1 - Wharton IB Guide

Wharton Finance Club, 2007-2008

Investment Banking

Resource Guide

“DON’T PANIC”

TABLE OF CONTENTS

1 INTRODUCTION

4

2 “I HAVE NO IDEA WHAT I’M DOING”

5

3 INVESTMENT BANKING IN A NUTSHELL

7

3.1 What is Investment Banking? 7

3.2 Major Players 9

3.3 Internship Structures 11

3.4 Common Associate Tasks and Roles 11

4 RECRUITING COMPONENTS

13

4.1 Time Table 13

4.2 High Touch / Low Touch 16

4.3 Employer Information Sessions (EIS) 17

4.4 Closed List Events 19

4.5 Days On The Job 19

4.6 Informational Interviews 20

4.7 Cover Letters 20

4.8 Resumes 21

4.9 Networking (Phone Calls and Emailing) 22

4.10 Additional Best Practices 23

5 THE INTERVIEW PROCESS

24

5.1 The Interview Schedule

24

5.2 The Bidding Process

25

5.3 Considerations For Interview Scheduling

25

5.4 Interview Types

26

5.5 What Are Interviewers Really Getting At?

28

6 INTERVIEW PREPARATION

32

6.1 Making Your Story / Pitch

33

6.2 Anecdotes 33

6.3 Company Research: Knowing Your Audience

33

6.4 Knowledge Base

35

6.5 Preparations Before DIP Week

36

6.6 Tips for DIP Week

37

6.7 The Interview Rhythm

39

6.8 Calming Your Nerves

39

6.9 Body Language

40

6.10 International Students

41

6.11 Practice Interviewing

42

6.12 Dress 43

6.13 Final Words of Wisdom

46

7 USEFUL RESOURCES

47

7.1 Text Books

47

7.2 Classic Books

47

7.3 Wharton Resources

48

7.4 Websites – Finance, Business and Industry

48

7.5 Websites – Recruiting Related

50

7.6 Journals – Business and Finance

50

8 INTERVIEW QUESTIONS

52

8.1 The Basics

52

8.2 Other Very Likely Questions

55

8.3 Behavioral Questions

57

1 INTRODUCTION

So you’re interested in investment banking? Good for you. We’re here to help.

First the good news: Investment banking is one of the most interesting and

rewarding careers in finance. Bankers travel the world, interact with the most

senior people in business, work with highly talented peers, and constantly take

on new projects in new industries. The banker is an analyst, a strategist, a

salesman, and a negotiator.

Banking is a relentlessly client focused business that is driven by the executions

of deals. Bankers want to be exposed to as many deals, the biggest deals, and

the best deals possible. They want to work at the top of their game alongside

colleagues who excel at what they do.

As a career path, banking is a “stem cell.” That is, starting you career at an

investment bank opens up many different paths ahead of you within finance or

elsewhere. It provides you an opportunity to develop a wide range of skills,

take responsibility early, and become part of the Wall Street deal flow.

Here’s the bad news: the recruiting process is long and intense. It involves a

great deal of self-reflection about who you are and what you want. It also

requires successfully navigating a multipart process to ensure that you can then

get what you want.

This guide is your starting point. Through the years it has been passed from

one generation of Wharton students to the next, constantly being updated and

improved. There is a lot of information, but the guide has been painstakingly

edited to ensure that all the information it contains is current and pertinent.

Between now and the moment you have an offer letter in hand, these pages

will be your compass, guide book, and safety blanket. This guide, along with

the Finance Club’s various educational events and mentoring activities, the

MBA Career Management Office, and your Wharton education should leave you

well prepared to succeed in your quest for summer and full-time employment.

2 “I HAVE NO IDEA WHAT I’M DOING”

As stated previously, DON’T PANIC. You are a Wharton student. Inevitably this means that you are intelligent, hardworking, and obsessively well prepared. You probably hold yourself to higher standards than other people do – and that’s the reason you’re a success. That being said, Wharton will quickly inundate you with an untenable combination of heavy academic lifting, social events, and a busy recruiting calendar. You need to find your way. Here are a few thoughts as you begin your journey:

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Use your time wisely. You will quickly find that you are limited to 24 hours a

day -- despite the fact that you have 30 or 40 hours of activities you’d like to fit into each day. You have to pick and choose to find a pace that works for you. You must also schedule strategically to ensure that you don’t get behind.

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Use the Finance Club’s resources. We provide lots of resources on our

website and a number of educational events for your benefit including Training the Street’s valuation workshop (which should be considered mandatory for those interested in banking). The club will also provide opportunities for you to interact with and get advice from Second Years.

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All of your coursework is important, but Accounting and Finance are the most important for banking. Use your judgment in prioritizing your school

work, but keep in mind that failing to learn your cash flow statement or the leveraging and unlevering of Beta will come back to bite you in the interview.

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Spend some of your time following the markets on a regular basis. Ideally

you’d read the Wall Street Journal every day. But you’re busy. At a minimum, read “Breaking Views” on the back of the Money and Investing Section and check out the “DealBook” section in the New York Times. The technical aspects of banking are accounting and finance, but client interaction is often heavily focused on what’s going on in the market. Your coursework will increase your fluency in the academic areas, but you need to develop your speaking skills in the language of Wall Street.

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Work with your classmates. Planning to tell your interviewers how great you

are on teams? Well start early. Work with people you like, who have similar goals, and who are willing to share information. You can divide up tasks in doing bank research, preparing technical questions, and doing mock interviews with each other. Most successful teams are in the 3-4 person range.

As you go through the recruiting process, concentrate on four key themes: 1. Know your story

2. Form relationships

3. Acquire firm and industry knowledge 4. Master likely interview questions

It is no accident that knowing your story and forming relationships are prioritized above technical questions and even industry knowledge. At the end of the day, banking is a deeply personal business. Getting a job in banking is more like asking someone out on a date than taking a final exam. You can’t win just by studying the practice exams. The human element trumps all else. All the industry knowledge and technical mastery in the world will be inadequate if you can’t clear the hurdle on the interpersonal side.

Getting a job in

banking is more like

asking someone out on

a date than taking a

final exam…

The human element

trumps all else.

Much more about all of this in the pages that follow. But first: What exactly is investment banking?

