What is Analyst Investment Banking Training Like?

Who is there?
Many banks have stretched the net of who's included to global or nearly global. Having the Americas and APAC train in NYC and EMEA train in London is common but some bring everyone to the NYC headquarters. Analysts coming from APAC may have already worked several months because the school cycle is so different.

After spending some time with the analyst class there are some definite trends that become obvious. It is very rare to have analysts going to NYC who have not summered with the bank before, or at least with an IB of similar caliber. Most of the Ivy League school students end up going to NYC, which although geographically makes sense, is still interesting because many of these students exit with liberal art degrees. Many of the regional analysts would have summered before with the firm but that is not as strong a rule, most of these analysts come out of the less recruited schools, and many of them have econ or business backgrounds.

What is it like?
Training is generally a rehash of your average 4 year commerce program with a focus on applied skills (very little theory is taught), and familiarization of the tools needed to do the job. The NYC analysts may not be placed in their coverage groups yet, and so they are still networking for the job. Most of the regional analysts will have group placement and so training for them is less focused on performance, and more focused on getting the needed skills and having a good time in NYC and London.  Most firms in NYC will use one of two providers, wall street prep or AMT. The classes are very involved, you are constantly doing excel questions and creating output, which makes what is for many review a much less painful than it could be. The hours per day average between 8 and 12, with one or two all nighter's through the month.

Bottom Line
Analysts should take two things out of training: a network, and tool skills, in that order. Coverage groups will all treat projects fairly uniquely, so the modeling, valuation, and accounting fundamentals you have out of any business program are more than enough. You will however never have the chance to see the whole analyst class at the same time again, and you may need them in the future. Calling for information between groups happens and a friend is much more likely to carve out 15 minutes for your needs. Also when the analyst class looks to move on from the firm, the IB analyst pool can have great benefits when looking for exit ops.

After 4-6 weeks school is out, and the work begins. Enjoy your evenings while you have them!

What schools have traction with i-banks?

I ran across this graph for recent analyst hiring by a major BB IBD for North America. It's interesting how much of a chance the 'little guys' actually have.

Investment Banking Pay

I need to preface this by saying I don't actually know. I have a rough idea of what my first year compensation is, but I'm guessing on the performance bonus, and the hours per week are estimated from what analysts at wallstreetoasis.com are saying from my area and division.

I decided to try to map out the first 10 years, and I was fairly aggressive with my progression. My hour per day estimates are below.

So I'm thinking 2 years at Analyst, 3 at Associate, and then through VP to Director by the end of 10 years on the job. I know it's possible, I'm not sure if its plausible, but we have to start somewhere. I expect to be working 70 hour weeks as an Analyst, however I know that 100 hour weeks are possible. I set a lower bound at 45 hours, there is now way the deal could get sweeter than that, and if I'm only putting in 45 hour weeks its because my team has no work, so I'm likely both not looking at a good bonus and possibly out of a job.

Now for the numbers.

My sensitivity assumptions are subjective, should be viewed as upper and lower bands, not any statistical deviation measure derived from actual data sets. My expectation growth assumptions however are not entirely made up, there are lots of web resources that estimate salary scaling over time, I primarily used payscale.com.

So whats the story. The upper graph shows clearly that i-banking is a 6 figure foray with bulge bracket banks, a mind boggling figure for any starving student. Of course this is all pre-tax, but it's nothing to complain about. The lower graph however tells the real story; one that is a common find for anyone seriously considering the industry. The pay per hour can be less than great. I suggest you read this mergers and inquisitions article, to hear the horror stories of i-bankers making less than McDonalds wages in the crunch.

Now we aren't heading into a recession, especially not in commodities which is my area of work, so I should be hitting above $20 an hour, but there is no real reason to expect my pay to be that much higher. My "good" forecast assumes some pretty legendary bonus numbers, I really think I'm going to be hitting close to my expectations, especially early on. All this tells us that i-banking has its proving ground period, just like every other competitive entry level position in business. The salary numbers are big, but the hours put in at the office can be legendary; just look at all the i-banking blogs that talk about that exact topic!

It is sure to be an interesting couple of years.

The joy of always being wrong

I just watched a BBC documentary on science (video below) and it centered on a general theme of precision. Basically anything in life is unknowable if you want absolute precision; it is only by allowing a certain degree of estimation that we can know anything. You can never truly know the age of the universe, the length of the space bar on your computer, what time it is, etc.

