How to make it into Investment Banking, the South African perspective
Part I: How to be the perfect investment banking candidate
Following my recent post covering a broad range of questions about the African investment banking (IB)/private equity (PE) scene, I thought I would cover some questions asked of me in more detail.
This is the first of a multi-part series on the South African IB market. This post covers why people should choose banking as a career path and what investment banks look for in candidates from the South African perspective.
Generally, banks want candidates that are (or seem) exceptional, charming, hardworking, and entertaining. Fit is an important consideration; there is a fair amount of material on WSO in this regard.
Why banking?
Cash money! Although IB comp is not as stellar as it was in the past - with many banks capping bonuses-, bankers still earn a fair bit more at an earlier stage in their careers than people in most industries. South African banks tend to pay significantly above the average pay in most industries (except mining/energy) from graduate/analyst level to director level.
In addition to the above average pay, banking is still fairly prestigious (at least when hipsters are not around), bankers can meet influential people, learn about diverse industries and gain access to top exit opportunities. These collective proximate factors make banking a lucrative career path. In South Africa in particular, there are good exit opportunities to private equity, large industrials (mining, energy, telecoms, manufacturing, etc.), entrepreneurship and for those inclined, consulting.
Undergrad academics
In South Africa, most investment bankers recruited on campus meet certain criteria. After manning my previous employer’s stand at several super days I can indicate the following:
- Banks have a preference for certain “target” institutions; these target institutions produce 80%-90% of candidates recruited on for analyst/graduate programs at major banks in South Africa (RMB, Standard Bank, ABSA (Barclays) Capital, Investec, Nedbank Capital, Goldman Sachs, Morgan Stanley, JP Morgan, Merrill Lynch, UBS, Credit Suisse, Standard Chartered, HSBC and Citi).
- Target institutions include (without limitation):
Cape Town, Witwatersrand, Pretoria, Stellenbosch, Rhodes, Johannesburg and Kwa-Zulu Natal. - In South Africa, like most countries with modelled off the British educational system, certain majors at university are preferred for banking. Preferred majors include (without limitation):
Finance/Investment management, Accounting/Financial Management, Economics/Econometrics, Statistics, Actuarial Science, Financial/Applied Mathematics, Engineering (All specialisations), Law. - Naturally, banks expect candidates to be as close to the top of the class as possible. Having top grades may let bankers overlook other deficiencies in a candidate’s profile.
Leadership and excellence
In order to be a lucrative candidate for investment banks one needs to be exceptional, or at least seem as such. Banks perceive the following qualities as hallmarks of excellence.
- Membership in an executive capacity to an organisation whether it is the Finance club, the Student’s Representative Council or your local chapter of Amnesty International. Banks always seek out natural leaders that can shape discussions and think innovatively.
- Entrepreneurial ventures, whether it is a tech start up or a non-profit initiative, will make a candidate more attractive to banks.
- Internships at major corporations also make candidates more lucrative for full-time recruitment at an investment bank.
- Candidates should have generally exceptional track records in either sporting, academic, cultural activities or public service.
Post-undergrad candidates with some work experience
Some exceptional candidates leave university and join other industries and transition to banking thereafter. Good feeder industries to banking include (without limitation):
- Accounting (SAICA, ICAEW)
- Law
- Management consulting
- Investment management
- Mining
- Energy
It of course helps do be a top performer at one of the top companies in the above stated industries in order to be a preferred candidate for a transition to banking. Also, transitioning early in your career (1-3 years) is usually better for your chances to break into banking.
Good luck!
In part II, I will discuss how to get an ib interview.
How sophisticated is the deal process compared to other EMs?
All sounds familiar...
Classica
Globalisation also applies to investment banking, there is some homogeneity in the candidate selection process globally.
The local flavour comes with the choices of target universities, group industry focus areas and course selection.
ibd101
That is a very hard question to answer without making a sweeping generalisation.
I because it varies with product, team, division, company, industry, country, region, etc.
More specificity would aid me to provide a meaningful response.
Where do you work? IBD or sales and trading?
I work in PE but I previously worked in IBD and recruited many bankers.
Which IB did you work for? On the debt or advisory side? What is the average length of tenure for an IB analyst before transitioning to PE in South Africa?
Bomma
I worked at one the largest African banks both in debt and advisory.
On average you need 3-6 years banking experience to transition to PE.
Hi PanAfricanBanker, thanks for the post. I'm a recently qualified CA with CFA part 1 and BBusSci from UCT. I'm also non SaN so using recruiters is proving difficult.What do you think is the best way of getting an interview.
afrikanboi
My next post will talk about this at length.
The preview is as follows, being a South African national is an advantage when looking for work in South Africa. However, most banks are willing to look at exceptional foreign candidates particularly international banks such as Goldman Sachs, Morgan Stanley, JP Morgan, Merrill Lynch, UBS, Credit Suisse, Standard Chartered, HSBC and Citi.
Aside from choosing international banks, another good route is to use your networks (UCT, sports clubs, social circles, SAICA, etc.) and engage with international recruiters such as Michael Page, Robert Walters, Hays, etc. If that fails look at PE and consulting firms they frequently hire exceptional foreign nationals.