3 INVESTMENT BANKING IN A NUTSHELL

This section provides a brief introduction to the investment bank. For more information, please refer to the resources listed in the “Useful Resources” section.

3.1 What is Investment Banking?

An “investment bank” is a catchall term that refers to organizations that do some combination of the following functions:

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Provide strategic, financial and valuation advisory services

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Raise capital through the issuance of equity, debt, or hybrid securities

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Advise companies in merger & acquisition and restructuring deals

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Offer specialized products and services that satisfy the needs of corporate and government clients

Essentially, the bank is an intermediary between those who have money (investors) and those who try to put it to use (clients/corporations). Some banks also have private equity investment arms (making banks the investors) and private client services businesses (helping wealthy individuals invest).

Most Wharton students will work in one of the following three general areas: Investment Banking, Capital Markets (fixed income/debt and equities), and Research.

Traditional

Investment Banking

Sales & Trading

Research

•

Capital raising

¾

Debt

•

Analysis and

recommendations of

stocks and bonds

•

Includes company

coverage and sector

coverage

¾

Equity

•

Strategic Advisory

¾

M&A

¾

Restructuring

¾

Takeover

defense

•

Distribution and

execution arm

•

Sells and trades

stocks and bonds

•

Manages the firm’s

risk and makes

markets for

securities the bank

underwrites

The three roles, although different, are heavily interrelated. In a simplified example you have a company that wants to go public. Research analysts provide coverage of industries and companies and help investors process information relating to its businesses. Bankers work on the valuation of the company and facilitate its registration and execution. Capital markets actually prices the security and supports its trading. These same relationships work on a variety of other levels.

The primary work product of investment banks usually takes the form of preparing “discussion materials” or “pitchbooks” which address the needs of clients and possible solutions for those needs. This ongoing conversation with clients comes at great expense to the banks with no other reward than the hope that the relationships built will eventually lead to fee-generating business. Once a client has engaged a bank, the project moves from pitch to deal as the bank works to execute the deal (whether it be a merger, acquisition, equity offering, debt offering, restructuring, or something else). Large investment banks typically organize their

corporate finance functions along product lines (such as Mergers & Acquisitions, Leveraged Finance, and Equity Capital Markets) and industry groups (such as Healthcare, Retail, Industrials, Real Estate, Transportation, Media and Telecommunications, and Technology, etc). Smaller-scale and boutique banks may focus in on particular products or industries.

Banking Dichotomies:

Corp Fin vs. Sales

Bulge vs. Boutique

Product vs. Coverage

Things to consider when recruiting for investment banking:

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Are you interested in capital markets?

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Do you enjoy working on and managing processes and multitasking?

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Are you comfortable with accounting and financial concepts? Do you enjoy working with these concepts daily?

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How much training do you require? In the beginning of your career? Ongoing?

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Initially, are you willing to give up control over your schedule and personal life?

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Do you subscribe to the investment banking lifestyle (client service)?

3.2 Major Players

The major players in investment banking can be classified into three general types, depending on breadth of services and size: Bulge Bracket, Large, and Boutique.

• Bulge bracket banks recruiting on campus include Bank of America*, Bear Stearns, Citigroup*, Credit Suisse, Deutsche Bank*, Goldman Sachs, JP Morgan*, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS*.

• Large banks recruiting on campus include CIBC World Markets, HSBC*, Lazard, RBC*, Rothschild, and Wachovia*.

• Boutique banks recruiting on campus include Barclays, Evercore, Greenhill, Houlihan Lokey, Legg Mason, Miller Buckfire, and Sagent.

* Bank is also major retail bank as opposed to pure investment bank

Banks measure their performance in a variety of ways including revenues, profits, and market share. But the most widely talked about metrics are the league tables, which can be found on Thomson Financial. Banks torture the data in these tables to make themselves #1. For example, “Bank X leads the league tables in announced North American debt offerings between one and two billion dollars.” The next page offers the most up-to-date league tables of completed, worldwide transactions this year. Each bank has its own strengths, be it in executing certain products or in having industry groups with particularly strong client relationships. Many banks, particularly the non-bulge bracket banks, target specific clientele or specialize in certain product and industry groups only. They may not appear at the top of the league tables, but they are worth considering as you evaluate firms.

Global M&A League Table

Global Equity League Table

3.3 Internship Structures

Just as different banks have different organizational structures, they also have different structures for their summer internship programs. Some banks place students directly into industry or product groups, others have a generalist pool in which summer associates sit together and work on projects from various departments, and a few have rotational programs in which summers are placed in two or more groups over the course of the summer.

Each program also has a different structure for the full-time program. Again, direct placement, generalist, or rotational. These structures are not necessarily the same as the structure of the summer program.

There are advantages and disadvantages to each arrangement that are great topics of conversation with recruiters at EIS’s. They are also worth keeping track of as you make your decisions about which banks to target and to demonstrate to recruiters that you have done your homework on their banks. By the time closed-list dinners come around you don’t want to be the person asking the head of the recruiting team (who you’ve met three times) whether the program is direct placement or rotational.

3.4 Common Associate Tasks and Roles

“Managing the process” is

the shorthand for the role

of the Associate. The

Associate is the hub.

The Associate is the second most junior member on a banking team, after the analyst. (Of course, during your summer the full-time analysts will actually be your superiors in terms of knowledge and skills). Nonetheless, a relatively low position in the hierarchy does not diminish the role: the Associate is the project manager and analytical overseer for the daily work of investment banking teams.

The Associate drives the information flow both internally and externally and has ultimate accountability for the work product being used by senior people and corporate decision makers. The catchall description for these roles is “managing the process.” The entire point of the recruiting process for banks is to find people who will excel in the role of the Associate and who demonstrate the potential to eventually grow into a more senior person at the firm who can take the lead in creating external relationships and generating business.

It is often said that there is no “average day” in the day of the Associate. There are, however, some broadly defined tasks and roles which are summarized on the following page. If you want to see some of the various “directions” in which associates are pulled, the Vault Guide offers a sample schedule.

