Recession Special: My first weeks at a bulge bracket i-bank (Summer Analyst series continued)

So it's been a while since my last post. I've been getting questions from readers, and I'll be answering some of them in the end of this update.

As for what I've been up to, my industry group has been getting smacked with deals right now. The VP on the team I'm a part of has called the deals 'Recession Specials'. I haven't had a day off since I started!

I had my first major technical challenge the other day: I had to spread comps and synthesize the main points of the company's financial history in a few powerpoint slides. Spreading comps took about one afternoon (without Excel shortcuts it could have easily taken double that). I then looked through the 10-K's and 10-Q's of the company to construct the financial history and outliers. I researched the company's competitors to get an industry overlook and to put the company's history into context.

My other technical task was tweaking the DCF sensitivity and LBO model. Luckily I haven't had to build one from scratch yet. I became familiar with the style of the models and where to update the inputs (discount rate, free cash flow for each year, etc).

Other miscellaneous responsibilities I had during the week: print out powerpoint decks for in office meetings, schedule conferences with the client, flip pitchbooks (see that no errors in printing), and ordering dinner for the team through Seamless Web (an online listing of NY restaurants that deliver dinner to the lobby of the bank).

It hasn't been all work. There's been quite a few networking events - I got to listen to prime brokerage traders, risk management heads, and the merchant banking group. And, there's been a ton of coffee visits and happy hours to get to know people I don't directly work with. I realize that networking was always very important, and I think it can be crucial in getting a full time offer. I still am not sure if I want to do finance for full time, and speaking with more people has got me thinking about other divisions besides IBD.

Some questions from readers:

1. What kinds of work experiences did IBD interns have before this summer?

I myself had no finance experience. Only 3 of the other interns (the ones from undergrad business schools) in my group had direct finance experience (at a bank) before this summer. The other interns had very varied experiences - nonprofits, legislative aide, teaching at high schools, journalism (to name a few). Previous finance experience is certainly helpful, but by no means necessary!

2. Were there any common themes among the resumes of the interns in your IBD group?

Yes - despite the diverse array of experiences the interns in my group had, some common themes include:

• Campus leadership - class presidents, founders of clubs, student leaders that were university appointed to committees
• Good academic background - most above 3.5 (with a few around 3.0).
• Strong public speaking skills - demonstrated by leadership and strong academic records. Good public speaking is needed to convince clients of your results and findings, to "sell" the banking team and its recommendations to clients! I am confident that my public speaking helped me tremendously during the interview process (my interviewers remembered me and reached out to me in my first week to see how I was settling in)

There's also a great post on the main takeaways a resume should present - scroll through the previous tips! It is spot on in terms of how interviewers / resume reviewers screen resumes.

3. How has the banking culture changed over the past year, in your opinion?

This is difficult to answer without specifics, but generally I can say that bankers have mellowed out due to the economic downturn. The analysts I'm working with say that a lot of the top management (VP and higher) are now more wary about the security of their jobs, and that they have lightened up a bit. Everyone is extremely hardworking still, and put in just as much (if not more) effort into their jobs, but people tend to be cognizant of others and the needs of their teams. As you get more senior, my understanding is that maintaining a work-life balance in banking becomes more manageable. But after all this is still banking, and it continues to attract the same types of people - type A, competitive, money-driven.

Feel free to continue sending your queries to breakingbankers@gmail.com and chasingconsultants@gmail.com

Cranking away in a Cubicle

This is the third post in a series about rising college seniors who successfully navigated the summer recruiting process. Find the first post here.

Here's a quick update on what the experience has been like the last few days as a new IBD intern. Over the weekend I was on call but thankfully didn't have to come into the office - a nice break before the storm!

To get a better understanding of office organization, the banking team I'm in, and office politics, I'll give a rundown of the people and describe how projects are assigned to readers who haven't worked in IBD.

There are seven interns in my industry group - five of us come from top targets (our majors: economics, history, religion, sociology, and policy) . The other two come from undergrad business schools (like NYU Stern). There's 4 guys and 3 girls. Pretty diverse in my opinion. We all have gotten along well so far. Despite how competitive it is in this environment and how badly people want full time offers, I've found that it's important to develop good working relationships with everyone, since there's a good chance we will be working together in some capacity.

