Investment Banking Case Studies

Investment Banking assessment centers will always include individual and group case studies, which will require some preparation before you can handle those confidently

What are Investment Banking Case Studies?

A case study will consist of a question or several questions that are asked based on a client’s business. You will be given some information about the clients and your task will be to answer those questions, and justify what advice you would give to the client. Most case study exercises happen during the assessment centre day, i.e. you will be given the materials and prepare on the spot. Occasionally, some banks give candidates the case study materials beforehand and you will have some time (usually one night) to prepare.

Why Investment Banking Case Studies?

Interviewers want to put candidates into a “real” business environment to test their capability of handling real work. The case study exercise is a great way to test candidates’ analytical skills, creativity, presentation, communication and people skills! That is why case study usually weights much more than any other interview or test during the investment banking recruitment process.

What are typical Investment Banking Case Study questions?

• Your client A wants to get your opinion on which company they should acquire from 4 companies and why
• Company B needs to raise capital – and they come to you to ask should they raise debt or equity, and what’s the best way to do it
• Company C comes to ask you whether they should expand through acquisitions or organically?

Initial Tips

- Spend the necessary time reading and highlighting what you think is important in the documents you are given

- There will be many opportunities for the interviewers to assess your intellectual skills and motivation, especially in one-on-one interviews and during numerical tests. For oral presentations, rather than testing the actual content of the presentation, it is your physical behaviour and overall attitude that will be the most important points on which you will be assessed

- Be prepared to justify all your main arguments. Remember that sometimes there is no right or wrong answer but you need to be able to articulate your thinking

- Technical parts: generally speaking, don’t expect any excel modelling during case studies in assessment centers. However, if you are given a few days or one night to prepare your case study and asked explicitly to present a valuation in detail, the you will need to build a simple model, but this is rate.

- Do some powerpoint and excel practice beforehand

- Time spent split: 30% preparing/writing, 5% presenting, 25% Q&A; Do leave enough time for Q&A.

Can you give me examples of Investment Banking Case Studies?

Case Study Example 1: SWOT analysis - Individual Exercise

A common case study is question is to prepare a “SWOT” Analysis, which is the acronym for Strengths, Weaknesses, Opportunities and Threats. This could be a question in itself, or part of a larger case study, or even an interview question. A typical question could be:"Here is Vodafone Plc Annual report. You have 1 hour to go through and prepare a SWOT analysis for the company"

Case Study 2 Example 2: M&A recommendations - Group Presentation

"It is Friday afternoon, and Vittorio Colao, CEO of Vodafone, rings you up and wants to set up a meeting first thing on Monday morning. He just heard that Avea, a Turkish company, has come up for sale, and he wants to know what to do. You are one of Vodafone’s most trusted advisors and need to organise your team to prepare this very important presentation. Based on the Vodafone annual report and Avea financials that are provided below, what recommendation would you give to Vittorio? You have 2 hours to prepare a powerpoint presentation to make your recommendations"

For this question, you need to be able to come up with a good presentation structure and address the following points:

- Overview of the Target Company (business description, financials, ownership, positioning)

- Pros and Cons of an acquisition

- M&A considerations (how would the combined company look like, how would you pay - cash or stock)

Case Study 3 Example 2: M&A recommendations - Individual Exercise

After listening to your presentation of Monday, the CEO of Vodafone mentions to you that in fact they have been looking at several acquisitions over the past few weeks. He is under pressure by shareholders to make use of the large cash pile and debt capacity at its disposal to make an acquisition by the end of the year. He is keen on giving you the M&A mandate if you can pick the right acquisition for the company. Some information has been provided to you below about the targets. Based on this, what company would you recommend Vodafone to acquire? You have 1 hour to justify your decision.

For this type of question, there is no strict right or wrong answer, but you need to be able to justify your choice very clearly based on strong arguments. This kind of case study can come as a written individual assignment, or even in the form of a discussion with senior investment bankers. For each potential target, you need to go through a “checklist” of pros and cons, similar to what has been discussed in case 2. During the preparation, go through each checklist point. The basic questions that you need to be answered here are: i) does the acquisition really make sense? and ii) is it practically achievable?

For fully worked out answers to the 3 case studies above, please refer to our investment banking case study guide.