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How to Break into Investment Banking: A practical and honest guide for London

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Landing an Investment Banking job at Goldman Sachs, JP Morgan or any other prestigious firm is definitely the most challenging graduate career path a fresher can take. We have been there ourselves and we know the process inside out.

Running Congrapps and viewing hundreds of previously successful applications helped us identify patterns, talk to people and discover what it takes to land a job with the biggest banks. What we discovered is that those who failed were more or less the same – template cover letters, generalised answers and lack of creativity. Amongst them, were people from Oxford, Cambridge and LSE so the privileged background excuse does not count. On the other hand, the ones who succeeded were all unique in their own way. What does this mean? There is no golden rule when it comes to successfully applying and those who claim the opposite are – let me put it nicely – chatting sh***.

Having said that, we believe there are certain things you can do to get you much closer to the job of your dreams. By following these steps we can guarantee you will improve your odds in securing a place. Paragraphs 1 and 2 will give you an overview of what we think is a winning application mindset, while Paragraphs 3 to 5 will provide you with practical “Hacks” on how to land an interview with the top firms.

Is this the right career for you?

Investment Banking is not what it used to be. Things have changed and people have changed too. However, one thing remains the same – the investment banking industry exacts a heavy physical and mental toll on its workers. To survive as an investment banker, you need to have a high stress threshold, tolerate drama and be excellent team player. Consider this before applying as otherwise you may find yourself in a vicious cycle. The question to ask yourself is the following:

Am I a hard-working person and how have I proved it in the past?

So, let me explain why this is important. Lazy ‘get-rich-young’ people are everywhere. These also tend to be the most confident kids in the block and the best talkers. Thing is everyone can talk but not everyone can get a “First” in their degree as the latter requires commitment, sacrifices and all-nighters studying instead of chatting on Instagram. It also requires cancelling a night with your friends, bailing on this summer trip to complete an internship and actually paying attention to classes. So if good grades tell nothing about intelligence, they tell a lot in terms of all the skills required to succeed in Investment banking. These are willingness to work extremely long hours (80+ per week), high attention to detail, ability to take direction and team-work. While, yes your only objective while at Uni is to demonstrate these skills, it’s not all about grades. Excellent ways to showcase the above skills are online courses, meaningfully contributing to a cause you care about, running a side (or family) business or learning a foreign language – human or computer.

If you can’t think of a time you busted your *ss to achieve something challenging then I am afraid you will either have to start again or forget this gruelling career path.

Having, painted a depressing picture over the industry, here is why IB remains a kick-ass career option. First, the people surrounding you are going to be tremendously smart. In fact, there is a joke going around saying that an investment bank is the only place where you will find the country’s greatest minds doing repetitive and mind-numbing work. Why would they do it? The pay is great. Junior Analysts in London can end up making £70-80K in their first year. This means you are in the top 5% before you even turn 25 – probably even earlier.

Moreover, I genuinely believe Investment Banking is the greatest school for any graduate. Analysts in London tend to work ±70 hours/week * 52 weeks/year = 3,640 hours per year. The average white-collar worker, on the other hand, works 2,340 hours per year. This implies that in two years you will have learnt what the average worker would have learnt in three. Of course, I am not factoring all the soft skill and mentorship you would receive in such prestigious and challenging environments. I have to note however that this implies other sacrifices but trust me when I say this: in your early 20s, with very few important responsibilities, this can be a golden ticket for your future.

So in terms of applying, and as with everywhere, there are pros and cons. In Investment Banking though, both pros and cons are on steroids.

We interviewed those who shared their successful applications with Congrapps and the vast majority of people want to work in the industry for the money, challenge, learning curve and prestige. While these can be your honest reasons, what you tell in your application should be slightly different. Here is why.

Why Investment Banking?

While you never know what an interviewer is going to ask, be assured they will want to know why you want to work in Investment Banking. In fact, this will come up in every networking event, in all your discussions with alumni or people from whom you seek application advice.

Even if this question is not asked outright, it should be part of your overall story: “Tell me about yourself”, “Why do you want to do investment banking?” is a staple, and most times candidates fail to answer it adequately. The wrong way to answer the question is to focus on the money or prestige. “I want to be a dealmaker” is another poor answer. These answers are superficial and don’t focus on the specifics of why investment banking exists and what it does to provide value. Often, applicants say that they want to work with smart people or that they want to be in a competitive environment and be challenged. Although these are possible true answers, these answers can apply for many different fields—consulting, equity research, corporate law or even a non-profit.