There's an Associate in the group who assigns the interns to projects as they come up. Oftentimes, the MDs have a niche on the types of deals they work on (some specialize on IPOs and follow on offerings, others on M&A). The MDs also have close relationships with the management at several firms, so they do all deals for a particular client. From speaking with analysts, the assignment of interns to these deals is pretty random in the beginning. If an intern does an exceptional job on his first deal with a particular team, the MD / VP on that team could request that intern work on other deals as well. So I introduced myself to everyone the floor in the first week - I think it's good to get your name out there so people remember who you are. I would say speaking up is crucial - it differentiates those who take risks from those who shy away from hard work. When we interns introduced ourselves at the opening lunch to the industry team, I tried to speak with as many people as I could, while other interns just chatted amongst themselves.

My efforts paid off - I was the first intern staffed on a project. I was a little nervous in the beginning because I don't have any finance knowledge, but I was able to think through quickly and clearly about my responsibilites on the project. I was given select slides to revise in the master deck - which is basically the PowerPoint presentation we are pitching to the client. It hasn't been technical at all so far: I had to track the stock price data over the past 2 years on a graph and double check that the financial numbers were linked to the correct statements in Excel. (my Excel experience in my previous non-finance internships came in handy). The analysts checking my work liked that my work was right and that I had turned it around quickly. I heard from a friend (an IBD analyst) that an intern has to do two things to get an offer: 1) don't screw up on the small stuff and 2) in team meetings and project discussions contribute new ideas others haven't thought of. I've hit the mark on the first and hope to have the opportunity soon to do the second. To ensure success, I've been reading up on equity research on the company and comparing differen analysts' projections so that I can make my own contribution in our team meetings this week.

Yesterday and today has been really busy for me. Although the above tasks don't sound difficult, a high level of attention to detail is needed. I finally just got a small break. Things tend to slow down a bit around dinner time, and people in the office tend to sit together in a conference room for dinner.

When I asked people about their IBD internships in preparation for summer recruiting interviews, it was difficult for me to visualize how an intern fits in the picture - what interns contribute in team meetings, how they should approach people in their industry group that they haven't worked with, how they should strike up conversations with MDs (when they travel all the time) and so forth. I'm getting a clearer sense of what I need to do to add value here.

Five Ways to Kick Ass at your Summer Internship

As people start their finance internships this summer, I thought it would be a timely post to include a quick list of "do's." These directly apply to IBD but I feel like there's advice to be followed for those in all finance and consulting internships.

1. Have paper, two pens, a calculator, and a draft of the assignment you're working on with you AT ALL TIMES. Whenever you walk around, a person on your team can pull you into his/her office and start talking about the deal. You don't want to be caught off guard. And I say two pens because oftentimes the VP or MD won't have a pen on them and you will look good to be prepared.

2. Add bookmarks for the company sites, 10-K wizard, and to equity research reports. Read these in your down time. As an intern, if you can pull out revenue numbers and tell the story behind a company, this saves time for your team and shows that you know your stuff.

3. How do you develop relationships with senior people? Write down questions throughout the course of the day, and ask them at an appropriate time. The MDs will always be busy and it makes you look like a rookie if you ask questions during team meetings (which wastes time). I often emailed the MDs and asked if they had 30 minutes any time during the week where we could talk about finance, their careers, anything. This worked in my favor when it came to giving out offers, because senior people remembered me. Recruiters told another intern in the group that she did not develop enough relationships with senior people. So keep in mind that not speaking up and not introducing yourself to the team can go against you!

4. If you have some time before your internship starts, and you come from a liberal arts background, it may be helpful to run through some accounting terms on the cash flow statement, income statement, and balance sheet. The MOST IMPORTANT technical skill for an IBD intern is knowing how the three statements of a company are linked together - this is huge for building models and doing any type of valuation. Knowing accounting will give you a huge leg up.

5. At the end of the day, you can't take back a mistake that you made or re-do some work after the deadline. Regardless of the outcome, have a positive attitude towards everyone and everything. At the very least, you have a rich experience under your belt and have learned something valuable for your career and life. And people will like you if you are affable and easy to be around. Knowing finance and doing a good job on your assignments are necessary but not sufficient in getting the offer. Your personality and leadership potential are equally important.

Consulting vs. Finance

A couple years ago in the boom market, the lucky students who received offers from McKinsey, Bain, BCG (MBB) and Goldman Sachs more often than not chose Goldman Sachs.

