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Finance Interviews. Darren Wray, Finance Sector Manager Madison Investment Fund 2/26/07. Agenda. I. Basic Interview Tips -Ground rules for all Finance interviews II. Areas of Interest -Investment Banking, Sales & Trading, Research, Structured Finance, The “Buy Side”

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finance interviews

Finance Interviews

Darren Wray, Finance Sector Manager

Madison Investment Fund

2/26/07

agenda
Agenda
  • I. Basic Interview Tips

-Ground rules for all Finance interviews

  • II. Areas of Interest

-Investment Banking, Sales & Trading, Research, Structured Finance, The “Buy Side”

  • III. Investment Banking Recruiting Profile and Interview FAQ -Typical path of entry into I-banking as a JMU student

-What to expect in an investment banking interview

  • IV. Sales & Trading Recruiting Profile and Interview FAQ

-Why Salespeople/Traders are inherently better thanbankers

agenda cont
Agenda (Cont.)
  • V. Research Profile and Interview FAQ

-Highlight the different opportunities in research

-Illustrate common pitfalls in research interviews

  • VI. Structured Finance and Buy Side Profiles/FAQ

-What is Structured Finance?

-Brief overview of Buy Side interviews

  • VII. Conclusion

-List of resources for interview prep

-Closing Remarks

basic interview tips
Basic Interview Tips
  • Dress professionally, keep it conservative
  • Know every line of your resume
  • Interpersonal/communication skills
  • Accomplishments: Must be measurable
  • Be able to tell “your story” in 30 seconds or less
  • Build a rapport with the interviewer
  • Thank you notes
  • Have intelligent and relevant questions prepared
investment banking interviews
Investment Banking Interviews
  • Investment Banking Business Segments

-Corporate Finance: FIG, TMT, Energy etc..

-Mergers & Acquisitions

  • Typical Path of Entry for JMU Students

-Very difficult industry to enter. Must be persistent.

-Multiple phone interviews followed by “super day”

  • Expect to do most of the work independently

-JMU has no formal recruiting arrangements with any bank

investment banking faq
Investment Banking FAQ
  • Why I-Banking? What is I-banking? Why do you want to work for this bank? Various “fit questions”
  • Are you prepared to effectively sacrifice your social life by working 100+ hour weeks?
  • How do you value a company?
  • Tell me about a recent deal we completed
  • Explain how the three financial statements fit together
  • What is your biggest weakness?
  • Long stock recommendations
  • Brainteasers
  • Where else are you applying/interviewing?
  • Computer Skills
attitude
Attitude
  • “We don\'t hold it against people who have advanced degrees, like MBAs, but we do prefer people with PSDs: poor, smart, and a deep desire to become rich.”

- Ace Greenberg

sales trading interviews
Sales & Trading Interviews
  • Sales & Trading:

-Often the most profitable area of an I-bank

-Traders buy and sell financial products with the goal of making an incremental amount of money on each trade.

-The sales force primary job is to call on institutional investors to suggest trading ideas and take orders.

  • Personality Conflicts between Salespeople and Traders
  • Path of entry almost identical to Investment Banking
  • Interviews focus on your ability to work under pressure
sales trading faq
Sales & Trading FAQ
  • Expect Rapid Fire Questions from Volatile Traders
  • Long & Short Stock Recommendations
  • Impact on Markets Following Economic Data Release
  • What is the square root of .1?
  • Why should I hire you as a trader/sales person?
  • What would you do for a career if Wall St. didn’t exist?
  • Where are the major market indices now, and what have they done over the past 3, 6, 12 - month periods?
  • What financial publications do you read?
research interviews
Research Interviews
  • Equity Research

-Division which reviews companies and writes reports about their prospects, often with "buy" or "sell" ratings.

-Sell side research aids the firm’s traders and sales force as well as its institutional clients

-Buy side research is typically less formal

  • Fixed Income Research

-Ratings companies such as S&P, Moody’s, and Fitch evaluate corporate and sovereign debt instruments

research interviews faq
Research Interviews FAQ
  • Despite popular belief, research analysts are not hermits that enjoy going over 10-Ks in the dark by themselves.
  • Long stock recommendation…Very important
  • How do you value a company?
  • Explain how the three financial statements fit together
  • What financial publications do you read?
  • Do you stray away or look forward to client contact?
  • How has GDP trended over the past year?
  • What does the inverted yield curve mean for our companies?
  • Writing skills are VERY important on the sell side.
structured finance
Structured Finance
  • The securitization of an asset with a steady stream of cash flows. Ex. Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDO)
  • Big four accounting firms all have established structured finance groups which recruit actively at JMU
  • Interviews tend to be more personality fit based.
  • Computer skills, especially Excel, are highly valued.
  • Math skills may be tested.
the buy side
The Buy Side
  • Institutions such as mutual funds, pension funds and hedge funds that buy large portions of securities for capital-management purposes. Private equity firms can also be included in this definition.
  • Very limited opportunities for JMU students.
  • Buy side interviews will be very similar to sell side. Private Equity interview = Ibanking interview on roids.

Hedge Fund Research = Sell Side Research – Writing.

preparation
Preparation
  • Vault Guide to Finance Interviews

-THIS IS NEEDED

  • Become familiar with Wall Street pop culture.

Books: Monkey Business, Liar’s Poker, When Genius Failed, and The Bonfire of the Vanities

Movies: Wall Street, Boiler Room, American Psycho

  • As MIF analysts you should already be reading WSJ daily. Start reading more obscure/industry specific publications.
  • Practice with friends, fellow analysts, and your manager.
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