How do you prepare for the really hard technical questions? (e.g. Evercore)
I constantly hear about how Evercore's first-round and super day interviews are technical-heavy and more importantly hard. I am currently in the process of studying for the technicals by conceptual understanding and not brute force memory of answers. I was just wondering what extra studying I might need to do in preparation for the hard technical questions at shops like Evercore. Could anybody who has gone through the process guide me? Thanks!
Never did an interview at Evercore but reading about corporate finance theory helps a ton, any textbook will do. Also get the IB Valuation book by Pearlman and that will cover the intricacies of the IPO/M&A/LBO processes and also give you exposure to modeling. Ideally, you want to know a bit about everything because all the services an IB offers are somewhat related. For example, a PE firm buys another company (LBO + Valuation + Underwriting) and down the line the company could be under financial distress (Bankruptcy + Restructuring) but then turns things around and seeks to exit the investment (IPO/Secondary + Valuation). Understanding the incentives of shareholders/debtholders and how debtholders mitigate the conflict of interest is also important. Know an industry/product, have some insights on it and a reason why you want to work in that group.
Do some of the modeling courses online so you can see how everything flows on an excel sheet. I was also listening to a shit ton of lectures/audiobooks when I was walking to class and in the gym (places where you can't sit down and read but still have "free time"). Do a ton of mock interviews and networking calls. That will help you feel comfortable talking to bankers and answering questions out loud.
I did all of this and had barely any previous finance experience and am non-target. I did 2 interview processes, got 2 offers and accepted GS/MS.
Even though I agree with the above that reading stuff other than the guides is important, I think that practice is what really makes the difference. For example, no matter how many times you read about a DCF, actually doing them from scratch will make you much more prepared and confident. When I was recruiting, to practice, I would just make a few DCF of companies in different industries. I think this was beneficial because it taught me in-depth concepts that are hard to learn. For example:
-to learn about concepts like DTA/DTL by doing a quick table for your DCF rather than just trying to learn them from the guide
-create revenue build from scratch for companies in different industries and you will be able to better understand drivers and how different companies work
-when working on the WACC, try to understand everything, what cost of debt are you using/why, why this equity risk premium, which countries does the company operate in, what does it change
-understand the meaning behind WC, how do you project it across different industries
-to prep for my RX interviews, I would take stressed/distressed companies and try to model 2/3 scenarios and see respective recoveries in the cap structure, read credit docs see if you can find covenants and you have an idea of what they actually look like
I know, I was a hardo toward technicals, but hey it worked out: I am going to an EB for RX
EDIT: not sure why people are throwing MS, I am not lucky enough to get to a target school for the top EB, and since I knew I wanted to do RX, I knew I had to be really prepared to stand out. I was lucky enough to get interviews at PJT/HL/EVR and I am the first person from my school to go to that group in a few years. Had a great time and can't wait to go back FT. The point for underclassmen is: just because some guy thinks you are an hardo and you are studying too much, who cares? You have one shot at recruiting and trust me, it is worth putting in the work
yes that is right, which is why I told him to do modeling as well
you need the theory + the modeling + actually talking to bankers to get all the benefits
your prep was quite impressive, I never took it that far but love to see it
For doing revenue builds from scratch - would you look at a company’s types of revenue and look to industry research for growth outlooks and compare how the company has historically done vs industry growth to model either higher or lower than industry?
Hey! Interested in RX to, would you be able to elaborate a little bit more on how you went about modelling the distressed companies? And as for your second point, lol, everyone thinks I’m a hardo at my school to
Excellent advice! How do you maintain a social life while prepping Sophomore fall semester? Or do you forgo it and hold it off till junior year (bc as you mentioned we only get one shot at recruiting)?
^I genuinely want to know - not trolling
Hey- sophomore interested in RX. Can u PM me?
FT or SA?
SA boiiiiiiiiiiiiiiiiii
Honestly, all the above is great, but its a bit overkill IMO (except reading Rosembaum & Pearl, that helped a lot in understanding a lot of the concepts of banking).
The EB's I interviewed with were Evercore M&A and Moelis LA (received an offer from 1/2), both were extremely technical, but the most crucial aspect was understanding accounting BY FAR. Many of the questions relied on your ability to understand what items to account for when calculating FCF, then came understanding the valuation methods etc. But if you didn't understand accounting and how to get from revenue -> EBIT -> FCF with real numbers and curveballs (really understanding given complex questions testing if you really understand FCF) then your screwed. The valuation stuff is easy to understand if you study (personally did not complete any models and felt that the technical portions of the interviews were fine).
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I was definitely overprepared for interviews but coming from a non-target my mindset was I might only get one interview so I better not fuck it up. The target kids I coffee-chatted all had the same story of bombing the first interview at an EB (earlier timeline) and the failure motivating them actually learn technicals (lol).
You realize recruiting is like 2-3 months and you still have another 3.75 years of enjoying college right?
Somewhat agree with the above. People overhype technicals and underestimate behaviorals. Anybody can regurgitate stuff they read over and over again.
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Bombed an Evercore first round this spring but techs honestly weren't bad - I knew they were all from the M&I 400 I just didn't prep hard enough to blurt out the right answers. If you know the M&I 400 cold including most of the advanced section you're more than solid. Try asking variations of the questions to yourself to make sure you really understand the concepts. This was the advice I got from current Evercore analysts too.
Jerk off right before the interview to cool your mind, take a few bong hits, one sip of vodka to get the buzz going, and then start reciting DCF formulas
Had first round and SD with them. First round was all technical, but as some said above, not that hard. SD, however, was again all technicals but were far more difficult. All merger model math qs and accretion/dilution, did well but still far more difficult than interviews I had w BB I got offer from.
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