Post: #1

My second time writing this...I was 3/4 of the way done when my computer crashed

I've received a ton of emails in regards to how to get a career in investment banking, so I figured i'd create a datasheet. Note - this applies to Canada, but you can apply similar techniques in the U.S, and the UK as well.

I also wrote this pretty quickly, and just based of my experience - so if anything changed, or you experienced it differently, please add it below!

What it takes:

Before you decide that you want a career in IB, make sure it's the career you really want. You'll be trading your time, health, and social life for money. In your first two-years you'll be lucky if work less than 90-100 hours per week.

Starting salaries range from $50,000 - $70,000 CAD, with a signing bonus, and other performance bonuses attached on. It's not unheard of for first-year traders to make mid six-figure salaries.

The trade off is simple - time for money. If that isn't acceptable to you, or you're unsure if you can work the hours required, then maybe think of a different career. The most common route is to work in IB for four-five years, before transitioning to a hedge fund - much less hours, and around the same pay. The most senior trader on my team is 29 - which should tell you that the average career in IB isn't long.

Education:

In the U.S anything less than a top-tier school and you're in for some hard work to get a career in IB. You CAN go for an MBA, however, that's not necessary - they hire straight from undergraduate programs at the top-tier schools. If you didn't go to a top-tier school, go for an MBA - it'll raise your chances drastically.

In Canada, you'll have it easier if you're at a top-tier school (Rotmans, Schulich, Ivey, Degroote, Sauer, Queens etc...) but it's less necessary than in the U.S. We've hired students from lower-tier schools (York, Laurier, Brock, Ryerson). What's more important is what you do with your time in school, the experiences you accumulate, and your networking ability.

If your GPA is less than 3.5, you'd be best off retaking some courses. While GPA isn't the only factor, it's a 'sorting-aid', in that it helps to reduce the applicant pool easier than going through every applicants resume.

Summing up what is required during your four-years at school:

- Get experience (internship)
- Get involved (student groups - finance, investment teams etc..., case competitions, the Bloomberg labs)
- Network (networking is the #1 most important thing to do if you're interested in IB. It's a huge 'boys clubs', so if you don't network, nepotism will reign supreme).
- Good grades
- Create your own portfolio. Showing a solid performance record with your own personal money is massive, and I think it's one of the reason I got my current job. Show that you can manage money, and manage your emotions with real, tangible money.
- Learn the following inside and out : Financial modeling, Derivatives, M&A, Accounting, Valuation


Valuation:
Comparable Company Analysis – Look at publicly traded companies and the multiples they trade at, and then apply those to the company in question.
Precedent Transaction Analysis – Look at what buyers paid for sellers in similar industries and with similar financial profiles and apply the multiples to your own company.
Discounted Cash Flow Analysis (DCF) – Use a company’s projected cash flows, discounting them for the time-value of money and cost of capital, and sum those with the company’s discounted terminal value to find its present value.

Modeling:
Most modeling questions are on merger models – looking at what happens when a company acquires another company – or Leveraged Buyout (LBO) Models – calculating the return to a PE firm when they buy a company.


Interview/Resume:

Most people fail at the resume stage. They list skills, and experiences that have nothing to do with their aspirations in IB. List position-relevant skills:
- Knowledgeable in the field of M&A
- Capable of developing complex financial models
- etc....

If you did have your own portfolio, make sure to list your returns, as well as some (not all) of the positions you owned. When I applied for my job, I printed out a four-year performance chart comparing my returns to market indices. Going the extra mile is worth it.