Tasks Roles

Valuation

and

Analysis

• Understand financials (I/S & B/S), operations, competitive landscape, macroeconomic

conditions

• Know valuation methods • Accretion/dilution

analysis, debt sizing models

• Determine what analysis is required

• Check models worked on by analysts and do some of the more complicated modeling • Uncommon to create from

scratch, but sometimes perform your own analysis

Communication

and

Materials

• Creating of pitch books • Drafting information

memorandums

• Preparing presentations for clients

• Look through sources for company information (10K & 10Q, credit ratings, research reports, press releases, etc) • Communicate with senior

bankers for feedback (often very iterative and involves a lot of e-mailing)

• Put together analyses and presentations based on direction from senior bankers • Coordinate with other groups to gather data and synthesize into coherent analysis

• Coordinate with production resources to deliver end-product on time

• Quality control

Meetings

• Attending internal meetings

• Attending client meetings

• Coordinate meetings • Take detailed notes during

meetings

4 RECRUITING COMPONENTS

Banking recruiting is a marathon. If it’s not painful, chances are that you are doing something wrong. The upshot is that most of those who are diligent, attend the events, and network effectively will get jobs. But, as in a marathon, you must take recruiting one step at a time -- and pace yourself. Work on your resume and your story first. Then, over the course of October and November attend the firm events that are open to all students. Develop the relationships in that time that are necessary to get invited to the closed events later on.

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Your preliminary work is to make meaningful connections at the firms you are interested in. Most firms have teams focused on recruiting at Wharton (usually Wharton alumni). These are the people with whom you need to develop relationships. Each firm will receive dozens (even hundreds) more resumes than they can interview. You need to make yourself known to the bank to ensure that you earn an interview spot.

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All of your work up to and including the submission of resumes & cover letters in December is to make the interview list. Attending events is important. Many banks track their interaction with candidates in a database, noting the questions the student asks and the overall impression the student made.

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Once you get the interview, the game resets, and your performance in the interview will determine whether or not you get the job.

4.1 Time Table

Phase 2: Phase 3: Phase 1:

- Training Sessions - Employer Presentations - Resume Book Submission

- Closed List Events - Cover Letter/ Resume Drops - Days on the Job/Treks - Interview Prep

- Form Interview Prep Teams

September – October November – January January – May

- Interview Prep - DIP Week and

post-DIP Week recruiting 1st_Years 2nd_Years - Employer Presentations October

September – October – December

- Closed List Events - Cover Letter/Resume Drops - Interview Prep

- Interview Prep - Interviews

September

• Get the resume done. Work on it a lot. Run it by Second Years you trust. • Start thinking about your “story”

o Do not underestimate the importance of your story – potential employers want to know exactly what you are interested in and the steps you have taken to get there. Your story is about who you are, something of the utmost importance to people who will trust you with their businesses.

o Even if you don’t have an airtight “story,” make sure you can create one that is supported by your resume. Your story is personal. It can’t be borrowed from someone else.

o You need to convincingly explain why you want this job, why your background will help you succeed at it, and why you want to work at this firm. There is an expectation on the part of the banks that you are making a commitment. “I want to try it out” is a sure way to get dinged.

•

Familiarize yourself and use the resources provided by the Finance Club, including the investment banking recruiting presentations and guides, mentor program, resume reviews and interview workshops.

October

• Attend employer presentations

o It is critical to make a few key contacts at the firms you are targeting; follow up initial meetings with emails and phone calls. These people will often become your advocates within the firms.

o It can be hard to get much time with the recruiting team when they are surrounded by dozens of students each trying to get airtime at these cocktail receptions. Just listening to them can be very effective if you get their business cards. Follow-up with a concise email and ask your questions then. Assume they will save your emails in their database. If you are not sure what to ask about, just listen to the questions your classmates ask until you begin to develop your own understanding of the industry.

November

• Keep in touch with contacts/establish new ones. Alumni are your best bet. Ask the recruiters to put you in contact with alumni in a department that you are interested in. Bankers are busy people. Alumni will usually take the time to get back to you and share their experiences. Use each conversation as a way to refine your story.

• Begin to research the firms you are interested in (see example fact sheets at the end of this manual); forming a team to divide this task is a great idea. A team of 4 to 6 can be very effective if each member takes responsibility for researching 2 or 3 firms.

• Attend “Days on the Job” sponsored by the Finance Club; again, meet as many professionals as possible. Follow-up with emails and thank you notes, where appropriate.

December

• Submit resumes and cover letters to the firms you are interested in. If you are a career switcher, cast a wide net and submit resumes to as many firms in your chosen industry as possible. You probably won’t get selected to interview for all of them.

January

• Review possible interview questions in the later sections of this guide.

• Take part in mock interviews with Second Years to optimize your interview performance. Then mock interview each other to prepare for doing multiple interviews back to back on game day. Mock interviewing is the most important preparation you can undertake.

February

• Interview period: Be confident & enthusiastic. First rounds are usually during the first 2 days of the interview period. Firms will call you after your interview during those first 2 days with a decision about the next round. Second rounds are usually during the 3rd _{and 4}th _{days of the interview period. A few firms have third rounds}

which they hold at their offices.

• Follow-up interviews with thank you cards to your interviewers – especially important for the firm you are joining, but generally good practice to develop good will. You may be interviewing with these same people next year.

4.2 High Touch / Low Touch

Wharton students have made it a tradition to categorize banks according to their “touch.” Touch refers to how much contact the bank’s recruiting teams seem to expect candidates to make. Citigroup, for example, has held a large number of events in recent recruiting years and expected candidates to use phone calls and trips to New York to develop relationships with a number of people on their recruiting team. Goldman Sachs and Morgan Stanley, on the other hand, have taken a lower touch approach. The recruiting strategies of each firm may change from year to year depending on the recruiting team, but it is helpful to get a sense about which banks you are interested in and what their approach to recruiting seems to be.

Decide your recruiting strategy early on. Is it focused on a few banks or are you really going to try to hit all of them? Recognize that each bank will have at least 3-4 events. If you’re targeting 10 banks, that can mean 40 events during the three months of recruiting. Early on you may have a broader strategy and find over time that it tightens: maybe you just didn’t connect with anyone or at some point you actually grew to get a bad feel for a few banks. Drop them until you have a group of top choices and back-up banks that makes you comfortable. You do not need back-up banks for your back-up banks.

