Interview Questions for Top Financial Firms

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You’re on your way. You worked relentlessly on your résumé. You edited and tweaked until you got it just right. It didn’t end there. You practiced your pitch a dozen times, probably bugged a few friends for advice, and now you’ve done it. You’ve landed the interview. That’s right, the interview with a top financial firm that will hopefully get you a new position in the world of financial services.

The Phone Screen — Don’t Screw It Up

In most cases, due to the sheer volume of applicants across the sector, your first real interview may be via phone. Often referred to as a phone screen or informational interview, you’ll be asked to schedule a phone meeting to review your résumé and further the discuss the role. Sounds easy enough, right? (Especially given that you’ve read that official job description nearly 40 times, can most likely recite it, and want that job.)

It’s a candidate purge. It is important to bear in mind that the first point of contact will most likely not be the hiring manager. Why? Most large firms have a huge volume of applicants and a lengthy corporate screening process. It’s most efficient for an in-house recruiter to conduct the first round of phone interviews.

It’s about basics. For phone interviews, stay relaxed and speak conversationally without sounding overly familiar. Here’s what you may be asked:

• Why do you know so far about the role?

• Why do you want the role? And why with this particular firm?

• Let’s talk through your résumé. Tell me why you worked at Company X for just 5

months.

Be prepared for these common questions. If you get past this candidate purge, you will probably interview with multiple people on various levels before getting your foot in the door. From your phone screen, it will then be decided whether or not to pass you on the respective manager or hiring manager. And this is just the beginning.

Level Up: An Actual, In-person Interview

Interviews at this level usually include two parts.

Technical skills and aptitude: Once you get to the first in-person interview, technical knowledge will be tested. Be prepared to explain why you enrolled in that Advanced Economics course. Will you be open to a test? Of course you would be — after all, you’re a quantitative type and live for those complex balance sheets.

Top financial firms (and recruiters) are known to include a test as part of the interview process — be it a role for brokers, traders or investment banking desk jobs. Your grades may state one thing, but can you tackle a 12-page Excel file full of client data? Let’s hope so.

The long answers: Your aspirations and goals will, of course, come up during the big interview, and you must have reasonable answers that show thought, research, and ambition. This is when your fit and personality for the respective firm will come to the forefront. You obviously won’t say you want to be CEO in two years, but ambition won’t hurt, either. Remain humble, attentive and thoughtful in your replies. Your fit for the respective firm, how much you know about the culture, your expectations of the role and technical aptitude are what matters most. The same questions may even come up but in different ways by different interviewers.

Here’s a bit of what to expect:

• What makes you think you are a fit for this role?

• Why do you want to work for us?

• What will you bring to the role?

• Can you discuss capital flow?

• Can you walk me through a balance sheet?

• Are you open to relocation?

And expect the unexpected. Sometimes hiring managers ask unconventional questions — such as math problems, brainteasers or would you rather type situations — but it’s because they want to see if you can think on your feet. They also want to get a glimpse inside your thinking process. Stay relaxed and maintain your composure, even if you aren’t sure of your answer.

Send a digital thank you. Be sure to follow up in some fashion. A short, concise email is best. While pen are paper are nice, handwritten notes take time and may not arrive in a timely enough manner. Good luck!

About the Author: Dawn Kissi is an international multimedia journalist reporting on the business, finance and economies of the world’s emerging markets. She reports and writes on sovereign and geopolitical risk, as well as securities trading and the technology moving global exchanges and markets. She began her career in broadcast news at ABC News in New York, eventually movinginto print and digital journalism. She is a graduate of Columbia University’s Graduate School of Journalism.

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Boutique Banks 101

If working at a huge multinational investment bank is not your cup of tea, then you might instead set your sights on landing a job at one of many specialized, or boutique, investment banks spread across the country.

How Are They Different?

Unlike large “bulge bracket” banks such as Goldman Sachs, J.P. Morgan and other Wall Street powerhouses, boutique investment banks tend to be much smaller and specialize in certain industry fields, including technology, biotech, healthcare and energy.

They’re also usually private partnerships, not publicly traded firms, and often resemble what investment banks used to look like before major regulatory changes and consolidations transformed the banking industry in the late 1990s and early 2000s.

Why Boutique?

And the top-tier boutique banks are considered excellent and often lucrative places to work for those yearning to break into investment banking.

“It’s one of the best training grounds for young investment bankers,” says Alex Hart, a managing director at Signal Hill, considered one of the more prestigious boutique investment banks in the U.S., with offices in Baltimore, Boston, Nashville, New York, Reston, Va., San Francisco and Bangalore, India. “You can gain a lot of experience at a boutique that you can’t find anywhere else.”

What’s Their Niche?

The evolution: Modern boutique investment banking can trace its roots to roughly the early 1980s, when then young tech companies like Microsoft, Apple and other tech firms were first emerging as titans, or potential titans, in places like Silicon Valley and Boston’s Route 128 high-tech corridor.

Back then, boutiques played a key role in helping startups and medium-sized firms by raising capital and providing advisory services for mergers and acquisitions (M&A). But the bottom fell out on many boutiques in the late 1990s, as federal regulatory reforms allowed larger banks to jump into a wider field of financial services, including investment banking. Several boutiques ended up getting snapped up by giant financial firms.

“Many of these (mergers) failed miserably, as the cultures were quite different,” says F. Mark D’Annolfo, who formerly worked in investment banking at Deutsche Bank Securities and Adams, Harkness & Hill, a boutique firm that was purchased last decade by Canaccord Genuity.