This brings up a question: am I okay with being wrong. On a personal level I think I am okay that everything I think about life can be countered with a 'but'. I will really enjoy poking holes in all of the 'facts' my kids may bring home from school. It's being wrong as a professional that might get to me.

Valuation is all estimation, and over the course of the last year I am beginning to learn that the best investment banker isn't the best estimator. Because valuation is all estimation, everybody understands any value derived is a 'best guess'. The thing about i-banking is that bankers almost always have an incentive to make the value higher or lower than the true value. I used to think that i-bankers would spend a lot of time on getting the true value, and then adjust growth, margin, and discount metrics, to derive an either optimistic or pessimistic price. Now I'm beginning to think that i-bankers skip the true valuation altogether and go straight for the optomistic or pessimistic price. Instead of that price being a statistically plausible deviation from the true price, it just becomes a strategically plausible price that the buyer/seller will accept. The whole process moves from science to sales.

I like the science, I love how stochastic variables working together can bring meaningful estimations. The idea that time devoted to estimation of any variable makes it more accurate, that overtime any model can become more and more precise is extremely empowering. Like the mathematician/physicist/statistician, time spent on my task brings increase certainty; unlike the scientist, instead of studying how things are or were, I focus on how things will be.

I am okay with always being wrong if I cared about being right in the first place. Reality hardly ever strikes the middle of the bell curve anyhow. I am not sure if I'm okay with being wrong, if I use the excuse that I can never be right to shape (or fabricate) my sure-to-be wrong answer to the will of my employer. I can only hope after the mind shock of moving into the private sector that I remember the difference.

Working for the Empire - Convincing family and friends that i-banking is moral

Christmas has passed, marking the mid way point of another winter vacation and the conclusion of two great nights of debate with the extended family. Christmas eve was devoted to the virtues and problems of wikileaks, religion, foreign policy, Canada's involvement in Afganistan, and the motivations behind joining the army. Christmas day however centered largely on one topic, the financial crash and the gross immorality of investment bankers.

Before I resign myself to the idea that my years ahead will be spent reporting to Lord Vader on how I managed to squeeze $30M out of 5 deals that were not in the underlying firms interest, I think my trade needs me to give it the chance to be moral and just.

My fathers side of the family is composed of many families that have made their living in C level careers in the oil in gas industry. They are in essence a good composition of my future clients, and it's a bit startling to learn how much my future customers might secretly hate me.

Their main gripes center around two issues: the money, and the incentive. On the macro level they feel that the high pay draws away bright minds from engineering, medical, and policy careers that the country needs more. On the micro level they feel that salaries give i-bankers a false sense of superiority and invincibility. Make millions when times are good, get government bailouts when times are bad.

I argue that the money is good because few are up to the task of doing the work. There is no oligopoly in the investment banking world, it is highly competitive on all levels and in all areas. With so much competition, and so much interest in becoming an i-banker, if the workers didn't hold some element of a scarce resource their salaries would be squeezed away to keep the firms margins high. But it is the people who drive the business, and when one person manages to bring in $10M of revenue their salary becomes justified.

What I have more trouble explaining is why the business itself is so profitable. How has the ~3% spread stayed so high if there really is so much competition. The obvious answer is risk, but my uncles seem convinced that the i-banks of today have almost completely eliminated their exposure. I'm sure the next 12 months will shed some light on the issue. If in fact the industry has been able to collude and keep these historical premiums while managing to eliminate the risk (and the costs that come with it) then maybe the industry isn't so "fair". But it's a industry wide phenomena, and one that is admirable to any capitalist as long as there is not some anti-capitalist framework keeping it in place (government relationships, or true collusion). Over time the markets should correct for these non-normal profits and my future paycheck should get a bit slimmer.

The incentives are another issue because they really are a product of the individual i-bankers business conduct. My firm will make money when a deal is done. It will make more money if the deal is big, and it will make more money on more deals. Thus the big incentive is to have i-bankers drive as many big deals as possible. Deals are IPO's, bond issuance's, mergers, acquisitions, consolidations, spin offs, carve outs, and LBO's. It is my uncles contention that i-bankers advise companies to do deals when they shouldn't, and that when the deal is going through the i-banker isn't thinking about the firm, but instead how to maximize their cut.

