Investment Banking Careers – What To Do In Your 2nd 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
- Continue with the basics mentioned in What To Do In Your 1st Year Of University
- Get a position of responsibility – banks love organizers, self starters and team players
- Application organization – it’s a first come first served market, so apply as soon as they open, but don’t write generic application answers
- Be up to date with the business news
- Technical prep – to perform at a high level on the internship, you have to be all over accounting, modeling and valuation beforehand
- Attend talks and network
Start with the basics mentioned in What To Do In Your 1st Year Of University. As a quick reminder:
- Use your free time for finance related interests and internship related learning
- Steer your studies towards finance where possible
- Get any finance related work that you can
Now we move onto the next steps…
Positions Of Responsibility
This can be in the finance or investing society (ideal) but can also be in an unrelated hobby (which is still very good and shows breadth of character).
A large part of bank applications and interviews is spent trying to find organizers, self starters and people who are willing to work hard at something even though they are not being paid for it. It shows commitment. Think about an amateur sportsperson who gets up at 4.30am and is ready for practice at 5am.
So join a committee, become an officer in a society, even start a new event or club (which shows initiative) and note down the major things that you did individually and what the committee as a whole accomplished over time. Note how you worked well together, but also when you didn’t work well and how you overcame it. This gives great examples in applications and interviews.
If you worry that a non-finance committee won’t look as good, you’re wrong. Being the treasurer of the dance society, with 500 members, 10 weekly classes, a weekly committee meeting and lots of money moving through every day looks great on an application and provides plenty to talk about in an interview.
Just make sure to show your enthusiasm for finance in other ways.
Applications – Get Organized And Don’t Be Generic
Applications open early and many candidates apply early, so you need to be there too. In the US the applications will be over mid way through your 2nd year…even though the internship won’t start until the end of your 3rd year.
So make a list of the organizations you are applying to and note the dates when the applications open and close. Be aware that MANY will close before their official closing date, and lots of applicants will be ready on the opening day to fill in the application and submit it there and then. Being at the front of the queue pays off.
However this makes it very tempting to write some generic answers and then copy and paste the same thing into each application. This is a recipe for disaster. Avoid at all costs. Top institutions want to see that you have been dreaming about THEIR job in THEIR specific company for years, so using the same wording from one application to another won’t work. Be specific about deals they have done. Use newsworthy stories about them. Use examples and terminology that they use on their own website – a bank may refer to their values as “4 Core Values”, “Bank ABC Principles” or “Value Culture”. Use their own terminology to show you have read their website a dozen times and understand them completely.
Financial institutions expect you to be all over the news, in particular the business news, so start reading now so you are ready to talk about it in your interview.
If you are just starting on this, the “Lex Column” in the Financial Times is a really good summary of the news and can be read quickly. It’s a great way to introduce yourself to heavy papers like the FT or Wall Street Journal without getting bogged down. And then gradually start reading the rest of the paper.
The business pages of any serious broadsheet newspaper are a good start though – The New York Times, The Daily Telegraph, and The Independent are just a few examples from the US and UK. Get a subscription – there are student discounts available and they are well worth the cost.
There are of course great websites too – Investing.com and Reuters have good free versions, but a paid news outlet will always give you better business analysis, so invest in a subscription now. You can set email alerts for news on your target banks too. You should be reading proper news stories from decent news outlets, not just social media, every day.
Banks provide training in the first few days of the internship, typically one day each on accounting, modeling and valuation. For those who have done 3 years of an accounting degree, you know that can’t be squashed into one day. And yet you will be expected to use accounting knowledge every day of your internship. It underpins every major department.
So don’t expect a bank to see your lack of accounting courses and still decide to take a chance on you. We need to show that this job means the world to us and we want to excel in it from day one. So supplement your degree studies with extra work. This doesn’t mean studying 100 hour weeks. Start with 5-10 hours of extra training. Accounting, Excel modeling and valuation are the three big ones to hit, and you should certainly start with accounting.
But don’t just read – only a small amount of information will stay in your heads from reading. Instead learn by doing – compare one company’s accounts to another’s. Calculate some ratios and see how your companies look. Liquidity ratios, profitability ratios and leverage ratios are a good place to start. Then think about the future of one the companies and forecast the future in an Excel model. Once you have a little model, try valuing it.
So read books, attend courses, join discussion boards and get the training going early. There are lots of things available and your competitors will be availing themselves of these resources.
PC vs Mac
The world of finance nearly always uses a Windows computer rather than an Apple Mac. And yet most students use Macs. Being able to do basic things (and we mean really basic here, like print a document, file an email, organize files, etc) quickly and effortlessly is going to give you more time to do actual work…which will also be in a Windows program such as Excel and PowerPoint which you need to be fast at.
So move over to a Windows laptop if at all possible and do the slow clunky learning now rather than while sitting next to your boss who wanted the model finished 30 minutes ago.
Attend Talks By Your Target Employers
These are fantastic – take extensive notes. Everything they say will be specific to that bank, and often won’t be found on a website. This has the potential to be gold dust. Talk to the presenter afterwards and ask as many questions as you can without overstaying your welcome. Add them to your contacts on Linkedin and thank them the next day.
These talks can help in writing an application specific to that bank, and means you hear about details of M&A deals that would not have made it into press releases. If the talk is a bit generic then ask questions that will help you. We say it again – take notes.
Many of these talks can be found through your university careers service, or direct through the bank website.
Following on from the talks above, if you have the opportunity to meet with current bankers, do. Alumni from your university are a great way to do this, if possible.
Don’t aim for managing directors – they don’t have time to chat to university students. But analysts and associates do. They were in your shoes not long ago and know how you feel. Add them on Linkedin, send them a message pointing out your connection and ask if they would be willing to meet, chat, message, anything.
Not everyone has the luxury of well placed alumni (and many will be too busy to meet anyway) so chatting to presenters at talks is a great second best. Ask if they would be willing to meet up at another time so you can grill them about the work they did, and about what it was like working in the bank. Say you can meet them at their work to make it easier for them. If this involves travel then try to double this up with other network chats or activities.
These people won’t be decision makers in recruitment, so you aren’t trying to get a job from them, but everything they say adds to your knowledge of the bank and shows your unquestionable enthusiasm for a job there. It’s also great ammunition in interviews.
Your 2nd year is when everyone is cranking up the effort. So get organized early and start preparing for the job – read the news like your job depends on it. Get the technicals under your belt (and use a Windows PC if possible) so you can fly on day one of the internship. Prove you can work in a team, and find out as much about the industry and specific banks you are applying to as you can. The earlier you start, the stronger your application (and internship experience) will be.