You have lots of options after an MBA. You could be in Tech, Consulting, Investment Banking, Brand Management, Operations, Entrepreneurship, Strategy etc. etc. It is a long list. You know it! So, why would you want to be in investment banking?
Before I answer the ‘why’ let me put out other bunch of stuff related to it.
What are the paths to get into IB as a career?
There are two ways to get into. One is right after undergrad, you get a business, finance or economics major and with the bit rudimentary knowledge about the shops (banks), you can get hired as an analyst (age- 21 to 24). From there after three or four years, you get promoted and you become an associate. Another is right after an MBA (age — 27 to 30), you can get hired as an associate without even any prior work experience. From there, after six or eight years, you will be promoted as VP then Director and finally Managing Director. That is pretty much the organization structure.
What does IBs do?
Gosh! You may need a lifetime to figure that stuff out if you become one but they do serve client and almost every aspect of the work is hinged on client. Clients are mostly business owners, CEOs and CFOs. There are three buckets of differentiations as per the job role-
1.M& A (Mergers and accusations)- buying and selling of firms
2.Debt — syndicated bank market, high yield investment bonds. Mostly cash flow control.
3.Equity Capital Market — IPO- both Public equity andPrivate equitySo you may focus on one bracket and gain expertise or you can go industry wise and focus on one industry (suppose car) and have a good knowledge about all three buckets. The main job is to help your clients to raise money through buying and selling its products or services.
Now here is the fun part! If you know the specifics of a business in-terms of monetary ways and get a sense about forecasting and deliver results, you get to interact with the big shots who are on top of their game in every industry(earlier in the eighties at wall street, they used to be like rockstars. But after the financial crisis in 2008, it has been more process driven. The very people who are driving the industry, the more close you will be with them, the better will be your chances of understanding the business. It can be a very close knit. You could be in a meeting with a business owner who is doing business since forty years and he is the leader in that industry, his CEO who is there may be since last twenty years and CFO for last fifteen years. I mean holy cow? What are you going to advise them? They know business more than anyone. But they do need advice in both long term and short term aspect of sustaining and growing the business in financial terms. So, there is a scope of learning and this model is there through out the world. Like life will gets you to places with commodities which you generally play with and there will be some really bright people running the show. Take the opportunity. You could be in TMT (Technology Media and Telecom), M&A, Debt, Equity, Consumer , Find your directive considering the strength and directive of each brackets. At the end of the day, your job should have relevance to you at least. So choose wisely.
Recruiting Process?
Business School is tough. Job hunting starts almost immediately after Day 1. (Fun games. Day1& Day 2… LOL.. get yourself in the market!!) Schools have very structured processes. Consulting & IB — you won’t have enough time. Firms want to know you. Coffee chats ,Resume drop, intense stuff). Firms just want the best talent available. Just keep on moving. Start to prepare from Day 1 for technical part and fit part.Do well in the internship. You will sign the offer letter before you come out of the internship. You can chill out — This is the highest probability.
There are two types of IB- Bulge Bracket Investment Banking — Full suite ( Goldman Sachs, JP Morgan, Morgan Stanley, Citi, Bank of America, Wells Fargo and Boutique Investment Banking — usually focus on M&A —mostly the sell side — Big shots : Allen & Company, Cowen, Perella ) : Best product for a young banker but they are not on campus. You got to do the network. You need to go out and be the discoverer. Career service is just not enough. Do not expect the platter to be served. Start making calls. NETWORK IS EVERYTHING. Catch up with people. It will be eye opening. You will have success rate of 99 % with an alumni. So exercise your brain. It depends on the shops where how many investment banker will be there. In a shop there will be two to three investment bankers and they will close deals worth millions. PEOPLE ARE SO IMPORTANT in IB.
What are companies looking in you as an IB?
Clear out your unconscious bias. Be yourself. Never be the guy who is trying to fit in. PASSION for something helps. Job roles are cliche and they are overrated. (Analyzing leverage, capstone modeling, cover statics to do descriptive analysis — just adding subtracting, multiplication, divide — Maths are never hard. )But are you trust worthy? Done right, done on time. Are you going to put yourself on the line? Get stuff Done, not necessarily the hard stuff! Ability to handle pressure. Why are going to be Invest Banker? Well researched , well rehearsed .. blah ..blah!! Fight for it — cliche, but works! Stuff flying over your head but fun. FINANCE IS ALL ABOUT BEING THE GO TO PERSON. YOU ARE NOT REDUCING POVERTY LEVEL TO BE HONEST. You are not saving the world. But you will make hell lot of money. Hell yeah to you for this.
Ways to prepare for obscure interview questions?
IB Interview Guide, http://macabacus.com/learn (entrepreneur — former analyst, good resource)
Office of Recruiting
Most opportunities are in New York. (Wells Fargo — Charllote, New York, Los Angels but New York is most structured.— Coverage of all three (M&A, Debt, Equity), Product based one specific .Do your work. It can be uncomfortable. NY is structured. LA is not that structured. There are very less shops. Predominantly sell side model. USC and UCLA are close.Others are Charlotte, San Fransisco, Boston, Chicago.
International student
Predominantly it is dominated by US players throughout the world in-terms of corporation control and corporate governance has a big say in these stuff. Leaders are in here so you learn a lot to work anywhere in the world. This puts you in competitive advantage. Money is here for big firms. That is the sweet spot in business decisions. But in terms of business operation perspective, it is global and every firm sees global. Work culture are mostly caring and collaborative — they are not Gordon Gekko. But it is competitive . You win or loose. It is CITIv BOA v JP v WF always.
Worst Part
Work life balance- you loose control of your track. Work takes a lot of time. Client takes a lot of time. It is not fair. Analyst and associates are treated better these days in wall street as tech has changed the way people work (— Bin bag chair at Google). If you are miserable at this after six months, get out. Do something else. After all you are an MBA.You will be an asset any where. Find your fit/ passion!
Leaders in IB? ‘Why’ IB?
People are motivated by a lot of different factor. You cannot assume why people do it. Some people are just there for the pay cheque. That is okay. It is fine.That’s capitalism -provider of services to the client.
