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6/10/12

Happy to answer any questions about anything related to banking for SA's and FT's that start this summer.

Comments (136)

5/27/12

Hi
I was wondering if you could provide me with some tips with regards to the buyside?

what are interns expected to do, (eg, a 3rd year undergrad student) with a paid position in a HY/distressed focused hedge fund during the summer? typical expectations, and how to exceed those expectations? currently reading moyers distressed debt analysis :s

Thanks

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5/27/12

(1) Do you ever get any time off, maybe to take a vacation?
(2) Since you work so much is it easier to save money, because you don't have time to spend it?

Thanks

Rules are for the obedience of fools and the guidance of wise men.

5/27/12

drunken question deleted, lmao

GBS

5/28/12

How come even though I tell you on Friday "yeah I doubt [enter ticker name] we'll have comments back on the management presentation given Memorial Day, but they could, so keep close to the office / check your black berry," and you don't pick up your black berry or reply to emails when we do?

5/28/12

re: dinner -- you are free to use all of your allowance -- over time, not a great decision though considering that you're sitting all day. better just to eat what you'd need to get proper nutrition and stop spending after that -- you'll thank yourself later.

re: chicago schools -- definitely know some very smart people from those schools on the street -- networking is important though.

re: Visa -- I know of foreigners working in NYC but can't answer specific questions b/c I'm a U.S. citizen -- best to speak to HR depts about issues related to this area.

re: distressed / HY -- best advice is to read that book and understand it as much as possible. having spoken to current distressed / hy analysts who entered the buyside after college graduation, knowing that book backwards and forwards will teach you pretty much everything you need to know. if you can have a good sense of how to even think about valuing the liabilities that a company has, how that relates to the assets of the company, and where investment opportunities might arise, I'm sure you'll be ahead of the game. I don't know what they do on a daily basis but I'd assume it's related to analyzing and making recommendations on potential investments -- probably a lot of research involved too. Nevertheless I don't think they'll expect you to be an expert so, just as you would in a banking SA position, go in there, be positive, and try to have some fun. Sounds like a cool opportunity.

re: vacation -- usually analysts get 2 weeks per year. most 1st years don't take off in the 1st calendar year (1st 6 months or so), until christmas. vacations tend to happen in the summer time (half way point). if you're not busy though you can get time to take weekends off which is good.

re: spending -- nyc is expensive. it's possible to not save even if you're working a lot -- all depends on the analyst and your particular spending habits. having to work as much as you do, especially in your first year, can help you save though.

In reply to oppcostofcapital
5/28/12
oppcostofcapital:

re: dinner -- you are free to use all of your allowance -- over time, not a great decision though considering that you're sitting all day. better just to eat what you'd need to get proper nutrition and stop spending after that -- you'll thank yourself later.

re: chicago schools -- definitely know some very smart people from those schools on the street -- networking is important though.

re: Visa -- I know of foreigners working in NYC but can't answer specific questions b/c I'm a U.S. citizen -- best to speak to HR depts about issues related to this area.

re: distressed / HY -- best advice is to read that book and understand it as much as possible. having spoken to current distressed / hy analysts who entered the buyside after college graduation, knowing that book backwards and forwards will teach you pretty much everything you need to know. if you can have a good sense of how to even think about valuing the liabilities that a company has, how that relates to the assets of the company, and where investment opportunities might arise, I'm sure you'll be ahead of the game. I don't know what they do on a daily basis but I'd assume it's related to analyzing and making recommendations on potential investments -- probably a lot of research involved too. Nevertheless I don't think they'll expect you to be an expert so, just as you would in a banking SA position, go in there, be positive, and try to have some fun. Sounds like a cool opportunity.

re: vacation -- usually analysts get 2 weeks per year. most 1st years don't take off in the 1st calendar year (1st 6 months or so), until christmas. vacations tend to happen in the summer time (half way point). if you're not busy though you can get time to take weekends off which is good.

re: spending -- nyc is expensive. it's possible to not save even if you're working a lot -- all depends on the analyst and your particular spending habits. having to work as much as you do, especially in your first year, can help you save though.

thank you!
i cant give u sb... i think it is because i have negative credit :( sorry monkey ~

5/29/12

re: SA-FT -- as long as you get through training, which you will -- you'll be fine. You'll find that you're just responsible for a lot more -- its not that the work gets that much more complicated always -- although some modeling stuff can get tricky if you're new to it, but if that's the case, make sure you ask questions, get help, and figure out how to complete the task efficiently ASAP. not sure what group you're entering, but you can probably expect the hours to be similar -- the difference is that instead of doing it for 10 weeks, you're doing it for two years. what happens usually is that things will be really slow for the first stretch of time, depending on how quickly you pick things up, and then slowly it'll start to get better. it's an adjustment process, but being able to respond quickly and effectively to requests of all kinds at all hours is one of the main skills you'll get out of banking -- it's a pretty unique experience.

not all ibd firms have to take the series 79 and 63 -- but from what I have heard from those who have taken it, as long as you study for it and put the work in you should be fine.

