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

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Comments (136)

  • KKS's picture

    Thank you for doing this.

    I will enter FT recruiting with a PE internship under my belt, but no SA at an IB. Other than taking TTS/BIWS/WSP, how can I overcome that disadvantage? I might be able to get an internship at an IB during the fall, but that would start after FT recruiting has (i.e. it would not be on my resume). I have and am continuing to network.

  • oppcostofcapital's picture

    there's plenty of opptys to get relevant banking experience in a PE SA experience, esp for lev fin and m&a groups. If you can, try to get on a project that will get you LBO experience, that'll definitely be relevant. most important thing is to learn the point of an LBO, and to use that to understand the point of a DCF and the point of a merger model (LBO = affordability analysis for a financial buyer, DCF = intrinsic valuation of the company's projected future stream of cash flows, MM = affordability analysis for a strategic buyer) etc. If you can get there and be able to talk about the things you do well in FT interviews, you should be fine.

  • BeenPrepping's picture

    How do Bankers "show" their wealth? Do they brag about buying X or spending X amount? Showing off expensive car keys, etc.. Or is it a subtle and humble environment?

  • WhiteKnightDD's picture

    It seems in banking your occupation crosses over your identity. 2 totally different things. I hope it doesn't go to some of your heads.

    Who you are and what you do should always stay separate.

    Reminds me of this kid in my M&A class who thought he was so hot because he was at ML. I wiped the floor with him in every area of every event we had.

  • oppcostofcapital's picture

    In my experience, people tend to be pretty humble and down to earth.

  • In reply to oppcostofcapital
    WhiteKnightDD's picture

    oppcostofcapital wrote:
    In my experience, people tend to be pretty humble and down to earth.

    Could be if your in a boutique,smaller teams.

    In BB everyone is secretly darth vader.

  • Michael Scarn's picture

    Can you speak to the differences between the SA and FT recruiting experiences and how to approach FT recruiting (timeline, contacting your network, resume prep, etc)? Thanks.

  • oppcostofcapital's picture

    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.

  • blueslord2910's picture

    That is amazing! Thanks a lot and have a great evening.

  • jpmoranmonkeysachs's picture

    This stuff is gold!! Thanks

  • BBnkr10's picture

    Thanks for answering questions! I have one:

    How hard is it to transition from mgmt consulting to banking?

  • oppcostofcapital's picture

    mgmt consulting to banking is hard because a lot of the modeling and finance you don't cover in consulting, I understand. consulting is complex in its own way, but in terms of hiring, its much easier to move from banking to consulting than the other way around.

  • Funkfreed's picture

    How are the buyside recruiting interviews compared to the banking interviews? Any noticeable differences that are worth mentioning? Thanks again!

  • oppcostofcapital's picture

    Buyside interviews are everything I wrote in that big post above +
    1) more in-depth acctg and finance questions.
    2) modeling tests
    3) investment ideas

    For PE -- usually you'll have some kind of LBO modeling test unless it's a case-oriented firm in which you'll have a more qualitative interview. Also lots of finance questions and questions about the deals you did in banking. need to know your deals cold.

    For HF -- many places will have you build operating models (but not all) and you usually need at least one good investment idea -- which is a lot harder than you think. you need to know a lot about the company's financials, prospects, risks, etc and be able to defend them to ppl who do this for a living. Most places will accept equity pitches regardless if the fund does equity or credit. At this age and from banking, more important how you think than the specifics of your investment philosophy -- HFs hire young ppl so they can mold them.

    And, you still have a full-time job. And you usually meet with headhunters as well. It gets hectic.

  • NHG's picture

    Thanks for opening this thread. I have one question. How would you network with different firms (for FT recruiting) if you already found an internship at a BB this summer? For example, what kind of excuse do you use to request informational interview/coffee chat? Any advice would be highly appreciated.

  • sink's picture

    thank you for doing this

    1) Can you still get promoted to associate if you get rejected from b schools? The MD/Associates would prob know because of the letters of recommendations

    2) Same question, but for PE funds. If you don't get any offers can you stay put and work as an associate?
    .

  • oppcostofcapital's picture

    re: FT recruiting -- would just say that you are trying to learn more about the firm, interested in banking, having a great time @ current BB, and trying to consider in advance all options b/c FT recruiting moves very quickly when august/sept/oct come.

    re: promote -- yeah you can promoted without business school. there are MDs who started as analysts at same firm - less common but happens.

    usually PE firms are 2 and out. you can apply to other PE firms, apply to HFs, or your firm might let you stay. getting a return offer at PE firms for post-mba is extremely competitive though, so you should def use time in PE to consider what you really want to do.