Most banks will come to campus multiple times (8x on average) although some come only once or twice. It is highly recommended that you try to attend each event for the banks that you are interested in, especially if they are a high touch bank.

ƒ

Bear Stearns

ƒ

Citigroup

ƒ

Lehman Brothers

ƒ

UBS

ƒ

Preferably attend all events

ƒ

Networking outside of events is highly encouraged

ƒ

Credit Suisse

ƒ

JPMorgan

ƒ

Merrill Lynch

ƒ

Try not to miss any

events

ƒ

Some networking outside of events can be beneficial

ƒ

Banc of America

ƒ

Deutsche Bank

ƒ

Goldman Sachs

ƒ

Morgan Stanley

ƒ

Attendance at

events matters less (other factors may be weighed more heavily)

4.3 Employer Information Sessions (EIS)

EIS’s are the initial point of contact banks make with students. They are also a toehold for your own thinking about recruiting and for establishing relationships with the recruiting teams. Generally, representatives from divisions seeking to hire summer associates will be present at a firm’s first EIS. Eventually, many firms will have separate EIS’s for each division in order to have a more targeted effort.

You can expect anywhere from 100-200 students to attend the EIS’s of the larger investment banks and roughly 40-80 students to attend the EIS’s of boutique investment banks. You goal at each EIS is to get to know how that particular firm does investment banking and what are the firms’ strengths and weaknesses.

The EIS is a great time to find out what you can say when later asked in an interview “Why do you want to work for us?” A good practice is to bring an index card on which to make notes you can refer to later in preparing for interviews.

Do not think of an EIS as a race to collect the most business cards or meet the most people. Recruiting is all about winning “memory share” – what is the chance that at the end of the night someone at the firm will know you were there? Focus on the quality of the interaction and whether you are finding out the information that you need. This will pay off bigger dividends than simply meeting a large number of people.

Recruiting is all about

winning “memory share”…

Focus on the quality of the

interaction and whether

you are finding out the

information that you need.

During the EIS, you will need to practice your 30 second story on “why investment banking” and “why me”. The event is about the art of conversation: your personal story, your strengths your interests and goals. As you attend more EIS’s, you will learn more about investment banking and you will begin to tailor and sharpen your story. At the same time, you shouldn’t be doing most of the talking at an EIS. This is an opportunity to ask thoughtful and appropriate questions that you want to have answered to help you decide which banks are right for you – and to use later on in the process. As the process continues, your questions should increase in sophistication as you begin to ask not only basic questions but questions about deal announcements and industry trends.

Keep in mind that unless you happen to have a great conversation with someone, spending approximately 20 minutes with each banker is more than enough. Once you feel that you have asked a few questions, and perhaps received a business card, do not feel compelled to monopolize the banker’s time by standing around awkwardly while trying to think of something else to ask.

Having meaningful interactions with 2-4 bankers per event is the goal. But remember: meaningful contact is not standing silently in a circle around a recruiter. If a group seems too crowded, more along to the next group.

Do not try to talk only to the senior people present. Spread your time among associates and vice presidents as well.

• Associates have a greater understanding of what the Associate role is like, and this will give you a better idea as to whether this firm is a good “fit” for you. • Senior bankers travel 3-4 days a week and sometimes more. This makes it hard

for them to respond to email inquiries (even with Blackberries, a senior banker will not respond to a recruiting email if he or she is in the middle of a meeting). If all of your contacts are senior bankers, the chances of getting a response may diminish. Associates and vice presidents tend to be in the office much more and are therefore more likely to be able to answer emails and have phone conversations.

• The best time to get people is often outside of normal business hours. Associates are often the only ones left in the office who can have a phone conversation with you during those times.

• Last but not least: associates on the recruiting team usually draw up the first draft of the interview list!

A final note on EIS behavior: some people become notorious for their willingness to elbow other people out of the circle around senior bankers. This is never a good strategy. The EIS is an opportunity to make an impression on a bank – possibly a bad one. Your Social skills and emotional intelligence are the key. Use them. Bankers are generally very observant people. Acting in a socially undesirable way at an EIS runs a strong risk of branding you as undesirable not just to your classmates but to recruiters.

The EIS is an opportunity

to make an impression –

possibly a bad one.

Your social skills and

emotional intelligence

are the key. Use them.

At the end of the day, EIS’s are a lot of work. You may get out of class at 3:00 pm or later. Then you will have learning team meetings, club meetings, and personal items to tend to. Once you’ve finished this, you’ll have to attend EIS sessions (sometimes several back to back), and you won’t reach home until late. At this point you will want to send thank you emails (which invariably take longer than you think they will), and then you will have school work to do. You will probably see your work pile up day by day as you fall more and more behind. In addition, at some point you will likely become frustrated and have a bad day where you do not feel like you connected with any bankers at an EIS. This happens to everyone. Do not let it get you down. Just remember that you will likely do better the next day.

4.4 Closed List Events

Closed list events are events that are invitation only. Your goal in going to EIS’s and following up with phone calls is to get invited to closed list events and, ultimately, on the interview list. In closed list events, banks will invite a smaller group of people to dinner or drinks and give you a chance to get to know them in a smaller setting. As with other recruiting events, these are evaluative. Not making a closed list event does not mean that you not going to get a job with a particular firm. Nor does making the list mean that you will definitely get a job. It is simply another step in the process. Many firms have more than one closed list event and typically try to invite different students to each event.

At closed list events, the goal is to have a more meaningful conversation as opposed to just a standard Q&A session. This is face time, so make sure you talk to the bankers and move around from table to table if possible. Getting invited to these events means you have already made some efforts with the bank: refresh your knowledge of the basics and the deals, mention the people you have spoken with before, and greet people by name if you remember them. You should be careful not to monopolize any recruiter’s time. As always, you are the driver of the conversation.

4.5 Days On The Job

A “Day on the Job” (DOJ) is supposed to be an educational event, typically held at the firm’s NY offices, that give you more information on what it is like to work for them. Unfortunately, sometimes DOJ’s turn out to be nothing more than a glorified EIS held at a hotel in New York that could just as easily have been held in Philadelphia. Nonetheless, you should make an effort to attend the DOJ’s for the firms that you are interested in. While there, make the most of the opportunity to interact with recruiters. Many times, two firms will have DOJ’s on the same day, so you are making a trip to NY to visit more than just one firm.

