1.      Prepare

Do your homework. Research the company you applied to and study their history, work ethics, business partners and business deals. Most investment banks are focused on target schools and usually conduct interviews through your school career center. Be sure to regularly check the available positions and opportunities with your school career counselor.

If you are not coming from a target school, the hunt for an interview is slightly harder, but not impossible. Reach out to your career center and find out if they can introduce you to alums. Join a local networking society and try to meet as many people as possible.

LinkedIn is a great source of network connections. Use the LinkedIn groups and reach out to people that are working in the industry. Briefly introduce yourself and express your desire to find out more about any career opportunities.

2.      Master Networking

The interview is a series of questions you are supposed to answer. It’s an active exchange of specific information. The more you get, the better. But be sure to not drown your interviewer with non-relevant information about yourself. Stick to the one that will help you career-wise, like your interpersonal skills and knowledge about investment banking.

3.      Don’t ask for a job on the spot

Sales rule number 1: the one to speak first, loses. So, don’t ask for a job on the spot. Keep the networking flow steady and actively engage in the conversation with relevant questions and brief answers. Don’t overwhelm your interlocutor with excess information.

4.      Enroll Investment Banking Training

Don’t get scared away if you lack a practical knowledge. Enrolling an investment banking training <insert link to training classes> will help you sort out the theoretical information and will put it to work. Investment banking classes are usually led by industry experienced and seasoned instructors. This advantage gives you the incredible opportunity to learn from the best all the tricks you don’t get to learn at school.

5.      Be present

Get up. Dress up. Show up. Always.

THE RISING STAR OF SINGAPORE

There are a few reasons why Singapore has turned into a hub for Asia’s richest (and their money), the most obvious being the city’s strategic location in the Asia-Pacific region. The stability offered by the country’s government is another favorable factor, especially given that this is not always the case with other Southeast Asian nations.

Additionally, Singapore has turned into a tax haven on account of its low tax rate on personal income and tax exemptions on foreign-based income and capital gains. Reuters last year quoted data compiled by PricewaterhouseCoopers as part of its Global Private Banking and Wealth Management Survey as showing that the city is well on its way to dethrone Switzerland by 2015 as the world’s top center for managing international funds amid a global tax crackdown and tighter regulation poised to erode the Alpine nation’s appeal as a tax haven.

And last but not least, Singapore has also taken care to make the rich feel “at home”, accommodating their needs with the appropriate infrastructure, including high-end shopping, hotels, restaurants and entertainment.

INVESTMENT BANKERS’ PARADISE

So, with billions of dollars (or rather, billionaires) lying around, it is only natural to have the appropriate quantity of investment bankers to handle all that money.

Citi, for instance, has been present in the country since 1902, and as noted on the bank’s website, its Private Bank and International Personal Bank make the company Singapore’s largest banking employer. JPMorgan has also chosen its Singapore office as a hub for its operations in South East Asia, as well as an Asia Pacific head office for a number of business lines and corporate support functions.

European giants such as BNP Paribas have also established presence in Singapore, while London-listed Standard Chartered and HSBC have long traditions in the city, with Standard Chartered opening its first office there in 1859, followed by HSBC in 1877.

On account of its proximity to Australia, Singapore is also a preferred location for Westpac whose head office in Asia is located in the city, as well as ANZ which opened an office in Singapore in 1974.

An interesting survey by financial services recruitment firm Astbury Marsden which made the headlines at the end of 2012 showed that investment bankers in the UK favored working in Singapore rather than in New York or London.

“A fast growing, low tax and bank friendly environment like Singapore stands as a perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York,” Mark Cameron, chief operating officer at Astbury Marsden, commented at the time, as quoted by the Financial Times. “Far more London-based bankers are now more willing and able to relocate the 6,700 miles to Singapore.”

PRIVATE EQUITY AND VENTURE CAPITAL CATCHING UP

It is, however, not only investment bankers that would gladly relocate to Singapore in a heartbeat. The abovementioned tax exemptions are one of the factors which have made the city particularly attractive for private equity firms. Singapore has in fact developed into one of Asia’s leading asset management hubs over the last decade. According to the September 2014 edition of Ernst & Young’s “Asia-Pacific Private Equity Tax Newsletter,” the industry’s assets under management in the city have grown almost fourfold to $1.34 trillion since 2002, while the number of investment professionals has tripled to 3,052 in 2011.

And as if investment banking and private equity weren’t enough, Singapore is also well on its way to establishing its own Silicon Valley with the government pumping millions of dollars for early-stage startups. In February 2014, the Wall Street Journal quoted data from Hong Kong-based Asian Venture Capital Journal as showing that venture capital invested in Singaporean tech firms by funds had totaled $1.71 billion in 2013.