The answer to why you want to do investment banking needs to be specific and focus on what investment banking is and how it provides value. It also needs to mention to whom it provides value.

There are two basic types of investment bank: full-service and boutique. Full-service institutions engage in all kind of activities, including underwriting, trading, merger and acquisition (M&A), merchant banking, securities services, investment management, and research. In contrast, boutique houses focus on particular segments. Some specialize in M&As, some in financial institutions, and some in start-up and growth business.

Investment banks engage in public and private market transactions for corporations, governments, and investors. These transactions include mergers and acquisitions, divestitures, and the issuance of equity or debt securities, or a combination of both. Investment bankers advise and assist clients with specialized industry expertise. The industry or sector grouping often includes industrial, consumer, health care, financial institutions, real estate, technology, media and telecommunications, and others.

Investment banking includes capital raising and merger and acquisition (M&A) advisory services. Investment banks help clients raise capital through underwriting in which investment banks purchase the whole block of new securities from the issuer and distribute them to institutional and individual investors. For the service, investment bankers earn an underwriting spread, the difference between the price they receive from investors and the amount they pay to the issuing firm

Another major line in investment banking is strategic advising on mergers and acquisitions. Services offered include structuring and executing domestic and international transactions in acquisitions, divestitures, mergers, joint ventures, corporate restructurings, and defenses against unsolicited takeover attempts. Fees are usually negotiable. This line of business is attractive, because, win, lose, or draw, bankers earn fee income.

Full-service investment banks offer services that go beyond just investment banking. Principal transactions have accounted for a very significant portion of total net revenues at many Wall Street and European houses. These transactions include proprietary trading and merchant banking. In proprietary trading, the investment bank trades on its own capital. Merchant banking invests the firm’s own capital as well as funds raised from outside corporate and real estate investors.

Investment management is an integral part of investment banks. Major players such as Morgan Stanley, Goldman, and JPMorgan each manage hundreds of billions of dollars for their clients. This is an attractive segment of the financial services industry. The income stream is less volatile than trading or underwriting and, hence, contributes to the stability of earnings. Another line of business is securities services that include prime brokerage, securities lending, and financing. Prime brokerage offers tools and services desired by clients looking to support their operations in trading and portfolio management. In security lending services, investment banks find securities for clients to make good delivery so as to cover their short positions. Alternatively, financing services provide funds to finance clients’ purchases of securities.

Practical Hacks to land an Investment Banking (or Finance) job:

Congrapps is the first-ever platform where you can view verified previously successful applications for most Investment Banking jobs in London. On a day-to-day basis we review and anonymise tens of previously successful applications. This helps us identify winning patterns and the tricks those who made it actually used in order to land such a competitive job. Below are our two cents:

  1. The Power of Linkedin:

Objectively, Linkedin is gold – and I don’t refer to the premium version even though I believe it comes handy despite its cost (lol-lame joke). Anyways, what I want to say is that Linkedin can help you stand-out. Not your profile though as firms with graduate recruitment divisions will not actively headhunt at junior level.

Linkedin helps you get tips and contacts. If you are in your 2nd or 3rd year of University looking for a summer internship the best people to approach are high school (or uni) alums who just got hired. As the Investment Banking hiring season begins early in Autumn, recently graduated students who got hired into these banks typically go through a training program in the summer. So by early September they are just beginning their full-time role and are still eager and excited about their position. Get in front of those analysts before the job duties become so overwhelming that they no longer have time to reciprocate.

To enhance your chances of getting selected, find an analyst or associate working in the group you are applying for and reach out to them. So if you submit your resume for a position in M&A at Morgan Stanley, use Linkedin to find who is actually working in that group and send them an InMail. Keep you message short and professional and specify what interests you about this department.

As we discussed above, avoid general statements. They will never respond to you unless they think you might eventually make a good analyst. Investment Bankers get a ton of emails from students who want to break into the investment banking industry, however, as work takes over and conversations with students are surprisingly boring and repetitive, bankers will filter who they respond to. Give them a reason to respond to you. Similar to the actual application, template messages will not work. Demonstrate how serious you are about breaking into Investment banking. This makes the cut.