The current climate: Over the past 10 years or so, boutiques have reemerged as key players within the investment banking field, often taking on smaller deals that mega-huge firms don’t want to touch. In other words, they’ve found a nice and often very lucrative niche.

What’s their bread and butter today? Some boutiques raise capital for IPOs and other public offerings, while also providing advisory services for M&A deals. But the majority of boutiques focus on the M&A advisory side of the business, effectively acting as middlemen between small-to medium-sized firms of all stripes and potential financiers, such a private equity firms and other fund companies.

Why it works: Boutiques tend to specialize in certain industry fields — such as technology, healthcare, biotech and energy — and often locate in major cities with cutting-edge companies and industries. Their deals are usually smaller than what the bulge bracket banks handle. Boutique deals can range from $20 million to $1 billion.

“After that, you’re starting to compete with the big guys,” M. Benjamin Howe, chief executive and head of investment banking at AGC Partners in Boston, says of the huge Wall Street firms.

The Best of the Best: Top Boutique Banks

There are literally hundreds of investment banks across the U.S., largely because anyone can technically call him or herself an “investment banker” and try to act as a financial advisor on major M&A and other financial deals.

But the most well known, top-tier boutique investment banks include Evercore Partners, Signal Hill, AGC Partners, Pacific Crest, Catalyst Group, GCA Savvian and others who are considered key financial players within certain industry sectors.

D’Annolfo, the former investment banker and now managing director of the Stephen D. Cutler Center for Investments and Finance at Babson College, cautions that those applying for jobs at boutiques need to carefully research firms to make sure they’re the right fit, such as whether a bank’s industry focus matches a candidate’s own expertise and interests.

“You really have to do your homework, as the experience can be very different from firm to firm,” he says.

The Best of the Best: Ideal Candidates

The best boutiques want the same type of job candidates as the big investment banks: potential top-notch financial analysts who are excellent at sifting through and analyzing complex financial data.

They also tend to recruit from top colleges and universities, though some boutiques may be partial to smaller prestigious schools close to their headquarters or satellite offices. Like bulge bracket banks, they look highly upon candidates who have majors in both business and specialized fields, such as computer science, biology and other science-related fields.

Compensation

Compensation at boutique investment banks tends to be lower than what is paid at the mega-
big banks, largely because their deals are smaller, and they don’t have as much capital and global franchises.

But the compensation at boutiques, by any other standard, is still excellent, with some boutique starting first-year analysts off at $80,000 to $100,000, with additional performance bonuses. The pay rises as employees move up the corporate ladder and, if they can crack into senior management positions, compensation can easily surge into the seven-figure range.

The Typical Day — and Why It’s Better Here

For junior employees at boutiques, the average day is not unlike what financial analysts endure at big firms — long hours of research, research and more research.

But there’s a huge difference: Early-career boutique employees can get much more involved in actual deal strategizing, working closely with senior investment bankers and even clients. In other words, their jobs can be more flexible within a collegial environment, allowing them to gain far more experience than they might at bulge bracket banks.

“They’re also on a much faster track to partnerships because firms are smaller,” says AGC Partners’ Howe.

 And another big plus: Many young boutique bank employees can parlay their valuable experience into landing jobs at private equity firms, hedge funds and larger banks.

Some even occasionally take the entrepreneurial plunge by joining young startup firms that they’ve previously worked with on finance deals.

About the Author: Jay Fitzgerald is a business journalist based in Boston. Over the years, his articles have appeared in The Boston Globe, the Boston Business Journal, the Boston Herald and other publications.

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Alternative Paths to I-Banking

Alternative Roads Into I-Banking

Not in school? A foreign student? Recruiter doesn’t come to your school? You can still get an interview. And you can still get a job in I-banking. Here’s what our insiders recommend if you fall into one of these categories.

MID-CAREER HIRES
If you already work on Wall Street, you know where to go-and you’re probably not reading this guide. If you’re coming from another industry, you’ll probably have a tougher time. Everyone is happy to hire lawyers who are fully proficient in banking or, on the research side, people with deep industry experience. And a few firms are willing to take a chance on a brilliant academic. But most tend to fill the gaps in their analyst and associate pools with men and women who have worked in a similar capacity for competitors. If you are a lateral hire, the good news is that you don’t have to suffer at your current job waiting out the long recruiting season. Throughout the year, recruiters scurry around to replace those analysts or associates who have either defected or fallen off the corporate track. Because lateral hires are typically not interviewed during the normal training-program season, they usually begin their new jobs without much, if any, formal training.

FOREIGN STUDENTS

For foreign nationals who lack the right visa status to work in the U.S. after attending an American university, the process is less complicated than you might think. Investment banking is an increasingly global enterprise. Recruiters unanimously agree that candidates who are not U.S. citizens are treated the same as any other applicant; your working status is not an issue. In fact, your proficiency in several languages and close ties to your own country may give you a highly desirable edge. If you receive an offer, the firm will arrange your visa and, after a given number of years, your green card.

NO-NAME COLLEGE DEGREE
“I don’t have a prestigious undergraduate degree and/or I attend a second-tier MBA program. Is all hope lost?”

No. If the top firms’ analysts all appear to be summa econ graduates of U.S. News & World Report’s Top 10, or if the associate class seems to have been culled from the ranks of former analysts or the Penn and Harvard Clubs, you’re not far off. Investment banking firms are disproportionately staffed with Ivy Leaguers and top-tier MBA graduates who get scooped up on the recruiting tour. But there is no need to give up just because the scoop never came for you. There is a way in, albeit a more difficult one. If you’re going to be the exception, you need well-honed interviewing tactics. Preparation, strategy, and aggressive but discriminating networking will all help get you the job.

