Finance Interviews
Darren Wray, Finance Sector Manager
Madison Investment Fund
2/26/07
Agenda
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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.)
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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
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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
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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
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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
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“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
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Sales & Trading:
-Often the most profitable area of an I-bank
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-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
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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
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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
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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
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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
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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
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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.
Questions & Comments?