If you have gotten through the Behavioral and Technical interviews you’re probably going to have to survive the Investment Banking Case Study. The case study is not as tough as it sounds. It is as much about keeping control of your nerves as anything else.
Typically the Case Study will be one of the last rounds you go through in the investment banking interview process. Each investment bank will run their case studies slightly differently and some don’t bother with them at all.
This post will go through what the case studies normally involve and how you should best approach them.
What does the investment banking case study involve?
Because each bank runs this process different it is hard to tell you exactly what your interview will involve. Some of the most common types of case studies are:
- Getting a set of information including broker reports, news articles and stock exchange releases. You’re expected to talk through the deal, the valuation implications and metrics and what you see as the rationale for the deal
- You get some raw data sets and are asked to find the most appropriate target for a given bidder. You are expected to talk through the valuation considerations, possible acquisition structure, tactics and impediments
- You get a set of information about an acquirer and target and have to do a presentation to a hypothetical board about the acquisition, the valuation impacts, structure and impediments.
Note that you may have to present this case study in front of a small group or assessors or you may have to do it in front of a large group of bankers and other interview candidates (I have seen both of these models).
If you’ve thought through the different case study models above you may have picked up on a couple of common threads that are common to all case studies:
- You are going to have to deal with valuations in a practical sense
- You will be given time and a calculator so make sure you have some basic valuation metrics to talk about
- Talking through the strategic rationale for the transaction is imperative
- All M&A transactions have a strategic imperative and addressing this will demonstrate your ability not just to talk about finance in the abstract but to show your general business knowledge in an applied sense
- Acquisition structure
- So you’ve talked about the finance aspect and the business aspect…next you have to talk about the practical M&A aspect of the deal…how do you actually do it
- Knowing the different ways you can do an M&A deal in your jurisdictions and the different ways you can pay for it is key to nailing this section
- Impediments to a deal
- No deal ever goes as smoothly as you want it to so to really put the cherry on the Investment Banking Case Study cake you need to talk about what could possibly stop the deal
- Is an interloper going to come in and snatch the target, are there going to be anti trust issues that you need to overcome
- Explain the issues and explain possible countermeasures that could be taken (if applicable)
Don’t get stressed out…the case study isn’t as important as you may imagine
This interview is important but it is not the same as the fit or behavioral interview. You’re not going to get cut because you screwed up the case study. How do I know this? Simple…I screwed up the case study…majorly…and I still got the job. I saw others make a real hash of it as well and they got the job.
The case study is much more difficult than any of the other interviews and interviewers are going to give you a lot more leeway to get things wrong. If you stick to the main points I mentioned above you will fly through it (no matter how badly you think you went).
That being said…you want to give yourself the best shot…
So how do you get over your nerves and how should you best spend the time you are given to prepare for the case study?
- Make sure you understand the points you need to address and all the high level answers before you get into the detail of the financials…
- Bankers love numbers so make sure you allocate more of your preparation time working out things like acquisition value and multiples than on things like anti-trust issues
- Have the strategic rationale for the deal nailed down before you head into the room to speak…you can be sure you’re going to get a question on this one
- Be calm and speak slowly and clearly
- Logically order your presentation so that it is clear when you are moving from section to section. Signposting where you are going is going to win you a lot of points
- When you have finished speaking WAIT…you will get questions and you don’t need to fill the silence with waffle
When answering questions
- Listen to the question and try and understand what they are looking for (it is normally pretty basic)
- Ask them to repeat the question if necessary
- If you don’t know the answer do not try and fake it. Say you don’t know and then try and work it out from first principles (you would be surprised how effective this technique actually is)
- If you are getting asked really hard questions you are doing really well. Honestly the bankers aren’t trying to screw you. If you are nailing it they are going to push you to see where your knowledge ends. Just keep going until you can’t answer any more and then admit as much
You never go as badly as you think you did
Honestly you never go as terribly as you imagine. I thought I was completely out of the contention for one bank with my performance in the case study. I wasn’t perfect but they weren’t looking for me to be perfect. They are looking for someone that can think rationally and think on their feet and also someone who can present well.
I have trained heaps of people to nail the Investment Banking Case Study so if you have any qu