The first step is networking. Do not waste postage blindly mailing your resume to every firm. Focus instead on setting up appointments with industry insiders, either through introductions from friends (or even friends of friends) or by targeting alumni of your school who work on the Street. Ask lots of thoughtful, informed questions and demonstrate your commitment to investment banking. Keep in mind that, like the S&T hopefuls, you will probably have to fly yourself to headquarters (most likely New York) on your own nickel and pay for your lodging.  This show of initiative may just be your ticket in. Remember: Being hungry for an investment banking job is at least as important as having a top-tier school on your resume. What really makes a candidate stand out is enthusiasm and commitment to the work. One recruiter told us of a candidate she hired from a school where the firm does not recruit: “On top of her excellent academic and professional experience, I was so impressed with her initiative to seek out several people in the firm. She demonstrated a genuine interest in investment banking when she flew to New York to meet with us and several other firms over her Thanksgiving break.”

Most insiders concede, however, that candidates from lesser-known schools need to have either stellar work experience or the ability to fill a unique need at the firm, particularly for CorpFin positions. It also helps if they have previously worked with someone in the firm who can serve as a reference. At the same time, several recruiters for sales and trading reveal that they interview-and hire-many graduates from no-name undergraduate schools or MBA programs. One insider explains that if you went to a lesser known institution you need to be prepared to give a valid reason. The best reason, as you might guess, is that you received a full scholarship. And if you’ve already had a lot of relevant experience, the good news is that where you went to school has much less impact on your candidacy.

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Two Hidden Gems for Financial Analysts: Real Estate and Mutual Funds

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News flash! You don’t have to work on Wall Street to be a financial analyst.

Financial analyst jobs come in all shapes and sizes, so there are plenty of opportunities to land
analyst positions at a wide variety of financial firms spread across the country — not just in Manhattan. Analyst jobs can serve as springboards to other finance jobs in various sectors,whether they’re at investments banks, hedge funds, brokerage companies, private equity firms or other types of companies located in major cities across the country and globe.

Really? Tell me more…

Take Roy Sandeman, 26, who got his MBA at Providence College three years ago and considered pursuing a finance career at one of New York’s big financial houses. But after extensive research and networking, Sandeman, who earned an undergraduate degree in mechanical engineering from the University of Leeds, decided to take a job as a financial analyst at a major commercial real estate firm in Boston, where he crunched numbers and analyzed multimillion dollar commercial real estate lease deals for major corporate tenants and office building owners.

How’d that work out?

Two years later, he was promoted to senior analyst within the firm’s capital markets group, helping put together even larger office and industrial building sale deals. He now hopes to move up the ladder into senior management positions in coming years. “You have to keep your eyes and options open,” says Sandeman, who believes his engineering background has helped him in his new finance career within commercial real estate. “I’m in a field I like. I’m still crunching numbers, but now I’m in direct contact with clients and helping out in actual deals.”

Following is a look at just two areas that financial analyst wannabes might consider: real estate and mutual fund financial analyst jobs.

Real Estate and Mutual Funds: Where You’ll Become an Expert

The job of a financial analyst always come down to roughly the same thing, no matter the sector: long, hard hours of carefully researching company, industry, market and economic data and then making recommendations to senior managers about a course of action — such as whether to pursue a deal or pull back. Candidates with degrees in business administration, finance, accounting, math and economics are preferred.

In the case of commercial real estate and mutual fund analysts, though, their research concentrations can and will vary greatly.

Real Estate: Financial analysts within commercial real estate — which also includes publicly traded Real Estate Investment Trusts (REITs) and commercial mortgage companies (which effectively serve as investment banks for the buying and selling of sometimes huge commercial properties) — have to learn the intricacies of the real estate industry: office and industrial lease prices for a given market; cash flows of office buildings and industrial facilities; and debt payment and refinancing details. In addition, analysts will need to keep up with average moving and renovation costs, the economic and employment conditions of particular industries within regions and countries, and a host of other variables specific to real estate.

Mutual Funds: Financial analysts at mutual funds — either independent mutual fund firms or funds within giant parent companies, such as banks or insurance firms — serve as the effective eyes and ears for portfolio managers who can oversee multibillion dollar funds of a seemingly infinite variety: small-cap funds, Blue Chip funds, tech funds, energy funds, healthcare funds, and the list goes on and on. Financial analysts at mutual funds are usually assigned to a specific sector fund for a few years, and they better master the sector intricacies they’re covering.

The Upside: Career Potential and Flexibility

Move on up in real estate. Financial analysts within commercial real estate traditionally move up the ladder to become brokers, vice presidents, directors or partners, depending on the terminology and structure of individual firms. MBA degrees are highly advisable in order to advance, but not always critically necessary. One thing is almost always a must: Studying for and getting a commercial real estate broker’s license.

Or climb the ladder in mutual funds. The ultimate goal of analysts at mutual funds is to become a portfolio manager overseeing funds and managing other analysts working under them. MBAs are highly desirable for those wanting to advance to higher positions, and becoming a Certified Financial Advisor is must.

Then, leverage that experience. A major attraction for financial analysts at commercial real estate and mutual funds is that they can parlay their sector expertise to land jobs at hedge funds, private equity firms, investment banks, REITs, asset managers and other financial firms specializing in their new fields.

And live where you want to. Because there are commercial real estate and mutual fund firms and offices in most major cities across the country and globe, financial analysts in these fields also have incredible geographic flexibility. They can generally work where they want after they gain some experience, or at least they have a greater opportunity to land jobs where they hope to go.