5/30/12

My question is about the SA--FT transition. I'm entering the FT analyst program at the same BB I interned at, albeit in a very different group. What kind of differences in expectations, hours, and work-function can I expect?

Also, how hard are the standard Ibanking licensening tests? Are liberal-arts students without much specific experience at a real disadvantage--is failing the first time a serious possibility?

5/30/12

Thanks again for all this:

1. What's training like? Did you enjoy it? Is there really as much partying/drinking as people make it seem?
2. Are you paid during training?
3. Do you need a credit card to pay for flight/housing as you wait for the firm to reimburse you? Or do they pay for it outright (i.e. give you their credit card info)?

5/30/12

re: training

Training is cool -- you get to meet everyone in your analyst class. what you do should be anywhere from nowhere near groundbreaking to somewhat new based on your previous experience in finance. it's the last time you'll be together like that with your whole class -- so while you should definitely make sure you get your stuff done, it's good to go out and socialize with members of your class -- most of whom you won't see that much for a long time. I believe you are paid during training. Don't think you have a credit card during training -- not sure how firms do it -- probably a firm by firm thing.

6/1/12

Great thread thanks! If I want to graduate earlier my senior year to save a semester of private school tuition assuming I get a summer analyst position next year and then a full time offer would I be able to start working full time in January? Is there typically training for off cycle analysts who are starting winter instead of summer? (And would that make the analyst stint 2.5,3.5 years vs 2,3 years?) If so, is it common?

Thanks again!

6/1/12

@BankorBust -- depends on the bank -- to be decided after you get a full-time offer. I think you'd do training when the rest of your class got there. your stint would also be 2.5/3.5 years -- you'd be more likely to stay as an associate -- but don't have to -- it'll just be more tempting. not too common but I know some people who did that.

6/2/12

seem to have answered most questions -- for any other follow-up q's or personal situation questions, feel free to PM me. may take me longer to respond, but I'll be sure to get to you as soon as reasonably possible.

6/11/12

Hi,

How did you prepare for buyside opportunities and when did you find time to prepare for them?

Also I know that this years PE recruiting was not straightforward because the megafunds did not recruit as before. Do you think it will be similar next year?

In reply to oppcostofcapital
6/11/12
oppcostofcapital:

SA recruiting -- you could say that interviewers won't expect as much because you're younger and because it's just a 10 week deal and if they don't like you, they can find someone else to take your spot. FT recruiting tends to be more serious and has a lot fewer spots. Disclaimer: As mentioned below -- anything is fair game on your resume, so if you went to Wharton or Stern et al or you said you did a lot of finance stuff, you should be prepared to answer finance/acctg questions related to the work that you have done.

A lot of programs tend to fill a big portion of their class in the summer, while some will get rid of many of their summers and plan to get a good number from FT. You should start prepping for FT recruiting during the summer, and use your summer internship (if you have one) to start that prep by going over your finance and your accounting, knowing your resume, knowing your story, etc. I'd say SA and FT recruiting are pretty similar (main difference is that FT is more finance-intensive and there are fewer spots) -- but to give yourself a good shot at any standard IBD generalist role -- you need to make sure you have some understanding of the following:

1) Everything that you wrote on your resume

You need to be able to talk to anything you wrote or did -- people can and will ask about anything and it's totally fair game -- it's easy to get caught here, so spend the extra time and make sure you've got everything down to where you could summarize the experience in a couple interesting sentences (or more if its related to finance / banking and something that the interviewer might test you on, like what a DCF is if you said you created a DCF analysis with WACC sensitivities or something!). Particularly, being able to talk about previous finance experiences well and how they fit into why you want to do investment banking for 2 years -- that's 104+ weeks -- that's 730 days -- will be very helpful to making the case for why the firm should hire you.