When it comes time to interview, you'll need to prove a few things:

- Quick on your feet (Here they ask you logical reasoning questions ("how far can an economist run into the forest"), analytical questions ("Walk me through a DCF. How does 40% cash vs. 50% cash affect a merger model? What happens on all 3 statements when COGS goes up by $10?"), and theoretical questions ("thoughts on EBITDA")). This is just a very very general example.
- You want to make a lot of money (Jordan Belfort without the illegal component)
- You're social (They can tell instantly if you're not. Without sounding racist, this is the reason there aren't many Asians in IB - they simple aren't as social as your average Caucasian/Euro guy/girl).
- You can work like a dog (I remember from my interview they asked me "We might ask you to stay an hour or two late here and there, are you comfortable with this?" This is a very tricky question, because what they're looking for isn't "yes", they want to hear "I'll work all night, all week, skipping christmas if I have to")

LBO:
The most common question: “Walk me through an LBO model.” You could also get questions on the different drivers and how they affect the return at the end.

More advanced questions cover different types of debt (e.g. bank vs. senior vs. subordinated vs. mezzanine), pro-forma balance sheet adjustments, and debt covenants.

Make sure to sound enthusiastic - smile, use hand gestures. Everything plays a part.


You'll be asked industry-specific questions as well. Most trading teams split traders into whichever industry/sector they're most comfortable with. "What do you think of the energy industry" is fitting for today's economic climate.

They know no one is perfect - so if you make a mistake, admit it. Don't try to be a know-it-all.

Career-Path:

The ideal career path is: Analyst - Associate - leave IB and work at a Hedge Fund. They'll hire you out of an MBA program as either an Analyst, or an Associate, but they usually promote to Associate from their Analyst pool. If you're coming from an Undergrad program, you'll start at the bottom of the food chain - an Analyst.

You don't want to spend forty years working in IB, it's too detrimental to your health.

EDIT: I forgot to mention; if you think bankers doing Cocaine is only in the movies, or in the 90s', it's not. Some of the older more worn-out guys at my office consistently use Cocaine. It's not something I or the younger traders partake in, but it is a big problem, even today. These guys walk down to the main lobby, and buy it from the cooks at a restaurant nearby. The first time I heard about it I couldn't believe it was a real thing haha.

Summation:

I've made it seem like investment banking is all doom and gloom, when in reality it's not. The work hours are long, and hard - but the environment is fairly relaxed, and the 'boys club' mentality makes it entertaining to say the least. I'm in my third-year, and the hours have dropped substantially - in addition to getting holidays off.

If you're comfortable with the work hours, and are hungry for money, there isn't much better than investment banking (aside from being an entrepreneur and starting your own business).

Post: #2

Quote:My second time writing this...I was 3/4 of the way done when my computer crashed

How'd that happen to a third year analyst?!

Good datasheet. +1 Get your money right, everything else follows.

Post: #3

(03-09-2016 01:04 PM)Peregrine Wrote:  

Quote:My second time writing this...I was 3/4 of the way done when my computer crashed

How'd that happen to a third year analyst?!

Good datasheet. +1 Get your money right, everything else follows.

I call it my post-kiev relaxation period . Still dreading my return to work Monday.

Post: #4

Thanks man! Much needed datasheet rather than pm you bits and bits of questions.

Post: #5

Canadian citizen here. Are these jobs more limited to the Toronto area or are they available out west too? I.E. Calgary?

Post: #6

(03-10-2016 03:13 PM)Laurifer Wrote:  Canadian citizen here. Are these jobs more limited to the Toronto area or are they available out west too? I.E. Calgary?

My firm has offices in Calgary, and so do a lot of others. It's not at the Toronto or Vancouver level yet, but it's emerging as a good job market for young graduates in not only IB, but Corporate Finance.

Post: #7

Just curious - how did you become interested in finance?

Were you originally drawn to it because of the money?

I ask because I feel it might be kind of interesting, but I don't understand it well (lots of terms that make it like reading another language at times). Did you originally have some interest in it or was there some motivating factor like money that got you into it and upon getting in, you realized you liked it?

Thanks for the info

Post: #8

Thanks for this-- I'm in the process of qualifying for a position in the same field so this is good timing.

