How to do well in Investment Banking Interviews
Originally published: 12/12/2017 15:34
Publication number: ELQ-53355-1
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How to do well in Investment Banking Interviews

A guide on how to do well in investment bank interviews for both core and non-core recruiting


Understanding Whether you are Core or Non-Core

There are two separate interview processes that the investment banks run: one for internships, and one for full time recruiting. This is true for both analyst and associate hiring. Figuring out where you fit into this interview process is extremely important—many banking candidates are not aware of the nuances.

Generally, the largest investment banks are the ones with the most structured interview processes—they have a thorough and rigid recruiting game plan each year. This differs from smaller Boutiques, which will usually hire more on an as-needed basis because they don’t have the predictable deal flow nor the financial and human resources to implement a structured recruiting program each year. The investment banking recruiting process at larger banks is typically divided up between “core” and “non-core” college recruiting (sometimes called “target” and “non-target”). Banks have a certain number of core (target) schools at which they interview on-campus each year; they typically allocate a certain number of job slots from each school for their incoming analyst and associate classes.
Whatever is leftover after “core” interviewing constitutes the “non-core” recruiting; this process typically trails core interviewing by a few months. Thus, for example, if you go to Penn State you will have a much different interview process than a job candidate from Wharton, because you will be recruiting for one of the non-core slots in the incoming analyst class (or associate class for incoming MBA students).

The makeup of recruiting from “core” schools always differs by bank, but it will typically include recruiting from the top 10-15 business and liberal arts schools in the country. Thus Harvard and the University of Pennsylvania (Wharton) will always be core schools while Indiana University and UCLA will always be non-core.
Non-core recruiting is conducted differently. Most candidates are introduced to the process via internal referrals and, to a lesser extent, online applications. It is a good rule of thumb that if you are a non-core candidate without an internal referral, it will be very tough to ever get noticed. Investment banks will receive tens of thousands of resumes every year with hundreds of internal referrals. Because their time and resources are finite, most of these candidates will not even get a first glance, let alone a second one.

Now, compare this to the number of job slots: a typical Bulge Bracket investment bank generally hires about 60-80 first-year analysts every year, with a majority being internship hires and students from core/target schools. It is estimated that roughly 900 first-year analysts are hired every year in the U.S., with a majority of these coming from the Bulge Bracket banks. As you can see, the odds are stacked against all of the candidates — but especially against the non-core ones. While the process to get noticed and do well is very challenging, it can be done. This Chapter can teach you how.

  • Step n°1 |

    Breaking Down Core Recruiting

    Again, core recruiting (also called target recruiting) refers to investment banking recruiting where the banks will visit your school for on-campus recruitment. These schools are the backbone of the hiring process and generally makeup roughly 70% of total hiring for analyst and associate programs for Bulge Bracket banks.

    Core recruiting is a very structured process and it is really important for you to understand how this process works, if you are a candidate from a core/target school. Later in this training program we will discuss dates and deadlines, but for now let’s focus on how the overall process works. Generally, the core recruiting process is done in 3 steps. (Steps 4 and 5 are strictly on the candidate side and don’t directly affect the banks themselves.)

    The first step is applying online via the college’s Career Resources Center (CRC) and/or the individuals banks’ websites. Make sure you are checking the dates/deadlines on the school’s CRC website, because the online application process will often close weeks before interviews actually begin! The investment banks will then bundle up the collected resumes into a book and send them around for current investment banking employees at the bank to peruse (usually 1st and 2nd year analysts). Also, banks will often host information sessions on college campuses a month or two before interviewing starts. The information sessions typically only last for a few hours but it gives candidates an opportunity to learn more about the firm and network with a few professionals at the firm. These information sessions provide candidates a great opportunity to stand out. Come prepared to these sessions with thoughtful questions and make sure to follow-up with thank you emails.

    Interviewees are then selected for on-campus interviews based on feedback from the information sessions and their resumes. The investment banks will work with the school’s CRC to schedule a time to interview accepted candidates on-campus. These generally consist of 30-45 minute interview slots, where candidates will meet with 1-2 investment bankers (usually Associates and VPs). There will be both behavioral and technical questions asked — so make sure to prepare for classic investment banking interview questions beforehand.

    The third step in the core recruiting process is called a “Superday” (or something similar). A Superday will typically be your final round of interviews, and it can be grueling. It will occur on-site at the bank, and it usually lasts from about 8am to 6pm with as many as 8-12 interviews. At the bare minimum, you will meet with at least one analyst, one associate, one VP and one MD. Plus, there will be interviews with 4-8 others of various groups/ranks within the firm. Each of these interviews will generally last for 30-45 minutes. There is no “standard” interview format: some candidates might get all behavioral questions and some might get all technical questions, so be prepared for either!