From speaking with friends and students at my school in the past two years, the trend has reversed for many. We are looking at consulting much more seriously - it gives broad exposure to a swath of industries. You get to learn about the finances of companies and much, much more: branding, how to sell a product, whether to acquire / merge, how to expand product offerings, how to start a business. I worked in finance before, and learned a tremendous amount about how to read 10-Ks and build several valuation models. But I can say, without a doubt, that the work in consulting has been a lot more exciting for me at a junior level - I am expected to speak up in meetings with senior people, and the director on my team asked me for my opinion in a meeting with the client! I build models that have no template - I am given the responsibility to take an idea and explain it as clearly and powerfully to my team and the client. Such experience is hard to come by in banking.

A list of major differences between consulting and finance internships/analyst positions, in my experience:

For Consulting

- exposure to the client

- strong team work with senior people

- senior people more willing to mentor

- more "soft skill" training

- looking at the company from all sides

- expertise in PowerPoint

Finance

- longer hours and learn endurance

- execution of deals instead of pure advisory

- tense environment, more emphasis on "face time"

- work closely with junior people on modeling

- focus on numbers (the pitch fits the numbers)

- expertise in Excel

Other notes:

• in consulting, I've had much more flexibility with scheduling non-work activities than in finance. As much as banks have made strides to be more family-friendly and progressive, as an intern/analyst you can expect to have to cancel your dinner plans. Keeping a work-life balance is easier in consulting.
• Just looking at the numbers, it is harder to get a consulting internship than a finance internship in your junior summer. The summer analyst classes at banks are very large - in the several hundreds. At MBB, the summer intern class is anywhere from 3-10 (depends on the office).
• However, don't let the numbers scare you from applying to consulting. If you make it to the final round for a consulting internship position at MBB, the people who don't get an offer are usually guaranteed a first round interview for full time. Other firms 'fast-track' you to the final round for full time. So there's a huge incentive to participate in the consulting recruiting process in your junior year.
• I like to think of consulting as giving a broad platform for any type of business, whereas in finance you learn one important aspect of business (financing) very well.
• Consulting firms look favorably upon investment banking internships. The reverse is not necessarily as clear cut. Why is this important? I had offers from consulting firms and banks for my junior summer, and decided to take the finance offer (even though I knew I was a better fit for consulting). I worked at one of the top banks in New York, learned everything I could. It was easy for me to "sell myself" during consulting interviews when I jumped ship to one of MBB firms. Consultants tend to be ex-bankers and they could relate to my story - I ultimately got offers from all MBB. This thinking may help those deciding between these two industries for junior summer.

If there's anything you're interested in knowing, and want to separate fact from myth, as always feel free to comment!

Starting to Bank

This is the second post in a series about rising college seniors who successfully navigated the summer recruiting process. Find the first post here.

This week has been training for all of the summer analysts in IBD at the bulge bracket I'm working for. It's been interesting meeting everyone so far - there are 8 other students from my school, and around 80-100 in the entire class. And surprisingly there is good representation beyond the Ivies, Stanford, and MIT. There are some from BC, UC Berkeley, UVA, UCLA, BYU, NYU, GW, Georgetown, UTexas, UGeorgia, UMich, and the liberal arts schools (Williams, Amherst, Wellesley, Colgate). I'm sure there are lots that I am forgetting to include here but the point is it's a diverse class!

The first day we received our assignments - either a product or industry. I'm excited to be part of the industry group I was assigned - it's in a field that's busy right now, which hopefully means that I'll get to work on cool deals.

Most of our training has been about spreading comps, getting acquainted with banker-speak, learning about the presentation templates, and some standard orientation stuff like "this is harassment" and "this is against the law." We also became acquainted with Excel. I guess the most important thing I learned was that as a summer analyst, I really need to work with experienced analysts to be successful. The top analysts in the bank were the ones guiding the training sessions, and really knew their stuff. Honestly I slacked off a bit during these sessions; my mentor mentioned to me that the most important thing to being successful is learning on the spot.

That said I have found my preparation useful in some areas. I'm glad I worked through an accounting program on my own before this week - knowledge of accounting gave me a leg up in terms of understanding the basics of valuation. I'm sure many of the business-background kids already understood valuation, but those coming from a target picked up the basics quickly. My impression was that those without a business background were the most open to learning and asking questions during training. And there are more people with non-business/non-finance majors.

I guess there are different pros and cons to learning business as an undergrad. If I had to generalize, this is what I would say are the main differences between the business and non-business majors, according to my personal experience and what I've gathered from recruiters (note: there are exceptions):

1. Those coming from a top business program really know their stuff and clearly are interested in banking for the long-term. It's clear to a recruiter that they want the job and are willing to work feverishly hard for it.

