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Investment Banking Discussion Thread

Discussion in 'Business, Careers & Education' started by jslade, Mar 9, 2012.

  1. Khayembii Communique

    Khayembii Communique Well-Known Member

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    I understand what you're saying. Thanks for taking the time to elaborate. I just don't really ever accept the numbers game because I think it's possible to network your way in, no matter what the numbers look like. If I accepted the numbers I wouldn't have gotten this offer in the first place, and wouldn't have resolved myself on this path at all. Think about the response I would have gotten in this thread, possibly even by you, by saying "I'm a mechanical engineer at a no-name manufacturing firm. I graduated with a mediocre GPA from a no-name public uni and aside from my second major in economics have no experience in finance. What are my chances of securing an internship at a private equity firm in the next year?" In fact you could probably go back in this thread and see what the responses were from when I was at that point.

    I don't even have access to gaining anything but the shallowest understanding of the industry; think of what I could accomplish with a job (even internship) in the field, access to a large network of people that have worked in the industry for years, insider information and experience, access to a large network through schooling, etc. At least that's how I'm looking at it. And I realize how stupid this all sounds, and maybe I'd change my plan through b-school depending on how it goes. Who knows.

    But out of everything I've learned in the past year the most important lesson I've learned is that to get anywhere in life you have to be extremely patient and throw your entire being behind what you're intending to accomplish, and that while you should know when to quit, that point should be way, way beyond what a "reasonable" person would recommend and should never involve throwing in the towel entirely.

    I have contacts with partners at firms upmarket (though obviously not KKR or Bain) that haven't worked out because of timing and my lack of experience, so I think that if I got this far with networking I'll be in a much better position to network with some experience and MBA prog under my belt.

    What I'm getting out of what you're saying though is that it's going to be probably very difficult if not impossible to use this internship to work my way into a full time position in private equity by the time it has concluded, which is helpful to me.

    I think what I'm going to do is talk to some professionals in the industry here for their take on it, and then when these guys make a formal offer sit down with them and discuss my reservations, including everything you have said here. Since they're doing this as a favor to me I'm hoping they'll work on this with me constructively, perhaps allowing the internship to be moved to next year after applications (though I hate moving it forward because it's guaranteed uncertainty).
     
    Last edited: Dec 17, 2013
  2. Thearkly

    Thearkly Well-Known Member

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    Someone should start a thread on networking do's and dont's.

    If your genuinely interested in finance stay in finance. Otherwise go into the technology field. 10 years experience can get you 200k+ salaries and you don't have to wear suits. Plus, everything is technology related now so you'll be in a field of knowledge and power....

    What does an Investment banker do?
    The career path sounds interesting. Meeting with clients and sitting in front of a computer, is sadly, but truly the thing I want to do. Is that what IB's do? I want to understand the markets and invest accordingly. I want to be able to put everything together and make the best decisions in investing. I want to be able to move upwards eventually in terms of corporate structure maybe manage some people. I am doing it for the money too. From what I hear you have shit working conditions, so I want to be compensated accordingly. I don't feel entitled to it I am trying to mentally prep myself to be lucky if i get a 30k job after my ugrad studies.

    I am going teaching myself to program in R. I am reading a book published in the 70s about financial analysis and I also have a book on mutual funds. I am also reading The Art of Worldly Wisdom by Baltasar Gracián. To prepare me for my career when im not on this fashion forum looking for advice. (please help me find east coast weather clothes <3) so i can get back to my self studies)

    I want to know as much as I can about IB, because no matter what I hear I still feel I don't have a big picture. I want to know more about it before I commit the last 3 semesters of my studies towards a Banking path. Though, I fear my lack of knowledge and lack of networking skills will prevent me from reaching my goal.
    I spoke to a a ceo of an international company and an investment banker and/or hedge fund manager at the airport. He talked about all this stuff he did. Though what bugged me is he said, "just keep doing what your doing and everything will fall in line." Though from what I heard his parents were powerful people and he too told me the industry was going to shit (indirectly of course). What also bugged me is it could have been a networking opportunity that I missed out on. Maybe it was a sign that if I kept doing what i was doing I really will make it! (wishful thinking).

