IB switching to Research - have an interview with a top 3 firm next week? What do I need to know
(Orangutan, 368
Points)
on 7/25/08 at 3:14pm
Hello,
I have been an analyst at a lower BB for a year now. HAving talked to my mentor and knowing myself, I have decided that a career in Equity research would be better suited ot my skills and interests. I have an interview with a top BB (think GS/MS/Citi) for a research position next week. What type of questions can I expect? Are there a lot of brainteasers? Or a lot of valuation questions? ANy help will be greatly appreciated, as I really want to make the switch, but I am not sure how to adequately prepare for a research interview
my firsthand experiences and insights
Hi Salam, it's interesting that you're considering the move from banking to research. I remember that when I was working in equity research at BB's, I was thinking about switching to banking in order to ease the transition into private equity. Fortunately, I was able to go straight to PE from research, bu twith much hard work and persistence...
Anyway, there's a lot I can relate to in your case having worked in research, and also having once seriously thought about doing banking while I was in college only to turn down banking and go into research. As a matter of fact, I also worked for at least one of the firms you mentioned, and helped hire another associate that came from investment banking (I feel like your question was unintentionally directed towards me...what are the chances?). Anyway, if you're convinced you already want to do research, I won't get into debating the pro's and con's.
I know how recruiting process goes for all of the firms you mentioned, and for the most part, if I were you, I would focus on several things. First, you'll want to be able to articulate why you want to leave banking for research; believe it or not, just about any answer you give would be fine since research analysts view bankers as having very good financial skills, so just don't get caught flat-footed here and you'll be fine. You might want to talk about how you're more interested in learning about how to invest in public equities (research) rather than transactions (banking); this is probably the safest answer to go with. Also, show that you understand the day-to-day in research, and be able to prove to them that you know how to "think" like an investor. Come prepared with at least one long and one short equity investment idea and be able to present it to them in a compelling fashion so that they know you are interested in the markets. I don't think you will get much valuation questions that you won't be able to handle; most of the technical questions, if any, will be focused on understanding the relationships bewteen the financial statements and in particular cash flow/working capital. Assuming you've done a fair amount of operating models in banking, research modeling should be pretty straightforward. Mostly, come across as someone who actually wants to do research, understands what the job is about, and has some type of enthusiasm for the stock market.
On another note, the associate that I worked with on the research side actually moved from banking as well. When I interviewed him, he obviously knew his financials well, so as I was interviewing him I mainly just focused on trying to understand his intellectual curiosity, passion for the markets, and so forth. I wanted to see someone who was insightful and analytical, and not just a number cruncher. I'm sure your interviewer will look for the same in you.
I hope that helps. Also, why do you want to leave banking for research, and how do you know it'd be better suited to your skills and interests? You're definitely going to get this question in an interview so I'm curious to hear your thoughts. Plus, I also want to make sure that you are looking at every aspect of the equation; sometimes people want to leave their job without having a total picture of where they would rather be, but hopefully that isn't the case with you.