I think the biggest point of issue is that business men know how to run their business, and if they are good, they know how to run it well. Unfortunately finding oil reserves and getting to them efficiently, doesn't have a lot to do with a bond deal or a takeover. Very smart individuals get caught in a world they don't understand and it's their baby at stake if things go sour. When you don't have a good grasp of the playing field it's natural to feel like its slanted against you. And sadly it is natural for it to be slanted against you. Businesses need capital, and so they need i-bankers, and i-bankers need businesses to need capital. This symbiotic relationship should ensure that neither side screws the other on the macro level because each side can permanently avoid the other on an individual level. If an i-banking team gets a rap for being sleazy and underhanded they won't get business. If a business gets a rap for providing faulty information and trying to screw their bankers, they won't get capital. These 'jungle rules' keep both parties from the extremes, but I would agree that the balance of power is in the i-bankers court. Tough.

Neither of these business realities are immoral. I truly believe that an i-banker that screws his clients, is not long for his job, and definitely not destined for riches in the long term. Like any service industry the client is king, and the i-banker that does right by his clients, will win their trust and lead them through the really bid deals when the time comes.

The Virtues of Finance

There has been a lot written lately about the insider trading scandals in the states, particularly the one involving Raj Rajaratnam and his old hedge fund Galleon Group. I did my 4th year business ethics term paper on Raj, and I have kept an eye on the events as they've unfolded. The big takeaways I've gathered are that: in business it often boils down to intent, and that although painted black and white these scandals are often very grey.

For instance think about the whole purpose of hedge funds. Their goal is to achieve returns above the market return. If they are able to do this with less risk then they have just disproven either Semi-Strong Form (SSF) or Weak Form efficency (ie. are they arb, valuation, or trading based). Market crashes aside, the market seems to be fairly SSF efficent, and so any hedge fund manager making ground must be cheating.

Galleon group had expert panels. This seems like an obvious must to a firm whose strategy is valuation. Talk to industry participants about where they think the industry is going, and then tailor your investments accordingly. If industry expert A says "I think that the semi conductor industry is ready for a comeback, data warehousing is going to bring in a huge demand force. If I were you, TriQuint would be a hot buy right now - they are really poised to sell into data warehouse demand.", then that's pretty above board advice. But what if expert A is telling you this and his firm is a data-warehousing firm, who is about to make a big play for a TriQuint. A lot shadier.  This is were it can come down to intent, and the court gets to decide your motives, not you.

In finance this is painted with a much broader brush against the whole industry, and I experience it in conversations all the time. People on the capital side of the business are seen as the fat cats, who care about nothing except personal gain. Why?

Umm what do you do exactly?
Focusing on investment banking, I think it gets it's reputation for several reasons. First it's confusing. The general public has very little concept of how a investment banker adds value. It's easy to think you understand what an astronaut, firefighter, tax accountant, surgeon, does in a day, or how a car company makes money. Even trading seems somewhat understandable, but what in the hell do those i-bankers do to make 6 figure salaries right out of college? The average joe either just envisions an open excel spreadsheet, or a golf course. They don't see any output, there is no product, it's just really really hard to think of what the work is.

When I began talking to my parents about roles I was considering, or where I landed, I saw first hand the difficulties in explaining the business. Now that we've switched over to Skype to ease the international phone bill, I can literally see their eyes gloss over when I talk about how I plan on valuing a target oil company for a Chinese bidding firm.

Now my laymen one liner is: "I attempt to put a price on a really large business by predicting, as accurately as possible, how much it will make from now to forever." or if I'm feeling quippy "I price the future", "I value things that are hard to value", and if I'm trying to pick up, "Come back to my place and I'll tell you what you're worth" (bet she's not imagining the excel filled night I am....).

Okay so how does this help anybody?
Or put bluntly by a friend, "explain to me why you're not increasing world suck". This is a bit harder to defend because you do hear about situations when you can be forced between a moral choice and a profitable choice. I conceed this point, but I'd point out that every job has the ability to hurt society from time to time. Think car mechanic. Sometimes your mechanic may overcharge you for the work, or replace things that don't need replacing. This is because there is a large information asymmetry - you know nothing about your car. The thing is some mechanics will do it the right way, and they'll quickly be recommended by their customers, so although you may know nothing about your car, you do end up getting to know who is a good mechanic. The mechanic may add to world suck everyonce in a while, but too many fraudulant transactions and he's lost his business.

It has to be the same way in the business world. If someone is going to pay me, I have to be helping someone. I see the M&A i-banking role contributing two things. The first big one is information. Through my days toiling at the office I am creating information where none existed, I am lessening the information asymmetry between the bidder and the target (or on the issuance side the investor and the company).  A creator of knowledge is a pretty good thing to be, and although I'm not curing cancer, I may be contributing to the process that gets the money to the person who does. And this is the second big point. Investment banking let's people invest. My team is tasked with lining up good ideas that need money, with money that needs good ideas.