2. I'm a policy major and have seen people who study international relations, government, english, and even music in my summer analyst class. It's a bit harder to generalize our answers to "why banking?" When we broke off for lunch, a group of us were talking about our interview experiences. In her interview, the music major had a hard time convincing some recruiters why she should be chosen over others; however, in her interviews, she answered that she could engage in conversations on any topic with people from any background - which is crucial in a client-facing business where bankers need to not only work for the client but also have their trust. I think this story goes to show that personality is just as important as academics.

It will be interesting to see if there is a difference in performance of an intern based on their field of study. Everyone here is more or less very smart. Again, from speaking with my mentor, what separates those with full time offers at the end of the summer from this without will come more from personality (a leader, ability to work in teams, interpersonal skills) rather than straight academic success. Coming from a target was a huge leg up in recruiting but now it's all about the results and value added that I bring.

If people have any specific questions on the composition of my analyst class or anything I've covered in these two posts, leave a comment and I'll answer! As a preview, I'll be making another post(s) on what bankers actually do; I've found that there's only so much you can learn about the industry from reading industry books and periodicals. So hopefully the examples of the work I'm doing in my internship will be helpful to prospectivte bankers!

Luck of the Draw or Draw of the Luck?

REVIEWING RESUMES AND COVER LETTERS

There is an element of luck behind success in the recruiting process. One time at a bulge bracket, a candidate’s resume did not open properly, and the recruiter denied the candidate outright. Another time a recruiter saw that a candidate was also on the squash team at his alma mater and gave him an interview slot.

There are several resources out there that already list what resumes should avoid and what they should include. In this tough market, recruiters have cut their full-time hiring positions and summer analyst classes. The margin for error on resumes is much smaller.

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Getting and Preparing for an IBD internship at a Bulge Bracket

This is the first post in a series about rising college seniors who successfully navigated the summer recruiting process.

I have a week until my Investment Banking internship starts at a bulge bracket in NYC. As way of background, I'm a public policy major at a target school on the East Coast. I've been lucky this year - it's been puzzling why a lot of economics concentrators had a hard time while a few people with purely humanities / non-economics studies like me have landed internships. I'm sure luck was a part of it, but my hard work and knowing how to talk about my story went a long way.

A lot of people at school ask me how I got interested in finance. I've read the Wall Street Journal since middle school, and found understanding markets and knowing what's at stake in mega mergers to be exciting. I also knew that policy was a HUGE factor in the private sector (look at TARP now). I never thought about doing finance though - it was more of a hobby. Once I started college, I became interested in seeing how national economic policy was implemented at local levels. So I interned part-time at non-profits that dealt with homelessness and higher education, and also at a local representative's office. Over time, I received more responsibility and also had the chances to speak with people on the boards of these places. It happened that a lot of them had prior finance experience. I was curious why people working in the public sector - at non profits no less! - had started out at Goldman Sachs or Bain. From our conversations, I gathered that finance and consulting jobs are 'hot' commodities for people like me interested in social enterprise because beyond the technical experience at bulge brackets/management consulting firms, I would have access to not only develop my finance skills but also have:

- opportunity to improve public speaking

- a structured training program

- opportunity to network and learn from people who advise management of companies / policymakers

- understand the intersection of private enterprise and the public sector

Heeding the advice of my mentors, it made sense to really test out finance and see where it would take me in terms of public policy. I don't plan on doing finance long term, maybe not even past this summer, but I figure it's probably the last time I would have time for a summer internship in the field. At the very least it's a chance to see historic change in the entire financial system.

I think that especially in this economic climate interviewers appreciated that I had really pursued my interests. Some alums looked at my resume and told me that they found it was refreshing that I had applied my education in a socially beneficial way - I took on leadership and worked with other college volunteers in assessing policy. Knowing your own story is crucial - I think I was able to make a lasting first impression. As an avid reader of the Times and the Journal, I could speak about current issues: the effect of TARP, whether Geithner's plan was working, what Obama needed to do. My advice to people preparing for their interviews is to be able to really talk about themselves and about current events.

Now that I have the internship, I realize that my public policy background may not compare with others who have direct experience and formal study. I finished school 2 weeks ago and have been reading sites, talking to interviewers I kept in touch with, and speaking with past interns who go to my school. It's really important to be a confident (but not arrogant or entitled) when speaking with people. That way people at least respect you and don't find you annoying. Be likable - respect their time, be flexible, get to know them as people (not bankers or what have you), and ask questions that can't be answered from reading.

As I start my internship, I'll be describing how well I stack up against the competition, talk about the people I work with, give tips for what else I could have done to prepare. I'm looking forward to being in the city!