Congratulations! You managed to land yourself an investment banking interview. You have just improved your chances of landing an investment banking job from something like 1 in 200 – 300 to more like 1 in 30 – 40. You’ve actually passed the hardest hurdle…getting yourself noticed in an incredibly crowded environment.
Most investment banking candidates are so focused on passing this initial hurdle that they don’t really think about the next step…actually getting through the behavioral and technical interviews. This guide will give you an overview of how to deal with the Investment Banking Behavioral Interview and the most common topics that will be covered during your interview.
So what is the behavioral interview?
The behavioral interview exists to determine what sort of person you are, how interested in finance you are and generally how ‘likable’ you are.
Although the behavioral interview is a ‘soft’ interview it is as important if not more important than the technical interview.
The people interviewing you are going to be working with you 16 hours a day, sometimes 7 days a week and they definitely want to know that they can get along with you.
What does the Investment Banking behavioral interview look like?
The behavioral interview is normally broken into a few distinct sections:
- You background and a general discussion about who you are
- Demonstrating your interest in finance and investment banking
- A discussion of your previous employment history
- A discussion about your core skills and talents
- Any questions you may have to ask your interviewer
How to discuss your background in a behavioral interview
Every fit interview will start with the interviewer giving you the opportunity to tell them a bit about yourself. This is going to happen so make sure you have your answer prepared. You should hit the following points:
- Your education background and it’s status (yes I know you described it on your resume but cover it anyway)
- Your interest in financial markets and your desire to work in the finance industry. You need to tie this to your background and education
- Your previous relevant employment history
- A brief summary of your main hobbies and interests
How to demonstrate your interest in finance and investment banking
If you have read my 7 Steps to Getting a Job in Investment Banking you would know that demonstrating an interest in finance early is key to landing an Investment Banking job. It is important to actually get the interview and then in the interview itself.
You will always be asked whether you follow the financial markets. The only acceptable answer is yes. The natural follow up question is
“Please tell me about a deal that you have been following in the market”.
There are several ways to answer this question but I have outlined one possible answer is below:
- Make sure you talk about a relevant deal. If possible make sure the bank you are interviewing with is NOT working on the deal
- Most of the advice I have read seems to suggest that you should talk about a deal that the interviewing firm is involved in. It shows that you have ‘researched the firm’
- There is one big problem with this. However there is a strong possibility that the person interviewing you is actually working on the deal. There is only so much you can pick up from media reports and they will know exactly what you are missing
- With other deals in the market though, they will only know as much as you do so a high level summary should be sufficient
- Outline the parties involved in the deal and the headline figures
- g. offer price of $x.xx per share implying a market capitalisation of $x,xxxm and an enterprise value of $x,xxxm
- Outline the strategic rationale for the transaction
- What are the implied multiples for the transaction?
- Make sure the multiples you use are relevant for the transaction you are describing
- Some multiples you may want to include are EV / EBITDA, P/E, Price / Book
- People rarely go into this level of detail and if you do it will really show that you have done your research
- What sort of impediments is the deal likely to face?
- This sort of discussion shows that you have really thought through the deal you are talking about
- Some impediments may include interlopers, regulators, a hostile board etc.
You will also be asked what financial publications you read and will often be asked what you invest in and why
- If you are from the US you want to explain how long you have been reading the Wall Street Journal
- If you are Australian the relevant newspaper is the Australian Financial Review
- If you are from the UK it is the Financial Times
- For the ‘what do you invest in’ question have the stock ready and explain your rationale for investment. Also if you can explain when you made a mistake and what you learned from the experience you will really impress your interviewer
How to discuss your previous employment history
If you have worked for financial firms before or if you have done an internship in the past you will always get a question on this. There are a couple of key rules you should always remember when discussing your previous employment history:
- Always talk about your previous employers and the experience you got out of it in a positive light
- If your previous experience was in a different field say that you enjoyed it but you were looking to enter Investment Banking because…[any reason other than money]
- Never ever bad mouth your previous employers – this is the quickest way to get cut
How to talk about your skills and talents
The opportunity to talk yourself up will normally come towards the end of the interview. It would normally be asked as follows:
“Is there anything you would like to tell me about yourself”
This is your opportunity to talk about your skills and achievements. I have noticed that in some countries this is a lot more acceptable than in others. In Australia, for example, it is seen as unseemly to blow your own trumpet so people tend to play down their achievements.
You need to swallow this impulse and talk about what you are good at and what skills you bring to the table
Do you have any questions for us?
This is an absolute gift of a question. The number of candidates who do not take advantage of this astounds me. You want to ask something uncontroversial but that shows that you are really interested in the industry and in the job. Good questions include:
- Can you tell me about the training programs offered by your firm?
- Are there any opportunities for travel and how long does it usually take to be able to take advantage of these?
- How does your team structure work? Do you use a generalist model or a sector team model? Is there the potential to work within other teams?
If you are prepared for all of the sections above you will probably be less stressed and more able to show them that you are a willing and able employee who is interesting and who is interested in working in the industry.
Whilst you are going through the interview process don’t forget that interviews are a two way street. They are trying to see whether you would be a good fit for their organisation and you are trying to see whether it is the type of place that you would be interested in working at.