I may not be producing energy efficient solar cells, rice bags for the poor, or biomedical advances, but I am part of a system that lets those things happen, and without that system, none of those things would be possible. The catch is every once in a while, I may inadvertently (or maybe even knowingly) help line up capital for an idea that is not a net good for society. My defense is that these idea's need demand, and people don't pay for what hurts them. Sometimes they do, but they do it unknowingly. I argue for the system to work, these bad idea's, bad mergers, bad companies, must be few and far between, because if they were common consumers would lose trust. When you lose trust, you lose consumption, which leads to layoffs, which leads to depression. We all work around the principle that everyone is contributing to society, not taking away from it. It's a sound principle and it guarantees virtue in every profession if it holds.

Why so much money?
I haven't developed a good explanation to this yet. I'd still pursue finance if it paid a fraction of what it does; I'm made for the trade, what is more fun than predicting the future! Finance is my plan A,professor B, and helicopter pilot plan C. After that I would start thinking about professions that were "jobs" that could pay for other things in life I enjoy, but for now I'm looking for a career that is the life I enjoy. Chris Rock explained it this way.

So why the money. Well economically it should be because supply of the job is much higher than demand. But this isn't true, thousands of people apply to 1 opening, statistically each applicant has 0% of getting in, the wage should be dead low, because if you don't want it the firm can just give it to the next applicant. Before we ditch economics lets drop the assumption that every applicant is the same. Maybe out of the 1000 applicants, there are only 50 that could do the job? I don't know the answer to this one, but I'm sure it plays a part of the story, there are 4 rounds of interviews after all.

The hours need to be factored in as well. If you are working 90 hour weeks for 51 weeks a year, you are making under $22.00 an hour. Averaging a 90 hour a week is a bit steep, but I'd wager most i-bankers are making less than $30.00 an hour before bonuses in their first 2 years.

And let's not forget what employers are asking for here. Quants with presentation skills. It's not that hard to find a very well spoken university grad from a liberal arts degree. It's not that hard to find a quantitatively sharp university math major. It is hard to find someone who has both. Many business students are good speakers, decent on the business skills but lack the fundamentals in statistics. I-banking is high powered sales, you need the best of both worlds if you are going to solve and explain business combination investment problems.

The Image
I'll admit, I've read the blogs (for example the leveraged sellout), and seen the movies (Wall Street... the first one), and I can concede that those with less than admirable intentions may flock to the profession of i-banking. But I will say that I plan on leading a life of virtue (maybe a bit on the Ayn Rand side of the definition sure), and after speaking to my to-be team in the interview rounds I'm left with the impression that they do as well. It's never like the movies anyways...

Must Have Links - Finance & Otherwise

Quick post on my favorite information resources for both finance projects, casual reading, and time wasting. I plan to add to the list as I find more. I apologize in advance for the links not opening in a new tab.

Finance
Data for modeling
Current US Risk Free Rate WSJ
Canadian (Not as user friendly)  BoC
Rm & Rf data Global Damodaran
Excel Spreadsheets Pre-coded (Mid Quality) Damodaran & Matt Evans
Multi-Factor Pricing Data (Famma-French) Dr. French
Charts
Day Counter (Weekends included)
Coding help in excel (forum)

League Tables
Money Manager Rankings, IB Rankings, Check Bloomberg for:  Global FI , Global M&A, and Global Cap Markets Rankings.

Investment Data
Hedge Fund Performance CS, Barclay Hedge

Economics
Forecast reports BMO, Scotiabank, Euromonitor,
Forecast & Data BER, WEF
'Clean' Macro Data Site NBER
International Monetary Fund IMF

Options
Strategies (Academic) Numa
Pricing & Info on nominal exposure CME

Oil & Gas
Oil Price Forecasts IEA, EIA
Energy Ontario Specific

Agriculture
Commodity Forecasts USDA

Daily Reading
I recommend the WSJ, Bloomberg and The Economist.

