Careers in Investment Banking

Insider

Guide Careers in Investment Banking

2008 EDITION

Careers in Investment Banking

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Careers in investment banking 2008 Edition ISBN: 978-1-58207-779-6

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Copyright 2008 WetFeet, Inc. All rights reserved. This publication is protected by the copyright laws of the United States of America. No copying in any form is permitted. It may not be reproduced, distributed, stored in a retrieval system, or transmitted in any form or by any means, in part or in whole, without the express written permission of WetFeet, Inc. The publisher, author, and any other party involved in creation, production, delivery, or sale of this WetFeet Insider Guide make no warranty, express or implied, about the accuracy or reliability of the information found herein. To the degree you use this guide or other materials referenced herein, you do so at your own risk. The materials contained herein are general in nature and may not apply to particular factual or legal circumstances. Under no circumstances shall the publisher, author, or any other party involved in creation, production or delivery of this guide be liable to you or any other person for damages of any kind arising from access to, or use of, its content. All illustrations by mckibillo

Careers in Investment Banking

CHAPTER

1 23 1 Investment Banking at a Glance

5 The Industry

25 The Firms

6 Overview

26 The Big Picture

8 The Bottom Line

26 Major Players

8 The Basics of Investment Banking 10 Emerging Industry Trends

Careers in Investment Banking

13 Industry Performance 14 Industry Rankings

conte 2008 EDITION

4567

67 On The Job

81 The Workplace

93 Getting Hired

68 Overview

82 Lifestyle

94 Recruiting Overview

68 Corporate Finance

82 Culture

94 The Recruiting Process

70 Mergers and Acquisitions

83 Hours

103 For Your Reference 104 Investment Banking Lingo

96 Interviewing Tips

108 Recommended Reading

98 Getting Grilled

109 Online Resources

83 Workplace Diversity 71 Public Finance 84 Travel 72 Sales and Trading 84 Vacation and Perks

99 Grilling Your Interviewer

75 Research 85 Compensation 77 Support Functions 88 Training 88 Career Path 89 The Inside Scoop

nts

Investment Banking at a Glance

1

At a glance The Industry The FIRMS On the Job

Careers in Investment Banking

at a glance

•

Opportunity Overview

Major Minuses

Undergrads and MBAs from top schools are recruited for a number of openings that’s small even in the best of times. Competition is fierce, so if you’re not from a top-tier school, you might need to be more resourceful and persistent than those who are. Doing an internship in investment banking (I-banking) is essential to breaking into the field in today’s business environment. Networking is key; make use of your alumni network. • Undergrads vie for two-year positions as analysts. If you do well, depending on the firm, you might get to stay for a third year, perhaps even abroad.

•

How many different ways can you say, “Work your tail off?”

•

No job security—only the unemployment line has more people who have been fired

•

Tedious work, especially at the lower levels.

•

The industry has more than its share of big egos, abrasive personalities, and workaholics.

•

Your life is the market, but a bear could put you out of work.

•

For Your Reference

Getting Hired

The Workplace

•

MBAs compete for fast-track associate slots, and international assignments might be available for those who want them. Mid-career candidates are recruited by headhunters or hired on an ad hoc basis for positions at various levels. Although relatively few people come into the industry from other fields, it can be done, especially by those who have a technical background in a specific industry and an aptitude for and interest in finance. Otherwise, expect to start at the bottom.

Major Pluses •

The I-banking industry still pays more than most others, despite the fact compensation has declined in recent years from its apex during the tech and dot-com boom.

•

Excellent opportunity to learn the financial aspects of business inside and out.

•

Chance to build a network of well-connected professionals.



W E T F E E T I N SIDER GUIDE

Your life is the market—riding a bull is exciting and lucrative.

Recruiting Overview •

Very formal and extremely competitive process at the entry level; it’s exceedingly difficult to get in the door these days if you haven’t done an internship in the industry.

•

Primary channel is on-campus recruiting, but there are opportunities for mid-career hires, nonMBA advanced-degree holders, and candidates from second-tier schools.

•

Heavy emphasis on quantitative and analytical abilities

•

Hard work is rewarded regardless of race or gender; however, white males dominate the industry.

