How do you get hired as an investment banking analyst?
In London, most of the analysts are hired from the best undergraduate and masters degree programmes at top universities across Europe – everyone except MBA programme and some PhD programme graduates (who will join as associates). Analysts can get their offer after a successful internship that was done during their studies, or directly after going through investment banking assessment centres. Students that get an offer will start as a “first year analysts” and join an intense training programme called the “analyst graduate programme” before starting at their desk, typically in August or September. Generally, banks will try to hire at least 70% of their first year analysts through their internship programmes, and the remaining 30% will come from the assessment centers and also headhunter referrals (some headhunters specialise in helping banks finding junior analysts), and from applications from experienced professionals that spent one or two years in non-M&A jobs but that have relevant skills for M&A (i.e accountants, lawyers, traders or equity research analysts).
What does an investment banking analyst do everyday?
Research work: finding and organising data, in excel or powerpoint, from the Internet and the multiple databases that the bank has access to. This can be finding the number of mobile phone subscribers in Lithuania, finding the shareholders of a specific company, or finding out what are the top five companies selling oil pipes in Europe.
Benchmarking: "comparison" tasks such as comparing the Revenue growth EBITDA margin of the top 25 companies luxury goods retailers in the UK, or comparing the number of hospital beds of all European hospital companies.
Profiles: preparing a powerpoint presentation (usually one or two slides) about a specific company, including business and product description, market shares, latest financials, share price performance, key management bios, calculation of trading multiples, etc. It is not uncommon to be asked to do this for twenty companies, or even more.
Preparing “Pitchbooks”. 'Pitchbook' is a fancy word for powerpoint presentations that are shown to clients to try to obtain their business. As an analyst you will be asked to create slides that will include various financial analysis, profiles, a presentation about the bank, and recommendations to the client.
Financial modelling: analysts will take the first shot at building merger models, discounted cashflow valuations and LBO models, but associates will always review them extensively once the “architecture” of the model is laid down.
Comparables ("comps"): analysts will have to create and update large databases of "comparable multiples", such as price to equity ratios and EV/EBITDA ratios for a wide range of companies. This involves updating share prices, updating new financials when they are released, calculating net debt and doing a number of accounting adjustments.
Admin work: taking notes at meetings, organising conference calls, preparing internal documents, literally running around to print and carry the books before presentations, printing and checking documents for associates, VPs, directors or managing directors.
Who do investment banking analysts work with?
90% of the time you will receive work from an associate who will be in charge of giving you guidance on how to do the work, checking it and giving you further comments to process. You may end up working with more senior people, but this will be more the exception than the rule. Depending on your relationship with your associate they can be your best friends or worst enemy. Some associates will dump a lot of work on you (you will quickly find out that every person who is your superior has the right to dump work on you), but almost all of them will teach you how to do a good job as an analyst and will be very valuable resources. They are usually tough, but don't forget that while associates may dump a lot of work on you, they have tremendous pressure from VPs, directors and managing directors.
Do Investment Banking Analysts work long hours?
Of course. A typical analyst days starts at 9.30am, and ends usually around 10-11pm on a good day, or 3-4am on a busy day. An “all-nighter”is when you do not go back home and work through the night until the following morning; this will definitely happen to you at some point. You will also spend most of your weekends in the office (not all of them though – you will get a break from time to time), although weekend work is much lighter and you will only be in for 4-5 hours. Overall, expect to work a minimum of 70 and up to 100-110 hours per week. The better the investment bank (from league table perspective) the worse the hours, because they will be extremely busy. However, every year that you spend in banking will get better working-hours wise. You can manage to maintain a social life, but spare time will be scarce and you will have to learn how to manage your time efficiently. What usually happens is that other analysts will become your best friends and you will support each other through the difficult times.
When do investment banking analysts get promoted?
The standard is after three years, at which point you become an associate. Some of the best analysts can manage to get promoted after two years (this is called being “fast-tracked”), but it is quite exceptional.