Career 
Search Canada,  Canada General, Vlaad
HSBC, Barclays, BMO, North Leaf, Credit Suisse, GS, Colonial, OMERS, Macquire, PIMCO, RBC, ScotiaCapital, TD Securities, UBS, Brookfield Power

i-Banking & Finance Blogs (for motivation)
The Leveraged Sell-out, Things i-bankers like, DealBreaker, SeekingAlpha, iBankCoin, GuyNance, Living The Dream, The All Nighter (Leads to many more good blogs)

MBA
General & GMAT, Canadian,
As for MSF best resource I've found so far MSF HQ

For Fun
Cartoons (get the igoogle app for real cartoons), More Cartoons, so I like cartoons... Also reddit.com and grooveshark.com

Moral Balancer's (you know you need it)

Ted Talks, New Left Media, Liberal Viewer,

More to come!

A Typical Interview Process for an Investment Banking Analyst

Investment banks hire their Analysts about 10 months before they start. The exact process varies from bank to bank but generally an applicant should expect the process to begin in the middle of August and end in the middle of September for the top firms. These are the big multinational bulge bracket investment banks like Credit Suisse, Goldman Sachs (although they are a bit later), UBS, Barclays Capital, Morgan Stanley, and so on.

The theory I've heard is that the top firms pay top dollar to get what they think is the best talent coming out of this years business school graduate class at the undergrad (analyst) and grad (associate) level. After this hiring cycle is done the next tranche of banks on the league table grab their candidates for a little less money and it trickles down through the fall and winter as mid-market and boutique firms make their play for graduates. Come spring all the firms open their doors again if they want to fill a spot or two and offer unemployed grads a direct hire position. There are of course on the spot hires for teams that are in heavy need of more hands throughout the year but most graduates are recruited in one of these cycles.

Round One
The first round is the screening round. Resumes flood the firm through online applications, campus recruiting, and in firm recommendations. In my fall push I was 1 for 2 on an in firm push through approach, and 1 for 15 on the only online application approach - even then the 1 that bit was something I don't think I would have taken if it was offered. So if your serious in your landing attempts you need to reach somebody in the firm who can place your resume on the right stack. If you're successful you'll be given a call to line up a behavioral interview; I was given about 12 hour notice, so its good to be on your toes in your interview prep as soon as you are applying.

Round Two
Unbeknownst to me at the time I actually did my behavioral interview before I was screened. My contact in the firm had gathered enough on our 'informational interview' to form an opinion on my fit in the firm that he must have given me a pass on this round. The general questions you can expect here are the classic ones like: "Walk me through your resume", "Why investment banking?", "Why [firm name]", "Why this team?", "Do you think you can take the hours?", "What three of your strengths and weaknesses", "What are some questions you have for me?". The list goes on; generally if you take some time to think about your motivations and skills you will be equipped with genuine answers to give to the interviewer. If you are just memorizing what you think they want to hear because you think they wouldn't like your answer then perhaps you are applying to the wrong line of work?

Round Three
When I was given my 12 hour heads up for my behavioral interview, what I was actually being notified for was my third round technical interview. This became pretty clear after the second question, and I had to lean hard on my undergraduate knowledge and CFA I prep to answer valuation questions on the fly. Keeping in mind that I was applying to an M&A role in a office that deals primarily with large oil and gas firms here are some technical questions you can expect in the third round.
1. Walk me through your resume
2. How do you value a company?
3. How do you value a pure play oil and gas firm?
4. How do you value a firm before it IPO's?
5. Should you expect your DCF value to be higher or lower than your comparable's value?
6. What multiples should you use to value Oil and Gas companies? Be as specific as possible. (He wanted to hear Enterprise Value over Reserves, and I got likely got the next question as a follow up to see if I could incorporate the 'right answer')
7. You have been researching a firm and have a solid grasp of BPD [barrel per day] numbers, and their current and historical reserves. They are a pure play upstream O&G firm. How do you use this information to help you value the company?
8. A firm in the same geographical region and with normal firm activities (no blow ups ect) has a stock that is under-performing peers. What are the possible explanations for this / what would you check for?
9. Talk to me about LBO's. Should the precedent value set by other deals be higher or lower than your DCF valuation?
10. Any questions for me?

Round Four
And now the final round. They usually do this one on-site and so expect to be flown to the location at a moments notice. I learned of my Friday morning interview on a Wednesday afternoon, and had Thursday travel booked by Thursday morning; everything is last minute. You get to see a bit of how the firm values your candidacy at this point, everything is paid for and you are put up in very nice hotels. The day of the interview begins with a gathering of the prospective candidates. I expect each office does this their own way, but for my final round I ended up talking to the other three candidates for about 20 minutes while the team assembled for the rolling interview rounds.