  • In reply to oppcostofcapital
    Newspeak's picture

    oppcostofcapital wrote:
    beenprepping -- key is to be discreet. always speak positively about your current job (the street is a small world). Generally, I've seen that getting an SA offer if you're doing IBD your junior summer is a critical determinant of advancing in FT processes -- so I'd make sure you focus on doing a great job at the place you're currently working. Unless you're in an accelerated process if you had an SA offer from some place or you advanced far in their SA process, generally whether you get an SA-->FT ends up being pretty important.

    Hey, thanks for doing this.

    I just finished my junior year at a target and I'm doing my SA at a tiny boutique in NYC. I'm trying to leverage the experience into a FT offer at a BB or elite boutique during the next recruiting cycle. How possible is a move like that and do you have any specific advice for making the jump?

    Also, you said that getting a FT offer from your SA position is pretty important. I'm pretty sure that the boutique I will be working at doesn't hire for FT out of the summer program. How damaging will this be?

    I talked to a guy in PE and he said that it's likely that the FT interviewer won't believe me when I tell him that the boutique doesn't give out FT offers. Do you think that's likely?

  • Anacott_CEO's picture

    Awesome thread, SB for your time.

  • above_and_beyond's picture

    This might be a dumb question, but I have to ask..

    How does the typical work station of an IBD analyst look like? You only see pictures of traders sitting in front of 6 to 8 computer screens with Bloomberg on them. But how does the work station of an analyst differ from that? And which programs are always on your screen(s)? Apparently Excel or PPT, but what else?

    Thanks man!

  • oppcostofcapital's picture

    newspeak -- start networking early. also fair to say in FT interviews that it wasn't a SA --> FT place and you'd be happy to connect them w/ ppl who you worked with. In general the experience you'll get this summer is most important -- just make sure you can explain clearly and confidently the story with the SA position. some places may be skeptical -- you'll just have to be upfront and honest and blow them away with your technicals and your excitement about the prospect of working in investment banking for at least two years. Also, if the firm makes it clear to you that they aren't hiring anyone for FT because they don't have the spots to do it or some other structural reason, after your SA stint feel free to work with them and see if they can help connect you with ppl who do hire full-time, presuming that you do a good job and have ppl that will vouch for your work.

    The desk is usually filled with materials you've created -- presentations, information booklets, drafts of presentations, drafts of other presentations, your notes and to do lists, and standard office stuff. Ideally you have a way to keep things organized. People's organizational styles in banking tend to vary widely.

    IBD analysts depending on the firm generally only have 1 or 2 screens. Outlook is always open -- web browsers, and then typically some combo of Excel, PPT, and Word depending on what you're doing. I'd suspect that this is not shocking, haha. Working in Excel and PPT and Word is pretty much what we do all day.

  • gh15's picture

    First of all, really appreciate you doing this.

    I'm placed into working in LevFin this summer and was wondering if there is anything I can do in the prior weeks to prepare? While I know I won't be able to contribute much during the summer, I have heard from peers that the best way to get the most exposure is 1) not fuck up with the easy stuff they give you & 2) show that you have some basic knowledge (which I assume can be developed through reading books/guides/forums etc).

    Currently reading a book on distressed debt investing (b/c i'm interested), but I was wondering if you know anything I can possibly pick up that would help me more specifically within IBD or Lev Fin.

    Thanks!

  • oppcostofcapital's picture

    gh15 -- first, a blanket statement -- in general, don't worry about it. hard to prepare for banking in advance. chances are even if you studied the right stuff your group will do things just a little bit differently and you're going to want to do things the way ppl in your group want, period. Plus, I'm assuming you're in or done exams... enjoy the summer. Go do something fun! You're going to be working very hard for 10 weeks.

    That being said -- if you wanted to read up on LBO's and how the financing works, that'd be helpful. A good book to read is "Barbarians at the Gate" -- can't remember who wrote it but it tells the story of KKR-Nabisco, a famous leveraged buyout transaction. Gives a lot of good history and is pretty cool b/c it mentions ppl who are still in the business today.

    Assuming the distressed debt analysis book you're reading is "Distressed Debt Analysis" by Moyer -- great book -- if it isn't the book you're reading, you should go find it eventually. Probably won't be too relevant to what you'll do this summer, but a great book to read especially if you think you might want to work at a credit hedge fund in the future. If you end up FT in LevFin, this will probably be something you'd consider.

  • gh15's picture

    Yes, it is the Moyer book. It is surprisingly easy to read given how little I know.

    Yes I am enjoying every bit of summer right now haha. One more question, how many shirts do you think are enough for me to get through for the summer? I currently have about 9 shirts and 2 pair of pants (suit pants). Would I possibly need an extra pair of pants? How often do you go to the cleaner?