The Burning Question: What About Compensation?

Salary: According to the U.S. Bureau of Labor statistics, the mean salary of financial analysts is about $75,000 — and that roughly holds true for analysts within commercial real estate. The pay at mutual fund companies is usually higher, but it varies from firm to firm.

Bonuses! On top of regular pay, financial analysts within both fields usually get bonuses, from 20 percent to double their salaries, pushing their compensation higher.

Potential: The salary rises as an analyst gets promoted and takes over more responsibilities. Compensation in the hundreds of thousands of dollars and even in the low millions is the norm within both fields after bonuses and commissions are included.

About the Author: Jay Fitzgerald is a business journalist based in Boston. Over the years, his articles have appeared in The Boston Globe, the Boston Business Journal, the Boston Herald and other publications.

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Biggest News from Recent Investment Bank Deals

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IPOs and M&As — they’re the type of deals investment bankers love.

And the U.S. markets for initial public offerings and mergers and acquisitions improved considerably in 2013, hauling in small fortunes for the investment bankers who helped raise capital or acted as financial advisors on the mega-huge deals.

Larger transactions were usually handled by “bulge bracket” banks, or large multinational institutions whose names are generally familiar to the public. But some deals also starred smaller, less known boutique investment banks.

The prospects for 2014 look just as strong for both IPOs and M&As, barring unforeseen economic developments, and that means investment bankers should have a very busy and prosperous year.

Here’s a look at some of the top IPO and M&A deals — and the investment banks involved — in 2013.

IPOs

The IPO market surged in 2013 to 222 deals valued at $55 billion, compared to 128 deals valued at $42.4 billion in 2012, according to Renaissance Capital. The 2013 performance was the best since 2000. The top IPO deals included:

1. Plains GP Holdings LP — $2.8 billion. The underwriters/managers: Barclays, Goldman Sachs, J.P. Morgan, Bank of America-Merrill Lynch, Citi, UBS, Wells Fargo, Deutsche Bank, Morgan Stanley, Raymond James, RBC Capital Markets.

2. Hilton Worldwide Holdings Inc. —  $2.4 billion. The underwriters/managers: Deutsche Bank, Goldman Sachs, Bank of America-Merrill Lynch, Morgan Stanley, J.P. Morgan, Wells Fargo, Blackstone Capital, Macquarie Capital, Barclays.

3. Zoetis Inc. — $2.2 billion. The underwriters/managers: J.P. Morgan, Bank of America-Merrill Lynch, Morgan Stanley, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Jeffries & Co., BNP Paribas.

4. Twitter Inc. — $1.8 billion. The underwriters/managers: Goldman Sachs, Morgan Stanley, J.P. Morgan, Bank of America-Merrill Lynch, Deutsche Bank, Allen & Company, CODE Advisors.

5. Antero Resources — $1.6 billion. The underwriters/managers: Barclays, Citi, J.P. Morgan, Credit Suisse, Jeffries & Co., Wells Fargo, Morgan Stanley, TD Securities, Tudor Pickering Holt & Co., Baird, BMO Capital Markets.

Mergers and Acquisitions

Though the global M&A market is back to its approximate pre-recession level, worldwide M&A activity has generally stagnated in recent years. However, in the United States, M&A deals were up 11 percent in 2013, totaling more than $1 trillion.

Here are some of the top M&A deals and the investment banks involved:

(All the M&A deals were announced in 2013, but some of these transactions won’t technically be completed until later this year.)

1. H. J. Heinz Co. — $28 billion. Buyers: Warren Buffett’s Berkshire Hathaway and GE Capital. Centerview Partners and Bank of America-Merrill Lunch were advisors to Heinz. Moelis & Co. was adviser to a Heinz board of directors committee. Lazard was lead financial advisor to buyers, assisted by J.P. Morgan and Wells Fargo.

2. Dell Inc. — $24.4 billion. Buyers: Dell founder Michael Dell and Silver Lake. J.P Morgan and Evercore have been advising Dell’s board. Goldman Sachs, Bank of America-Merrill Lynch, Barclays, Credit Suisse, Centerview and RBC Capital have been advising buyers.

3. Virgin Media Inc. — $23.3 billion. Buyer: Liberty Global Inc. LionTree has acted as lead advisor to Liberty Global; Credit Suisse has also acted as an advisor. Goldman Sachs and J.P. Morgan have acted as advisors to Virgin.

4. Life Technologies — $13.6 billion. Buyer: Thermo Fisher Scientific. J.P. Morgan and Barclays have acted as financial advisors to Thermo. Deutsche Bank and Moelis & Co. have been advisors to Life Technologies.

5. Onyx Pharmaceuticals — $10.4 billion. Buyer: Amgen. Lazard was lead advisor to Amgen, while Bank of America-Merrill Lynch has also acted as an advisor. Centerview Partners have advised Onyx.

And those are just the top domestic (U.S.) merger and acquisition deals of 2013.

The largest global M&A deal in 2013 was Verizon Communications’ agreement to pay $130 billion to buy U.K.-based Vodafone Group’s American wireless business. It’s the third largest corporate deal in history. Barclays and Bank of America-Merrill Lynch acted as financial advisors to Verizon, while Goldman Sachs and UBS advised Vodafone.

Sources: Renaissance Capital, StreetInsider.com, Bloomberg, Reuters, and Business Wire.

Jay Fitzgerald is a business journalist based in Boston. Over the years, his articles have appeared in The Boston Globe, the Boston Business Journal, the Boston Herald and other publications.

