How to break into the Investment Banking Industry
By Vinayak (Investment Banker)
Investment banking (IB) is the ultimate thing that most college graduates want to find themselves in in their mid-twenties. The pay can be in the six figures even at the entry level when you include end-of-the-year bonuses and the like. However, it is a highly demanding job and very few are really built for this. On top of that, banks are very particular about whom they hire and an Ivy League background is very common on Wall Street and the other financial capitals of the world.
I do have some good news for you. It is very possible to break into IB even from a non-traditional background. I am going to focus on those aspects in this article as I know that the Ivy League graduates among us already have plenty of guidance and advantages in this sphere. Here are a few areas that you will need to work on to land that investment banking analyst position you've always dreamt of.
The Resume and Cover Letter
There are numerous resume and cover letter formats. The ones I like are in the Mergers & Inquisitions site and Investopedia. Stick to the format for the resume and cover letter. At most, hiring managers spend about a minute on both your resume and cover letter. Tell me about it!
If you are already in school, you want to challenge yourself as much as possible. High GPAs are great, but an English major and an Engineering major are not treated equally by hiring managers. A 3.3 GPA as a chemical engineering major at a college like the University of Minnesota - Twin Cities (note: a non Ivy League school) will wow a lot of hiring managers.
It's been tough in the US for the majority of us. What is going to separate a star performer from an average one is his or her network. Networking is very important in winning multiple job offers and that is why it is vital that individuals devote the necessary time to developing relationships that can potentially help you in your quest to land an investment banking analyst position. We've heard all about 'having a story', 'informational interviews' etc but what I want to focus on in this article is to have a list in an Excel sheet filled with people in the industry you've spoken to or wish to do so. This is the best way to stay on top of networking; keep updating the list.
Microsoft Excel and Programming Skills
The way to approach Microsoft Excel is to look over the high usage shortcuts/formulae and processes prior to an interview. I've been through the whole process so I can tell you from experience that after a few months of going back and forth with Excel, you will build up an in demand skill set.
I would advice aspiring IB applicants to build up some programming skills (C++, Java, HTML) that will put you at an advantage in your attempts to break into the industry. It will also keep some money coming in during the long IB hiring process that could run up to 3-4 months. In the sense that you can do several short-term projects either online or at a brick and mortar office when you have IT expertise while applying for IB jobs.
What does IB lead to?
Once you have followed the tips to improve the above three areas, there is no stopping you. A career in hard to decipher industries such as Private Equity (PE) and Hedge Funds (HF) awaits those with about a couple of years of experience in an investment banking role. These are the big leagues of money making and they are extremely hard to break into. Nonetheless, keep this tips in mind and you will do fine.