Advice for New Investment Banking Analysts

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So july and august are the two months in which almost all investment banking analysts are gonna start their new jobs if you graduated this year that means you’re gonna be starting in the next couple of weeks and i’d like to share with you some information i wish i knew when i was starting my job now a lot of your performance as an analyst is going to depend

Strictly on just putting in hard work and lots of patience but there’s a couple of key things you can focus on that are going to have a disproportionate impact on the start of your career the very first thing i think the most important relationship that you have in all of banking is the one with your staffer the staffer is the person who is going to give out

The projects give out the different deals and the kind of deals that you’re on the deal experience you have is probably the most important thing that will differentiate you at this point it’s not supposed to be a secret who the staffer is just reach out to someone in the group you’re about to join and figure out who’s in charge of giving out the projects then

Reach out to that person for a zoom call or for a coffee and then just suck up to them treat it like a really important informational interview ask about the different projects they’re on and if there’s anything that you can specifically help out with and there might not be an immediate staffing at the get-go but you can still demonstrate your initiative and your

Determination by trying to help out with other administrative tasks if there’s a social editing that needs to be planned or if there’s very menial tasks like organizing a directory you can volunteer to help out with that just so you can build a relationship with your staffer even after this first few staffings even when you’re a second year i still think that the

Staffer relationship is so important if you want to be on the biggest deals the biggest projects this is the person who’s going to get you on those deals if you want to coast through your second year and if you just don’t want to work at all this is the person you can complain to and have them trust your opinion so i do think focusing on this relationship is the

Best way to sort of navigate the craziness of investment banking now the reason why focusing on staffings is so important is because there’s just a huge disparity in the kinds of deals that there are some can be very good training and really good modeling experience while others are more powerpoint or more administrative focused if there’s three analysts in your

Team and there’s only three staffings you know one could be a 10 billion dollar buy side one could be a one billion dollar buy side and then one could be a pitch book and there’s just a huge amount of discrepancy when you’re talking to interviewers and how that reflects upon yourself in terms of categorizing the different deals i think the best transactions to

Have on your resume are m a or mergers and acquisition type deals these deals are bound to be extremely modeling heavy and why they’re so good is because when you’re in the interview room you can specifically talk about the investment rationale and there’s so many more related questions that just make the interview flow a lot better asking about deals is one of

The biggest components of these private equity interviews so the more related experience that you have the better those interviews will go the absolute best kind of deal to be on is to advise a private equity firm in a transaction especially in the industry that you’re going for but that’s pretty rare that doesn’t always happen but ideally you’re on some kind of m

A transaction the next category of deals would be these financing and advisory type deals of these i would say an equity and debt primary financing is going to be better followed by refinancing advising on a fairness opinion or to the board are sometimes viewed as less substantive because they’re more confirmatory in nature meaning that a lot of times that company

Or deal was still going to happen and you’re more acting as a rubber stamp on that deal and lastly the worst kind of deals to be put on initially are pitches because pictures take a long time to materialize if they ever do into real deals and a lot of pitch work is very qualitative there’s not as much private data to work with and it’s just viewed as inferior

Experience if the staffer isn’t receptive to your advances or if they’re stonewalling you the next best people to target are the second and third year analysts who are willing to mentor people a lot of these second and third year analysts will already be on live deals so if you can get one of them to take you under the wing it’s of no more organizational cost to

Have a first-year analyst shadow a third year analyst for example one of the best situations is if you’re friends with a second or third year analyst who’s on a live deal that’s about to close they can just add you to the project and then you’ll have live deal experience as you’re talking to headhunters and recruiting with firms so reach out to anyone at that

Firm that went to your school or has a similar background to you or you know you’re just friends with these second and third year analysts are also invaluable because of the recruiting intel that they offer recruiting is handled differently at almost every single firm in every single group some firms don’t like you to recruit in public some groups will have md’s

That are going to specifically bat for you or make recommendations and the people who know all this are the second and third year analysts there are a couple of key questions that you’ll want answered as you’re thinking about recruiting the first question you should be cognizant of is who do headhunters reach out to a lot of the time headhunters will reach out to