At a glance

The Industry

ThE FIRMS

On the Job

The Workplace

Getting Hired

For Your Reference



WETFEET INSIDER GUIDE

The Industry

2

Overview....................................... 6 The Bottom Line........................... 8 The Basics of . Investment Banking...................... 8

Emerging Industry Trends.......... 10 Industry Performance................. 13 Industry Rankings....................... 14

At a glance The Industry The FIRMS On the Job

Overview You’ve seen the headlines deriding Wall Street

firms, the news photos of disgraced research analysts who recommended certain stocks to the public even while they trashed them in email to colleagues. You’ve heard about the nine-figure fines investment banks have had to pay for transgressions such as conflicts of interest. You’ve seen the fictional movies and maybe even read some of the nonfiction books. Yet you’re still not discouraged. In fact, you’re intrigued. There’s something attractive about the industry—the legendary long hours and mega-bonuses—and you like to imagine yourself a pinstripe-wearing, jet-setting investment banker. But suddenly it dawns on you: What the heck is investment banking (I-banking)? What do investment bankers do? What’s the difference between sales and trading and corporate finance? More to the point, why do you want to be a banker? The intensely competitive, action-oriented, profithungry world of I-banking can seem like a biggerthan-life place where deals are done and fortunes are made. In fact, it’s a great place to learn the ins and outs of corporate finance and pick up analytical skills that will remain useful throughout your business career. But I-banking has a very steep learning curve, and chances are you’ll start with a job whose duties are more Working Girl than Wall Street.

Getting Hired

The Workplace

Careers in Investment Banking

I-banking has a very steep learning curve; chances are you’ll start with a job whose duties are more Working Girl than Wall Street. Wall Street is filled with high-energy, hardworking, young hotshots. Some are investment bankers who spend hours hunched behind computers, poring over financial statements and churning out spreadsheets by the pound. Others are traders who keep one eye on a Bloomberg screen, a phone at each ear, and a buyer or seller on hold every minute the market’s in session. Traders work hand-in-hand with the institutional sales group, whose members hop from airport to airport trying to sell big institutions a piece of the new stock offering they have coming down the pipeline. Then there are the analytically minded research analysts, who read, write, live, and breathe whichever industry they follow. So where do you begin and how do you focus your job search? Let’s start with an important reminder: I-banking isn’t one specific service or function. It is an umbrella term for a range of activities: • Underwriting, selling, and trading securities (stocks and bonds) •

Providing financial advisory services, such as merger and acquisition (M&A) advice

•

Managing assets

For Your Reference

Investment banks offer these services to companies, governments, nonprofit institutions, and individuals.



W E T F E E T I N SIDER GUIDE

At a glance The Workplace Getting Hired For Your Reference



On the Job

WETFEET INSIDER GUIDE

ThE FIRMS

Traditionally, commercial banks and investment banks performed completely distinct functions. When Joe on Main Street needed a loan to buy a car, he visited a commercial bank. When Sprint needed to raise cash to fund an acquisition or build its fiberoptic network, it called on its investment bank. Paychecks and lifestyles reflected this division, too, with investment bankers reveling in their large bonuses and glamorous ways while commercial bankers worked 9 p.m. to 5 p.m. and then went home to their families. Today, thanks to the repeal of laws requiring the separation of investment and commercial banking, many firms do both, thus blurring the lines and cultures. The action is still centered in New York City and a few other money centers around the world, but the list of players is getting smaller as the industry consolidates. Today, leading banks include Citigroup (whose I-banking arm was until recently known as Salomon Smith Barney), Credit Suisse, Goldman Sachs, JPMorgan Chase, Lehman Brothers, Merrill Lynch, and Morgan Stanley. These and other firms are regular visitors to campus career centers. But before you get excited about the promise of riches (and bid all your on-campus interview points), you should research the industry and think about whether I-banking is a good career for you. One thing is certain: You shouldn’t go into banking just for the money—the lifestyle is too demanding. To survive in

The Industry

Thanks to the repeal of laws requiring the separation of investment and commercial banking, many firms do both, thus blurring the lines and cultures.