4.6 Informational Interviews

Informational interviews (often just referred to as “informationals”) are a way for you to visit a firm and have a one-on-one conversation with bankers of all levels. Be aware, however, that these types of interviews are designed to convey information to you about the firm and or group of your interest, they can turn into difficult real interviews. You should not schedule an informational unless you feel prepared to go into a real interview.

Depending on the banker you meet you may enter a casual conversation or be grilled on topics such as finance, accounting, current business events or deals (especially any that the firm worked on), your past work experience, etc. Most informationals involve meeting multiple bankers (anywhere from 4-7) in back to back one-on-one sessions. It can be a good idea to do an informational, but only if you are prepared to discuss anything on your resume, answer technical questions, and field all other topics that would be fair game for a real interview. If you are not confident in your ability to do this, you run the risk of doing yourself more harm than good. In addition, if you schedule an informational interview, be prepared with an agenda and list of questions. Do not expect the recruiter to start talking without direction.

4.7 Cover Letters

Most students spend too much time worrying about cover letters. The reality is that a cover letter will virtually never advance your prospects. It must be taken seriously, however, because it can seriously damage your application if it has errors. The best approach is to design a cover letter that minimizes risk. With cover letters, resumes, and other written materials accuracy is of the essence. Read, reread, and read again.

With cover letters,

resumes, and other

written materials

accuracy is of the

essence…

Read, reread, and

read again.

Cover letters should be fairly simple. You don’t need to reinvent the wheel when writing them. Use your cover letter to highlight why you would make a good fit for banking, but that can be quickly tailored for each specific firm to highlight the people you have met during the recruiting process and what unique attributes of that firm appeal to you.

For more detailed information, MBACM has extensive resources on their website on writing cover letters. Most students structure cover letters with three main parts:

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Introduction: Tell the reader what you are applying for and perhaps mention some of the people to whom you have spoken to.

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Body: Highlight the parts of your past work experience and education that you feel are the most relevant to investment banking.

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Closing: Thank the reader for taking the time to review your resume.

4.8 Resumes

During your first month at school your resume is your top career priority. Your resume encapsulates, in one page, everything about who you are and who you want to be. At first glance, a resume appears to be a backward looking document – everything on it has happened in the past. In reality, however, a good resume is a prospectus: a forward looking document that tells future employers about why they want to hire you. While your resume MUST be honest and accurate you have substantial discretion on what to include and what to exclude. The rubric is simple: include that which highlights the qualities recruiters consider important to the job you are applying for.

The resume rubric is

simple: include that which

highlights the qualities

recruiters consider

important for the job you

are applying for.

You should have approximately 4-5 people look at your resume and give you comments. While you do not have to incorporate everyone’s suggestions, this will give you an idea of what an “outsider” thinks of you when he or she reads your resume. Second years are a huge resource for resume review. Even investment banking analysts find that Second Years who did summer internships are able to provide them with helpful advice on how to make their resume more appealing to firms. The Finance Club will organize a resume review where you can sign up to have a second year look at your resume and provide feedback. You should also find additional readers on your own.

The MBA Career Management Office also provides a resume content review service, but most students find that this is NOT enough. Also, keep in mind that a second year who has had success in the recruiting process may be able to give a different perspective than that of career management. MBACM is quite helpful in providing resume resources on their website including the excellent list of 174 “resume action verbs” (http://mbacareers.wharton.upenn.edu/student/resumeinfo.cfm).

You should take the resume review process extremely seriously and not wait until the last minute to have people review your resume. This is especially true since many times, a firm will make sure you are interviewed by someone who has not met you before hand. In this case, their first impression of you will be based of your resume. If your resume does not show you in the best light possible, or is sloppily put together, you may not advance in the interview process not matter how much rapport you developed with the firm over the course of the year.

Anything on your resume is

fair game… Be prepared to

substantiate any claims you

make and to discuss in

some detail any project or

experience you include.

Be aware that anything on your resume is fair game for interview questions. Think carefully about what you include and what you exclude. Do you really want to include that you won that college strip poker competition? Also, be prepared to substantiate any claims you make and to discuss in some

detail any project or experience you include on your resume. If you worked on a banking deal in 2003, do you remember what the EBITDA multiple was? Do you really speak fluent Portuguese?

A note for international students: Be sure to

have native speakers proofread your resume and cover letters to ensure that they are

grammatically flawless. There is very little tolerance for imperfect English in written materials of this level of importance.

4.9 Networking (Phone Calls and Emailing)

Always send thank you e-mails if you have had a meaningful interaction with a recruiter at an event or on the phone. E-mails should be short: easily read on a Blackberry without having to scroll. A good rule of thumb is to send the e-mail within two days of meeting the banker. It is not advisable to send an e-mail immediately after an EIS, due to the fact that all bankers have Blackberrys and you do not want them to go off in the middle of the night. A good tactic to use when writing a thank you email is to include a question in it. Don’t be too worried if you don’t hear back. For example, you can thank them for their time, and then mention a part of your conversation that you found interesting and follow up with a question regarding that topic. This eliminates the “problem” of simply sending “mindless” thank you, and it gives the banker a more compelling reason to respond to you, rather than just sending a “thank you for your thank you” email.

Exercise the discipline to check your e-mails for spelling and grammatical errors. Errors can leave a very bad impression on a recruiter, particularly if you accidentally spell the name of the firm or banker incorrectly!

Phone calls to bankers – when made in moderation – can be a good idea in order to signal your interest in a firm/group and to learn more about the firm/group with a one-on-one, focused conversation. Always start the call by identifying yourself with first and last name “from Wharton” and ask “is this a good time for you?” If you get voicemail, leave a message and wait a few days before calling again if you don’t get a return call. Understand that it may be difficult to reach a banker and you don’t want to appear overly aggressive.

Once you have someone on the phone, keep in mind that the burden will fall on you to lead the conversation. Do not assume that the banker will provide the content for the call. You should let the conversation flow naturally, but also have specific questions in mind that you would like to ask. You do not want awkward silences to occur during the phone call.

