Bulge Bracket Technicals (SA)
Can anyone share some hard technicals they have received from BBs for summer analyst roles? I've heard that EBs tend to have harder interviews but I missed the boat on most EBs and am just gunning for BBs now. Non-diversity, target student.
I've just been looking at the guides now (mostly BIWS) but any advice + topics to focus on would be extremely helpful. Of the 6 sections (accounting, DCF, MM, Valuation, EV, LBO) which should I spend the most time on?
Accounting, DCF, Valuation was def enough in my experience (superdays at MS and JPM, first-round for GS). Not sure what MM is.
Merger Model
Ah ok, I also had a superday at a EVR/PJT/CVP and the only technical question I got asked that was related to Merger Model was calculating Weighted Cost of Acquisition vs. Seller's Yield, most of the interview focused on accounting and valuation. I'd def make sure you're solid on those and if you have time, look into other sections.
BB interviews tend to be less technical, but not all the time. Expect the basic accounting, comps, and DCF. It would also be good to know LBO/Merger Model stuff, but you might not get any of those. Make sure you know the deeper meaning behind a technical, so that you can at least give a thoughtful wrong answer. Personally, most of what I got was from the 400 question guide.
I wasn't prepared for 2 markets type questions. 1) "Pretend you are a coverage banker in the X group. What potential deals make the most sense/what mandates should you chase right now, given the COVID impact?" 2) "Now, pretend you are a PE sponsor looking for a LBO. What deals make sense now?"
These were actually fun to answer as I got to really think critically rather than regurgitate a script from the guide. Got a chance to play banker which was cool. For BBs, definitely focus on behaviorals more, especially if have a good network and make it to the final round.
what would be your response for the second? got a similar question at a BB and couldn't think of a good answer
If I'm not mistaken, I would personally answer the second question the same way as what makes a good LBO candidate. Strong cash flow, competent management, room for growth/expansion, opportunity to reduce expenses and etc.
Bump ^
As mentioned already, the answer for good LBO candidate is applicable. Strong cash flows, undervalued, opportunity for growth and scale, management. I would then follow by pitching an industry, like Healthcare for example. Find the microlevel inefficiencies that can be targeted. Also, you could mention average valuation multiples for companies within that space. You don't actually have to run through the numbers of an LBO tho, it's more big picture.
How would the first question be best answered?
Not too sure if this is correct but I'm thinking depending on the coverage group, I think most deals being done in coverage groups rn would mainly be debt issuance since companies would need the money to restart their business
My first answer was to look for LBO deals, as companies are seemingly going to be undervalued in the COVID market, which creates opportunity. Also, the large PE funds have publicly stated that they are sitting on a lot of capital that needs to be deployed. The core benefits of buyouts come during recession/struggling times. I ruled out M&A because strategic buyers usually pay premiums for their deals to receive competitive advantage, but right now their priority is how to shoulder the fall. I also pointed out that recent LBO deals and news, even those that are negative (Sycamore) to identify risk.
My answer for the first one led to me being asked the second question.
How did you answer the first if you don't mind me asking?
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Which BB was this??
Also curious what BB this was.
Questions like this pop up in 1 of 2 scenarios. 1) You were flexing your technical knowledge and got grilled, rightfully so or 2) The interviewer was an asshole.
In all likelihood, it was number 1.
Source: I am a BB IB Analyst.
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BBs look for more of a fit than anything else. Make sure you're not a loser who just studies 388 elections for fun.
Having said that, my question to you is asset or stock sale?
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