Post: #9

I'm very interested in this. Since it appears that the first version of my "Canadian Dream" which was to work in oil and gas 6 months a year and fuck off to Asia for the other 6 months went to the shitter along with oil prices, this can very well be my second Canadian dream. My questions to the OP are as follows;

Quote:It's not unheard of for first-year traders to make mid six-figure salaries.

How unheard of is it really? I'm not afraid to spend 168 hours a week at the office if that's what it takes.

Quote:If your GPA is less than 3.5, you'd be best off retaking some courses. While GPA isn't the only factor, it's a 'sorting-aid', in that it helps to reduce the applicant pool easier than going through every applicants resume.

How important is the GPA? I went to a very tough technical university with uptight professors and didn't give any fucks so my GPA is in the shitter. I can deliver an amazing GMAT though. I'm also a Mensa member.

Quote:They'll hire you out of an MBA program

Is an MBA necessary? Also is 27 too late to do this career switch? I'll be at least 27 before I get my Canadian work permit, I don't want to waste any more time with an MBA.

Quote:- Learn the following inside and out : Financial modeling, Derivatives, M&A, Accounting, Valuation

I was thinking about doing an MBA couple years back so I did some self learning. Therefore, I guess I'm decent at these, and I'm a very fast learner so I'll probably have gotten this on lockdown by the time I'm showing up for interviews. Though;

Quote:- Get experience (internship)
- Get involved (student groups - finance, investment teams etc..., case competitions, the Bloomberg labs)
- Network (networking is the #1 most important thing to do if you're interested in IB. It's a huge 'boys clubs', so if you don't network, nepotism will reign supreme).
- Good grades
- Create your own portfolio. Showing a solid performance record with your own personal money is massive, and I think it's one of the reason I got my current job. Show that you can manage money, and manage your emotions with real, tangible money.

I haven't done most of these things, since I'm doing a career switch. I've been working in IT (Enterprise software development and architecture) and the most relevant thing I've done is to work in a software team at a retail bank. I ran my own start up and I did fairly well (It didn't tank horrendously so that's "fairly well" in the tech startup industry) and I've traded stocks and made some coin, though what I did wasn't much of having a portfolio but rather pure speculation.

Lastly, does a well put together, well mannered foreign national have a chance or is it a white boys club like Wall Street?

I was thinking about writing you a PM but I'd rather post this here so everyone can make use of the answers.

Cheers OP. Thanks for the thread, repped.

Post: #10

Quote:How unheard of is it really? I'm not afraid to spend 168 hours a week at the office if that's what it takes.

Not sure exactly what WeekendCasanova does, but first year IB analysts (who are not traders) don't make mid six figures (e.g. ~500k). More like 80k base + ~100% bonus for a total of 160k. But maybe that's what he meant.

GPA is super important. Super super important. Like WC said, it's a screening method. Plus, GPA is seen as a proxy for how hard you work. You won't get in with a mediocre undergrad GPA unless you get a top tier MBA, which you probably won't get into with a mediocre undergrad GPA. Your only (realistic) option would be to retake enough undergrad courses to have an acceptable GPA. Sorry, reality sucks. High GMAT doesn't mean much/anything because it's so easy, and people will laugh at you if you mention that you're a Mensa member.

27 is not too late. It's rather common for engineers to get an MBA as a way into finance.

Quote:Lastly, does a well put together, well mannered foreign national have a chance or is it a white boys club like Wall Street?

White boys club, but non whites can succeed too.

http://www.wallstreetplayboys.com is a good resource.

Post: #11

Quote:How unheard of is it really? I'm not afraid to spend 168 hours a week at the office if that's what it takes.

It's not too unheard of. I made low six my first year; I'd say 1/4 make that. 2/4 drop out, and the other 1/4 just barely gets by. If you work hard, you'll be fine. Your starting salary + bonus takes you close to the six-figure mark anyways, so it's not TOO hard to hit into the six-figure's with commission bonuses.

