Ask an Investment Banker

Question

Hello. I am an investment banker in the UK (Equity Division) and have been asked to hold a Q&A, so - any questions - fire away.

Nerdboy · Answer

First question - is the great big M&A comeback happening?

LondonIB · Answer

In a word : no.

August 2009 was the worst month for M&A since 1995, according to Dealogic. (It was still the worst month since 2003.) To the end of August, the total value of deals worldwide was just short of $1.5 trillion, 36% lower than at the same stage last year, and 56% below what it was at the end of August 2007, the record year.

A Kraft bid for Cadbury and a UK tie up of DT and FT's mobile units do not a come-back make.

Corporate activity needs more than two things for levels to pick up. Low rates (we have that), however lending capability is not there and neither is a risk appetite there yet.

I'd also like to make clear that I work in Equity distribution rather than M&A and I am here more to answer questions on careers rather than Finance and economics.

pm4553 · Answer

Could you describe a typical day? i.e # of working hrs, career progression in IB, et cetera.

Thanks for taking out time.

-PM

Moss · Answer

Why did you choose investment banking (I assume you're in corporate finance) over something like S&T or investment analysis? What part of your skill set makes you most compatible with investment banking?

LondonIB · Answer

As I said in an earlier post, I work in distribution, ie Sales & Trading. 
I'm not a Corporate Financier.

Typical day : 6.30/7 am to 6pm earlier if a Corporate doesnt visit, however there are usually sales meetings at market close (4.30pm BST) . Traders and Sales Traders are usually out the door by 5pm however.

I can't really describe a 'typical day', depends on markets, which deals we have on, which meetings are booked but I can attempt a generalisation :

6.30/7.00 am read emails/Bloomberg/Reuters/reports
7 am Morning meeting with inhouse analysts
7.30-12 On the 'phone broking
12-1 Meeting with a client/and or in-house analyst
1-5 Broking
5-6 Evening meeting with visiting Corporate or in-house analyst

And of course you would also have to read research at home, as you'd never be able to keep up.

LondonIB · Answer

Career progression.

This is almost impossible to quantify. There are too many variables.

If one in bright however, and personable, delivers results and most important of all IS ABLE TO GET ON WITH COLLEAGUES AND MANAGEMENT, then an example could be:

1-3 Years Associate
4-5 VP
5-7 Director
7-10 MD

Of course those times can be shorter/longer if one moves from one bank to another if 'poached', so much is circumstantial however, it's impossible to calculate really.

I would repeat however, the main key to success in a financial organisation (in my opinion|) is 'fitting in'. I'm not saying become a robot, lose personality, or that one has to become someone one is not. I'm talking about having the social skills to want other people to want you to be around. It's no use whatsoever in being a high revenue generator if your an ass-hole. You won't get promoted.

Nerdboy · Answer

I heard that investment banks in London are hiring again. Are they re-hiring people who got laid off in 2008, or are they hiring fresh MBA graduates? What are the chances of someone who needs a work permit?

LondonIB · Answer

Yes - there is a lot of hiring going on especially at houses who are building, such as Barcap and Nomura.

They are most likely looking for experienced hires only however, but there is no harm in applying to their MBA programme hire anyway,

Nerdboy · Answer

For an MBA student, how important is networking in order to get a job offer?

Of course networking can never hurt your chances, but what I mean is: will the recuirters care that you met some of their bankers for lunch and they liked you, or is just that by having lunch with those guys you have learned more about the firm?

yangsta8 · Answer

Hi LondonIB, Do you have an MBA? (sorry if that seems a bit direct, ignore it if you want

) And what is the general hiring attitude towards MBA's? What I mean by this is, do they typically target specific top schools such as in your area, LBS? I noticed you said only experienced hires, do you mean by this that regardless of having an MBA or not, you would need experience prior? Thanks in advanced.

LondonIB · Answer

I would say it is important.

Try and make personal connections and then work at cultivating them. The people at the Investment Banks who make the desicions 
will be impressed if people follow up, it shows initiative and will set you apart. It sounds really obvious I know but IB's
want to hire driven people. Any evidence that the candidate is driven will help set apart and as I said earlier, your personality and
how you would fit into a team is probably more important than where you got your MBA from or what your academic qualifications are.

I used to be on the graduate recruitment programme- in that I conducted interviews with grads looking for jobs -
and I made my desicions mainly on personality, character and nous - even more so than academic qualifications.