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Ace Your Financial Analyst Interview

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When applying for a financial analyst job, get ready to spend huge amounts of time and energy polishing and customizing your résumé and cover letter — they’re the entry point to landing a job interview. But once you get the call to meet in person, that’s no time to relax.

Now the Real Work Begins

Recruiters and hiring managers are quick to note that too many job applicants don’t dedicate enough time preparing for the most important part of landing of the whole process: the in-person interview.

Fortunately there are ways to prepare. Here are some tips for acing the interview based on conversations with financial services recruiters and active hiring managers.

1. Know the company and sector inside and out. You’re applying for a research job, so you had better show that you actually took time to research the company and its place within the financial world.
Study the company and make sure you’ve covered all these areas:

-History

-Size

-Services

-Fields of expertise

-Any recent big deals or acquisitions

-Names and backgrounds of the chief executive and the people who will interview you

-Recent press releases and any other up-to-date news about the firm

It’s all readily available via Google, Wikipedia, Yahoo Finance, Bloomberg, government regulatory agencies and other sites. While you’re at it, talk to friends, relatives and acquaintances who might be knowledgeable about a company — or at least its reputation.

2. Tailor your answers. Don’t treat financial analyst jobs as cookie-cutter positions automatically transferrable from one finance sector to the next — they’re not. Research the specific sector and expertise of each company you interview with and be prepared to tailor your responses so they’re a match.

3. Draw up a mental list of your strengths and weaknesses. It’s corny, but you’ll almost inevitably be asked a variation of “So, tell me your greatest strength,” or “What’s your biggest weakness?” Similar inquiries include: “Tell me your greatest success at a job,” or “What was your biggest mistake while on a job?” Create a list of what you think are three or four of your strengths and a few of your weaknesses.

4. Assemble a portfolio. To support your answers, review any past examples of research reports or other business assignments you’ve done as an intern (or as a junior analyst if you’re applying for a senior analyst position). Analyze the specifics of those particular cases, and be prepared to answer detailed questions about them. Bring the reports — along with any accolades from supervisors or teachers — in an organized portfolio to the interview.

4. Plan to talk about life experiences and career goals. Be ready for discussions about your career goals, college major, extracurricular activities, summer jobs, post-college jobs (if any) and other items on your résumé. One investment banker says he also likes to hear from candidates about non-business successes they’ve achieved in life. “I’ll say, ‘Tell me one thing you’ve really mastered and are good at.’ It can be music or painting or running road races. We want (to hire) someone who has already proven they’ve done something really well.” And whatever you do, be confident but not cocky.

5. Be able to explain why you want the job. One commercial mortgage banker, who asked not to be named, says he carefully explores a financial analyst candidate’s knowledge of his industry and why they specifically want to get into commercial real estate. “I want to find out if they’re serious about getting into (the field) and so I’ll ask them, ‘So, why aren’t you applying for a financial analyst job on Wall Street? Why are you here?’ ”

You’d better have an honest answer — with details about the type of financial company and position that you’ve applied for.

6. Be prepared for spontaneous tests. The same investment banker says he’ll sometimes verbally outline a general business scenario, such as one firm trying to buy another firm, and asks candidates, “So why would someone want to buy such a company? How would you go about researching that company?” Such “tests” are not meant to be trick questions. They’re meant to see how you might react and approach a problem.

If you’re working with a recruiting company to land a financial analyst job, they’ll often subject you to a number of assessments before you head out to an interview, says Richard Deosingh, a recruiter at Robert Half in New York. Recruiters might test how well you know Excel or if you can efficiently organize spreadsheets, for instance.

During interviews, companies rarely ask candidates to physically prove they know how to use Excel, PowerPoint and other software programs needed to conduct, analyze and present data in research reports. But they may ask you detailed questions about the programs or how you’ve used them in the past.

7. Ask questions that show your interest. Interviewers almost always invite questions from candidates. This is another chance to be personable and demonstrate interest in the job, so have a list ready in advance.

Some questions to consider include:

-What’s a typical day like for a financial analyst at this firm?

-What type of clients will I work with?

-Would I specialize in a specific field of interest?

-How did you (the interviewer) get his or her start in finance?

-What are the prospects for promotions?

Preparation is key. Practice, get your story straight — and you’ll be on your way to crushing the interview.

Jay Fitzgerald is a business journalist based in Boston. Over the years, his articles have appeared in The Boston Globe, the Boston Business Journal, the Boston Herald and other publications.

 

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Do Your Homework: I-Banking Interview Prep

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Everyone says I’m expected to “do my homework.” What exactly does this mean? How much will I be expected to know about each company with which I interview?

First and foremost, “doing your homework” means that you genuinely understand the role of an investment bank and can clearly articulate the distinct roles of its various functions and that you have devoted some time to distinguishing among the major players. It means you’ve considered all of this information and shaped an idea of which firm you’d like to work for, and in which general area. It means that you’ve developed reasonable job expectations, done some good old-fashioned soul searching to decide whether or not the inherent sacrifices are worth it to you, and determined the specific benefits you’d hope to gain from the analyst or associate experience.

The homework bar is higher at the MBA level than it is at the undergraduate level. In general, interviewers are more forgiving of analyst candidates for two primary reasons: First, no one expects a 22-year old interviewing for his first job to know for certain that his destiny lies in investment banking. Second, investment banks typically hire analysts for a two- to three-year time horizon, after which they expect many will go on to business school or other jobs. Nonetheless, firms will expect that both undergraduates and MBA candidates alike can articulate solid reasons for pursuing a job in the field, and they will expect to see evidence that you’ve invested some serious time determining whether this career-and this firm in particular-is right for you.