There was four stations, or offices, that had two different people that would test you on different things, except for one office that housed the managing director. All of the interviews would start with "walk me through your resume" and the interviewers would focus in on different things as you made your pitch. I started with the MD and it was a behavioral / interest interview. It was my responsibility to ask most of the questions, and go into a bit of explanation of why I thought I was a good fit and could handle the work. Each interview would last about 40 minutes and then you would immediately transition to the next interview.

My second interview was with two members of the team - the interviewers ranged from the Analyst to VP / Director level. This one went technical quickly and I quickly sensed it was going to take an accounting bent. Like some young financiers I look at accounting like pilots look at radio protocol. Necessary to do the job, but always an unpleasant experience. So after covering as much ground as I could on the more interesting projects I was bringing to the table, it was time to tackle their questions. They went something like this:
1. Walk me though your resume
2. How do you value a company
3. Walk me through a DCF valuation from Revenue.
4. I just bought a piece of equipment for $100, $50 was cash, $50 was debt. Walk me though every accounting transaction that occurs during the year. And fill out the financial statements starting at net income.

This last question in particular is a tricky one and I heard it replicated in a interview prep course I ended up sitting in on after landing so I assume it's industry standard. I asked if I could write things on their white board and I was told no. I got them as far as the depreciation tax shield and change in retained earnings but it was a bit slow and painfully confusing to do all in my head. I solved it on paper on the plane ride home and it is actually a tricky question that looks deceptively simple to do in your head.

My third interview was another fit interview after being a bit shaken from my accounting interview I hit this one as hard as I could. In the moment it felt like it went well, and it was passion filled. It was one of those moments that you realize your dream might be slipping from your finger tips and the adrenalin kicks up yet another gear. It was in that interview that I realized how crushed I would be if I didn't land at this particular firm, and how much I really did want the job. From what I can remember it was a re-hash of the behavioral questions that should have been my round one.

My fourth and final interview was a valuation interview, something I've taken to be a personal strength, but after 2+ hours of grilling I was losing my crispness. Questions I recall being asked were:
1. Quickly walk me through your resume
2. What stock would you buy today?
3. How would you value it?
4. How do you measure investment risk?
5. Why Investment Banking?
6. You experiences lean towards investment management, why not pursue that?
7. Why Canada after studying in the USA?

And that was it. I raced out of the office to catch my flight home and my emotions swung a bit as I re-ran questions in my mind. In particular the accounting questions ate at me, and I felt I had definitely given them enough to say no.

Mercifully the offer call came in the next day on a Saturday afternoon and I worked with HR Sunday evening to iron out all the details - yet another indication that anyone in an investment firm never sleeps.

How to make your 4th Year in a Finance Undergrad Count

So you've spent 3 years in your BComm and you've just started to get into the exciting stuff. You've cruised through your foundation accounting courses, and finally gotten through the marketing, ops man, and info tech courses that round out your BComm requirements. Now you get to finally get to the meat, advanced investments classes, fixed income, derivatives. Having just graduated, here's what I think makes the most powerful 4th year BComm if you want to move into a i-banking role, or back office investment role.

Lets start at the end of your 3rd year. Hopefully you've been very involved with finance and investment clubs so far, and have taken - and aced - every quant pre-req you could get your hands on. Also (unlike myself) hopefully you have interned at a firm and made a connection that will push your resume forward come September when Analyst recruiting starts. Either way at the end of your third year you need to strongly settle on your goals. What job do you actually want? Can you get it with a BCom education? Do you have a connection that will vouch for you come September - don't be fooled by those online applications, if you're shooting high enough they are merely a facade; all the hiring happens through personal recommendations. So line up your contacts, grab that internship and work your but off.

Even if you think you can get this job with an undergrad I'd hedge your bets. Take kaplans GMAT prep course in the evenings after-work during the summer and plan to write that ungodly demoralizing test sometime in September. Obviously if you've decided you want to be hard-core quant back office you're going to need a masters in financial engineering or financial economics and so you should be looking at either the GMAT or the GRE.

Come August start making your push for that September Analyst hire (they hire in September for a July start the following year). Reach out to your network and try applying to 5-10 of the top firms that hold your job of choice. Enroll in the CFA level one for a June test date and put it on your resume. If you've got the connections and/or the grades you'll get picked up, if not you're preparing for the +1 lap.

