I recently lateraled from a “no-name” boutique to a top MM and wanted to share some of the knowledge that I gathered and wished people had told me when I went through the process. I also have several friends who also went through this process. Hopefully this will help someone.
My background: I graduated from a non-target with a business degree. I had completed a few boutique IB internships while in school, but failed to close anything during FT recruiting. I ended up at a “no-name” boutique where I worked for as an analyst for a year before lateraling to the MM where I am at now.
Lateraling Overview
Banking is a very small world and the skills gathered at any bank are highly transferable. Because of this, even if you are at a “no-name” boutique, it is very possible to move between banks. After all, you are doing the same work that analysts at GS/MS are, just on a much smaller scale. So, if you graduate and have no MM or BB offer, it is not the end of the world.
Lateral positions tend to pop up all the time, but most will show up towards the end of June/beginning of July after bonuses have been paid out. I highly suggest checking Indeed.com (it is a job posting aggregator) every day for postings and signing up for email notifications. You can narrow it down by city, but I would just search “investment banking analyst”, unless you absolutely have to work in one particular city.
The lateraling process is very unstructured. You will still have your typical phone interview followed by a superday, but the process may only take a week, it may take several months, you may be the only one at the superday, etc.
Applying
Your first step should be getting your resume in order. You really need to highlight your deal experience, or if you are not in banking, anything that is transferable. I used WSO’s investment banking resume review service for this and highly recommend it. (//www.wallstreetoasis.com/wso-finance-resume-review)
Unlike with SA and FT recruiting job postings, lateral recruiting job postings are not black holes. Most of my interviews actually came from blindly applying online. For the offer that I ended up accepting, I had no contacts at the bank and just applied online. If you networked a lot in undergrad, definitely leverage that network. Not every bank will be looking for analysts, but if your network knows that you are looking, they will keep you in mind should anything pop up.
Another thing that I really found worked well was to apply to a position and then shoot out two to three emails to associates and senior bankers in that group the day after I applied asked to learn more about group culture. Some may say this is too aggressive, and I can respect that, but when many banks post a job, they need it filled ASAP, so it really separates you if you take the time to reach out. Make sure to prepare for the calls, though, because they are always interviews.
The Interview
I honestly found that lateral interviews were much easier than FT interviews and probably on par with SA interviews in terms of difficulty. Lateral interviews just seemed less predatory in nature, and it seemed more like banks wanted to learn more about your deal experience, as opposed to drilling you with technical in the hopes of whittling down their resume pile. You still need to be prepared, though. I found that the M&I interview guide and basic modeling course were more than enough. The boutique that I worked at did zero modeling, so I was behind from the get go, but M&I prepared me well.
The first step is the phone interview. Some banks do an initial HR screen that focuses on why you want to join that bank. You should obviously have some reasons why, but make sure to also mention what you can contribute. For example, if you are interviewing for GS FIG and have a lending background, mention how that knowledge can be used at GS FIG. The phone interviews with bankers all varied. I had a few that were highly technical, while others involved nothing more than talking about one of my interests on my resume.
Next up is the superday. These again vary by bank, as I had some that were very technical, while others involved no technical questions at all. At this stage, fit is more important. If you make it to the superday stage, you are qualified enough from a technical standpoint, but the bank still needs to see if you would make a good fit. Just be yourself, but try to be buttoned-up. I cannot believe this still happens, but I have seen everything from kids spitting food out during the superday dinner to kids bashing accounting careers when one the bankers is a CPA.
The most important thing about lateral interviews after fit is deal experience. Know your deals cold. Company revenue and EBITDA, selling price, reason for selling, deal complexities, buyer search process, your role on the deal, etc. are all things that you need to know like the back of your hand.
The Offer
Since the process is so unstructured, the general WSO rule of “if you do not hear back the next day” does not apply. The bank may call you as you are heading out of the building, while others may take a month. The bank whose offer I finally accepted took a month from the superday to extend me an offer. So, do not sweat it if you do not hear back right away. It is definitely nerve-wracking, though.
You will most likely not have the opportunity to select between multiple offers since the process is so unstructured and since banks generally need analysts ASAP. Unless you are lateralling from a top MM or BB, chances are that you will lose a year in the process (e.g. I lateraled in as a first-year, even though I already had worked for a year). This can actually be beneficial if you are looking to get involved more early in PE recruiting.
I hope this is helpful, but I am sure that I am forgetting something, so feel free to ask any questions. Please try avoiding PMing me questions, so that everyone can benefit from them.
Mod Note (Andy) - as the year comes to an end we're reposting the top discussions from 2015, this one ranks #28 and was originally posted 6/21/2015.
Everything but the modeling, so creating marketing materials (CIMs, teasers), reviewing NDAs with senior bankers, managing prospect tracking lists, interacting with the client to manage the data room, evaluating due diligence requests, etc. Since there was no modeling, I would stay a bit late in the office and just create DCFs and LBOs myself with client data (obviously never taking any of that outside of work). The models were never used, but it gave me some practice.
