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So apologize for the bad formatting here, no idea how to use this thing still but this should be helpful for guys trying to get into Wall St.

Here's the breakdown on how to stand out as a Non-Target.

After having an analyst already quit after under 6 months on the job it was time to search out a new IB candidate. Notice the context here, we're looking for a lower risk candidate who can handle the job and not stress out, freak out and quit.

When we entered the conference room, of the ~8 candidates, we killed 4 of them on Technicals (missing easy ones, depreciation on 3 statements, basic DCF, PE multiples on private companies) and then dropped one off for having a sub 3.5GPA (had a 3.2GPA). Which left us with 3. Finally, the #1 Managing Director said he just "didn't like" one of the remaining three and the rest he was fine with. At that point it came down to two candidates. To avoid revealing large details here's the break down.

Stats:
#1. Top 20 Target - 3.5 GPA - Business Major
#2. Non-Target - 3.5GPA - Economics Major with Finance classes

Technicals:
#1. No missed questions.
#2. Missed one question on declining growth company DCF analysis.

Fit:
#1. Standard answers.
#2. Stood out.

So notice the marks here, basically missing EASY Technicals gets you a quick boot and pissing off a BSD managing director (not sure what happened) gets you auto dinged. Notably, the Vice Presidents actually made the final call on the hire. Why? the MD's were okay with any of the two at this point and now the VP's are typically the hardest nosed so they literally compared "fit answers". During the discussion three very key answers made the decision.

"Why should we hire you?"
#1. Standard response with "Hard working, have finance experience, interested in the market, wants to learn and believes he can help add value immediately by taking on the job with a positive attitude" (nothing to ding here)

#2 Standard response, however at the end he stated this "Finally, to be honest I know there are probably lines of people with 4.0 GPAs and perfect resumes in front of you but if given the opportunity to work for XYZ bank I'd be more than happy to update, automate and take responsibility for any work handed to me. If this means late nights making minor changes and updates to small pitchbooks or even PIBs it would get done in a accurate and in a timely matter.

So hopefully the distinction here is a bit more clear, while the answers were very similar candidate two showed for sure that he did his homework and knew garbage was likely going to be the first course of the day. In addition, by mentioning responsibility "accuracy and speed" we now know he really does understand the job. One VP stated "I was surprised he knew so much about the industry with no resources at XYZ university"

Why M&A?
#1. Standard "I believe this is the best product group to start in because it has a steep learning curve and it is a great way to understand the selling/buying process. Given deals recently done in XXXX...."

#2. Standard. However again he added something different. "While the modelling aspect is certainly interesting, the additional knowledge on how to develop, foster and maintain strong relationships with clients is also a skillset I would like to develop

Difference? #2 thought high level. Again VP commentary "It seems like he might consider banking longer term even if he isn't a long-term fit at least he's wants to learn relational skills."

What's your best skill?
#1. Standard answer "Situation, Task, Action, Results - hardwork/won't quit"
#2. Standard answer. Followed again by one small tweak, instead of using the phrase "run through brick walls" etc. which is a standard one we get he used the phrase "Take pride in my work and view a two year stint as a contractual obligation".

What's the difference? None of the answers were wrong but the difference in one phrase change was interesting because another VP stated "It seemed like #2 is less likely to quit, if he called the job contractual which makes me believe he'd at minimum do the 2 years"

TL;DR.
1. Technicals get you killed if you miss basic ones but not if you miss tough ones.
2. Be careful with the MD interview to come off as personable.
3. Know the type of situation the bank is in. #2's answers were slightly better because you can read between the lines and realize the major worry was someone quitting again.
4. Know who you are interviewing with and try to feel out their personality

Disclaimer: Based on the commentary below, one thing that should be cleared up is this, in no way shape or form is it being recommended that you use more intent language such as the differences above in **every** interview. The read between the lines is now in bullet 4 of the TL;DR. Context is key.

One funny extra, one of the Directors actually said this about the target candidate.

"If XYZ was so strong I wonder why he didn't land a job in normal recruiting season"

Hope this helps and if there is anything else that needs to be clarified feel free to comment. Looks like you guys got the message.

See my other post "Top 5 Basic Technical Questions That Will Show You the Door"

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Comments (45)

  • Kanon's picture

    Good post, SB'd. Very accurate and sounds like the kid did his homework.

  • Ukon's picture

    SBed. However, I have to say that your VP is pretty naive. Lol.

  • mariozou's picture
  • AndyLouis's picture

    thanks for the post, just homepage'd it and will add it back up next week as well

  • Cruncharoo's picture

    "It seems like he might consider banking longer term even if he isn't a long-term fit at least he's wants to learn relational skills."

    What does it mean that he is not a long-term fit?

    This to all my hatin' folks seeing me getting guac right now..

  • kraziazi's picture

    Very helpful, thanks.

    This could be it, sweetheart.