The burden will fall on

you to lead the

conversation. Don’t

assume the banker will

provide the content.

As a rough guideline, these calls should last about 20-30 minutes max, but should be longer than 10 minutes. A good idea is to have an agenda of 5-6 questions prepared so that you can ask one at any time should there be a lull in the conversation. This will allow you to achieve this time goal and have a substantive conversation without the risk of monopolizing the bankers time.

4.10

Additional Best Practices

• Arrive to events ON TIME and do not leave events early. If you must leave early, sit near the door and do it DISCREETLY.

• Dress code: ALWAYS follow the specific dress code. When in doubt, remember that the bankers will probably be in suits.

• Attend every event you have RSVP’d for. If you realize you can’t go for some reason, give advance notice that you cannot attend.

• Be professional, conversant, and enthusiastic when talking to recruiters. Ask thoughtful questions.

• Don’t neglect your extracurricular life at Wharton. Not only should you be participating for your own mental health, but you are likely to be asked about it and want to demonstrate your involvement in the community.

• Know one person in each of your target banks well.

• Don’t get too intimidated. Remember that the bankers are people too and, if they’re recent Wharton alums, they were in your very shoes not too long ago. • DO NOT LIE. The finance world is too small. Saying one thing to one bank and

something else to another will be a disaster for you.

• Go the Finance Conference and utilize treks. International job seekers especially: EuroTrek and AsiaTreks are very helpful.

5 THE INTERVIEW PROCESS

So you’ve got an interview. Congratulations! You’ve come a long way from the start of the process. You’re already halfway there. But remember, you’re only halfway there.

All of your networking got you the interview – but it is a new beginning once you enter the interview room. In past years, some students have had multiple first round interviews and no second round interviews. This is a telltale sign that the interview is an independent variable that deserves considerable attention. In the following sections we will give you a variety of tips to help you schedule, prepare for, and perform in your interviews.

5.1

The Interview Schedule

This year’s DIP week schedule for investment banking will be as follows:

Round Group 1 Group 2

1st _{round Monday, February 4 Tuesday, February 5}

2nd _{round Thursday, February 7 Wednesday, February 6}

Final offer Friday, February 8 Friday, February 8

The major exception to the above schedule is interviews for locations outside the US (e.g. Asia and Europe). MBACM has given permission for banks to interview students before DIP week in order to accommodate these offices’ travel schedules. Some smaller banks may also begin interviewing later in the week.

You will schedule your first round interview(s) well in advance of DIP week via the MBACM’s CareerPath website. Be sure you know this process before you need to sign up for interviews.

The second round of interviews is a little less structured. If you progress to the second round, the banks will give you a telephone call. The banks could call you at any time between the end of business on the day of your first round interview up to the night before the second round interview. When banks contact you to arrange a second round interview they are required to offer you the choice of at least two slots.

In order to ensure you obtain your optimal second round interview time slot be sure to have your schedule with you at all times during DIP week and keep your cell phone with you and on at all times (except in the interview room during an interview!). Companies that interview during DIP week are not allowed to make any offers before 9am (EST) on the Friday of DIP week.

5.2

The Bidding Process

Bidding was instituted for the first time last year at Wharton but has been used at other schools successfully. The intention of the bidding process is to decrease pressure on students to attend all recruiting events and to help them signal to employers which students have a high level of interest. Like the course auction, the bidding process gives students the opportunity to quantify the strength of their interest in an outcome. Anecdotally we are told that firms also liked the process because they liked being able to supplement their closed lists with students with a strong interest in them who might have been excluded from their interview lists. Students have deployed many different bidding strategies. Unfortunately, there isn’t a lot of historical data to help students formulate their bidding strategies. Some students bid on their top priority banks (even those they felt reasonably comfortable about getting an interview with) in an attempt to guarantee a spot. Others students bid for priority banks in which they had an interest but were less confident about getting an interview. Others still used bidding to get interviews with banks they had not worked very hard with during the interview process.

Bidding is done through CareerPath and is managed by MBACM.

5.3

Considerations For Interview Scheduling

Once you have received an interview invitation from a bank, CareerPath announces a time when the system will allow students to choose a time slot for their interviews. This usually results in a bit of a free for all as students scramble onto CareerPath in order to get the “best” spots. Since slots fill up so quickly, you need to go into the scheduling screen with a strategy: know three or four different times during the day when you want to schedule the interview.

When are you at your best?

Establish what part of the day you are at your best and try to schedule your interviews for these times. Ask yourself, are you a morning person? Or do you often suffer a “post-lunch coma”?

Some people like to schedule their first few interviews with employers who are lower down on their preference list. This lets students “get into the swing” of interviewing before they have to interview with their preferred banks. You may also learn some useful lessons from these early interviews.

Other people like to schedule their most important employers up front because they perceive that they will be more fresh. Think about what works for you.

On a different note: please keep in mind that we are one community at Wharton. Therefore, in the interest of student cooperation, if a student asks you to change an interview slot because of a conflict they cannot avoid, try to be accommodating – you never know when you will be on the other end of the request.

Manage schedules with location in mind

Another aspect to consider while scheduling interviews is the interview location. During DIP week all interviews will be held in Philadelphia with the majority of first round interviews held on campus (in JMHH and OCRS). When scheduling your first round interview you will be able to see the location via the MBACM website.

For second round interviews you will be told of the location when you receive the call back phone call. Second round interviews tend to be held in Philadelphia hotels. Take note of the exact location and the travel time between locations before scheduling interviews too close together. Count on it snowing during DIP week and factor that into your travel time.

Leave some breathing room

In addition to factoring in transit time and scheduling delays, consider trying to buffer additional time between interviews to regroup, gather your thoughts, and review your notes for your next interview.

Super day interviews

Some banks (typically regional offices and boutiques) might schedule ‘super days’ after DIP week at their office in addition to the regular interviewing process on campus. This could be for one more final round of interviewing / meeting more people from the bank, or could be to choose specific groups for the summer once an offer has been made.

5.4

Interview Types

An interview usually lasts for around 30 minutes. As such, if you have an interview scheduled for an hour, it is likely to be either two 30 minute interviews or possibly three 20 minutes interviews.