Quote:How important is the GPA? I went to a very tough technical university with uptight professors and didn't give any fucks so my GPA is in the shitter. I can deliver an amazing GMAT though. I'm also a Mensa member.

Ha, it's funny you mention Mensa - I'm also a member. GMAT score is good, but GPA is equally important. They aren't stupid, and they know that GPA isn't everything however.

Quote:Is an MBA necessary? Also is 27 too late to do this career switch? I'll be at least 27 before I get my Canadian work permit, I don't want to waste any more time with an MBA.

I didn't get my MBA, but no it's not required. I think only one, or two guys on our team have any MBA. It helps, but it's not like you gain a massive competitive advantage. MBA's are more suited to people seeking jobs in Corporate Finance IMO.

Quote:I was thinking about doing an MBA couple years back so I did some self learning. Therefore, I guess I'm decent at these, and I'm a very fast learner so I'll probably have gotten this on lockdown by the time I'm showing up for interviews. Though;

Yeah, take a few months to start hammering the concepts down before you apply. Be very comfortable with them. They'll train you, but they don't want to have to hold your hand if you know what I mean.

Quote:I haven't done most of these things, since I'm doing a career switch. I've been working in IT (Enterprise software development and architecture) and the most relevant thing I've done is to work in a software team at a retail bank. I ran my own start up and I did fairly well (It didn't tank horrendously so that's "fairly well" in the tech startup industry) and I've traded stocks and made some coin, though what I did wasn't much of having a portfolio but rather pure speculation.

Lastly, does a well put together, well mannered foreign national have a chance or is it a white boys club like Wall Street?

I was thinking about writing you a PM but I'd rather post this here so everyone can make use of the answers.

Cheers OP. Thanks for the thread, repped.

It does help to have experience, and to have networked, but again the most important thing is the interview. Your age isn't too old, so they'll likely want to make sure you can hack the hours. That's usually the biggest deterrent to hiring older people, even though 27 is young. Experience being your own boss proves you're a self starter, which carries weight, so that should be quite beneficial to you.

As for your other comment, it is a boys club, but I wouldn't say it's a "white boys club". As I mentioned, the biggest thing is that you need to be social, and preferably not a thick accent. Most foreign people that come interview have a thick accent, and are quite socially awkward - I'm stereotyping, I know, but most foreigners I've seen apply fit this category. If you're a foreigner, as long you don't a super thick accent, you won't have a problem.

In the end, just go for it. Even if you do one-year in IB and decide it isn't for you, the experience carries a lot of weight elsewhere. Having IB on your resume is big. Best of luck, and if you have any other questions feel free to PM me!

Post: #12

Quote:How unheard of is it really? I'm not afraid to spend 168 hours a week at the office if that's what it takes.

Quote:Not sure exactly what WeekendCasanova does, but first year IB analysts (who are not traders) don't make mid six figures (e.g. ~500k). More like 80k base + ~100% bonus for a total of 160k. But maybe that's what he meant.

It's a bit different in Canada as well. Firms are leaning heavily towards pure commission-based pay grades. You get a signing bonus, which as a I say above brings you close to the six-figure mark, along with a commission bonus. Where I work, our signing bonus isn't exceptionally large (~25k), but the commission is fantastic.

The way the IB industry is heading is lower base salary. Firms are starting to fire a lot of staff, so this is the way they're starting to hire new talent. Offer large commission-based pay, lesser upfront.

The average for 1st year Analysts is anywhere from $100-$200K, but as I said - it's not unheard of to make mid-six figure salaries. Highest I've heard of is $400 (at my firm). Guys in the U.S make much more.

Also, I'm an Associate, in case you were wondering. Started as an Analyst, which is where you start unless hired out of an MBA.