    It is essential to send a “thank-you” note to everyone you meet with on your Superday. This will not “make or break” your offer — decisions are made very quickly and a thank-you note most likely will have little impact — but it helps to develop that relationship and demonstrate respect for the bankers’ time. If you get the offer and work with them, it can enhance the working relationship and even if you do not, it can help foster an ongoing networking relationship with an individual that could be helpful down the line.

    This is the easy part. If you are getting a job offer, you will generally hear back almost immediately (either on Superday or on the following day). If you don’t hear back immediately it doesn’t necessarily mean you didn’t get the offer – sometimes it can take a few days – but as each day passes the odds of an offer coming decrease quite a bit. If you haven’t heard back within 4-5 days feel free to send the bankers that you met a follow-up thank-you email reaffirming your interest in the position – but at that point, recognize that it’s become a long-shot at best.

    What is listed above is only a fraction of what you need to know for investment banking interviews. Having been through the process and understanding how this process works, Street of Walls has developed comprehensive guides to help with the more detailed, technical aspects of what you should know for your investment banking interviews. In particular, be sure to see the Investment Banking Technical Guide for further information on what can be covered in a banking interview.

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  • Step n°2 |

    Breaking Down Non-Core Recruiting

    As we’ve established, there are over 3,000 colleges and universities in the United States alone, and only a select few of these schools fall into what investment banks call the “Core Recruiting Process.” These are typically the top Ivy League universities and business schools that are “Target Schools” for the top investment banks. If you do not fall into this category, your odds do become harder, but do not get discouraged: investment banks have established a process designed for top-talent candidates coming from other schools. This is called the “Non-Core Process.”

    As you might expect, this process is extremely difficult as candidates are interviewing for only a few available positions and are competing against candidates from every other non-core college or university in the country (not to mention the fact that students who go through core recruiting can also participate in the non-core process).

    Team members at Street of Walls have personally gone through this non-core recruiting process and have succeeded. The purpose of this section is to detail how we did it and how you can as well.

    Landing the first-round interview is the first major goal in the “Non-Core Recruiting Process” and, given the volume of applicants, quite possibly the hardest goal to accomplish. Every year, Street of Walls sees non-core undergrads who possess the necessary talent but who will never get the chance to demonstrate it at an investment bank. It is possible to put in months of intense preparation for the interviewing process in banking, only to discover that you never even got the opportunity to show off your skills. This is why it is essential to be not only as prepared as possible, but also as connected as possible. Candidates who have connections in the field are far more likely to get a chance to interview with investment banks.

    The first step in the process is to apply online for investment banking positions. This is a prerequisite for every potential candidate. After you apply online, you will have your own personal login, so that you can post your current resume and update information as it changes. Typically, investment bankers are very focused on resumes—they will check your resume for proper formatting and content. Investment bankers format Pitch Books on a daily basis, so even the slightest formatting error could raise a red flag to your attention to detail. Therefore, the need is clear: make sure your resume is excellent. If you haven’t already done so, please visit the Street of Walls article on building the perfect investment banking resume.

    These days, with top job opportunities becoming intensely competitive, applying online with a great resume, stellar GPA, and good work experience is not enough to ensure an interview. You will often need some internal help. Generally, the best way for a non-core candidate to land a first round interview is by having an employee at the bank refer your resume to the Human Resources department. The higher up the employee, the better your chances of actually landing an interview. Now, you might be thinking to yourself: “But I don’t know anybody in investment banking.” If this is the case, the following concept is extremely important.

    Networking is a key to success for non-core applicants. Typically, university alumni are great people to get in touch with for this. Work with your school’s alumni network to find contacts that currently work in investment banking. Don’t stop there though; get in touch with every family friend, relative, or friend-of-friend you know and see whether they know anybody that works in investment banking that you might speak with. As soon as you feel that you have a good base of contacts, send out emails to everyone asking if they wouldn’t mind speaking over the phone about their job, experience in investment banking, and how the recruiting process at their bank works. Most people are more than happy to speak over the phone with someone looking for assistance in the process, especially if they believe that person is serious about the industry and could be a good candidate for it.

    Here is a good example/template for an email to help get you in a door with an associate at a bank:
    Dear John,
    My name is Jack and I am currently a Finance major at Penn State University. I am eager to learn about the investment banking industry. I received your information from our alumni directory and would love to speak with you regarding the Bank of America Merrill Lynch Summer Analyst Program. It would also be great if I could hear your perspective on the investment banking industry and your experience at the firm. Would you be available to either have coffee or speak over the phone for 15-20 minutes? As a fellow Nittany Lion, I would really appreciate your help. Thank you, and I look forward to hearing back from you.
    Penn State University
    Phone: (XXX) XXX-XXX

    This next and final step is the most crucial to receiving an appropriate referral in the non-core recruiting process. During your calls with bankers, if you feel like the call is going well, you should politely ask whether they would mind referring your resume to Human Resources. This question is greatly dependent on how well the phone call is going. Most people will not refer just anybody for these positions—they have to feel that you are a strong candidate, and that you would fit well within the position and the firm as a whole. When an employee refers a potential candidate, it makes them look bad if the candidate gets an interview and ends up doing poorly. That being said, if your conversation is going well and you feel that the banker you are talking to truly wants to help you out, you should politely ask for a referral as demonstrated above.