Thank you, what are your thoughts on boutique IBs in SA. Do you think they have enough prestige to give you good exit opportunities to PE firms? Also, when is the part 2 going up?
Pan African banker, I am a Ghanaian student who is now a MasterCard foundation scholar at Mcgill University. as a MasterCard scholar, i am supposed to return to Africa to give back. Is Mcgill respected in south Africa? Is weight put on how elite one's university is as done in Europe and America? how do i break in? My grades are good but do I stand a chance? Pan african banker please note that i am referring to investment banking.
Ali-Fordjour Obed
Firstly, well done on the scholarship and surviving the weather at McGill.
We need to elaborate on what you mean by "give back".
Naturally, investment banking is fairly elitist, expect bankers to assess the pedigree of your school rigourously.
Make sure you meet the candidate specs listed earlier in the original post, being an exceptional candidate always gives you a chance.
As for how to break in my next post will cover that in great detail.
Hi. I'm curious as to the kind of starting salaries one could expect in a graduate programme at say one of the big South African banks (Standard/Barclays Africa/Nedbank/FNB) vs one of the big bulge brackets in SA? Any idea?
Mat
Full-time 1st year analyst salaries vary materially from bank to bank between c. ZAR 300k - c. ZAR 500k.
One can expect to earn 20%-50% more on base salaries at BB banks in SA compared to major local banks.
However, this is principally the case if you join on an analyst/graduate programme. If you join the IB specific teams directly the discrepancy may not be as significant.
Also bonuses tend to be somewhat higher at BBs but the workload is also significantly higher.
PanAfricanBanker,
Great article, thank you so much for the insight! So much on the web about IB basically everywhere but South Africa, so great to have some inside info.
I am actually an engineer with a masters trying to get into IB in South Africa (only been working for 2 years). I have been doing a BCompt(Financial Accounting) through UNISA.
I didn't even crack an interview with Goldman when applying for their grad programme, ouchhh.
Any advice about what to emphasize on the CV for an engineer? (Obviously I included everything you mentioned above i.e. natural leader, good academics etc.). I am basically just applying to all the banks here
Are there any banks that I should focus on?
Thanks man, much appreciated!
But you will obviously stand the best chance of beating local South African graduates and breaking into the South African Investment Banking job market if you studied at one of the Ivy Leagues or Oxbridge/LSE/Imperial/Warwick for instance.
Investment Banking in South Africa? (Originally Posted: 07/09/2010)
Im currently a 2nd student at the University of Witwatersrand and would like to start building myself for a career in investment banking in South Africa.
Anyone here from South-Africa with help or any advice on what to do or how to get started?
Thank you for any help.
Maybe this links will help.
http://www.db.com/southafrica/ http://corporateandinvestment.standardbank.co.za/sa/ http://www.rmb.co.za/ http://www.hsbc.co.za/ http://www.investec.com/en_za/#home.html
above list is a good starting point. in addition, take a look at Rothschilds office in Jburg. they are hiring analysts into their graduate program to. investec has a graduate program too.
ideally you'd start out finding yourself an internship at a reputable bank in SA to get a first idea of what its like/whether you like it. that way you'll also meet alot of ppl that can give you advice/you can network with. also talk to career services at your school about getting in touch with alumni who are currently in banking.
i can say little about whether witwatersrand would be what they call a target school in the US. stellies and UCT probably are.
Standard chartered bank is the most respected bank and largest (I think) in Africa. They have a comprehensive graduate program. check their website, try and network and tke off from there
only reason i went to witwatersrand was because i stay in joburg, and was advised that it was one of the best in South Africa. In all honesty i am not looking to ever move to the US and i am happy to build a career in South Africa.
Thing about these graduate programs is that they only take graduates, and seeing as though i havent graduated yet, it will be nearly impossible to get in.
I actually just want to try and work a bit, to gain some reputable experiece and so on.
Why not contact them and ask them about possible part-time internship experiences? I know the small boutique banks would be able to cater to your needs.
Is anyone here able to give me the names and numbers of any boutique banks in South Africa?
Besides RMB's, ABSA, Standard, HSBC, Investec etc.
Thanks
Medical Student looking to do IB in South Africa (Originally Posted: 03/24/2015)
Hi I am a 3rd year Medical Student(3rd year of 6) looking to switch to IB in South Africa.
I would like to know which is the quickest and most feasible way to break into IB at one of the top banks in SA
1) Finish my medical course and then try getting in some way?
2) Study Bcom with Finance and Investment Management at a target school?
3)Study Bcom with Finance and maths?
Thanks
Search the forums. Lots of good info there.
Hello Guys, Im Hugo, new to the blog currently doing my MBA in Italy...........There always been a war between IB VS Management consulting careers globally and i wanted to ask, to your humble opinion what is the status of that in South Africa, comparing the big 4 IB banks, BB operating in SA VS MBB consulting elite firms in SA, in terms of salary bonus at analyst level and associate, and in terms of hours one put in, future exit opportunities,
Also what are the available options for MBA graduates especially in those different areas
Thanks a lot
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