Getting into investment banking without any type of previous relent work experience can be an uphill battle but don’t worry many have done it before you and many will after you. The only question will you take the necessary steps required to be part of the few who make into into investment banking.
Similar to our article on how to break into investment banking with work experience, there are pre-application or pre-recruitment preparation required to make sure you tick all the right boxes and to give you the best shot possible at landing one of the most lucrative roles in finance. See our original article for a full list of what you need to prepare first. In this article we are going to focus more the options available to you given your situations and how to improve your odds at breaking in successfully.
Investment Banking Entry Route
Scenario 1 – Student without experience seeking internships
Scenario 2 – Recent graduates seeking Analyst or Associate Roles without relevant experience
Scenario 3 – Looking to transition or transfer without relevant experience
Scenario 4 – Considering alternative an easier options without relevant experience
Investment Banking Entry Requirements
Before we begin our journey into investment banking lets take a step back and look to see if investment banking if even right for you, because unfortunately, investment banking isn’t for everyone.
Although, I have already covered this topic in detail listing all 7 criteria, essentially if you are going to break into investment banking you will have to satisfy two essential questions which every recruiter is wondering when considering a potential candidate.
The first, will I want this candidates to work for me? In other words will this person do a good job? do they have the right attitude? Does this person have the necessary technical skills to do the job?
The second, will I want to spend time next to this person? In other words if I am going to be stuck with this person for 12 hours a day in the office, will I enjoy his/ her company? Will the candidate be fun to conversate with or boring and make me regret hiring this person?
Even without experience you will have to satisfy both questions and where you lack in the experience department you will have to make up else where which is what we are going to cover here.
Pre-Investment Banking Application
The more you prepare now the better your chances are at getting into investment banking and specially for a candidate without work experience and or poor grades. How you approach this will depend on your age and experience so let’s separate this by your current status, student, recently graduates and graduates with 2+ years of experience.
Currently Still A Student
If you have little to zero professional work experience and poor grades then applying for an internship at an elite bank will be very difficult given the level of competition and instead you should focus on boutique banks and related areas to investment banking. Consider applying to any firm which offer investment banking transaction experience e.g. Private Placements, Private Equity, Valuations, M&A contracts, M&A related roles, Equity based strategy Hedge Funds…etc.
Here networking will help so you have to get started right away and embrace nepotism, call all your first point of contact .
Routes into Investment Banking
Scenario 1: Applying for an internship without experience
Seeking an internship has effectively become a formal part of the full time recruitment cycle for candidates serious about getting into investment banking. And, for good reasons, almost 50% of full-time analyst and associate cohorts were offers extended to summer interns.
As a result, the recruitment process (interview questions and previous work experience) for internships has now become very similar to the requirements of a full time role. However, for internships roles there are less interview rounds then full time roles.
If you are struggling to land an investment banking internship then consider the following industries which will provide very similar experience and sometimes even better experience if you can prove that you are capable of more work. Consider any industry which has a significant overlap or deals directly with investment bankers e.g. Private Equity, Venture Capital, Corporate Development, Hedge Funds, Private Placement, Trade Financing, Management Consulting, Corporate Banking…etc
The obvious types of firms you should be targeting are not the large international firms but instead the smaller boutiques which are listed on page 6+ on google which hardly gets any hit as nobody bothers to go beyond page 3 on google. These firms are often unable to hire an intern, if that is the case then you might want to suggest to them that you want to volunteer your services so long as you get a lot of experience. Take a look at our database of over 8,000+ investment banking boutiques included in the interview guide which list the banks names and contact details to make this step easier.
If you are still unable to secure a related internship or work experience opportunity then consider the emergency work experience program which is very effective specially if you have zero previous experience. The idea here is to volunteer your services at start-up companies who have recently raised venture capital funding. Although these companies might not offer relevant investment banking experience but the experience that you develop here can land you an internship or an off-cycle internship which would materialise in a full time offer. Take a look at our dedicated article on this for a step-by-step instruction on how this works.
As a side not although it is always recommended to apply with relevant work experience, this does not apply to everyone. Some candidates might have developed their interest for investment banking whilst studying a very focused and intensive subject e.g. medicine. In this case, investment bankers are willing to overlook your previous lack of work experience because the candidate poses a specific skill set to analyse pharmaceuticals companies which your regular analyst from a finance background wont have.