2) Finance and accounting

To be safe (never hurts to be overprepared) you should know the basics / high-level of how a DCF / MM / LBO work and what the point of them is -- as I mentioned earlier in this thread.

You should know how the 3 financials statements flow together. IS = Revenue - Expenses = Net Income. Net income gets adjusted for non-cash items on the income statement and cash-related items on the balance sheet in Cash Flow from Operations. CFO + CF from Investing + CF from Financing = Change in Cash. This change will be reflected in on the balance sheet in the Cash (!) Account. There are other ways the 3 statements connect -- Net Income also connects to the balance sheet via the retained earnings account (Change in Retained Earnings from period 1 to 2 (on 2 side-by-side balance sheets) = Net Income - Dividends Paid). The list goes on and on. Depreciation is an expense on the income statement, gets added back to get to CFO in the indirect method, and affects PPE. (Change in PPE = Capex - Depreciation)

I would also make sure you know your ratios (Interest Coverage Ratio, Days Payable, Return on Equity, etc -- there are a lot -- and how to calculate them). Sometimes you'll get technical questions that can be easily solved if you know these.

Understanding the difference between levered and unlevered cash flows is important.
Unlevered FCF go to everyone that owns a piece of the firm.
Levered FCF go to everyone that holds equity.

The list goes on and on -- I'd get a couple of the guides (WSO, Vault, etc), and study with friends so you make sure you're not missing anything and that you can speak to this stuff while keeping your cool. In general, chances are, even if you know this stuff down cold, you will probably get an interviewer will ask you something you've never thought of. Key is to ask questions, and if all else fails, say you don't know and would have to look it up. Pretending to know the answer to something and being wrong is bad -- people can usually pick this up, and especially in FT where the firm is making a hiring decision for 2 years on faith, it's generally very not smart to try to pull a fast one or something.

3) Fit

Probably as important as anything else in the interview. Be yourself. Act normal. See if you can generate a rapport with your interviewers. Also, ask good questions and find out if they are people with whom you'd want to work, and if the firm seems like a place you'd thrive. The people you work with in banking will absolutely determine your experience -- and 2 years is a long time. So be relaxed, be yourself, and try to find people you fit with. If you are really strong on #1 and #2, and you spend serious time thinking about #3 with respect to the interviews you'll have, you'll give yourself at ending up in a great program where you'll work hard and learn a lot and enjoy the people around you. In banking, that's the good scenario.

With respect to networking, make a game plan as early as possible (even now), and map out the next couple of months. Who have you met so far? What do you need to do to decide what type of bank is best for you? If you're going to be in New York, who do you want to meet up with when you're free? Where do you want to apply? The list of questions goes on -- but they all make sense.

What types of questions are you going to ask them? Sometimes I felt that I could not ask them any questions if I talked to them before. Should I ask more about the position then?

6/11/12

I go to a nontarget undergrad with a 3.9 GPA entering Sr. year. I'm currently a temp FA at IBM Finance. From your experience from anyone you may know in a similar situation, would I have a chance at either BB or IBD?

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

6/11/12

This is a question aimed from your history as an interviewee and potentially an interviewer.

At the end of the interview when they ask: "do you have any questions for me/us?"; what would you recommend asking?

Thanks in advance.

6/11/12

re: prepping -- it's tough. usually you get very efficient after first few months, and then it gets squandered when you have to prep for interviews as well. ultimately you'll be fine.

re: megafund timing -- I have no idea, but if you forced me to guess I'd say they'll be a lot earlier next year.

blueslord -- don't understand your question

that_aston -- don't know anyone specifically but I'm sure its possible with networking and a lot of studying

re: intv questions -- ask something you can't find anywhere else -- their experiences, what they like about the job, what they do for fun -- will help you fig out if its a good cultural fit for you

6/11/12

I mean some type of questions you asked the interviewers, but you answered it on the post above.

6/11/12

Thank you, is there anything that puts a big 5/5 score/ticks the box though on that structured interview were applicants are scored?

6/11/12

donjuan -- not sure what you're talking about -- generally if you show that you know your stuff, that you really want the job, and you have a good rapport with the interviewers, you'll find something. there's no one thing that will automatically guarantee someone to move forward in a process that I can think of -- and for banking, I'd argue that it's difficult to get an offer anywhere without demonstrating all three of these in the interview unless there are extenuating circumstances.