Another thing I always asked, and again it sounds obvious was : have you ever traded shares before on a PA basis, 
do you read financial press?,etc. and I asked questions and tried to engage candidates in debates about the market. You'd be amazed
how many very qualified grads didnt trade/hadnt traded before for their own account and couldnt engage in a discussion
on what was happening in the markets. DONT be scared of giving 'the wrong answer'. There is no 'wrong answer' as you will
find if you enter the profession. It's an opinion that counts and whether you can back up your ideas that is important.

LondonIB · Answer

I don't have an MBA. I began my career back in 1987, I don't think anyone at the firm I started at knew what an MBA was back then...

With regard to the hiring attitude towards MBA's - depends on the Firm, and who runs the Dept. The American banks are probably more skewed towards looking favourably on candidates who have one. I remember MBA's and an empahsis on them at the American bank I worked at in the 90's. I don't remember many or much focus on them at the European banks I worked at subsequently.

Every top bank has an MBA hiring programme however and I would guess they have a set list of schools they recruit from. You would have to check with each bank directly to see which schools are on their lists. From memory Insead and LBS were/are on the list at the last European bank I worked at.

With regard to experienced hires : In this market, especially where banks such as Barcap and Nomura are building, they want people who are currently in the industry and have at least 5 years experience in their field. These banks want to build quickly and have a 'plug-and-play' organisation. They want to build scale quickly hence, my previous comment about preferring experienced hires. That is only my guess however and I'm sure they also have some MBA slots.

bigfernhead · Answer

Hi London IB -

1. How many more hours do you put in on research when you get home?

2. How important is generating sales when brokering. Do you have a quota?

3. What is the culture like? Do they differ based on different "desks"?

4. Can you describe some of conversations you have on the phone when "brokering"? Are the sales easy/hard?

5. Can you describe the some of the meetings with inhouse analyst/clients?

Thanks.

bb · Answer

Kudos London IB!
Thank you for making this thread happen.I will include it in the weekly newsletter we send out.

Posted from my mobile device

LondonIB · Answer

Depends on workload, can be an hour a week, can be five. It's just reading reports.

Broking IS sales. No hard and fast quota, as retail brokers have, however def have targets that you are expected to meet

Different firms. I could spend a day discussing culture. I'm sure you are aware for example of GS's culture.
Generally European banks have a less aggressive culture, although...again, it's subjective.

You discuss ideas, sell your Co's research, debate on what the market is doing or what news is in the market.
It can be very technical or it can be very broad. Depends on what you are selling.

An analyst will present his research, talk about the salient points for up to 30 mins, followed by Q&A.
When you take an analyst to visit a client, similar but 1-1 so more personal

MAPKYC · Answer

Hi LondonIB,

Thank you for taking the time to help out and give advice.

My questions are in regards to education needed to improve one's chances of getting into banking.

1. How useful is Masters in Finance, as opposed to the MBA to break in the industry?
2. Any thoughts on Frankfurt School of Finance and Banking and EDHEC in France and their Masters of Finance programs?
3. What is your opinion on CFA or CQF certification?

In regards to the future direction of banking.
4. Are there any European cities that you foresee will emerge as banking centers, challenging London?

5. How would you contrast the job markets in London vs. Frankfurt, Moscow or Paris ?

Your answers are appreciated.

Thanks

LondonIB · Answer

Hi MAPKYC

PGY001 · Answer

Hi IBanker...
and thanks for fitting this Q & A into your hectic schedule. I am keen on project financing opportunities in i-banking specifically in the energy sector. How are career prospect in project finance like and which i-banks are noted for their strength in that area.
Brgds

LondonIB · Answer

This isnt really my area, check 
 https://www.projectfinancemagazine.com/default.asp?page=7&PubID=4&ISS=25453&SID=721667&ReturnPage=8

for a 2009 league table of which banks are biggest in this field. I would guess the banks which are strong in emerging markets are the ones to work for.

I couldn't imagine their being too many hiring opps in this area at the moment however whilst banks balance sheets are as they are at the moment.

Why do you want to work in this area, incidentally? My guess would be if this is the area that truly interests you, you'd be better off at quasi Govt finances houses such as the EIB  https://www.eib.org  or the ERBD  https://www.ebrd.com/

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