This also means you will have to prepare an answer as to why you don’t have a summer internship?
Applying for Internships (Only UK & EU applicants)
For those applying from the Europe, UK, some parts of Asia and Africa, what is becoming increasing more common are spring internships and winter internships which are effectively a 2 week program which is design to give you a taste of what working at an investment bank is really like.
These will take place during April – May for spring and December – January for winter internships. Candidates who are successful during their spring internships in standing out and perfuming the little work they are given are often offered a summer internship.
Route 2: Recent graduate seeking analyst or associate roles
For those who did not manage to get a summer internship, then another outlet are off cycle internships which are similar to regular internships but they occur during term time and offers canidates a lot more expeirence whcih are compatable to a full time analyst.
This is where you can start to see the differences between the American style and the European style of recruitment. Lets, start with the European style for once, to apply for off cycle internships you have two options.
Firstly, industrial placements or long-term internships which can be anything from 6 to 12 months and takes place after the second year and before final year of university.
This type of off cycle internship, although not as competitive as the summer programs since not everyone wants to take a whole year out to do an internship working investment banking hours for half the pay. This disincentive opportunity cost creates opportunities for those who really want it.
The second type of off cycle internships are for those who have already graduated and seeking longer term internship programs, these are usually only a 6 months program and are a cross between summer internship and industrial placements because they occur during term time and the pay is weak but the hours are like a full time analyst.
This is ideal for candidates about to embark on a master’s program or simply seeking to try investment banking but do not want to commit to anything after they have graduated. These programs are clearly visible on each banks online recruitment platforms.
The American style of off cycle internships, although not generally advertised at all banks – you would have to find them online or more likely network and ask for these roles, also falls into two category.
First, one type are for candidates who have graduated, these off cycle internships roles which can last anywhere from 6 to 12 months or sometimes even longer (as long as the bank can get away with paying someone an interns salary to do an analyst’s role they will).
The second, more exclusive to the American style of recruitment which is a 20 – 30 hour work week internship, where candidates will attend classes and work part time at the bank. This is very stressful and can cause some conflict with your schedule.
This type of internship, admittedly is by far the hardest but will genuinely demonstrate the ability to perform well under pressure by being active at work and school and you must have a deep interest and passion to become an investment banker to embark on this type of work experience.
The easiest route into investment banking
Currently off cycle internships are one of the easiest routes into investment banking because they do not require any psychometric testing or competing against 250,000 other candidates for the same role or going through multiple rounds of interviews (usually).
Although the barrier of entry is low, you are expected to know how to build financial models and answer technical questions like an analyst because you won’t get the same training as those on the regular program.
Off cycle internships can arise at any moment e.g. when someone suddenly leaves or someone gets fired from the bank, and the banks desperately need someone ASAP, they usually go for an off-cycle intern. The goal of this is of course to be given a full-time role.
Route 3: Full time Analyst & Associate Roles
Undergraduate students and post-graduate Masters students will be applying for full time analyst roles. Candidates applying for the associate roles are generally MBA students from a prestigious business school or an analyst with at least two years of experience from one bank applying to a different bank for whatever reason.
As already mentioned, the recruitment style will be very similar to the internships in the local country. The region from where you are applying from will dictate the opportunities and difficulty you will have when applying into investment banking.
Some notable regional difference are Australia with virtually no Associate style of recruitment only analyst, South African and India allows chartered accountants to also apply for analyst and sometimes associate roles (increased competition), Germany and a few western European countries have a strong preference for finance candidates where as the UK and the US is indifferent of candidate’s backgrounds.
European / UK / Middle East / Asia / Africa – Recruitment Style
In the European style of recruitment where candidates can only apply online, this limits the effectiveness of networking, in fact networking to get into a bulge bracket bank or elite boutique bank does not work in the UK or Europe.
Networking in Europe or the UK is only effective for smaller boutiques which does not have a formal recruitment process.
Almost every bulge bracket bank and elite boutique banks will require candidates to apply online and submit their resume/CV and cover letter along with answering a few motivational and behavioural questions which you can see from our behavioural guide.
Once submitted, candidates will be prompted to complete a numerical, verbal and graphical psychometric test. Depending on the psychometric test results your application will either be seen or not by a member of the HR team.