PARADISE FOUND

As is the case with landing a job anywhere in the investment banking industry, you would still have to go through a lot of hoops, including lengthy application and investment banking interview processes before you can buy a one-way ticket to Singapore. You’ll also need to brush up on your financial modeling skills in order to compete for high paying investment banking jobs.

Still, if you don’t mind adding a little bit of exotic flavor to your investment banking career, the sheer amount of opportunities Singapore offers will more than make up for your efforts.

QUESTIONS ASKED AT AN INVESTMENT BANKING INTERVIEW

Any aspiring investment bankers successfully arrive to their IB interview insufficiently prepared for the different kinds of questions they’ll encounter. In this article, we try to provide you a brief outline of what questions to expect during an interview and how to approach them.

Questions interviewers have in store for you seek to ascertain two things about your candidacy:

• Would you fit in?
• Can you do the job?

Thus, broadly, there are two main types of questions you will encounter during your interview: (1) personal questions (Qualitative) and (2) technical questions (Quantitative).

Personal Questions

Personal questions give the interviewer an opportunity to find out about your attitude and to assess whether you are right for the company. We can further break down personal questions into two sub-categories: (1) “background story” questions and (2) general ‘fit’ questions.

Background Story

 Almost every interview starts with a question on your background. Whatever form it takes (“Tell me about yourself”, “Walk me through your resume” etc.), it is by far the most important question you’ll be asked. Interviewers make up their mind about a candidate in the first few minutes of the conversation. Your answer to this question should be logically structured, coherent, and concise. It shouldn’t take longer than 2-3 minutes, so write down your story and practice it to perfection. Here is a simple structure you can use to formulate your answer:

1. Your back story (school / university / prior career)
2. Why you’re interested in finance
3. Why you’re interested specifically in investment banking
4. Why this investment banking firm

A good story should exude enthusiasm and confidence and should leave no doubt as to the motivation behind your career choice as well as why this firm is the right fit for you. Make sure that you do some research on this particular firm before you get to the interview.

Fit Questions

 The fit questions are the other type of personal questions you’ll be asked. As the name suggests, they seek to establish a fit within the company. Investment banking positions involve working long hours with a team of other investment bankers. Therefore, recruiters want to ensure that burning the midnight oil with you won’t make the job intolerable. Senior bankers tend to ask more of these questions, and since they’re the ones making the decisions at the end of the day, acing these questions is crucial.

It’s hard to categorize all the fit questions that could be thrown at you. The best thing to do is remember to relax and be yourself. You should also read as many sample questions as you can and prepare several short stories from your experience that demonstrate abilities and skills required for the position. Don’t be boastful as you could come across as dishonest. Remember, the very fact that you got an interview invitation means that recruiters already believe you’ve got what it takes – you just need to justify that vote of confidence.

Technical Questions

Technical questions are your chance to demonstrate how well prepared for the job you are. These questions are most often asked during the earlier rounds of the process when interviewing with junior investment bankers because they tend to have a more technical focus in their day-to-day lives at the investment bank.

You can expect three main types of technical questions:

1. Accounting and Financial Statements
2. Valuation Methodology
3. Financial Modeling

1. Accounting and Financial Statements Questions

 For these questions you need to know your way around the 3 main financial statements; namely, balance sheet, cash flow statement, and income statement. You’ll also need to know how these 3 statements interconnect. The most common example of an accounting question involves explaining the effect that a change in one of the statements has throughout the others.

Example: Assuming a tax rate of 30%, what happens to the other financial statements if $100 is added as a depreciation expense to the income statement?

2. Valuation Questions

 Valuing companies and projects form the core of a junior investment banker’s duties, so expect interviews to cover this skill extensively. In order to prepare effectively, as a minimum you need to have a good grasp of the three main valuation methodologies:

1. Precedent Transaction Methodology
2. Comparable Company Methodology
3. Discounted Cash Flow Methodology

Make sure to know the differences in outcome that each method is likely to produce. Also make sure to know how all three methodologies are used together to form a conclusive valuation.

3. Financial Modeling Questions

 Modeling is the other core skill an investment banker needs to possess. Modeling interview questions usually revolve around either M&A or LBO models.

Mergers and Acquisitions (M&A) Modeling

 The purpose of a merger model is to demonstrate the impact of an acquisition to the earnings per share (EPS) of the acquiring company. You will need to consider whether the transaction is “accretive” (new EPS is higher) or “dilutive” (new EPS is lower). Needless to say, you will have to know very well what the EPS depends on. Especially, you need to know your way around the different financing options for the acquisition (debt, shares, and/or cash) and how each of them affects EPS. Thus, you have to be ready to make a reasoned conclusion as to the optimal financing solution for an acquisition.

Example: What can cause an EPS dilution in an M&A transaction?