Regardless of the specific position for which you are applying, “doing your homework” has two primary components: understanding what distinguishes the firm in its industry, and understanding what distinguishes the firm as a place to work. The first of these relates to the firm’s position in the financial marketplace, while the second has to do with its “employment brand”-the unique way the firm positions itself to prospective employees.  Our Seven-Step Homework Guide should help you to learn about both distinctions:

1. PARTICULARLY IF YOU’RE AN UNDERGRADUATE WITH LITTLE PRIOR EXPOSURE TO INVESTMENT BANKING, MAKE SURE YOU UNDERSTAND WHAT AN INVESTMENT BANK DOES AND HOW THE VARIOUS FUNCTIONS OF A SECURITIES FIRM FIT TOGETHER.

We’d recommend that you start with WetFeet’s Insider Guide to Careers in Investment Banking. Mariam Naficy’s book The Fast Track: The Insider’s Guide to Winning Jobs in Management Consulting, Investment Banking, and Securities Trading also provides an excellent overview. As the name implies, this book is a particularly good resource for those candidates comparing potential opportunities in multiple areas.

2. ONCE YOU’VE DETERMINED WHICH FIRMS YOU’LL BE INTERVIEWING WITH, CHECK OUT ANY FIRM SPECIFIC LITERATURE YOU CAN FIND.

This includes the WetFeet Insider Guides to investment banking firms (see the list at the end of this book), which provide insights into the firms’ areas of relative strength and insiders’ perceptions of the companies’ culture. In addition, be sure to review any recruiting literature on file at your campus career center. This information is likely to be general, but it will provide a useful overview of each firm’s organizational structure and respective recruiting processes. Also, these materials will give you a general sense of the “employment brand” that the firm is trying to convey-in other words, you’ll get a sense of how the firm distinguishes itself from other firms in the marketplace that compete for talent.

3. CHECK OUT THE WEBSITE OF EACH FIRM WITH WHICH YOU’LL BE INTERVIEWING.

This does not mean that you’ll be expected to memorize and regurgitate either the company’s financials or its business principles in the course of the interview. However, if you’re interviewing with a public company, at least take a gander at the firm’s annual report (generally available through the Investor Relations section of the firm’s website). In addition to providing detailed information on the company’s financials, the annual report highlights the key transactions in which the bank was involved over the course of the previous year and summarizes the relative performance of each of its major revenue-generating areas. Also, check out the most recent press releases for any noteworthy developments that have taken place since the last annual report went to press.

4. REFINE YOUR INDUSTRY-SPECIFIC KNOWLEDGE AND REVIEW THE MAJOR TRANSACTIONS IN WHICH EACH FIRM IS INVOLVED.

Trade journals such as Institutional Investor, Investment Dealers’ Digest, and The Daily Deal provide a wealth of timely industry-specific information. For example, Investment Dealers’ Digest (www.iddmagazine.com) offers an excellent online database for subscribers, which includes league table information, recent deal flow activity, and information on the biggest transactions in various areas (M&A advisory, high-technology, energy, etc.). Unfortunately, an annual subscription to this little gem costs a hefty $995, but full-text articles from the print publication are available through Factiva, a comprehensive online news database; if your business school library offers Factiva access (and it’s worth checking into), you may want to take a look. If not, Investment Dealers’ Digest occasionally offers trial subscriptions at little to no cost. In all likelihood, you won’t ever be asked about a particular bank’s league table standings, but it doesn’t hurt to develop a sense of who does what on the Street.

5. KEEP ABREAST OF CURRENT EVENTS-THOSE RELATING TO THE FINANCIAL MARKETS AND OTHERWISE.

Even if you’re not ordinarily a faithful The Wall Street Journal reader or subscriber, it may behoove you to become one, at least during the recruiting season. The publication’s online edition is particularly user-friendly and is available to students at a significant discount (as is the print version). The Financial Times (WSJ’s European equivalent) is another excellent source of financial news and not surprisingly provides a more pronounced international focus than the The Wall Street Journal. At a minimum, know the major developments and trends characterizing the investment banking industry. In particular, the increasingly widespread practice of “bundling” investment and commercial banking services and the intense scrutiny over firms’ investment research franchises are two trends you should feel comfortable discussing in an interview. Also, be sure to have at least a general sense of movements in the major indices (investment banking interviewers have been known to ask what the Dow closed at the previous day) and the events that most directly affect the financial markets.

6. ATTEND THE ON-CAMPUS INFORMATION SESSION.

Trust us: The hour that you spend at each firm’s on-campus meet-and-greet will be time well spent. At the information session, the company will undoubtedly address the topic of what sets it apart from its chief competitors-its competitors for business and its competitors for talented people. Pay attention to what the firm’s representatives stress as its key selling points: whether it’s the firm’s untrammeled dominance of M&A activity, its unique rotation program for incoming analysts or associates, or its unparalleled reputation as an employer of choice. In addition, these information sessions provide an opportunity for you to meet current analysts and associates and to hear them answer the questions that you’ve been formulating throughout the course of your research.