Quote:GPA is super important. Super super important. Like WC said, it's a screening method. Plus, GPA is seen as a proxy for how hard you work. You won't get in with a mediocre undergrad GPA unless you get a top tier MBA, which you probably won't get into with a mediocre undergrad GPA. Your only (realistic) option would be to retake enough undergrad courses to have an acceptable GPA. Sorry, reality sucks. High GMAT doesn't mean much/anything because it's so easy, and people will laugh at you if you mention that you're a Mensa member.

27 is not too late. It's rather common for engineers to get an MBA as a way into finance.

I disagree about the GMAT comment. It's not heavily weighted, but in Canada it's held to a bit higher standard, based on what I've heard. I say it above, but most of our staff don't have MBA's, it's more important in the U.S where competition for IB is so much higher.

You can come straight out of a mid-tier school in Canada with good grades (3.5 and above), and get a job in IB. Having lesser grades can hamper you, but balance it with a nice GMAT score. And as Peregrine said, Engineers commonly enter the IB field because of their technical skills - derivative teams love the math-guys.

Quote:Lastly, does a well put together, well mannered foreign national have a chance or is it a white boys club like Wall Street?

Quote:White boys club, but non whites can succeed too.

http://www.wallstreetplayboys.com is a good resource.

Yes, I mention this in my comment above. WSPB is a good resource.

EDIT: Forgot to mention, that while WSPB has it's uses for U.S-based individuals, it is a lot different in Canada.

Post: #13

(03-11-2016 02:11 PM)whiteknightrises Wrote:  Just curious - how did you become interested in finance?

Were you originally drawn to it because of the money?

I ask because I feel it might be kind of interesting, but I don't understand it well (lots of terms that make it like reading another language at times). Did you originally have some interest in it or was there some motivating factor like money that got you into it and upon getting in, you realized you liked it?

Thanks for the info

Grew up with a family involved in Finance, so I kind of naturally fell into it. I started investing in the stock market when I was in grade eight.

Money was a big factor for me, but I always loved the stock market - the thought of having actual ownership in a company, attending shareholder meetings etc...

I think the biggest thing was seeing my family with so much freedom. Just seemed like a natural fit.

Post: #14

I have a background in math and data analysis and am also good at low level computer programming. Some time ago I talked to someone who'd been in investment banking and he suggested I could find a good job in IB. He said I could make good money in a short period and after that can decide what I want to do. Out of that conversation bore the dream of working for a big name IB in one of their branches in Latin America.

Now when I research the jobs in IB I see mostly analysts and associates. It seems to me with my skills something like a "modeler", i.e. someone who analyzes the market not in direct contact with clients is more relevant but I don't seem to be able to find such a thing on the actual job lists. It's worth mentioning it's been several years since I graduated.

Post: #15

good data sheet but you can't overemphasize the hours the competition.

also, in the u.s., its very clubby. a lot of them are from the northeast and attended the same boarding schools. that's not to say you have to, just that there are a lot of folks who have a leg up. and those silver spoon guys are going to be expected to work just as hard.

a book to read that only scratches the surface is Liar's Poker - the core of it is still true even though some of the specifics are dated.

don't expect to have nights or weekends free. After we close a big deal, our bankers fly in from NY to our location take us to dinner. think about that - the investment of time and money they expend to take the client to dinner, and what that costs from their team. it makes sense for them because of the size of fee we pay them. but that is the level of commitment they expect.

Post: #16

duedue, if you want to work at a bank, you want to be looking for positions such as risk or Treasury analyst. Different business units such as credit cards might also employ their own modelers.

You won't make ibanking dollars, but you will work less hours. It's all about what you want.

Edit: recommendation based on what you said your background is

Post: #17

OP why no mention of a CFA? At your shop are there guys who have advanced without it? Thought that was pretty much required at Canadian ibanks.

Post: #18

OP - is this specific to IBD (not sure what that covers exactly, but in my mind generally M&A, Cap Markets, Leveraged Finance)? Or does it also apply to Sales & Trading and Equity Research?

I guess what I'm trying to get at is 1) are there other front office (or, I guess in the case of Research, front office-ish) roles that don't fall into the same extreme time-for-money route as conventional IB? and 2) are they/how available are they for undergrad recruitment?

