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Investment Banking Interview Questions

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-You can "burn the midnight oil" - you work hard, consistently.



-You "don't shake the Jello" - you do not make mistakes.

-You "want to be Gordon Gekko" - you love business and finance.

Burn The Midnight Oil

More than just claiming you "work really hard" you need very specific stories here. When I was interviewing for these jobs in my senior year of college I discussed my experience working at a big company and how I regularly put in 100 hours a week and lived at the office toward the end of my internship there.

How can you show just how hard you work?

-Starting your own company: Not even banking is this much work.

-Taking leadership of a large project that takes several months to complete.

-Working 2-3 jobs at once and multi-tasking all the time.

-Running a political campaign over many months.

Don't talk about Finals Week or how you worked hard for 1-2 weeks with something. In banking you'll often be exhausted for months at a time, so come up with something at least this long in duration.

Don't Shake The Jello

As a junior investment banker, your most important duty will be checking numbers and not making mistakes. As with showing your interviewers that you can burn the midnight oil, you need specific stories here to stand out.

The way to show your attention to detail is by emphasizing that whatever you did was used by real, paying customers or read/viewed by a lot of people. Having wide exposure implies that you had to get your work right.

A perfect example of this kind of experience would be running a website or publication with thousands of daily readers. If you were editor of this publication, you would have to spend hours checking for mistakes and errors before publishing anything. And by relaying such a story, you could get across your leadership abilities as well.

If you have nothing like this, make a list of every single organization you've been in and every single project you've worked on over the past 3-4 years. Find the one where you were most attentive to detail and speak to that.

Want To Be Gordon Gekko

Even if you're not quite Mr. Gekko himself, you have to convince me that you're actually interested in finance.

This sounds elementary but you'd be surprised how many people don't do this. Why are you applying for this job if you're not interested in it? Yes, it pays a lot of money but you'll never be able to stick with it unless you're genuinely interested in the industry.

Here's an example dialog showing how to convey your interest in an industry:

Interviewer: "Tell me about a market you're interested in."

You: "I really enjoy following the alternative energy industry because it's so new. There has been a lot of activity lately in the solar cell manufacturer sector, driven by technological breakthroughs and favorable government subsidies worldwide."

Interviewer: "Did you invest in any companies? It seems like there's a lot of hype surrounding everything solar."

You: "I agree, most solar companies are overvalued. After researching the major companies, I invested in Solar Company X a year ago. They were trading at a discount to their competitors, despite growing at a 50% rate with 10% profit margins. And their Price To Earnings ratio was only around 30 rather than the 40 to 50 other companies had."

Interviewer: "Sounds good, but why were they valued so much lower than the competition?"

You: "They came in below earnings expectations just before I invested, and announced expansion plans and new capital expenditures at the same time. Investors questioned why they were spending more and more on product development when they were getting less profitable."

Interviewer: "So why did you invest anyway?"

You: "I found a much stronger correlation between annual stock returns and growth compared to profitability. Investors were focusing on short-term results instead of thinking long-term and looking at other companies in the industry. It is a nascent, high-growth industry so growth matters more than short-term profits."

This response shows you've put some thought into this stock pick and can explain in simple terms the qualitative and quantitative reasons for investing.

It's important to do both because candidates often focus on one or the other without considering the whole picture.
Investment Banking Interview Questions
Who Calls The Shots

Unlike the resume review process, Managing Directors are actually involved in handing out offers. HR does very little aside from scheduling the interviews - usually the MDs even tell them how many Analysts they need.

Typically everyone from Analyst to Managing Director will interview candidates. Everyone does have a say, but it's ultimately up to the Managing Director who gets hired.

Sure, junior people can disagree with something or try to push back, but the Managing Directors can never be overruled. This is investment banking, after all.

The Selection Process

After the first round of interviews, the interviewers decide who they want to invite back for Superday - where 10-20 candidates are interviewed and final decisions are made.

Sometimes there are too many people and not enough slots. In this case we'll give interviews to the best few and put everyone else on the waiting list.

During Superday, each interviewer will evaluate different qualities -leadership, drive, technical skills, for example. Candidates are not necessarily ranked on these, but we have an idea of who was the best in each area.

Afterward, HR gathers everyone for a debrief and sees what people thought. Usually consensus emerges pretty quickly on who we give offers to, who goes on the waiting list and who is rejected.

Very rarely are we overwhelmed with star prospective bankers. Most of the time we are only impressed with 1 or 2 people.

How Many Get Selected

In general, we receive 500-1000 resumes for 30-50 interview spots, then give Superday interviews to 10 of those 30-50. Then we pick 2-3 of those to actually receive offers.

These odds don't look great, but most people we interview do not stand out and you can greatly improve your chances just by practicing and knowing what to expect.

What We Look For In Candidates

We look for people who really, really want the job and will do anything to get it.

Some interviewees are doing it just to test the waters and don't really know what they're getting into. Bankers can spot people like this from a mile away. Don't be one of them.

Prove that you can work hard on very little sleep, learn quickly, play well in teams and are hungry to get experience and you will get offers.
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Ian Spellfield has sinced written about articles on various topics from Pets, Social Issues and Culture and Society. Ian Spellfield, a former investment banker, advises students and young professionals on understanding investment banking and how to get an investment banking summer internship.. Ian Spellfield's top article generates over 12100 views. Bookmark Ian Spellfield to your Favourites.
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