Investment Banking Career – What To Do In Your 1st Year Of University
US vs Other Geographies
In the US and some other areas, summer internships happen at the end of the 3rd year at university, whereas in Europe they happen at the end of the 2nd year. But US applications happen 1 year earlier than in Europe, so whether you are in the US or in Europe, this advice still applies to your 2nd year. In other areas it may be more nuanced so you may have to check.
Key Learning Points
- Start early. To get a lucrative summer internship at the end of your penultimate year at university start planning 2 years earlier
- Free time: You must join societies, network with older undergrads, skill up by taking banking courses or reading books, everything possible to improve your CV
- Studies: Get your best grades at the start of university, and show your commitment to finance through your choice of courses
- Work: Get something (anything) finance related in the holidays to boost your CV
Why Start So Early?
Banks love internships. Summer internships are used to recruit the majority of new analysts. They act as a super interview where banks get to test drive the analyst before offering a permanent role, and a successful internship often means an instant job offer.
But banks are no longer the only high-paying employers. So they have to recruit early to get hold of the most motivated employees. And your fellow students are doing everything possible to get that coveted summer internship.
Is There Much I Can Do 2 Years Before Internship Application?
Yes! There are two basic principles to keep in mind when choosing how to spend your time:
- Your CV needs to display a fully fledged and unquestionable enthusiasm for finance
- Your CV needs to show a firm grasp of the technicals of banking (accounting, modeling, valuation, etc)
Now that you know the two things you need to do, here are the four ways you are going to achieve them:
1. Spend your free time doing finance things
- Join the finance and investing societies. Network with older undergrads who have had internships. They have filled in applications, done internships, and will have done intensive training in their first week at the bank (often with Financial Edge). Ask them how to skill up on the technicals
- Do finance case studies
- Enter an Excel modeling competition
- Attend finance related seminars and webinars
- Attend finance related careers talks, connect with the presenter on linkedin and thank them for the presentation the next day
- Top tip – do as many of these things as possible, even if it covers the same technical content twice. When you see a film for the second time you always notice the details and the plot holes better. The same happens with new technical content – more of the content is understood and you think of better questions to ask
“But I won’t understand it”
You may think a finance society case study makes no sense to you at first, but it will by the end and you will have learned invaluable terminology and delved into a real company’s income statement, balance sheet, and cash flow statement.
You may come in 10,000th place in a modeling competition, but you’ll have opened Excel and tried creating a financial model, forecasted the financial statements and started using keyboard shortcuts.
Gradually populate your Linkedin profile with everything above, and compare it to second and third year undergrads. This is your public professional self – if you send a thank you email to a careers event presenter, guaranteed they will look you up on linkedin.
Start by choosing a course in finance, accounting, economics or something that is numbers related e.g. computer science or engineering. These will take you to many other careers if a job in finance is not forthcoming.
If there are optional courses in your degree, choose the easiest for your early university years to boost your CV. 100% scores aren’t needed, but get as high as possible.
If there are any finance or accounting optional courses, ensure to take them so you can show your enthusiasm for a career in banking, but also to get as much technical training as possible so you can impress during your internship.
Get learning the technicals of banking fast. Once offered your summer internship you won’t have lots of time to prep, so start early.
Core topics that underpin the world of banking include:
Get your own books that focus on these and start reading. Open Excel and start building a little model. Do courses that give actual practise in real sets of accounts, forecasting Excel models, real valuation cases and even M&A scenarios. Don’t be the person who applies for technical roles but has not tried to gain any of the technical knowledge themselves.
Attached to this are the accounts for Under Armour to get you going. Initially just focus on the three financial statements – income statement/consolidated statement of operations, balance sheet and cash flow statement for now (see page 55 onwards of the PDF). Try to understand what each of them is doing and what each line item within them means.
Start with the major line items like “revenue” which you will find in the income statement/consolidated statement of operations (there is a screenshot below to help you find the right page), and “property, plant and equipment” which is found in the balance sheet (also see below), before moving onto the other line items.
4. Finance related work and early internships
The summer internship 1 year before finishing university is the big prize, but there are other earlier internships available. Some banks have internships in the summer 2 years prior to finishing university, while others have Spring internships. Getting a place on one of these would be amazing, and leads straight into the big summer internship, so find them and apply early. However, sadly, these internships are relatively rare in banking. So get any finance related job possible during your holidays. Even if you don’t want to be an accountant or asset manager, if you can get a spring or summer job in those areas, that is your springboard to a later internship in a bank. In some geographies such as the UK, a year in work (a sandwich year) in the middle of your studies is a popular way to get work experience and should be carefully considered.
Other undergrads know they want to go into a high flying finance role from the first day they get to university, and they are prepping hard to get it. These are your competitors so choosing early is going to help you out. Leaving your prep until the last few months before applications is going to make it harder. Not impossible, just harder.