Investment Banking Analyst: 15 Things I Wish I Knew
I was writing an email to a fellow monkey who is about to start as an investment banking analyst in the summer. It's been a little over 5 yrs now since I was a wee young first-year analyst in restructuring for one of the/Houlihan/ type firms (I call them the firms where most people will still say "What?" and sort of nod their heads when you tell them where you work - thanks for validating my 80 hour work week - anyways moving on).
I really like mentoring and sharing knowledge for future generations - a lot of people have helped me along the way, and still are, and I really like WSO in general - there are giant gold nuggets all over this site from which I have benefited so I thought it's high time to throw one back in the pit.
What I wish I knew as a first year investment banking analyst:
1) Your performance from day 1 matters.
So, prepare as much as you can beforehand. Ask (politely) if your future colleagues can send you some pitches/other helpful materials and start working on your excel, formatting, attention to detail. Keep your Outlook box tidy and have a folder for every single deal - learn to back up your email box. Have a good system for knowing where each file is. Always carry a notebook and your HP12C, and learn to use that little calculator really really well. That thing can run a fullin seconds if you know what you are doing. Especially if you work in debt, know how to use the financial functions (I, PMT, PV, FV, n).
2) For your first 3 months you will be a burden
- just try to be a small burden. Don't spin your wheels, ever - Associates hate when their analyst is sitting there fumbling and stymied. Don't ask questions that you haven't at least tried to think through yourself - but once you've thought them through, don't be afraid to ask. Write down everything so you remember what you learned and don't have to ask again.
Get close with a good Associate/Sr. Analyst - tell them you just really want to do well and look to them for areas to improve BEFORE your midyear/full year reviews. Your first midyear review will likely be pretty pointless, unless you've done something really bad, but keep the year-end review in mind and realize people's memories are much shorter than you think, so a good 3 months leading into the review can make up for quite a bit of mediocre performance. Bankers love to see when people have really "stepped it up" - it validates that their criticism did something and that you aren't afraid to improve and take advice well.
3) If you want to someday go to the buyside, think of that from day 1 as well.
Start talking now with people who are where you want to be in 2-5 years time. Figure out where past analysts have gone and how. You can jump after 1 year, 2 yrs, or later - but realize it might get tougher later on. You will need to teach yourself how to model quick and dirty - prepping for/PE buyside interviews is serious, serious business. I could write a whole article just on that process.
4) Be thinking about whether you want to go to grad school, and where, and what experiences will help that cause.
Keep detailed records of the things you do - because you're about to do so many things, that you will inevitably forget some of the best ones. 2 yrs at a non-incredibly-amazing firm is not likely to get you into HSW, even with a good GMAT - a better track is to target 4-6 years of work experience and have a non-banking role in between - PE, work for a startup, go do microfinance in Tunisia, whatever you like really - just something to distinguish you from all the other bankers - HSW will have plenty ofkids from target schools to fill their class. If you know you want to go for an MBA eventually, think about taking the GMAT before you are working 80 hours a week. I think the GMAT takes about 2 months of good work for most really to maximize your score (this is another good WIWIK possibility).
5) Before you present important work, ALWAYS print it
- errors stick out like sore thumbs on paper and are much easier to find and correct. Take the 5 minutes and print the product before you put it on your boss' desk. Set the tone early that you are simply not a person who makes spelling or formatting errors.
6) Spell Check
On that note, set the print area right away and always run a spell check (yes,has spell check too!)
7) Master your macros
- if you have time or inclination before starting, maybe even take someVBA classes online or something - if you are really good with you will be a prized asset. Ask your future colleagues if there is a particular package they use and if they can send it, otherwise maybe use the pack or any macro pack you can find. Remove your F1 key because it will only get in the way. People generally say don't touch your mouse - I mostly agree for , but there are still the few odd things that are quicker with a mouse sometimes. is another potential WIWIK topic.
8) What Headhunters want:
smart people, who can hold a good conversation, humble, good team players, sharp modeling, who can THINK LIKE INVESTORS - always be thinking like an investor - if you want to do PE/HF later on, this might be your single most important point. Many investment banking analysts go into PE/HF interviews and have never thought like an investor - they have no conviction in their ideas and their investment theses have little basis. Many BB kids think they are simply entitled to a HF/PE job. Don't be one of those. Do your work. And be a good person. Everyone will have decent technical skills, but if you can strike your headhunter as also being just a super nice and hardworking person, that counts big time.
9) If you want to practice for HFs, pick any public company that doesn't have nightmare financial statements
(i.e. don't pick aunless that's your thing), download the latest K and Q, and give yourself 2 hours to make a working 3 statement model with a DCF and a quick analysis. You should be able to get the 3 statement model with 5 yr projections and a balancing in 1 hour or less, then do the DCF and LBO in the next half hour, and leave a half hour to check your work.
9b) Be a good person.
Don't be a finance 'dick.' Yes you work in investment banking and probably make good money doing it. No that doesn't automatically make you cool. You can be hugely successful and still be a nice guy and down to earth. Take note of the associates and VPs that you really like to work for, and aspire to someday be a person that you yourself would like to work for. Finance is full of jerks and egos - that makes people who are down to earth and really genuinely nice an asset. Find a style that works for you and is true to who you are - you'll have to be firm sometimes, but keep that blade sharp.
10) Adhere to the logic that you can't learn if you aren't listening, and you can't listen if you are talking.
Be a good listener. Some bankers and even some analysts are so garrulous that they miss key points, and their words just lose weight over time - they're so eager to say what they know that they just blurt out whatever they know on a subject. You want it so when you speak, people know you have listened, and you're saying something of value. Keep your cards close.
11) Perhaps the most important - figure out who on the Admin end really runs the show.
Admins are some of the most powerful people in terms of making your life better as an analyst. Treat your admins with respect and go out of your way to treat them well. Bring up some flowers every once in a while to brighten the reception desk. Pick up a few extra coffees when you run out, and take note which admins like which kinds of coffee. Being a banking admin can be really dreary work sometimes and those little things can brighten their day a lot.
12) Be neat about your reimbursements
- I probably lost hundreds to low thousands just by not being prompt/organized about receipts and the like. Get the best possible credit card plan you can find for travel and hotels.
13) Take care of your body
- watch the Thursday night cocktails and save it for Friday/Saturday. Oversleep one important call/meeting and you might never recover. Most analysts are vitamin deficient - take a good daily multivitamin and drink water, not red bull. Fish oil is good for keeping your skin/eyes/brain in good shape. Burt's Bees Serum for your face is a god-send - my girlfriend says it looks like I am glowing after I put it on.
14) If you do mess up badly at work
- learn from it and get over it. Don't beat yourself up too much. Other people might have a little giggle now and then about your f-up but believe me nobody is thinking about the f-up as much as you think they are. Consider how many of your brainwaves you spend in a typical day thinking about other people. Now get back to work.
15) Work-life Balance
Many bosses will preach a work-life balance and say things like "This can totally wait until Monday." But they will still be more impressed if you did it over the weekend and give it to them Monday morning. Figure out who those bosses are.
I think those are the main ones - I'll probably think of more here and there and I'm sure tons of other users have some great things to add. Any questions/thoughts let me know.
Interested in Investment Banking - Breaking In
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