There is no strict rule about the type of people who interview you in the particular rounds. You are, on average, more likely to be interviewed by associates and VPs in the first round and by VPs, directors, and/or Managing Directors in the second round. But don’t be surprised to find a Managing Director conducting the interview in the first round interviews and for Associates to be involved in final round interviews.

The most common arrangement is not for one-on-one interviews but for there to be two bankers conducting the interview. Although uncommon, it is not unheard of for three bankers to be in the interview (more of a possibility in the second round).

It is likely you will be interviewed by some people you have met during the recruiting process, but the banks also usually want a “fresh set of eyes” to consider your candidacy, particularly in the second round. As such, expect to be interviewed by people you have never met before.

The majority of people interviewing you tend to be Wharton alumni and therefore understand the concepts of learning teams and the MBA curriculum. You can therefore expect to be asked questions about these features of life at Wharton, for instance “what feedback did your learning team members provide to you?”

Be aware that if you are recruiting for a bank that gives you a division-specific offer immediately after DIP week that the people from your division of interest will be highly interested in interviewing you. You should therefore have some clear answers in mind as to why you want to work in that particular division. You should also get to know these people well in advance of DIP week.

Interviews usually follow a specific format and below are some ways to think about interview experiences:

‘Walk me through your resume’

In the interview you are in the

driver’s seat – you should be

driving your interviewer to a

place that helps your case.

Most interviews start or end with a complete discussion of your resume. This format is open-ended and allows you to structure your interview and lead the interviewers into aspects of your resume that you want to

highlight. Review your resume before the interviews and practice summarizing your major achievements in a coherent and compelling manner. A bad summary rambles and tries to explain every point on your resume. Make your summary

relevant to what investment bankers are interested in hearing about. Remember: in the interview you are in the driver’s seat – you should be driving your interviewer to a place that helps your case.

Technical, Behavioral, Fit

Much has been made of the “behavioral interview” versus the “technical interview”. Make no mistake: All interviews are behavioral interviews.

Put yourself in the shoes of the recruiters. Their job is to give offers to people who are smart, people they want to work with, and people who are likely to end up

working at their bank. Technical questions are the “threshold tests” that seek to answer the first question. Everything else is behavioral and tries to get at the heart of the recruiter’s job: do they want to hire you instead of someone else at Wharton receiving the same education?

Make no mistake:

All interviews are

behavioral interviews.

The banks are looking for candidates who are able to communicate their interest in the firm, their ability to work well on teams and with clients, and their prospects for further growth.

There is no way to determine exactly what an interview will feel like – it depends on each applicant's background and what the firm is looking for. Some firms are more notoriously technical than others. Lehman, for example, has a dedicated part of the second round just on technical questions. At the same time, students interviewing at the same firm with different interviewers – or even the same interviewer – report very different experiences and mixes of questions. Be prepared for all types of questions.

Good-cop, Bad-cop

This is a rare interview format but has been seen in the past during banking interviews. In this format, one banker will play bad cop with the intention of making you uncomfortable with his/her line of questioning while the other banker will play good cop trying to engage you in a positive discussion while helping you along the way. An interview may also take on a hostile atmosphere with the interviewers asking you questions in an aggressive tone or perhaps cutting you off before you complete your answer. In most cases it is not necessarily because the interviewers do not like you or your responses, rather they are trying to test your interpersonal skills, how you perform under pressure, and the firmness of your own beliefs. Stay calm and collected (remembering it is not personal), but hold your ground.

In summary, one can never predict exactly what format, questions or people one will face during an interview and hence it is important to prepare well for any situations you might face.

5.5

What Are Interviewers Really Getting At?

A lot of mystery – and anxiety – surrounds the interview process. Many people wonder: What are interviewers really getting at? There are essentially three major criteria that banks care about:

1. Are you up to doing the job? (Level of competence) 2. Are you likeable and dependable? (Level of fit)

Your job in the interview is to

persuade the interviewer that you

can do the job, that you are likeable

and dependable, and that you are

serious about their firm.

The firm’s impression of you as it relates to these questions will be based on three interrelated buckets of information provided by you: your experience and unique attributes, your transferable skills for the requirements of an Associate, and your cultural fit at the firm.

Experience and Unique Attributes. You have a unique story and a unique background.

That is what you are selling. In thinking about what you have to say don’t try to copy someone else’s story – or start off from what you think the bankers want to hear. Start with who you are and then move in the right direction. You have had success in your previous career. You have a proven ability to deliver in some way. You have had achievements that signal your leadership and success. These are things that need to be communicated to recruiters in a compelling way.

Transferable Skills for the Requirements of an Associate. Everything you’ve done in

your life doesn’t relate to banking, but some things most certainly do. Focus on those, perfect the way you talk about them so that they are forward facing for your job in banking, and highlight them in the interview.

• What are transferable skills? Just as your resume should be forward looking, so should the skills that you highlight. If, in your last job, you were an expert at creating Java applets, that is not a skill that is likely to come in handy as an Associate at an investment bank. If you did extensive financial modeling in excel, however, that is a transferable skill. As you consider what to highlight in your set of skills always keep in mind the requirements of the job of the Associate.

• Hard Skills vs. Soft Skills. As it turns out, soft skills are a lot harder than hard skills – and in many ways more important. It’s easier to teach people financial modeling or accounting rules than it is to teach them to have a positive attitude, work successfully in teams, or manage relationships with clients. When thinking about transferable skills, don’t just focus on your hard skills. Focus on your soft skills.

• What qualities are they looking for? Looking at recruiting materials from a few dozen banks you can compile a long list of qualities relevant to success in investment banking. We have attempted to distill them into basic clusters that will cover most items mentioned by banks. Give some thought to how you demonstrate these qualities when developing your story.

Commonly Listed Qualities

Excellence

Record of success / high achiever Demonstrable intellectual capacity

High standards / ambition / drive to excel Presence and Professionalism

Inspiring trust / confidence in others (particularly clients) Articulate Good judgment Commercial sense Attitude Pleasant to be around Sense of humor

Commitment to learning new things Motivated and hard working

Teamwork

Corroborative (communicates and works well with others) Respectful (both up and down)

Adaptable Leadership

Initiative (ability to make contributions and add value) Ability to get results

Dependability

Attention to detail (“safe hands”)

Ability to work hard, multitask, and handle pressure Integrity

Cultural Fit. Firms have (or at least think they have) unique cultures. Understand

what that is and see if it makes sense for you. If it does, say it. There’s no shame in repeating things you have heard from some people at the firm back to them if it resonates with you.