6/11/12

Thanks for your openness. I would appreciate it if you could shed some light on the best actions that should be taken for a student entering freshman year but looking to work on wallstreet, most likely IB. Also, what are your thoughts on a finance major with economics minor opposed to strictly accounting. Thank you for your time.

6/11/12

I understand the hours/commitment, however were you ever able to take a day off your 1st year (either because of a slow week or a federal holiday or both)? Also what was Halloween like? Typical all nighter at the office?

6/12/12

bankingboxer -- first of all, I'd explore the opportunities on your campus, study what you love, and get involved in things that interest you. if you study finance undergrad, it may help you out initially, but I studied virtually no finance in college and have learned pretty much everything I need to know about it in 6 months on the job. taking accounting courses and finance courses is certainly helpful, and can help demonstrate interest in finance, but I wouldn't assume that those will give you strict advantages. as long as you can learn how to walk through a DCF and understand how the 3 financial statements flow together, you could study celtic literature and you'd still be fine -- it's important to do something in college that you'll do well at -- I don't speak for anyone but myself, but I'd be impressed by someone who did fantastically studying what they cared about and what they enjoyed, and also had an understanding of finance and accounting, as opposed to someone who did mediocre studying only finance and accounting. ultimately, it's about the work you put in with respect to studying and how much you actually care about finance that'll differentiate you. there are finance majors and liberal arts majors in all groups that are outstanding analysts, and I'd attribute that more to their dedication to learning, effective communication with others, and quest for efficiency, regardless of what they studied in school.

re: days off -- there are definitely days that you can take off for federal holidays and weekends -- and yes, most people in my group, including me, were able to make it out for Halloween.

6/14/12

This may be a stupid question but if I entered IBD solely for the money, will I probably burn out quickly? And if you know anyone who did burnout, was it the hours that killed them?

Thanks for doing this

6/14/12

the theoretical parts of the job can actually be pretty interesting, so if you like it, then usually its the hours that cause people to burn out if they actually burn out -- but if you don't like what you're doing, I'm sure that would accelerate the process of burnout as well. hard to predict what your capacity to withstand the trials of banking are, but can't imagine it'll be easy if you don't enjoy what you're doing at all. there are a lot of other things you could do that might even be a better use of your time in the long run.

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6/15/12

first of all thanks again for doing this. how would you approach networking for sophomore internships? i just completed freshman year and am doing bb pwm this summer. Next summer i would like an internship with a boutique IB or small hedge fund, etc., a typical sophomore internship. Theres plenty of information here on how to network with alumni and other people you know but what about trying to network with people you dont know at all in NYC (I'm from the midwest and go to school there as well). would it be rude/a waste of time?

And what types of internships did you have before your current job?

6/16/12

wouldn't worry about what experiences you get before you apply for banking FT -- getting a jr. summer internship helps but its mostly about do you want it, do you know your stuff, and can you get along with the ppl you're meeting with.

would say that you should definitely try to network with ppl in nyc -- leverage all connections, friends, family, linkedin, and see what comes up -- it's not easy to turn cold-call networking into an offer but I'm sure if you start early enough, figure out which firms interest you, and focus your efforts, you should be able to find something. make sure you know your stuff though! networking will only get you so far -- a lot of great candidates that would be awesome for banking hurt themselves from the start by not reading up, studying the guides, and making sure they know what a dcf is/have a high-level understanding of the main valuation methods/can explain roughly how the 3 financial statements worth together. in general, you will get these questions somewhere in most, if not all banking interview processes, so make sure you know your stuff -- also supports the "I really am interested in working 70-100 hrs a week for 2 years" case.

6/16/12

thanks. I will definitely exhaust all connections when networking. but what about if I have no connection to this person at all-not family, not from my school, etc.? is it taboo to try to network with them?

6/16/12

its fine to try to connect w/ ppl cold -- just make sure that you know your stuff, you know exactly what you're looking for, and you do it in a way that is clear and forceful but at the same time, not too pushy. you also have to be prepared for a high no response rate, but hopefully if you do it enough, you'll find someone. would advise trying to make connections where you have at least 1 thing in common.

6/17/12

What's your story?

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.

6/17/12

How common are IBD associates with a JD at your firm?
From what you've seen across other firms, how common are JDs?

Also, please correct me if I am mistaken: JDs are hired as associates (?)

Thanks for taking questions :) much appreciated

Greed is Good.

6/18/12

if you want to talk specifics or personal questions, PM me.

there are a good number of JD's in banking -- most had some sort of corp law or finance background -- generally JD's are hired as associates (usually they are JD/MBA's, but not all). Some are hired as analysts depending on age, but that's rare.