Leveraged Buy-Out (LBO) Modeling

 Interviewers will test your understanding of the mechanics of a Leveraged Buy-Out (LBO) Model. The most typical question is simply “Walk me through an LBO model”. The key to approaching this question is to keep your answer fairly simple. Here is a three-step structure you can use to formulate your response:

1. Lay out the transaction assumptions: involves creating a table of sources and uses (with sources = uses). The uses section outlines the total purchase cost (expressed as a multiple of EBITDA). The sources section outlines how the transaction will be financed.

2. Build an integrated cash flow model: here you need to project the company’s financial statements for a stated period of time including the repayment schedule resulting from new assumed debt.

3. Calculate the company’s IRR: assuming the same EBITDA multiple which the company was purchased, calculate the PE firm’s equity stake. From there, the IRR can be derived.

Example: If in an LBO analysis the Private Equity firm’s return is too low, what drivers will increase the return?

Final Investment Banking Interview Tips

Preparing thoroughly for all kinds of questions is an absolute prerequisite if you want to get that high paying investment banking job.

Keep in mind, though, that when it comes to technical questions, graduating from an academic institution often times is not enough. A lot of candidates fresh out of a Bachelor’s or MBA program have substantial financial knowledge, but they lack the practical skills of financial modeling and valuation. Ensure that your skill set is in order before attending any investment banking interview.

Once you’re fully prepared with investment banking interview questions, please remember to relax and be yourself.

Happy interviewing!

Although you have done a great job getting this far, so have countless numbers of other applicants who are equally determined to get that cherished investment banking job. Your true initiation lies in setting yourself apart from the competition during the interview process. What this article will outline is what to expect at the interview stage of the selection process in the investment banking industry.

Investment Banking Interview Process in the United States

Though the interview process will be virtually the same at an investment bank, private equity firm, hedge fund, or asset management firm, there are differences between the interview process in the US and elsewhere. Upon receiving an interview offer in the US, you will typically be required to go through the following:

1. First-round interview: These are generally conducted over the phone or, if you are studying at a target university, in-person at your campus. You will be interviewed by a junior banker, and the interview will focus on technical questions to ensure you have the finance skills required (also because financial models and valuations are on a junior banker’s mind all the time anyway).

2. Superday interviews and second-round interviews: While the first round interview is mostly about measuring a candidate’s intelligence, the second round or Superday interview is going to rigorously test the candidate’s technical abilities, see how the candidate responds under pressure, and find out if they can get along with the rest of the team. This is a very difficult interview and preparation is key.

Superday interviews: If you ace the first-round interview, you will be invited to a series of interviews held at the bank’s premises that can last an entire day, though generally take upabout half aday. Expect to be interviewed at least 3 times (and as many as 7) by at least one banker from each rank: from Analyst to Managing Director,but not necessarily in an increasing order of seniority. Each interview will take about half an hour. Prepare to be put through the wringer with all types of technical, personal and behavioral questions. The technical portion of the interview process is not for the faint of heart.You will go head-to-head with a senior banker who is trying to find the ceiling of your financial prowess.

Second interviews: Though a Superday is the norm in the industry, some investment banking firms prefer a simpler process of a second/final interview. Whereas the content is much the same, these interviews are usually over in about an hour and are conducted by a combination of a Managing Director, Associate and/or Analyst.

3. Make a great impression on all your interviewers: you are more than likely to receive an offer.

*Note: The interview process is fundamentally the same whether applying for an Internship or an Analyst/Associate position.

Investment Banking Interview Process Outside the United States

The first round of interviews will be the same globally, so allow us to elaborate more on the second round of interviews for you. Though internationally the trend is shifting toward more Superday interviews, currently, there is one notable difference between the US and the rest of the world. Instead of the Superday, you will be asked to go through an Assessment Center.

The Assessment Center generally lasts 1-2 days and is designed to assess the candidate’s technical and personal skills with a series of aptitude tests and exercises including input in case studies and presentations. The applicant will interview and be assessed both as an individual and as a part of a team with other candidates. It goes without saying that this is an exhausting process which will test the limits of the candidate’s abilities. Just like the Superday, preparation for the Assessment Center is key.

After the Assessment Center interviews are conducted, an offer is extended to successful candidates.

What’s It All Mean?

Regardless of whether you’re applying with an US-based firm or looking to join a local company elsewhere, investment banking will always be one of the most competitive fields to enter – even more so today when companies are eager to recruit the best and brightest and the competition is fierce. Mind numbing is a phrase often associated.

To put it simply, it’s not going to be easy, and preparation is key. The interviews you’ll be sitting for are the single most important part of your application process and you’ll have to demonstrate your aptitude.

Remember, networking and soft skills will get you an interview and are important factors, but hard technical skills will get you the job. Interviewers won’t dwell too much on school grades or what you’ve been doing to this point, but on how much value you can add to their firm. What you can expect at an investment banking interview is to be scrutinized by your future co-workers who have to ensure you are prepared to produce from Day 1. This is why you should expect your investment banking interview to be intense, professional and rewarding – just like a career in investment banking.

Happy Interviewing!