So it is very important that candidates prove in some way that they know what they are getting themselves into either through experience or extensive knowledge about the industry. “Breaking into the industry” can mean the candidate read about banking in a blog and knows they can make a lot of money but doesn’t really understand the function and roles of a banker. Or it could mean someone is seriously qualified but just hasn’t gotten the right opportunity to interview.

So this is all you need to know about Linkedin – yes in one paragraph. Prove you understand the industry and that you have the qualifications to excel. Talk like a normal human being and be unique.

  1. The power of E-learning:

Coronavirus exposed us to what all of us knew but often neglected. The power of online education and course providers like Coursera, Udemy and Inside Sherpa.

Here at Congrapps we are romantic about education and we think constant learning is the greatest reward you will ever receive. In addition to the undeniable benefits of education and practical benefits in your future career, getting an online certificate is an easy way to demonstrate commitment to a career in Banking. For example, Coursera has partner with Wharton to deliver an excellent introductory course in Corporate Finance. You can choose for high level knowledge that will help you connect the dots or opt for specialised courses in fields such as Python or Machine Learning for Finance. What’s the best part? You can get certified for less than what you would spend in a night out in London. Put things into perspective reader!

While a certificate is a great first step, it is also important to demonstrate how you applied those skills. The easiest way and what many successful applicants wrote in their applications is Virtual Trading. Another interesting approach is to perform your own analysis (based on publicly available data) on a recently announced Merger, Acquisition or IPO. No one will care and no one expects your valuations to be spot-on. What matters is that you took the time to do it. This shows that you understand finance and are aware of some basic modelling concepts. It also demonstrates drive and commitment and passion.

We can’t stress enough how important the above exercise is. Once you do this you will differentiate yourself from the majority of candidates. It’s so easy and nothing – literally nothing stops you from doing it. Just get your **s down and start working.

  1. The Power of an Internship:

    As mentioned earlier, it’s important to have a story of yourself, from when and where you were born all the way to today—why you are sitting in front of the recruiter. The pitch is complete with the addition of a hook. The hook is a story, ideally from your past, that ties all these components together. The hook both completes and personalizes the story. The hook should in some way lead into your answer to why you are choosing investment banking.

    The reason why relevant previous experience is of particular importance is because Grdauate Recruiters review applications through a framework of pre-defined selection criteria. The most common criteria include (a) previous Bulge Bracket experience; (b) previous M&A experience; (c) unique potential. What is the verdict? Do everything you can to secure a Spring Week placement or an internship on a smaller M&A firm (even if this is outside of London).

As you can tell from the above, there are three boxes you need to check in order to land an interview. This entire article has focused so far on the third point and how you can show unique potential.

Why? Because showing potential is the starting point. As years pass and you approach graduation (or even graduate) it is important to support your “potential” with actual experience and tangible accomplishments. During the first or second year of University, the ratio between previous experience and a person’s potential would be 20/80, the older you become it shifts to 50/50 or even 80/20.

As we discussed above, there are different ways to investment banking and especially for graduate jobs a previous experience (even though helpful) is not necessary. What is vital though is the hook you use. The hook can be anything from a helping with the family business to running your own start-up or virtual trading portfolio. Remember Investment Banking is at its core M&A and securities underwriting—initiatives that drive growth in business. There are many angles from which you can connect your personal experience to the purpose of Investment Banking, so get your story right and start applying!

If you follow and implement everything above, you will be better equipped for investment banking recruiting than the vast majority of candidates. By viewing past successful applications and identifying patterns we realised that the most common mistakes are also the easiest to avoid. These are:

  1. Not understanding your unique selling points and failing to communicate your value;
  2. Not understanding what Investment Banking entails and why you want a career in the industry.

Good luck people!

 

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Congrapps is the №1 Platform for Verified Successful Career Resources! We collected the actual Cover Letters & Interview Experiences of those who made it to the most competitive graduate and entry-level jobs in Banking, Finance, Consulting and Law in London.
We help graduates achieve their dreams by levelling the playing field and giving access to the same information to everyone!

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