HR will initially go through your application and out of 100 immediately eliminate 50% for obvious errors and lack of experience, after another 30% for the smallest reasons e.g. bad formatting. Candidates will be invited for a first-round interview or some will have to pass a phone interview before they get invited to the first round interviews at the office.
First round interviews are usually 4 (more or less) back-to-back interviews with analyst and associates at the bank, each interviewer going through your resume with a thin tooth comb and unleashing a torrent of technical questions which you will have to answer correctly.
Those successful will be invited to an assessment centre.
Assessment centres are where candidates will have to complete group tasks, presentation and complete an e-tray of numerical and verbal tests to confirm it was the candidate who did the psychometric screening during the application stage.
Successful candidates will either be given an offer or some will be invited back for a final interview with senior bankers, at this points its just motivational and behavioural questions to see if you’ll be a fit for the group.
On campus recruitment events (OCR)
With the American style of recruitment for full time roles, almost all of the bulge bracket bank and elite boutique banks will typically come to a select number of undergraduate universities and business schools campuses each year to recruit both analyst and associates.
We’ll refer to school which investment banks target as “target schools” and they typically recruit at an average of 10 – 15 schools and business schools.
The process of on campus recruitment abbreviated as (OCR) usually occurs in the fall, investment banks will come to companies to deliver presentation lighting how great their banks are, and answer any questions from prospects.
Theses events are also a great opportunity for bankers to identify early talent, so later in during September and October they will be the first candidates to be invited for first round interviews on campus.
Bankers will select who received these first-round interview slots which are incredibly competitive. Some university also have a lottery system which will allocate a certain number of under privilege or random candidates to these first round interview slots (not all universities follow this system).
The students selected will have one to two 30 minutes first round interview on campus. Second and final round interviews will be held at the investment bank typically on a Friday or Saturday in what is generally called a “Superday” event.
Banks will normally pay to fly the candidate to the head quarters for a social dinner and the next day have 10 – 12 back to back interviews, each lasting around 30 – 45 minutes. Banks will typically make up their mind as to who will get these offers quickly.
Non-target school
If you are at a university which banks do not actively recruit from then don’t worry, investment banks also take applicants from non-target schools via online application portals and if you are good enough at networking and have connections via family friends to get in front of bankers in your city, you can leverage your network to give you a first round interviews.
Keep in mind that some banks will have a phone or HireVue (Skype type) first round interview before you get invited to the head office for final rounds, this is to make up for the lack of on campus first rounds.
At this point you will be competing against candidates from target schools, but you can easily spin this by saying you had to work harder to get to where you are now then those attending a target school so your drive and passion for banking is absolute.
You might have to cast a wider net in terms of the banks you apply for, and try to target boutique banks in all industries (see our database for a list of banks).
Once you land a role and get some experience you can transition into larger banks, you should ideally view this as a stepping stone if you want to work for larger firms.
SCENARIO 4: Alternative careers to investment banking
Who said investment banking was the end all and be all? typically when analyst have completed one to two years of their program they would either stay on and be promoted to becoming an associate or more likely leave to either do an MBA and to break into Private Equity. Some might not even do an MBA and just get recruited strait out of a bulge bracket back to associate at a PE fund. However, this model is changing.
The good news is that a lot of PE funds are now recruiting at the analyst level and competing head to head with investment banks for the exact same type of candidates. There is almost no difference in terms of the work you will do except when you are at an investment bank you are on the sell side of the deal and when you are at a PE fund you are on the buy side of the deal.
Most undergraduates have not even considered PE as a career because they are so focused on this picture perfect life of becoming an investment banker. The reality is, there is more money on the buy side and right now, it’s its actually easier to break into a PE firm as an analyst then to get into Goldman Sachs as an analyst because of the demand and supply imbalance.
Apart from PE analyst roles there are many other roles which offer similar benefits of working on investment banking transactions such as Private placements, Corporate development, Trade financing and Restructuring. These roles are just as lucrative and can also give you enough experience that in the future if you still want to be an investment banker would make the transition easier.
The reason why investment banking is extremely hard to get into is because of the demand pressure, GS reported receiving over 250,000 applicants per year for junior investment banking roles and only 250 roles were on offer. Hence entry criteria significantly increased, the listed areas which offer similar benefits to IB does not have this level of competition which is ideal if you are struggling to break into the industry.