I work in legal supporting Prime Brokerage Sales and Trading - I never see anybody on the trading floor or any of the Sales guys working past 7. IBD is usually a nightmare to work with and are around the clock.

My brother is a very bright kid who is in undergrad. He's interested in finance but I'm wary of sending him to conventional banking if there are other front office paths that are viable and comparably lucrative.

Post: #19

(01-19-2017 02:11 PM)Peregrine Wrote:  duedue, if you want to work at a bank, you want to be looking for positions such as risk or Treasury analyst. Different business units such as credit cards might also employ their own modelers.

You won't make ibanking dollars, but you will work less hours. It's all about what you want.

Edit: recommendation based on what you said your background is

Thanks for the tip. Any tips on how to actually start looking for a risk analyst or risk modeler? On the banks' websites or sites like indeed.com? I don't have any formal education in finance.

Post: #20

Quote:My brother is a very bright kid who is in undergrad. He's interested in finance but I'm wary of sending him to conventional banking if there are other front office paths that are viable and comparably lucrative.

The time/risk/reward balance is much more even than people think. The difference with more "high risk" options like S&T is that if you don't trade well your ass is on the street without a skillset that can easily land you a corporate finance job.

One other area to look at is financial research roles. They can be a bit wooly and are still extremely difficult to break into (the move towards passive investment funds is makign things exponentially more difficult recently) but there's still a fairly broad universe of exits available. Hours are rarely as bad as investment banking although earnings season is brutal.

Quote:Thanks for the tip. Any tips on how to actually start looking for a risk analyst or risk modeler? On the banks' websites or sites like indeed.com? I don't have any formal education in finance.

Your previous posts about a "modeler" also applies to entry level equity research. Brand new investment bankers typically are pure "modelers" and do financial modeling along with a lot of gruntwork on tasks like creating powerpoint slides and filling out SEC forms.

Getting into finance without an education is tough. You generally need experience (VERY difficult except through school) and education. Giving you an optimal path would relaly depend on what you've done before. Check out M&I as they have a couple of interviews on there that may help you out. Some previous backgrounds can help you lateral in, others will effectively require that you go back to school. The most common way for experienced people (3-4 years of work experience) to get in is if you are somehow able to win admission to an MBA program. Going lower than the top 10 ranked makes it difficult, and going lower than top 20 makes it VERY difficult.

Unless you get into somewhere like Harvard or Columbia you should be prepared to start at a mid-tier or small firm.

Post: #21

(04-10-2017 03:38 PM)duedue Wrote:  

(01-19-2017 02:11 PM)Peregrine Wrote:  duedue, if you want to work at a bank, you want to be looking for positions such as risk or Treasury analyst. Different business units such as credit cards might also employ their own modelers.

You won't make ibanking dollars, but you will work less hours. It's all about what you want.

Edit: recommendation based on what you said your background is

Thanks for the tip. Any tips on how to actually start looking for a risk analyst or risk modeler? On the banks' websites or sites like indeed.com? I don't have any formal education in finance.

You could talk to recruiters to get a sense for how competitive you are based on your background/skills.

If you have a math degree and can code, you could make up for the no financial background by writing the FRM or CFA. Some of the bigger firms/banks would want to see a masters in math though, because it's a very competitive field.

Post: #22

You might be able to network into an analyst job (entry level) at a bank, especially outside of the bulge bracket (internationally known, big ones).

Research "quant" roles. They're more likely to be associate level. Associate level gigs - you either need to rise up through threeish years as an analyst, or come in with a grad degree (MBA for generalists or math heavy for quant). CFA will augment a non-target background but will not substitute even a math minor, much less a math-heavy grad degree.

Finance industry does like engineering and science backgrounds as they're considered harder. Overall thinking is that it's easier to teach a scientist finance than to teach a finance grade math.