With the world becoming more connected and businesses getting more global in their operations, the job market scene is inexorably becoming fiercer by the minute. Job-seekers need to proactively expand their suite of skills to meet the rapidly changing demands of the industry of their interest-at each step of their career journey. Internships, in this respect, serve as facilitating platforms, for ambitious students to establish a credible foothold in the industry, company and job of their preference. For, if you view internships as opportunities to hone your technical competence and acquire practical knowledge, then you help yourself in striking an edge before people who have the authority to hand you a potential full-time job offer. But for that to happen, you need to make solid efforts in the direction of your dream job –right from your freshman year!
Striking gold in the investment banking arena is an even tougher proposition. One that requires conscious effort and targeted focus towards preparing for a summer internship. If you feel you have invested sufficient effort in gaining strong credentials during your academic course, then you deserve full right to aim for an internship program with the coveted investment companies -Goldman Sachs, JP Morgan, UBS, Deutsche, etc. However, a high GPA can only act as a stepping-stone in this intensely competitive banking world. Recent recruitment data indicates Goldman to accept only 1.8% of applicants for its summer analyst and full-time analyst positions. At the same time, Goldman claims that the number of applications it receives from graduates has risen by 46% since 2012. JP Morgan is reported to accept around 2% of graduate applications while Citibank accepts 2.7%. These figures may seem daunting but in essence they just indicate the criticality of career preparation for landing that much sought-after finance internship.
Understanding the Investment Banking landscape
Investment banks are firms that advise and effect deals for their clients both on the sell-side and buy-side. On the sell-side, their work revolves around helping companies raise capital investment in the debt or equity markets or offering the best direction in terms of strategic acquisitions like selecting the best company to enter into an M&A or joint-venture agreement with. On the buy-side, they act as investment consultants, working on building the wealth and investment portfolio for institutional clients. Asset management and fixed-income trading through buying and holding of securities are some of the activities comprising the buy-side of investment banking operations.
In terms of the internal business operations of an investment bank, the processes are primarily categorized in two ways. One vertical is called the ‘Product-group’ while the other is known as the ‘industry or Coverage Group’. An analyst hired in this group would be required to work on a specific type of deal while being exposed to a wide array of industries. The deals, in turn, can be classified as M&A, Equity or Debt capital market, leveraged finance and restructuring or distressed M&A. Applicants roped in for the industry group would be required to undertake financial modeling, company valuation and other tasks specific to a particular industry-say-healthcare, financial institutions, REIT, etc. while being involved in multiple types of deals from M&A to an IPO.
Within these broad verticals, lie a few sub-groups like origination, advisory and coverage. Origination deals with formulating marketing pitches to clients while Financial Advisory essentially focuses on conducting due diligence for M&A and other strategic transactions and coverage as mentioned before deals with multiple activities but for a specific industry. From the recruiters’ perspective, investment banks are segmented as ‘Bulge Bracket’, ‘Mid-Market’ and ‘Boutique’. Bulge bracket banks comprise the leading investment firms such as Goldman Sachs, Morgan-Stanley, Credit-Suisse while Mid-Market banks include Robert Baird, Piper Jaffrey, etc. and the boutique firms feature names like Lazard and Evercore among others.
So, how should you plan your preparation for securing a summer internship in this extremely competitive financial job market?
Research: Use your time effectively right from freshman year to keep abreast with latest trends in terms of job responsibilities for Summer Associate/Analyst positions. Build your skill set simultaneously in light of the job requirements by participating in investment-banking related seminars, competitions, enrolling in additional classes (say, for company valuation, modeling). Keep checking the career portals on the website of employer-investment banks for new internship positions. Be involved with your career service center and its database of jobs in order to identify the most interesting internship opportunity. Soak up on the latest financial news in terms of M&A, Shelf-registration activity. Study the market to identify your preferred business area-product (M&A) or industry coverage.
Participate in Spring Week/Insight days: Spring weeks are relatively more common in the Europe and are shorter versions of the summer internship program. Also known as insight weeks, these typically last between 1-2 weeks and are generally available to first-year students around Easter time. During this time, interns can obtain exposure to the various industries being catered to, learn the techniques of company research and some aspect of pitch presentations. But more than anything, a spring internship sets the path for obtaining a summer internship and even a graduate role. 25% of the places on some banks’ summer internship programs are assigned to people who were previously ‘spring interns’. Applicants who intern during a spring week stand a good chance of being preferred over others for getting a summer internship offer first. The selection process for such candidates is also less extensive as they get early access to the interview round and a chance to directly advance to the final round. Additionally, interns can use this opportunity to better understand the industry and working environment. Not to forget, a chance to break into the network of senior executives and partners before you begin your summer internship. Also, you get deep insight for shortlisting investment companies at your end for the summer internship.
Insight-days on the other hand, are offers lasting 1-2 days wherein selected candidates get an opportunity to attend sessions, network, participate in competitions at the bank and obtain a sense of the various job roles and process verticals. J.P. Morgan, for example, offers schools insight days involving sessions of interactive games and a tour of its trading floors. Visit banks’ careers pages for getting the lowdown on such events. Goldman Sachs, for example, has an area titled ‘My GS Events.’My GS Events.’
Refine your resume and interview prep: Take the help of your career services center to highlight experiences and projects in your resume that could be relevant to the demands of an investment banking internship. If you were leading the treasury club at your university or were responsible for a student-led investment fund, go ahead and mention that in the ‘Leadership’ section of your resume. Communication and analytical skills are highly sought-after in the investment banking field. Review your resume content to check if those are reflected through your experiences. Explore the VMock platform to measure your resume on this count and improve the representation of such competencies.
Approach your career counselor for help on mock interviews. Prepare on a wide range of technical concepts so that you don`t get caught off-guard. Brush up your knowledge on LBO, Merger models, company valuation. Be ready for questions where you are required to make a guesstimate of say, the telecom industry in Asia or resolve a hypothetical strategic transaction decision of a company. In terms of behavioral assessment as well, you should brace yourself for any question including if you could be one animal, which one would you be?! These days, banks hold the first round of interviews over video and then ask the selected candidates to appear for ‘Super Days’ for the final round. Super days, essentially mean dedicated days wherein the shortlisted candidates are asked to visit the bank and appear for a series of interview rounds that could stretch to 5-6 hours. With successive rounds, the candidates face a different and often higher number of interviewers including Partners and Directors.
Network: Since vying for careers in finance and specifically in investment banking, inevitably means, having to contend with intense competition, the importance of networking cannot be stressed enough. You would have to go all guns blazing to delve deep into your network of friends, family, seniors, alums to find that valuable connection at the firm. Contact your seniors who had interned at the firm and are now analysts. Set up time with them to ask for informational interviews. Attend company information sessions at your campus. Approach senior executives of the bank at the career fair event and try to ask engaging and insightful questions. Leverage the power of the social connections on LinkedIn. Find the important contact at the firm in your chain of connections who would guide you and offer you a chance to job-shadow for a few days. Join a local CFA society or professional association like the National investment banking association to expand your network of industry professionals.