    Any advice? How can i get an internship? How do you meet people, I am thinking I should expand my network via linkedin.
     
    Last edited: Dec 27, 2013
  3. MSchapiro

    MSchapiro Well-Known Member

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    Based on what you just wrote, I think you have a long way to go.

    This website is a good place to learn about IB:

    http://www.mergersandinquisitions.com/

    R is okay, but not as useful as VBA in investment banking, since you'll be writing Macros a lot.

    Given that you don't seem particularly comfortable with networking or people, I'd advise pursuing a back office role. If after some work there you still feel that ibanking is for you, then you can attempt to move to front office. There are plenty of technology roles within the back office of banks.
     
  4. Thearkly

    Thearkly Well-Known Member

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    I will look at that. You can learn networking, can't you ? I am comfortable with meeting people and dealing with them. I just don't know how to network.
    ie. Do you say well, its been great talking to you, you should add me on linkedin, or I have to go but I would love to here more about how you IB, why don't we exchange contact info....< any of that kinda stuff. Do those technology roles have anything to do with finance?


    The IB, Financial Analyst, Hedgefunds or Trading. Alot of reading to do, and yet ill never rellay know until I experience it >_>. Oh well. This is how you start right? How much experience/ knowledge did you havebefore you began preparing for your career. "preparing."
     
    Last edited: Dec 28, 2013
  5. MSchapiro

    MSchapiro Well-Known Member

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    It really depends. What year are you? Also where is your undergrad?
     
  6. Thearkly

    Thearkly Well-Known Member

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    ....
     
    Last edited: Jan 8, 2014
  7. MSchapiro

    MSchapiro Well-Known Member

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    It all depends on if you go to a target or non target school.

    Hedge fund analyst is likely near impossible without serious connections/mental ability/long standing interest in finance. At least at a top tier one.

    Your best bet is to read up on what these markets are, on investment banking (Pear and Rosenbaum write a book on this), fixed income (Fabozzi) and to try and meet someone in the industry if you don't go to a target. If you can score really really really high on the Bloomberg BAT test you can also attract some interest. You can also take a course such as those provided by Leverage Academy. All this will help you to understand if this industry is for you and explain the answers in detail to many of your questions above.
     
    1 person likes this.
  8. Joffrey

    Joffrey Well-Known Member

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    Do a search because there's a networking thread floating around. A lot of smart/established posters contributed.
     
    1 person likes this.
  9. nate10184

    nate10184 Well-Known Member

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    This should be pinned. If you don't have prior experience in PE you won't land at a blue-chip firm as a post-MBA associate...period. Your only chance is to network your way into a small firm in a secondary city, ideally one that invests in a sector you have some experience with. I'd bet the majority of shops don't even recruit post-MBA associates, and the ones that do focus on HBS and GSB and maybe Wharton to a lesser degree. Columbia and Booth aren't on their radar.

    The finance world is a big place, I really wonder why so many prospective MBAs latch on to traditional PE like it is the only fulfilling career path one can pursue. If anything it is the one that most closely resembles banking and draws most heavily on the skillset you pick up as an IB analyst. None of this stuff is rocket science but I'd imagine most shops want someone who already knows their way around a model, they aren't in the business of teaching you that stuff (and you definitely aren't going to learn it in B-school).
     
    Last edited: Dec 29, 2013
    1 person likes this.
  10. Thearkly

    Thearkly Well-Known Member

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    The Bloomberg BAT. You have firsthand experience with it?
     
  11. MSchapiro

    MSchapiro Well-Known Member

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    I do. It's easy if you know what you're doing.

    I took it senior year. I came in late after a few drinks at my school's pub with friends (had turned 21 a few weeks before) and just took it for fun/forgot I signed up for it. Even skipped the math section since I didn't feel like doing it.