In sum: Your job in the interview is to persuade your interviewer that you can do the job, that you are likeable and dependable, and that you are serious about their firm.

Please note: Saying you are serious about a firm is very different from telling them

that they are your top choice or promising them that you would accept an offer. Unless you really mean it, NEVER imply that you will accept an offer from a firm. See the practice interview questions section for how to handle this issue appropriately.

5.6

Grade Non-Disclosure

On January 18, 2007 the Wharton student body held its annual vote regarding the disclosure of grades to employers. The student body voted resoundingly (94% in favor) to reaffirm the Wharton Graduate Association’s policy of grade non-disclosure.

The WGA policy states that “the Wharton MBA student body believes that academic grades must be separate from the recruiting process.” As such, “students, both First and Second years, are to refrain from discussing GPAs or transcripts with recruiters” and “recruiters are requested to refrain from asking students about GPAs or transcripts.”

Ultimately, however, each individual student has the discretion to decide whether to disclose his or her grades or not. Last year’s recruiting season was the first year after a faculty-sponsored initiative to reaffirm an individual’s ownership of their grades while simultaneously and explicitly encouraging them to disclose those grades to recruiters. Despite this initiative, Finance Club members found that recruiters overwhelmingly respected the student vote and did not ask students about their grades. Some recent graduates even suggested they would view students volunteering their grades in a negative light given the community sentiment on the issue. Among those banks who did ask about grades, students reported that recruiters were understanding when informed about the student GND policy.

The WGA’s GND website elaborates on the history of the policy and the reasons for its implementation. (http://wga.wharton.upenn.edu/gnd/.)

6 INTERVIEW PREPARATION

Preparation is key for interviews. Preparation should be honed at delivering your message about your distinctive strengths in a concise manner. However, make sure that you are not so well prepared that your answers seem robotic. Wharton students have a reputation of being very strong interview candidates but the most common criticism is that their responses to interview questions seem too pre-rehearsed and their personalities fail to come across. This is the balance you must strike: a very high level of preparation with an ability to be genuine and animated in your interview.

The interview is a

30 minute

informercial you

get to star in and

direct.

Your ability to sell yourself

in an interview is a key

measure of your ability to

succeed as a banker.

The people who tend to do well in the interview process are those who stay relaxed and allow their personalities to come through while selling their strengths in a concise manner. Being yourself allows you to make a connection with your interviewers. Remember it is not the bank that is selecting you, it is the people on the other side of the interview table - so making that connection is important.

Don’t forget: the interview is a 30 minute infomercial you get to star in and direct. Because so much of the business of banking concerns your ability to connect with your clients and promote your services, your ability to sell yourself in an interview is a key measure of your ability to succeed as a banker.

In your interview, you need to be able to focus on a few key themes you want to get across and articulate why you want the job and are a good fit for it.

Your starting point for interview preparation is being able to answer these questions honestly:

1. Do you know yourself? (Competency, Interest, Values) 2. Do you know your resume inside and out?

3. Do you know how your skills and previous experiences apply to banking?

4. Do you know the company you’re interviewing with and why you want to work for them?

6.1

Making Your Story / Pitch

Every question in an interview is an opportunity for you to control the message you are sending about yourself to the interviewer. Clarifying in your own mind your three to four major marketing points is key to making your answers poignant and delivering a clear and concise message.

Every question in an

interview is an opportunity

for you to control the

message you are sending

about yourself to the

interviewer.

In addition, in many interviews you will be asked if there is anything else that you would like to tell the interviewers about yourself. This is your opportunity to clearly present your distinctive strengths in one clear answer. Knowing your distinctive marketing points upfront will help you deliver an answer that leaves a lasting impression.

When considering your key marketing points focus on how these points fit with the role of an Associate:

• What are your transferable skills for investment banking? • Are there significant accomplishments from your previous job? • What is it in your background that distinguishes you?

6.2

Anecdotes

It is useful to think of three or four anecdotes/stories about your previous experience that support your key marketing themes. When in doubt, go to one of your prepared anecdotes. Having these clear in your mind will help you answer questions in a timely manner and avoid uncomfortable silences while you search your mind for an answer. The general format for structuring anecdotes is called SOAR: Situation, Objective, Action, Result.

6.3

Company Research: Knowing Your Audience

Along with all of the other things banks value (positive attitude, team work, etc), the ability to differentiate among banks is considered an important quality in a candidate. Bankers usually have a sense of how their bank is different – or at least perceives itself to be different – and will expect you have figured that out as well.

As much as possible you want to be able to tailor what you say to each bank. After all, why would a bank want to hire someone who hasn’t bothered to learn anything about them? What message does it send about you if you are unprepared at one of the most important moments in your business school career?

In addition to obvious geographic and market position characteristics, firms have other differing qualities:

• Know how the firms are internally structured

o All have some type of industry and product groups o Every firm has a different approach to group placement • Know how the firms perceive themselves

o What are their strengths, what are recent significant transactions? o How do they view their own culture?

o What are they proud of? What’s their ambition?

o Why do their recruiters work there instead of at a different bank? o What are employee demographics?

Why would a bank want to

hire someone who hasn’t

bothered to learn anything

about them?

Many students find it helpful to make a one page summary (cheat sheet) on each bank to be your quick reference guide. It should include information such as the names of the people you met and interesting comments they made during the recruiting process,

the name(s) of the recruiting captain(s) for the bank, the deals they have recently been involved in and what type of program they have (summer and full time). These summary pages should be developed over the course of the recruiting process starting with the EIS. Once interview time comes around, bring your one page to read over while in the waiting room before your interview with the firm, this will keep the details fresh in your mind (and also make you feel a little less nervous because you are doing something productive).

Some things to consider including on your summary sheet for each bank include: • Stock price

• Market capitalization • Chief Executive Officer

• People you’ve met at the firm • Major deals of the past year