So assuming things didn't pan out, pour your heart into GMAT prep and try to grab a 700+ score. Then apply to an MSc program that will give you that added push (see previous post). Don't forget the extracurricular's; for me my GMAT was nothing to brag about but experience I had outside of class opened doors to the right MSc program. Finance specific stuff is a plus, especially research based. Get on a project with a prof, or your schools pension fund, and make it as quant heavy as possible. You want to be talking about modeling in your interview, not how you proof read some technical writing. Case competitions are good to hone public speaking, and they are usually a welcome break from the grind as they often involve travel.

If you can, line yourself up for 4th year Economics courses in modeling - Econometrics classes. These classes are often qualifying courses for Masters degrees in Economics and they are tough but extremely valuable. There is really only a couple of 'good' times to learn about heteroskedasticity, autocorrolation, GARSH models, unit roots parameters, and ridge regressions, and the leisurely pace of an undergrad class is one of them. Obviously knock yourself out with every finance course offered, and if you can stomach it, take intermediate accounting as well.

As the year trickles on apply for the November cycle of grad school apps and start plugging time into the CFA level 1. It will generally parallel your 4th year classes nicely but it takes a lot of time and to fail would unravel an important part of your whole brand package.

Looking like your hot shit to a firm is really all about momentum. Because many students - especially from mid teir schools - don't land in the September of their 4th year it's really easy to lose momentum when you know you're going to have a whole year between undergrad education and your eventual hire. If you can pack that time with as much finance as possible you'll A) commit mild social suicide amongst your non finance friends and B) look really hungry for a job, the hungrier the better in an employers eyes generally.

The MSc for the Undergraduate Business Graduate

Sometimes a business student comes out of their undergrad and finds that all the golden doors of the private sector remain closed. As they bang their fists, and think indignantly that they have jumped through the hoops, passed the tests, and achieved the grade - why aren't the best employers hiring me?

Maybe its the economy, we are in the bottom of the trough and they aren't hiring anybody. Maybe today's BComm is yesterday's high school diploma and we all need to upgrade to masters and PhD's before the job market opens. Maybe you aren't supposed to work high finance after your undergrad but instead toil away in high tech or at a rental car desk. Perhaps although your school taught you enough to walk the talk, it failed to line up that all important recruitment meeting in your 4th year.

Regardless of what happened, top students seem to do one of 3 things. They upgrade their degree with a specialized masters degree, lower their sights and get ready to plug some time at a mid level job, or take the whole situation as a sign to enjoy their youth and go to Europe. I went to school.

The trouble with choosing to go to school is you need to make the choice in the summer between 3rd and 4th year so you can prep for the GMAT. Unfortunately I had decided to finally get a real summer job and load up on experience, and so instead of spending my days in the sun with clients I needed to plug some serious hours into an internship. Drop 2 classes of TAing on top, plus weekend work with the old employer and there's no time to chug GMAT math questions. So for 3 weeks in September I ignored my classes and plowed as much time as I could into relearning how to do high school math by hand. This hack-kneed self prep only set me up for one thing - dissapointment. So when November came along I slapped my 660 GMAT score on my applications and readied myself for top 20-30 b-schools.

I figured because I had paid attention during my undergrad I should be painfully well equipped for the material offered - these programs pull 80% of their students from non-BComm backgrounds after-all. So although getting top education is a priority, it's not the number 1 issue; I needed a school with brand.

The top tranche usually don't offer MSc degrees and they require 3+ years of work experience. So even without a 700+ GMAT score I'm not going to LSE unless I want to be a financial engineer. So after trimming down to schools that even offered degrees for students straight from undergrad I needed to look for a school that A)was known as a very strong Finance school and B)was a recruitment center for capital market analyst positions in the top firms. I need a stamp on my head that says "high quality | employable", maybe one of these schools could give me that.

BComm-Finance students don't do a Masters of Science in Finance to learn finance, they do it to get a job. And it works out perfectly. You enter this one year super accelerated program in the summer. While acing the foundation finance courses though August, you network your butt off with anyone you can pull a phone call from through your family, undergrad network, and newly established grad network. September recruitment opens up for Analysts and Associates; they usually hire Analysts first. Now you are pushing your b-school tooled up resume that says MSF instead of BCOMM to analyst jobs that typically go to the top undergrad students from the top universities. Better yet, because its September you get to drop that first quarter 3.9 GPA onto to the page. You look like a rock-star candidate; Masters student from a high quality finance school that is rocking great grades and is willing to start out as an Analyst. What they don't know is that your grades are so high because all the general arts students are learning finance for the first time, pulling down the curve, and you are answering all of their interview questions with know-how you learned in your 4th year M&A class. So early in the degree you're really the mid-level BComm grad they wouldn't look at twice disguised as Ivy caliber talent.