What advice would you give for auditors looking to lateral into IB over the summer? Given that firms need analysts ASAP do you think this is the best time to go for those roles? I would assume so, given full time recruiting happens in the fall and bankers are leaving jobs now. Would like to hear your take on the situation, based on what you've seen and your industry knowledge.
I do not know any auditor who lateraled DIRECTLY into IB, so unfortunately, I cannot give much advice regarding that, but I would suspect that it is very difficult because your skill set is not the same as that of someone in banking.
If you are at one of the Big Four, my suggestion would be to get into your M&A group (if at Deloitte) or into anything related to transactions. I know a guy who went from auditing to transaction services to IB. He said that it is pretty easy to move to transaction services, so take that for what it is.
I hope that helps. Feel free to ask any more questions.
I moved from auditing at B4 to MM IB. I came in as a first year. It's possible. I highlighted my ability to interact with clients, work long hours and obviously my accounting skills.
Just trying to pass it forward. WSO has provided me with so much info over the years :)
I have been getting a lot PMs and posts here about moving from a non-IB position to IB. Unfortunately, I just do not have that experience, so I can only offer limited suggestions. My advice would be to get into any M&A-related section of your company, whether it is internal M&A, corporate development, FAS, valuation, etc. and then go from there. If your company does not have that, my suggestion would be to reach out to boutiques and possibly spend some time there before lateraling to MM or BB banks.
What you have to understand is that MM and BB banks receive many applicants for lateral positions. Think about it. Say JPM posts a job for their healthcare group. Every BB healthcare banker (except maybe GS or MS) that is looking to move will apply, along with every healthcare banker from top MMs that is looking to move, not to mention that non-healthcare BB and MM bankers will apply if they are looking to move. Then, you still have people from "no-name" boutiques applying. JPM would be hard pressed to justify giving an interview spot over someone from a non-IB or non-transactional role when they have piles of resume from applicants with relevant experience.
I am not saying that it is impossible, but I do not have deeper knowledge, and the knowledge that I do have says that lateraling from a non-IB or non-transactional role to IB is fighting an uphill battle. You may need to "rebrand" yourself with an MBA. I hope that helps at least somewhat.
Great post! I just wanted to confirm the timing of your lateral. So you said you interviewed for 6 months, so did you start looking around January and close sometime in June or July? And regarding your emails to the bankers in the groups, did you find them through LinkedIn? I assume the postings specified the group you were applying for.
I started looking in December and got an offer in June. Here is an example of what I did:
-GS industrials posts a job -I apply on Monday and then look up GS industrial bankers on LinkedIn -On Tuesday, I email two GS industrial VPs and and associate (never an analyst) -Hopefully they email me back the same day or the next
All jobs that I applied to were group-specific. A few did not mention the group, but they cleared that up during the interview.
Below is my template. Please make sure to change it up a bit.
"Hi [banker's name],
I am an analyst at an [industry/product]-focused M&A boutique located in City. I recently applied to a position in your [industry/product] group and was wondering if you would have some time to share some insight into group culture. Should only take 10 minutes.
Thanks,
[your name]"
I got a similar template from another guy on WSO. I cannot remember his name, unfortunately. I never attached my resume.
I was in contact with some EBs, but none of them were currently looking. Some deal-related questions included the following (this is not an exhaustive list- my memory is not the best, sorry): -Why did the seller want to sell? -How did you create your buyer's universe, how many buyers did you approach, etc.? -What models did you run, how much were you involved, etc.? -Product/service pricing questions that only someone who was really involved could know. -How does the selling multiple compare to the industry? You better know this because if you say that a TMT company sold for 3X revenue, but they usually only sell for 2X (just an arbitrary example), you will get dinged if you cannot explain that.
Expect all of your answers to be responded to by follow up questions. Do not lie because even if you are in FIG and are interviewing with industrials, the banker may have some FIG knowledge (again, just an arbitrary example). I hope that helps.
You need to stay at this lower MM for at least six months. If you start trying to lateral within a month or two of joining the firm, interviewers will not take you seriously, even if you are making an obvious "upgrade". I would argue that you might even want to stay a year at the lower MM (just going by what some interviewers and colleagues told me). Your excuse for why you lateral should always include some reason about how you want to move to a larger platform, gain more deal experience, etc. and, if you are lateraling to a non-NY city something about why you want to be there. Many people try getting jobs in non-NY cities as backups, and banks are completely aware of this and dislike it very much. For me, it was easy because my boutique did nothing but M&A, so saying that I wanted to gain experience with non-M&A products made sense. Let me know if you need anything else.
cafbuzz, sorry for the extremely late reply. Tag me next time so that I see your reply. I started a bit earlier (February) at my job, so October was around when I started reaching out for the lateral process. If you are starting in July or August like most analysts do, start the lateraling process in March or April.
@yessir1", sorry for the late reply. WSO changed its tagging system a while back. You need to include an quotation mark after the username. I never included a cover letter unless the application specifically stated it was required. There is no upside to providing one, but there is plenty downside.
@ChinaBankingMonkey", unfortunately, I have no experience with this, so rather than lead you astray, I will have to politely decline to answer. I would definitely make sure to highlight your transactions that you worked on (if applicable) similar to the WSO private equity resume temple. Good luck!