  • BBnkr10's picture

    Can you please go through a couple hard technical questions you threw at them, like correct PE multiples for private firms, declining growth company DCF, etc. Thanks.

  • Charles-perry's picture

    This is weird because I'm at a target and gave very similar answers to the 'non-target'. I was told 'they were looking for something more structured/STAR approach' in one interview. Although I was passionate and would 'hit the ground running' there were people with 4.0 GPA's they had to give 1st priority too.

    Guess this is the UK recruiting system for you!

  • WallStreetPlayboys's picture

    @workingworking - That is pretty much it, when a bank has just suffered a "quitter" they are usually annoyed and want to pick up someone willing to go through the tortures of a 2 year analyst stint and complete it. You can't teach effort.

    @cruncharoo - So when banks hire analysts they are much less likely to "care" if you can do the job long-term. There are two "buckets" of hires 1) work horses and 2) Long-term bankers if you seem like both you'll easily be getting a job. The reason why is because there simply are not many slots for an "A to A" promote... Analyst to Associate. If a group hires say 10 analysts, maybe 1-2 would be ok'd for a direct promote. So during an interview process people like VP's as mentioned above will try to sift out a couple of kids who can simply "get work done and not complain about it". Which leads me to Ukon's comment.

    @Ukon - I see where you can view it as naive, so the million dollar question is who is more likely to quit? A guy who had next to no chance of getting the job in the first place and will likely be happy doing massive meaningless tasks for the first few months or the guy who already knows the difference? Its a bit of an odd situation because the slot that usually opens when people quit is a "grind it out 2 years slot". In terms of qualifications you're probably right in terms of the other guy being a better analytical mind but we hired the non-target because we don't like having higher than average "churn" on this particular platform.

    @ddp32 - Sure can do, i just pinged Andy to see what the rules are on positing if it deserves another post. Basically there are a set of "easy ones" that will kick you out the door and a set of "harder" ones that you can shine one.

    @Charles - Both candidates gave very structured responses the real difference was the delivery of the message (sales anyone!). Also there are different situations, in a cookie cutter process I can see you getting pushed out by a 4.0 candidate in a pure numbers game/bad luck situation. Not sure what your background is but if you want to feel free to pm me and maybe I can help you flush out any bad answers. One thing simply from the response above if you say "hit-the-groud-running" then you absolutely MUST have real finance experience otherwise it sounds very different from "pride in work/commitments". The first slang terms implies prior experience you can bring to the table, the second one simply says you'll be checking your work for dumb mistakes and not quitting any time soon. So an average "college" grad with no experience certainly has very little to hit the ground running with... Hope that is helpful.

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  • Banker88's picture

    Nice post. Curious what you meant by the "private PE multiples" question though?

  • In reply to BBnkr10
    A Fellow Linguist's picture

    ddp34:
    Can you please go through a couple hard technical questions you threw at them, like correct PE multiples for private firms, declining growth company DCF, etc. Thanks.

    With regards to a declining growth company DCF, my guess is that you would simply use the EMM instead of the PGM when calculating the terminal value?

    For PE multiples for private firms, I'm also speculating that they would be a little bit lower than PE multiples for comparable public companies due to lesser liquidity.

    Any other thoughts on these?

  • tangent style's picture

    Also interested in the technicals, but great post too. Made the subtle differences clear.

    "Do not go gentle into that good night"

  • In reply to A Fellow Linguist
    GED or Bust's picture

    A Fellow Linguist:
    ddp34:
    Can you please go through a couple hard technical questions you threw at them, like correct PE multiples for private firms, declining growth company DCF, etc. Thanks.

    With regards to a declining growth company DCF, my guess is that you would simply use the EMM instead of the PGM when calculating the terminal value?

    For PE multiples for private firms, I'm also speculating that they would be a little bit lower than PE multiples for comparable public companies due to lesser liquidity.

    Any other thoughts on these?

    AFL - For a declining growth company DCF, are you taking the lower end of comparable EBITDA multiples for EMM?

    For the private company, are you taking Enterprise Value multiples (EBITDA) and backing into implied equity value? I'd presume lower EV multiples because of liquidity in ownership driving a lower p/e for most private companies.

    Thoughts?

  • BBnkr10's picture

    whats EMM and PGM stand for? Im sure I know the words, just not the acronym. Thanks.

  • BBnkr10's picture

    gordon growth method*

  • BBnkr10's picture
  • WallStreetPlayboys's picture

    Just got the PM back from Andy and will throw up the technical questions, both basic ones that will get you an immediate no and some of the harder ones. The harder ones are really just pushing to see how much you actually know about the space, ie. did you just cram through one interview guide and expect to land a job type questions.

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  • reformed's picture

    Was the guy the md just randomly didn't like asian by any chance?