A vp a lot of the time it’s the staffer to get a list of the analysts and their emails and again very similarly you want to make sure you have a good relationship with that person the second thing you want to be aware of is which pe firms and hedge funds does this particular group already have a strong track record with a lot of the times just like how investment

Banks hire from specific schools there’s going to be pe firms that hire from specific groups and a lot of the times this can be because of deals they’ve worked on or relationships at the senior level the third thing that’s really important to learn is which if any mds will support you during recruiting this is really firm specific but at evercore there were a couple

Of md’s that were notorious for reaching out to some of their good friends and making sure that their analysts got interviews and the thing is that recruiting moves so quickly is that you need to have this conversation relatively soon and the only people that really know who you can reach out to and when the right time to have that conversation is is the second

And third year analyst so make sure you befriend them and get this information from them in terms of research one of the things you should definitely do before you start is to check the recent deals over the last two years done by your firm specifically your industry group so if you’re joining industrials for example you’ll want to go through the company website

And see what industrials deals they’ve done recently if they’ve done for example a lot of aerospace and defense deals then you want to talk to people in that group you want to talk to the md the vp who does a lot of those deals because rather than just angling for industrials in general you’re going to the people specifically working on quality transactions and

That’s something you can easily do just checking websites going through news sources now the last thing and probably the most important thing i can recommend to you has to do with your work quality and you really have to check your work now a lot of you that are going to invest in banking are very smart you guys are the top of your class and you crush standardized

Testing but i find that that really incentivizes people to go really quickly and focus on speed when you really need to be focusing on taking your time and making sure that your work is correct and you can do that by checking your work and making sure that everything that you submit is of a high quality and that really just means taking your time there’s kind of

A fun monomic that i came up with when i was in banking that i use every time before i hit the send button and you should check the facts so the first thing f is formatting and specifically you want to make sure that you’re using all the firm colors that the logos are proportionally sized that all the page numbers are in the right order and the titles are using

The same kind of label structure i think the best thing to do here is get a deliverable that your md on your project has worked on a final product and just print it out and have it next to you so you know the kind of formatting they’re looking out for you know the exact kind of detail in the way they like to present their pages it’s just a lot more helpful and

It’ll save you a lot of time than just continuing to work off of drafts the second thing is to apply intuition now it’s not really your job to think as an investment banking analyst but you still need to apply a certain amount of logic whenever you’re modeling whenever you’re making an output what i like to look out for is that everything should follow a basic

Trend if you’re looking at like a high growth company then you should expect a lot of revenue growth so that should be your expectation as you are reviewing the numbers or as you are looking at a particular analysis the third thing is c comments you need to make sure that every single comment that your md or associate gave you is highlighted or crossed out and

You need to be methodical because if you miss a single comment then the deliverable is not perfect that means it’s not done yet i’m not kidding here you should literally print out the comments that you receive and make sure you highlight and cross out every single one it’s not good enough to just have their email up and then have a mental checklist going people

Are not as careful as they think you need to create a system in which no things can fall through the cracks the fourth thing is time and i have a general rule of thumb if you’re doing an analysis that means checking your work should take up between 10 and 20 of the total time that you’re going to do so if you’re given three hours to update a model and output it

Into powerpoint then you should spend at least 20 to 30 minutes checking through the excel and checking through the powerpoint this is kind of that thinking fast and slow mentality but when you’re checking your work you want to be in a slow mindset you want to treat it as a discrete task of reviewing the work and making sure it’s right the last thing you want

To do is save up and print that means you version up there’s no version control issues and you print it out for one final review it’s kind of like a psychological truism but when you’re reviewing something on hard copy you can just spot mistakes more easily than if you can review it on your screen so in summary what you want to do is make sure you’re in good

Relationships with the people who can put you on good deals it’s better to be on a buy side transaction where you can think about the investment rationale of the buyer and most importantly you want to make sure that you’re consistently delivering a high quality product and you can do that by checking your work so if you’re in banking and you’re already thinking

About private equity recruiting you can check out our private equity course online at we have a bunch of information on headhunters as well as the firms they cover and what the process has been like in the last couple of years thank you so much for watching this video please subscribe and i’ll see in the next one

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Advice for New Investment Banking Analysts By Peak Frameworks