7. TAKE THE TIME TO SPEAK WITH INSIDERS!

There’s really no substitute for good old-fashioned informational networking (a process which should be relatively easy for current MBA students, who have a considerable network of b-school students, former analysts, summer associates, and alumni to consult). If you’re an undergrad with fewer
industry contacts, check out your career center’s alumni database for the names and contact details of current firm employees (preferably within the division to which you’re applying). At the very least, contact the individuals who represented their firms at the on-campus information sessions (analysts and associates, please-firms may send VPs and the occasional MD to information session, but bankers at this level aren’t likely to return your call-remember our discussion of the hierarchical structure earlier in the guide?). Not only can these individuals generally answer your most pressing queries, they can typically put you in touch with other people at the bank who can provide you with a broader perspective on what it’s like to work there. Not only will this help you learn about the specifics of each firm’s culture, but it will give you some real-life insight into the life of an analyst or associate.

Make no mistake: Preparing for interviews is a time-intensive process. If your schedule is already filled to capacity with academic and extracurricular obligations, it’s particularly tempting to gloss over interview preparation in favor of the more immediate demands on your time and attention. This is a dangerous trap, and one that you should avoid at all costs. In this case, it’s better to take a long-term view. As one recently hired insider advises, “Take a light course load that semester if you can. The time you spend researching companies and talking to insiders is time well spent, and definitely worth the investment in the end.”

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Careers in Investment Banking: Corporate Finance

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Thinking about a career in Investment Banking?  I-Banking is one of the best ways a young person can learn about finance and make good money right out of school.  Even if you ultimately decide to reclaim your personal life by pursuing other options, the skills you learn on Wall Street will be valuable in most business careers.  Check out the following overview, if you think you might be interested in pursuing an internship or career in Corporate Finance.

What is Corporate Finance?

The Corporate Finance group (banking or CorpFin) serves sellers of securities.  The sellers could Fortune 1000 companies that are looking to raise cash to fund growth, or they could be private companies that are looking to go public. Think of CorpFin as a financial consultant to corporations.  This is where CEOs and CFOs turn when they’re trying to figure out how to finance their operations, structure their balance sheets, or how to best move ahead with plans to sell or acquire a company.

The activities of the CorpFin department can range from providing pure financial advice to leading a company through its first equity issue, or IPO.  As a result, industry or product knowledge is key; many investment banks divide their corporate finance departments into industry subgroups such as technology, financial institutions, health care, communications, entertainment, utilities, and insurance, or into product groups such as high-yield, private equity, and investment-grade debt.

As a whole, CorpFin does any or all of the following:

-Underwrites equity offerings.  The investment bank buys all of the shares of stock for sale from a corporation or government entity and then sells them on the market to investors

-Underwrites fixed-income (debt/bond) offerings.

-Helps firms analyze their financial needs.

-Helps firms devise and implement financial strategies. For example, structuring their balance sheets and proceeding with funding initiatives.

-Determines valuations for offerings. For example, what the opening price for the stock should be.

Who Does Well in Corporate Finance?

I-banking jobs in corporate finance require critical, detail-oriented thinking.  If you have a knack for crunching and using numbers to understand patterns that influence business, you’re going to be valuable to a company.  You should also enjoy and excel at solving problems and be able to think critically about the numbers you’re working with.

CorpFin jobs also require excellent people and communication skills because you’ll be working on a team and building solid relations with clients.

This career isn’t only for MBAs.  Lawyers can be a good fit, as can experienced candidates with a strong background in a given industry.  But, with rare exceptions, some kind of advanced degree is required, and so is sales ability because it’s necessary to sell banking business to potential clients.

What type of I-Banking career are you interested in? Does CorpFin sound like a good fit?

[Photo Source : The Real Deal]

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Wall Street or Bust

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As a recent graduate from Stanford University, I often hear friends of mine lament the downfall of the finance world. What was once such a hot industry – one many of us strove to join as bright-eyed underclassman – suffered serious setbacks in the past years, forcing hordes of Economics and Business majors to set their sights elsewhere. One friend of mine, a Finance major with previous internships in investment banking, decided to start a company promoting art museums when his job offer was rescinded. So for some, the shortage of jobs in finance has led them to pursue more unique, if initially less lucrative, opportunities.

Still, there are others who remain hopeful in their quest for capital gains, risk arbitrage, and absolute returns, holding on to the mantra, “Wall Street or bust!” Recently I sat down with James, a friend of mine who works for a hedge fund. I asked him questions about his work and about the sort of skill set required of an individual who is looking to break into the finance realm in such a competitive industry. Here is what he had to say:

What does your job entail?

I am an analyst for a long short equity hedge fund. My main responsibility is to advise my portfolio manager on investment decisions. This involves forecasting earnings and valuing companies based on my primary research.

Do you have any specific areas of focus?

My sector of focus is technology, which is extremely broad. Within technology, I’m currently focused on Internet and telecom companies, as well as alternative energy.

Did anything draw you specifically to Tech as a sector?

Definitely. Tech is a sector in which the United States is still very much a leader, and there’s always exciting stuff going on at the margin – new disruptive technologies turning whole industries upside down. Being a tech analyst requires you to stay on your toes and achieve a very comprehensive understanding of industry players. In some ways it is like being in college again – because you are often learning about these companies’ products and the science behind them, not just their financial statements. However, the workload is much more significant than in college, so I would recommend getting some recreation time in before you graduate if you do choose to work at a hedge fund.

What skills are emphasized in the work that you do?

I think it’s very important to be a good listener and a fast learner when you are ramping up – or learning the ropes. You have to be resilient as well – sometimes you will spend quite some time learning the ins and outs of a sector or the particulars of a company before you can really get an edge. But I think that in any finance role, diligence is probably the most important attribute for any candidate, particularly at the entry level. It’s very easy to lose the trust of your superior by messing up some minor detail, and once you’ve lost that trust, it can be hard to move back into a position where you’ve had the same responsibilities as you had before. That’s something I learned as an intern a couple years ago.