    I personally received 5 employee referrals at different investment banks during my recruiting process, and I ended up receiving first round interviews at 4 out of the 5 banks. Experience has confirmed that employee referrals are easily the best way to receive a first round interview, and if you can follow these steps I have no doubt that you will successfully land a first round interview, just as I did.

    If all goes well, carefully executing these steps will lead to a First Round Phone Interview. Much of this process can be learned, and I will guide you through each component.

    The Investment Banking Phone Interview is the second phase of the Non-Core Recruiting Process. Congratulations if you have landed a first round interview as it is the most difficult part of the non-core interview process. You should now feel more confident, because your resume was selected from among thousands of other hopefuls.

    The next step is being successful in your first-round phone interview. Phone interviews are done for both internship recruiting and full-time recruiting—all candidates will have to go through them, with the exception of core recruiting candidates who typically meet with the bankers on-campus for first rounds.

    So how does one do well in them? It’s quite simple: preparation, preparation, and more preparation. If you are entirely ready for the questions that will be asked, you should do very well. We at Street of Walls know these questions well, and they will help you stand out in the process; they will be discussed in a moment.

    Phone interviews are generally conducted by Associates and Vice Presidents within the bank. What usually happens is that the Human Resources department will give the banker 5 to 7 resumes and will tell him/her to rank the people he/she speaks with from best to worst. Typically, only the top 1-2 people on the list will go on to Final Round interviews (Superdays). Their primary goal is to reject candidates who are unlikely to fit the needs of the job, because they are unprepared, do not have the right personality, or aren’t serious about investment banking.

    The First Round is generally less technical than the Final Round (Superdays), and is primarily used to gauge the personality and cultural fit of potential candidates. If the candidate can hold a casual conversation with the interviewer while simultaneously showing that he or she wants the job more than other candidates, he or she will do very well.

    Here is a sample of questions that interviewers are very likely to ask in First Round (phone) interviews. A more detailed review of investment banking behavioral questions are described in Chapter 7.

    >Tell me about yourself.
    >Why do you want to be an Investment Banker?
    >Why do you want to work at this Investment Bank?
    >Tell me about the classes you are taking. What are your favorite and least favorite classes?
    >What are your biggest strengths and weaknesses?
    >Walk me through a Discounted Cash Flow analysis (DCF).
    >What are the different valuation techniques?
    >Walk me through the major sections or line items of an Income Statement, a Balance Sheet, and/or a Statement of Cash Flows.

    One very successful technique for preparing for the First Round interview is to make use of mock interviews. Ask a friend or, if possible, an employee at your school’s Career Resource Center to help you answer the questions listed above. Your answers can sound very different in your head than when you actually verbalize them in front of someone else. Again, the process of improvement involves preparation, preparation, and more preparation. Go through these mock interview multiple times; identify where you are performing strongly and where you need to work on your responses; and do them again and again. Once you feel confident in your ability to verbalize these answers, you are close to being fully ready for your First Round phone interview.

    The general rule of thumb in a first round investment banking phone interview is that you cannot stumble on any of the technical interview questions that arise. The technical questions in a first-round interview usually aren’t the most difficult, but you still should be prepared to answer anything. Bankers generally like to ask these questions to gauge that you have done your homework — if you stumble on these questions, the banker is very likely to assume that you haven’t prepared properly, and is likely to terminate your process with the bank right there. I went through dozens of phone interviews and kept finding myself making small cheat sheets for questions that might be asked. I have compiled my work into the Phone Interview Cheat Sheet found in this manual. I’ve handed this down to close friends and family who have landed full-time investment banking jobs, and all of them have said that it helped tremendously in their interviews—especially the phone interview.

    Assuming that you succeed in the phone interview round and make it on to the next round, you will go on to the on-site Superday round of interviews, at the investment bank itself. These interviews will contain a much broader set of questions and topics; all of these will be covered later in this guide.

    Also, after your phone interview be sure to follow-up with a thank-you letter to the recruiter. You will generally hear back regarding your phone interview within 2 weeks, and even sometimes within days. In this case it does pay to send the thank you letter as soon as possible, as they are likely to receive it before you hear back on the results of the phone interview round.

    First-round phone interviews are generally very predictable, and because they are conducted over the telephone, the interviewer will not be able to tell that you’re referring to reference materials while responding. Thus it makes sense to have this sheet available during the call (Look at picture attached).

    How to do well in Investment Banking Interviews image
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