Paul Sennett, A Former Managing Director at Deutsche Bank: A Career In Investment Banking... Tips On How To Get In
Photo: Paul Sennett
So firstly, it’s obvious that most of you reading this article will fancy being an investment banker, or at the very least are curious about being one. Maybe you watched the movie ‘The Wolf of Wall Street’, or the recent series Industry, and just wanted to find out if they were accurate!
What Is An Investment Bank?
It is a business of different divisions, with each bank having varying strengths and weaknesses in each of these divisions.
Investment banking can be split into 5 main areas. And the people who suit these areas are not necessarily the same:
Investment banking origination: debt / equity/ M&A.
Investment banking trading, research, and sales. Often simply called FIC.
Investment management
Controlling, legal and back office
IT
When you join, you tend to be put into one of these areas, and specialise quickly.
Let's look at each of these individually, but please note that there are clearly large overlaps between them.
Investment Banking Origination: Debt, Equity, and M and A.
This area arranges new transactions. Here are some example of acivity:
Company A buying company B.
Or
A private equity takeover of a public company. A so-called public to private transaction.
Or
A debt issue.
Or
Rights issues of equity for a listed company wanting to acquire another public company.
Or
Advising a company on its strategic options.
Or
Helping a tech company go public.
Much of what happens in these areas is conducted in secrecy and behind firewalls. This is simply because very confidential and market-moving information is handled. A typical day at work for investment bankers in this area starts at around 8am, but you might be working all night if there are urgent deals going on.
Typically deals take weeks and sometimes months to brew up, but if they are routine deals, they can be done almost the same day. This area suits many types of people but is generally suited best to someone who prefers the long essay style of working rather than a rapid series of transactions. It’s less mathematical than the FIC/ trading floor environment, but a lot more legal documentation is involved, as well as extensive pitch book preparations. You also have to be a strong team player, a greater communicator, and potentially willing to travel.
FIC:
My old world. A trading floor environment. Think of 1000 people all on an open plan floor. Days in this division tend to start early in the day. I used to wake up at 4:30am and be at my desk around 6:30am, but I was normally gone by 6pm. I used to have 6 computer screens and a NASA style telephone system. This division can be noisy and highly mathematical, but there is a real buzz of excitement about it.
Some traders have up to 16 screens. Business on the floors vary by firm but include:
Debt and equity trading and sales
HY bonds
Research
Distressed debt
Leverage finance sales
Derivatives trading and sales
Money markets
Tax arbitrage
Loan syndication
Debt syndication
Equity syndication
Foreign exchange
Investment Management
Typical roles within investment management are client management, fund management, research and portfolio structuring. It takes in decent fees and consequently has the potential to be a good business in the right circumstances. While it hires relatively few candidates straight from university, it is nonetheless a super interesting area with a terrific career trajectory.
Controlling, Legal and Back Office:
The controlling team comprises of compliance officers plus financial controllers and business managers. The legal team are in-house legal experts who are normally qualified lawyers. The back-office processes all the business we do, but it is increasingly moving offshore to India.
IT
This is a huge area in banking, and one of the ways firms differentiate themselves. We had 10,000 plus IT guys in Europe. If you have genuine IT coding experience, website creation or development skills, this is an area well worth applying for.
I hope you can see that within investment banking there are a lot of different roles, and some may suit you better than others. Be very careful which division you apply for, as doing something you hate for years is a waste of your life.
Now, how do you get into investment banking?
Top Tips
You should apply to all the investment banks located in London. Don’t just focus on the top 6, the smaller ones are also worth applying to. Clearly, the application process is very time-consuming so get ahead - use the summer break to prepare well.
If you are in year one, apply for Spring weeks, it is a crucial first step.
If you are in year two, apply for internships. One-third of our second year interns were offered full-time positions at the bank. This takes considerable pressure off of you during your final year. The amount of time spent on job applications and interview preparation should be double or triple the amount of time you think you should dedicate to them. A career in banking could end up paying you millions so give it your all when preparing. Think of final exams level of preparation and revision. You are up against the best of the best. You need to produce your A* magna cum laude game.
Study each of the firms very well. Learn the specialities of excellence of those different firms. You should also learn the names of the heads of each bank and key senior management, especially those located in London.
Write Faultless CVs with No Typos. No lies.
Remember your CV is an application for a banking role specifically. You need to tailor it to the job (i.e. banking) you are applying for.
If there are holes in your CV, fill them. Get involved in finance societies, get appropriate work experience, excel at what you do, find your niche and stand out from the crowd. You need to sell yourself hard. Think about what is unique about you and highlight your problem-solving skills. At this stage, just having a 2:1 or a 1st is not enough.
If you’re currently completing a degree that does not involve maths, or you have not studied maths since you were 16, you need to get back up to speed ASAP. You do not need to familiarise yourself with crazy algorithms, but you need to be comfortable with the rapid use of numbers and IQ type challenges. You will need these when you are called to assessment centres as part of your application.
Multi-Round Interviews.
You must practice, practice and practice your answer. Video yourself answering mock interview questions, and play your answers back. Be very self-critical here. If you are not convinced by listening to your answers, neither will your interviewer. Repeat and repeat until you are convinced to listen back. Exceptional communication skills are needed if you are to be accepted.
Wear smart and conservative clothing. If you are not used to suits, wear them for a few days to get comfortable. Stick to darker blue or dark grey colour choices and avoid brown shoes. For ladies, wear sensible shoes. You should dress this way, even if they are video Zoom interviews.
Remember the interview is your chance to convince the people sitting in front of you that you are the right candidate for the job. Sell yourself hard and convince them. If you are shy, try to change that.
While investment is about individuals working individually very hard, it is also about pulling together as a team. Much of the interviewer’s time will be spent assessing whether they can see you being an effective member of their teams.
Brush up on your commercial awareness. Have knowledge and opinions about what is currently happening in the economy and know what the world’s central banks are doing.
Finally, you need to be lucky. The odds of getting in are roughly 100-1, so however strong a candidate you are, you need a liberal sprinkling of luck in the end.