How did you land a job at a hedge fund in this job market?

I wish that I could say that I was just an exceptional candidate who could have gotten a job anywhere, but that’s probably not the case. The truth is, I essentially got to where I am now from my internship two years ago. I made certain to stay in touch with the people I worked with, and one of my coworkers from that summer ended up taking a job as a portfolio manager where I now work.

I would advise any undergraduate who has held internships before to try to stay in casual contact with their coworkers, because it makes things a lot less awkward if the time comes to follow up in search of a job. If you do fall out of touch, then it still won’t hurt to ask. Most people like to help other people out, so just be humble and confident and throw out a line.

Do you have any thoughts on the recent political controversy surrounding bonuses in finance?

I guess I can understand why some people are bothered by the bonuses being paid out at firms like Goldman Sachs and JP Morgan. These firms benefited a great deal from a government backstop, were really on the cusp of a liquidity crisis and now are in as good shape as ever. At a time when most people are suffering, that kind of prosperity in the sector that is blamed for the recession is going to hit nerves.

At this point in time, would you discourage people from entering finance?

I think now is actually a great time to get involved in finance, at least in certain areas. I think that the capital markets have been so depressed recently that, for bankers in leveraged finance, M&A, or any field that’s seen massively reduced activity, there will certainly be a bounce-back. And with head count lower, the compensation per employee might actually be higher down the line. I also think finance is a great place to be for young, driven professionals in search of a challenge, and I believe that there will always be room for the talented to succeed on Wall Street.

What steps could someone take to secure a finance job at the entry level right now?

Be exhaustive in your approach. Don’t be afraid to make phone calls to people who you barely know, or even don’t know, if you are certain that you want a job on Wall Street. My first internship in finance I got through a cold call to an alum of my school. He agreed to give me an interview and a chance to prove myself. If you are persistent and smart, something will stick. But the advice on being detail oriented applies to the application process as well – you can’t afford to make any mistake that will make it easier for people to shut you out.

In addition, a website like Doostang is a great tool for anyone looking for a job. Because there are such a limited number of available jobs out there at the moment, and because many of these jobs are kept within individual firms, it’s often difficult to find the positions you might want to apply for in the first place. It’s crucial to make use of every available resource you have at your disposal, and a job board that lists exclusive jobs at top firms certainly qualifies as a valuable resource.

So take it from the insider, if you’re considering entering the finance field – now is the time! And if you’re not sure where to begin, Doostang is there to help get you started with exceptional finance openings at all levels.

 

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How Do I Start My Investment Banking Career?

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High salaries and long hours are the hallmarks of the investment banking industry. After all, keeping on top of the world’s financial markets can be an almost 24/7 job, especially in a down economy. But the financial rewards-not to mention being a part of some of the big-name business deals that you see in headlines-can make the grueling hours an adrenaline-based rush.

Investment banking isn’t one specific service or function. It is an umbrella term for a range of activities: underwriting, selling, and trading securities (stocks and bonds); providing financial advisory services, such as mergers and acquisition advice; and managing assets. Investment banks offer these services to companies, governments, non-profit institutions, and individuals.

REQUIREMENTS First, if you’re an undergraduate, you’ll want to try to get an internship: it’s the best way to secure an eventual offer. If you’re an undergraduate from an Ivy League school with a great GPA, bidding recruiting points is still a favorable option-however, college recruiters are usually sent from the prestigious bulge-bracket firms, and not the smaller, specialized niche firms or boutiques. It’s important to discern the type of bank for which you are best suited, so conduct your own independent research. Big firms tend to have more turnover than smaller niche firms, which may better nurture their investment in training you.

If you’re not an Ivy League graduate, and recruiters haven’t been breaking down your door, networking is your best bet. Use your school’s alumni network  LinkedIn connections, and your neighbors and acquaintances to get in touch with someone at the I-bank of your choice. If you’re a good student who is truly interested, you’ve got a shot.

If you have an MBA or other advanced business certification, you’ll be paid more for a position than someone with a BA. But those with prior experience always get first shot, so be sure to get an internship. Industry expertise and prior corporate finance work can also be a way in, but you’ll have to be patient.

If your degree isn’t in business, take heart in the knowledge that banks are increasingly encouraging applications from candidates with specialized resumes in order to better appeal to a growing client base.

JOB OUTLOOK Undergrads and MBAs from top schools are recruited for a number of openings that is small even in the best of times-so you can imagine what the meltdown of a number of banks on Wall Street means for those seeking a banking gig. Competition is fierce, so if you’re not from a top-tier school, you may need to be more resourceful and persistent than those who are. Again, doing an internship in investment banking is essential to breaking into the field in today’s business environment. Networking is key; make use of your alumni network.

A few places hopeful investment bankers should consider looking for opportunities are boutique firms, healthcare organizations, and firms based in Asia and the Middle East, as well as specialties such as risk management, restructuring, and financial planning/wealth management.

The position you’ll start at obviously depends on your education level. Undergrads vie for two-year positions as analysts. If you do well, depending on the firm, you may get to stay for a third year, perhaps even abroad. MBAs compete for fast-track associate slots, and international assignments may be available for those who want them.

Midcareer people are recruited by headhunters or hired on an ad hoc basis for positions at various levels. Though relatively few people come into the industry from other fields, it can be done, especially by those who have a technical background in a specific industry and an aptitude for and interest in finance. Otherwise, expect to start at the bottom.

 

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