  • HowardRoark's picture

    @reformed, if he was indeed Asian, and the MD cut him because of race, then the guy lucked out because that's certainly not somewhere he'd want to work anyway

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  • In reply to HowardRoark
    tangent style's picture

    HowardRoark:
    @reformed, if he was indeed Asian, and the MD cut him because of race, then the guy lucked out because that's certainly not somewhere he'd want to work anyway

    I think this is something that students interested in IB always forget. The fit questions may be stupid, but if you bump into someone who hates you or you really don't click with you're probably better off not working with them at that institution anyway. It wouldn't be worth it.

    Edit: Myself included

    "Do not go gentle into that good night"

  • In reply to reformed
    WallStreetPlayboys's picture

    So if you're not going to get hired based on your ethicity be certain even if you get an offer at that place you're not getting promoted and you'll be the "mule/workhorse" in that group clocking 20hrs more than everyone else with a 0% chance of being promoted. So you shouldn't take the job unless its literally your only option in which case you "one and done" and flip banks.

    So back to your original. Basically the MD is a bit of a "egotistical maniac" like many of bankers are and what happened is when he asked about "deals" he didnt take the time to simply understand the coverage universe differences.

    During the interview the MD told him he covered XYZ specifically within XYZ sector. Then the guy started asking him about a certain deal and that deal happened to be in a difference space within the main sector. (as an example this would be like asking a "Internet banker" about "Semiconductor deals" or a "Medical device banker" about "Hospital deals" or a "Restaurant Banker" about "Retail deals".

    The rub? The MD absolutely hates the other MD who covers the deals he asked about and or thought was impressive. So remember when you interview with an MD they don't give a flying F about your technicals anywhere near as much as they care about you understanding the space and not annoying/insulting them.

    It was really a small mistake but goes to show listening is more important with an MD than knowing how to "correctly run an LBO off the top of your head with a Exit multiple with 99.7% accuracy"

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  • In reply to GED or Bust
    A Fellow Linguist's picture

    GED or Bust:
    A Fellow Linguist:
    ddp34:
    Can you please go through a couple hard technical questions you threw at them, like correct PE multiples for private firms, declining growth company DCF, etc. Thanks.

    With regards to a declining growth company DCF, my guess is that you would simply use the EMM instead of the PGM when calculating the terminal value?

    For PE multiples for private firms, I'm also speculating that they would be a little bit lower than PE multiples for comparable public companies due to lesser liquidity.

    Any other thoughts on these?

    AFL - For a declining growth company DCF, are you taking the lower end of comparable EBITDA multiples for EMM?

    For the private company, are you taking Enterprise Value multiples (EBITDA) and backing into implied equity value? I'd presume lower EV multiples because of liquidity in ownership driving a lower p/e for most private companies.

    Thoughts?


    GED or Bust, I'm not sure that I understand your intent in asking these questions. Are you a fellow SA-recruit trying to work this out with me, or someone who knows the answer and is trying to walk me through this? Appreciated either way, but I'm a little confused.

    In terms of the first question, that sounds right to me. I hadn't considered doing that, but that seems like a good method to go about it.

    As far as the second question, I wasn't taking Enterprise Value and backing into implied EV (by subtracting out debt, and so on and so forth). Rather, my thought process was to just utilize the lower end of PE multiples for public comparable companies in order to adjust for the liquidity issue.

    What do you think?

    ddp34:
    whats EMM and PGM stand for? Im sure I know the words, just not the acronym. Thanks.

    Exit Multiple Method and Perpetuity Growth Method (that's what they call it in Rosenbaum and Pearl).
  • Nudie's picture

    great post. *bookmarked*

    Thanks.

  • KKS's picture

    Great post. I appreciate you actually providing answers to the questions, as opposed to just stating that the non-target gave better answers.

    EDIT: One questions, though. For M&A, he said he wanted to develop relationships with other bankers. What would you have expected him to say had you replied "Well, do you not develop relationships in other product groups or in industry groups?"

  • BBnkr10's picture

    Do you mean when he said this, "develop, foster and maintain strong relationships with clients is also a skillset I would like to develop"?

  • Black Jack's picture

    Unsure of why his answer that he wants to maintain and develop relationships with clients was seen as a positive? That is so far down the road I wouldn't expect nor want him to be thinking that far in the future having never even worked in an analyst role before. My thoughts at least.

  • henryxub's picture

    I am not sure about how the "contractual obligation" works. This guy seems to think he's bound by a 2-year contract rather than driven by passion in banking?

  • In reply to GED or Bust
    A Fellow Linguist's picture

    GED or Bust:
    AFL - SA-recruit here. I just wanted to see what you were thinking for both. No malicious intent.

    Hey GED,

    Sorry, I wasn't implying that there was any malicious intent in your post. We're all here to help each other out. Was just wondering whether what you suggested was the actual answer or your speculation on how to go about answering it.

  • Plastic Cup Boys's picture

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  • In reply to reformed
    manutd's picture