  • oppcostofcapital's picture

    can't hurt to get an extra pair or two just to be safe. cleaners are up to you -- if you are worried about keeping things usable in a given week or 2 I'd err on the side of more pants. You just don't want to be caught in a bind. not the kind of stuff you want to be worrying about this summer.

  • RonaldBacon's picture

    i just had two quick questions to ask.

    1. Do you know how firms retain their summers? Is it mostly that they want to give FT offers to all of their summers? Or is that not the case and its firm specific? I'm the only SA in my group, and there are other groups at my firm that have multiple SAs and summer associates, do you think that'll give me a better shot for a FT offer?

    2. Also, there have been many posts about working the weekends. As an SA, I'm assuming I'll have to go in each weekend. But do they really expect SAs to spend 6-8 hours in the office each weekend even if they have nothing to do? Or is it group specific and depends on how much facetime you need to put in? It doesn't make sense to me since they're paying you at an hourly rate. Please tell me your experience with this.

  • oppcostofcapital's picture

    1. Completely dependent on the firm. Would try to put your focus elsewhere -- if you do a great job during the summer, you'll be fine.

    2. Couple thoughts on working weekends:
    -- If your team is in the office, you should be there to help. Being MIA when your team is working on a live deal is not a smart thing to do.
    -- If you really have nothing to do, you don't have to be there. You'll have intense stretches of time, so its best to get rest when you can.
    --That being said, if you have to be in the office for something anyway, can't hurt to use the time you have this summer to do some extra studying, try to build some models, and get as much out of what you're trying to learn. That doesn't mean staying 10+ hours every weekend, but showing that you have a great attitude and are curious about the job will be viewed very positively.

  • mhurricane's picture

    What do you do in your free time? Is it possible to go to the gym 4 (or even 3) times per week?

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

  • oppcostofcapital's picture

    see friends, party, go to the gym, explore the city, try out restaurants in the city -- when I'm not working. You have a lot less free time 1st year than you do 2nd year. It's def possible do to gym 3-4x per week -- you just have to be really dedicated because in banking, it's hard to believe but your time sometimes feels rationed. Amount of free time varies by firm, culture, and group.

  • needtodecide's picture

    oppcostofcapital,

    Do you mind if I PM you a question? Mine is very specific to my group/situation and for the sake of remaining anonymous, I'd prefer not to disclose too much personal information. Thanks and much appreciated.

  • oppcostofcapital's picture
  • oppcostofcapital's picture
  • gh15's picture

    Hey oppcost,

    In terms of the game plan for networking beforehand for FT, should you ever risk start networking during your summer gig? I'm not talking about starting from the beginning of the gig, but more towards the end (maybe with 2-3 weeks left of the program). Is it just smarter to play it safe and start networking as soon as your program is over?

    I have heard of some firms doing accelerated processes, or firms just doing things under the radar with FT recruiting where informational interviews (over coffee or office visits) can lead to a simple super-day format interview resulting in offers if you play your cards right. How much of this is true? Do you have any experience with this?

    In terms of contacting people, is it the smart way to start by just using the HR contacts you have from SA OCR process? (other than talking to the bankers or alums you know already in some firms).

    Thanks a lot!

  • Abbotryan's picture

    This may be a dumb/weird question, but I'm glad I can at least ask it under the condition of anonymity. For summer analysts, what's normal to bring with you to the office/to have at your desk? Do SAs normally have snacks or anything in their desk? Or do they normally eat only when all the other analyst eat lunch/dinner?

  • oppcostofcapital's picture

    First and foremost don't jeopardize ur current SA firm, gh15. That being said accelerated processes do happen. You will have a lot more leverage in them if u have an offer depending when they happen. Never did them myself and not sure how they work but would talk to ur campus career office and firm hr depts about it. Good in general to keep up w bankers and hr depts - can lead to accelerated intvs. Never stop networking - just make sure you do a great job for ur SA firm.

    Re food I wouldn't make a big deal out of whatever u bring. Just play it cool and don't let it interfere w ur or anyone else's work. Fine to bring food though.

  • Abbotryan's picture

    What about with regards to allowances for dinner? Say they give you 20 bucks in seamless or whatever, is there any courtesy rules or anything where you shouldn't really use all the money they give you?

  • WSOusername's picture

    drunken question deleted, lmao

    GBS

  • corilla's picture

    1. How are midwest targets (UC, NU) represented in NYC area as a whole?
    2. Do you know any international student who needs visa sponsor in you class?

    Thanks

  • bigun's picture

    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

  • CornerOffice21's picture

    (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.

  • Stringer Bell's picture

    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?

  • oppcostofcapital's picture

    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
    bigun's picture

    oppcostofcapital wrote:
    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 ~

  • cubechimp's picture

    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?

  • oppcostofcapital's picture

    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.

  • Funkfreed's picture

    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)?

  • oppcostofcapital's picture

    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.

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