    In hind sight those weren't good choice, but I still got something high like 97th percentile.

    I advise you to take some time to and prepare for it. If you can get in the top 1% it will be very helpful with internships. Especially since your junior year internships are so important for senior year applications.
     
  12. Khayembii Communique

    Khayembii Communique Well-Known Member

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    So I'm going to be going in and interviewing with these guys for this internship to start very soon. I'm still thinking about this. My admissions consultant says I should do it because it's an opportunity I probably won't be able to find again and, worst case scenario, I just frame it as a pre-MBA internship opportunity and can still say pretty much whatever story I want. My biggest reservation is taking a pay cut for the internship with uncertain exit opps, but I'm considering offering to do consulting work for my current employer and maybe even come back afterwards (framing this internship to them as a pre-MBA thing, also). Ugh this is a really tough decision.
     
  13. CunningSmeagol

    CunningSmeagol Well-Known Member

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    I can't remember. Did you say you want PE or IB post MBA?
     
  14. Khayembii Communique

    Khayembii Communique Well-Known Member

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    I said PE, why?
     
  15. CunningSmeagol

    CunningSmeagol Well-Known Member

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    What do you like about PE vs IB?
     
  16. Khayembii Communique

    Khayembii Communique Well-Known Member

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    I'm attracted to PE for a few reasons:

    1. You're working with a variety of companies, in potentially different industries and market sectors. I really like the idea of having a diversity of experience. This is also why I was originally attracted to IB.
    2. You're working directly with upper management to develop a growth plan, which is what I'm primarily interested in doing.
    3. It is a great crossroads between C-level management, entrepreneurship, financing and banking.

    I know if I went into PE at most funds that I wouldn't be doing this stuff. If I went into PE though I'd be interested in starting up my own shop eventually. Banking intrigued me initially but aside from the diversity in experience, you're just going through transactions and not working with businesses to grow, and as I've been working at my current company on that kind of stuff I've realized that that's what I'm primarily interested in doing.

    I'm also considering management consulting, C-level management and corporate strategy as long term goals.
     
    Last edited: Jan 22, 2014
  17. MSchapiro

    MSchapiro Well-Known Member

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    You have a long road ahead, but if your company is offering you to do consulting work then it makes the decision to take the internship easier.

    Personally, I wouldn't do the internship, but I don't think it is a terrible choice as much as a personal one.

    Best of luck either way!
     
  18. Khayembii Communique

    Khayembii Communique Well-Known Member

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    They're not offering it to me. That's what I would offer to them.
     
  19. MSchapiro

    MSchapiro Well-Known Member

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    If they'll take you back for sure post MBA then your only opportunity cost is your earnings + the MBA cost.

    I've spoken to a handful of people about doing PE myself. I have a background in consulting and finance and will soon have an MSc from a top UK school and am still getting almost no bites from major shops.

    Considering that no one knows what the industry will look like in three years, your main focus should be on having a strong back up.

    Just be aware of the things above.
     
  20. CunningSmeagol

    CunningSmeagol Well-Known Member

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    IB can be a good stepping stone to PE:

    1 - you get to know a lot of PE firms on any given deal, especially the seller. In diligence with buyers, you also have a chance to present yourself well. Analysts get hired this way, but I've seen associates do it too.

    2 - you get a lot of reps with valuation models, since you're doing DCF/LBO/Acc-Dil for every pitch. I don't think buyside has the same frequency. You also build projection models on live deals.

    2a - knowing how banks position companies and value them when going to market gives you valuable insight on buyside deals. A Barney's salesman probably gets better deals when shopping for clothes elsewhere than the avg joe.

    I can't see a good reason for a PE to hire someone w/o IB experience unless they have next level industry experience (i.e. has built and sold a business to PE, is a thought leader, serial c-level exec, etc.). And even then they'd be an operating partner.
     
    1 person likes this.

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