. Your finance spark;
  3. Your growing interest;
  4. The future & why you are here today

The beginning might be an introduction about yourself. For example, your international experience like exchanges or that you really like traveling. After the beginning you have to explain your finance spark. Describe the moment you realized that you want to pursue a career in investment banking and why that was the case. For example: you met a few bankers in London and talked with them about the job, or you did a case in university which you loved to do. Then, explain your growing interest. For example: you bought some books about investment banking, joined a student investment club, met up with investment bankers to get to know more about the industry, or did an M&A internship. To finish the interview, talk about your future, goals, and why you are here today. What do you want to do? What kind of deals? Why you like cross-border deals or why you want to stay local. Explain your long-term goals. Last thing which is very important: explain why you love this specific bank. You can get an idea of the culture by visiting the bank’s recruiting events, take a look at their career website or talk to employees.

Networking is one of the most important things in investment banking. Not only is it important to land a job, but also when you climb up the ladder during your investment banking career, you have to network a lot to win clients over or even with other employees to build up relationships within the bank itself. Go back to step two (strategy) to see what your strategy was and go back to step three to remember your story. With these two concepts, go out and network your ass off. I can describe how you should network and what the tips and tricks are myself, but I think Brian DeChesare did a great job describing the network concepts in investment banking. You can find his article about how to network in investment banking here.

And last but not least, ace your interviews. Now you have networked like crazy, you have a killer resume, and you have a couple of interviews coming up with prestigious banks. Prepare for your interviews very, very well. I think interviews in investment banking are one of the hardest of all industries. As described earlier in this article, investment banks are very conservative organizations which will aim to do what they did best for the last twenty to thirty years. They have a lot of experience with interviewing candidates and know exactly what they are looking for in a candidate. So, preparations are essential to ace your interview. For exemplary interview questions, you can search the internet and prepare some answers for the questions you find. Think about step three, how to craft your story in a proper way, when answering the interview questions. Show the recruiter that you are the most passionate person out there, and that you will never give up on your dreams or on a project. Give them the impression that no sleep is better than sleep with an unfinished project, and make them feel that you are unstoppable when you get handed over a project to finish. Do not be arrogant in your interview. There is a difference between arrogance and confidence. Be confident, but do not think that you know everything about banking already. I can tell you: you do not, so do not act on this.

I hope this helped you to form an idea on how to get into investment banking. Be confident and try your ultimate best. It is not easy, but when you eventually break in, you will be highly rewarded intellectually and financially. Good luck!