Not everyone approaches it this way, in fact most MS students land in the direct hire cycle in the spring. A lucky few with work experience can spin their MS like an MBA and grab associate positions, and some extend their 1 year program to 1.5 years to do an internship in the summer. But I'm convinced the best route is to tackle the market as a super-undergrad candidate. If you can land the top job the year at school refining your quant skills will be more than worth it, and you still leave the door open for an MBA later on.

Canada's Best Bachelor Business Degree

I wish somebody sat me down at the beginning of grade 12 and shouted at me for half an hour straight. I wish they had scared me shitless, telling me that this was the time to make it or break it. They should have told me my life depended on getting 90's if I wanted to get into a good school, and that my parents were wrong - getting into a good undergrad DOES matter.

In business a good business school matters, and it matters a lot if you want to get into high finance. My parents had this notion that any education was a good education if you went to a big Canadian school. After coming down to the states and working through a masters in a top tranche b-school I would half agree with them. Carleton (my undergrad) was a good education, but there was no brand, and brand is what you need to make it in Finance.

I just placed in a bulge bracket i-bank and in my final round a "stack story" I had heard on many an occasion in my undergrad rang true. The story is that undergrads from all over the country apply to the top firms. The big Canadian banks, and the international banks that operate in Canada; RBC, TD, BMO, Goldman, Macquarie - you name it. These banks, inundated with thousands of resumes and online applications create stacks. The first stack is from personal recommendations - candidates who have family / friends/ or networked hard enough to get a personal in-firm recommendation. The next stack is Ivy or Richard Ivy School of Business, the case based competitive and generally most stuck up b-school in Canada (yes I'm bitter retrospectively). The next stack varies by the firm, it's usually McGill, but sometimes Queens or UofT makes stack 3. Then it's stack 4, the "other" stack. Here promising grads from mid line schools like Carleton, U of O, Concordia, Acadia, U of A, ect, end up in a mountain of resumes. The firm will hire more than 50% from the personal recommendation pile and 40% from the 2nd stack - their preferred recruiting campus. The third stack gets a body in there once in a while and the other stack is left to recycling.

The only hope a mid pack school grad has of getting into a top job is to network into the first stack. Is this the fact for everyone? Maybe not, but I have yet to hear of a single hire story from one of my Carleton friends who did not upgrade post grad or grab a golden handshake from a family friend. This rings true in my bulge bracket final round interview. We all met before the interview started (another story altogether) and I had to smile as the stack story played out in front of me. There was a Queens MBA with lots of family in the city and an engineering background - likely a golden handshake story. Then there was two undergrads from Ivy, one doing a 5th year lap to grab a double degree Bcomm and Economics. The firm already had Ivy grads in it, and the two students gave a shout out to an Analyst on their way in, definitely golden handshake stories. I was leveraging an expected US degree and a family friend connect to get into the door and I had to wonder, could I have pushed in beginning of 4th year while still at Carleton. I doubt it. I needed to move up in the ranks before the golden gates would open.

The irony is that Carleton did a good job educating me. When half the student body doesn't give a shit and another 30% set their sights on small business book keeping there is a lot of opportunity to push to the top of the class and the top of your extracurricular's. After some sage advice I had weaseled my deep into the Economics department and had strapped some Econometrics courses to my finance tool belt. Most of my interview was filled with experiences I had on case comps, investment funds, research projects, and metrics classes. But here I am 1.5 quarters through a Masters in Finance, that more than anything else, is putting the right banner on my resume.

So. Canadian high school students looking to break into private equity, investment banking, sales and trading, or back office, need to shoot for the top schools. Ivy, McGill are good bets and the rest is up to research. Call the school and ask what banks recruit there. More than almost every other university degree a Bcomm Finance is a trade school degree - you are learning the skills you will use on the job. This means the University isn't the eye opening liberating experience it is for art students; for finance students university is the factory that will mold you into the model producing, sensitivity measuring, NPV pumping, quant jock you need to become. Go to the right factory.

Saying this I still really appreciate the education Carleton gave me and I have a strong sense of loyalty to the school, more so than my masters. As I start working I will be sure to keep in touch with my profs to push as many Carleton grad resumes forward as I can (and as quality allows for). If money comes my way, I'll pour it into the school. It's time to break that damn Ivy, Queens, McGill mold; but for now it exists.