7/3/12

First of all thanks for your time answering these questions. I was wondering on more of a personal note, looking back, what would you do/not do differently to end up where you are now?
Also, what is the #1 thing that helped you land the job?

7/3/12

Don't think I'd do anything differently -- although you can never be too prepared for technical interviews.

Number 1 most important part of banking is attitude, period.

7/4/12

Re: megafunds -- after doing banking you'll get a sense of what you want to spend your time doing assuming that that involves staying in finance and moving to the buyside. Some people love deals and process and working with management teams, some people love financial modeling (lbo, m&a, etc), and some people love using public information to assess the value of interests in businesses relative to where they trade. Figuring out which bucket you're in is step 1 (and takes a while). Figuring out where best fits that bucket is step 2. Figuring out what you need to know / do to succeed is that bucket is step 3. I think that working at a megafund would be an amazing opportunity, but relative to other opportunities based on how I view my strengths, I made a personal choice to recruit elsewhere.

Have 2 questions on buyside recruitment:

1. Heard that HH's begin to contact 1st years as early as 3-4 months in. Even though I'll likely be unsure which area of buyside I'm best suited for / most interested in, would you recommend telling the HH's that I am only interested in 1 type of position (i.e., PE, HF, or VC and not all 3)? Assume this makes you seem more focused and thus, a better candidate maybe?

2. Would you mind elaborating on what you personally thought made an analyst a better fit for PE vs. HF vs. VC (besides the more obvious characteristics such as liking financial modeling or preferring working with more early stage companies)?

Thanks so much! This thread has been extremely helpful so far.

7/4/12

Was wondering if it would hurt me if I didn't network that much within the office as an SA. Lately I've been getting staffed hard and I really haven't found the chance to ask people out for coffee or lunch runs. Also, I'm trying to be positive and say that it's good for my future (and FT chances) that I'm getting staffed relatively harder (by alot in my honest opinion) but what do you think?

7/4/12

aquamarine:

re: choosing PE/HF/VC -- I'd say that it's critical, both for HH and for you. The process starts early every year, and the more you think critically about which you'd actually enjoy, and the earlier you can clearly communicate that to your HH, the easier they'll find you jobs you want and the better a shot you'll find a job you want, which is the goal. There are ppl who stay on the fence, but in general, with some exceptions, it makes things a lot tougher. Past experience shows that people who knew what they wanted had a lot easier time finding those opptys.

re: PE vs. HF vs. VC there aren't really intrinsic factors that differentiate analysts who want those -- it's more of a preference thing. If you enjoy process work, getting the deal done, working with management teams, having lots of info from established companies -- then PE is probably your thing. If you enjoy limited information, assessing the strength of business models, taking advantage of arbitrage opportunities, taking in lots of unrelated information and using it to make decisions -- then HF is probably your thing. If you enjoy speaking with talented entrepreneurs and helping them think through how to turn their ideas into real cashflow generating businesses, then VC is probably your thing. All involve financial modeling and thinking about businesses, but what you do on a day-to-day should help differentiate the opportunities for you. I'd recommend checking out the other WSO forums for each of these to get more of a flavor for how ppl who are in those subfields think -- and see what seems like it'd be interesting to you. Would also talk to as many ppl that you can that are entry-level profs in those fields to make sure your concept of what PE/HF/VC is matches what ppl do on a daily basis.

gh15, I wouldn't worry about that. It's only been a few weeks. I'm sure if you're getting staffed hard then people know you're doing a good job. best thing you can do is keep your attitude up and show people that you want to be there. I can also imagine that you are interacting with other analysts plenty in the office, so I wouldn't worry about not getting to interact with them enough outside of the office. If there are people that you really want to get to know on a personal level, you'll have time to grab lunch / coffee at some point this summer. I'd focus on doing a great job as an SA and contributing to group morale. If you can do that well, people will know who you are. the SA program is an oppty for SA's -- first and foremost -- to show that they can potentially handle 2 years of being a FT analyst and hopefully enjoy that experience on some level regardless of how tough it is.

7/5/12

In your opinion, how much do ECs matter? I am a sophomore, currently working in a boutique M&A advisory firm. Do I need extracurriculars? I have relevant work experience. I hate the people who run the clubs at my school, they do not know much about investing, investment banking, private equity, etc.

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.

7/5/12

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