I-banking, much less to do well, you’ll need to like the work. Quite honestly, even if you love the work, an Ibanking career can still be a tough road. If the market or your industry group is in a slump (or if your firm suddenly decides to get out of a certain segment of the business), you might find a pink slip on your desk Monday morning. Things are looking good on Wall Street these days, though, marking a change from the early 2000s when the tech bubble burst and the stock market tumbled. Remember all those dot-com IPOs? For investment banks, that business dried up in a hurry when hundreds of dot-coms went out of business. At the same time, the rest of corporate America drastically tightened its purse strings, resulting in few purchases of new stocks or M&As. The extended market decline hurt the profits of I-banks’ brokerage operations because investors (and the commissions they pay each time they trade) dropped out of the market. Fortunately, the stock market has had a strong couple of years, meaning more trading commissions and equity-underwriting activity. According to Thomson Financial, in 2002 there were 83 IPOs by U.S. issuers worth $22.6 billion. In contrast, the fourth quarter of 2006 ended with 187 IPOs worth 34.1 billion—the busiest period for IPOs since 1999 (when 480 IPOs raised $91.7 billion) and for 2006 as a whole. In addition, the fourth quarter of 2006 saw record M&As for a year-end total of $3.8 trillion, up 38 percent over 2005. Analysts expect that trend to continue in 2007. Many banks have enjoyed record revenue and earnings results in recent quarters, and most have been hiring aggressively as a result. I-banking firms are always looking for new (read: cheaper) bodies. So if you like fast-paced, dealoriented work, are at ease with numbers and analysis, have a tolerance for risk, and don’t mind putting your personal life on hold for the sake of your job, then I-banking could be a great career choice.

At a glance The Industry The FIRMS On the Job The Workplace

The Bottom Line I-banking is one of the best ways a young person

can learn about finance and make good money right out of school. Even if you ultimately decide to reclaim your personal life by pursuing other options, the skills you learn on Wall Street will be valuable in most business careers. But before you can cash in on those potential returns, you’ll have to put up with some very substantial hardships, including high pressure, long days and nights of hard work, a few difficult personalities, and the expectation—no, the requirement—that all personal plans are subject to the demands of work. In addition, you’ll find that life on the Street is very much at the mercy of the market. A bull market brings more work to do than is humanly possible, but you’ll be rewarded with a paycheck that can sometimes double year-to-year. A bear market can leave you sitting at your desk with a pile of deals on hold, hoping that the rumored layoffs and smallerthan-usual bonuses don’t come to pass. Despite this inherent uncertainty, the field remains an extremely popular destination for undergraduates and MBAs. Indeed, Bank of America, Barclays Capital, Bear Stearns, Citigroup, Credit Suisse (USA), Deutsche Bank, Goldman Sachs, JPMorgan Investment Bank, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS Investment Bank are all on Fortune’s 2006 list of the 100 most desirable employers among MBAs. As a result, getting your foot in the door by doing an internship with a bank should be your top priority if you want to start a career in I-banking.

For Your Reference

Getting Hired

Careers in Investment Banking



W E T F E E T I N SIDER GUIDE

The Basics of Investment Banking You’re beginning your job search, and from

what you’ve heard so far you want to give I-banking a shot. But there’s one small problem: You’re not exactly sure what an investment bank does, so convincing the recruiter you’re perfect for the job is going to be a challenge. We’ll help solve that problem by giving you a basic introduction to I-banking and a view of the most common job opportunities in the field. The terms brokerage firm, broker-dealer, and investment bank are used interchangeably in popular conversation, but they actually represent different types of companies: • A brokerage firm executes trades, acting as an intermediary between investors and stock exchanges. For this, it takes a commission.

•

A broker-dealer works similarly, except that it also trades for its own account. That means if you purchase a stock, it could be bought through an exchange or from the dealer’s own account. You pay the current market price, regardless of what the dealer paid for it.

•

An investment bank is a broker-dealer that provides financing services to corporations, including stock and bond offerings, M&A advice, and some strategic planning.

All of these activities support each other, so let’s take a look at them individually.

At a glance

Sales and Distribution



For Your Reference

WETFEET INSIDER GUIDE

Getting Hired

Research Services Nearly all banks have staffs of research analysts who study economic trends and news, individual company stocks, and industry developments to provide proprietary investment advice to institutional clients and in-house groups, such as the sales and trading divisions.

The Workplace

To support the institutional and retail sales efforts, most investment banks actively trade securities in the marketplace, thereby providing liquidity (cash) and market prices for their investors. When a firm decides to make a market in a particular stock, it stands ready with its own capital to buy and sell the stock at publicly quoted prices. A firm can make a market either on the exchange floor for listed stocks or on its own trading desk for over-the-counter stocks. Traders usually focus on one group of stocks at a time, often becoming specialists in a particular industry.

On the Job

Financial Advisory Services Investment banks advise companies, government entities, and other institutions about their financial strategies and the most effective use of the financial markets. A very high-profile service is M&A advice. Examples of other services include assisting companies with their option programs, providing pensionfund managers with up-to-the-minute information and advice on investment strategies, and helping international companies understand how to best minimize their exposure to foreign currency exchange risks.

Trading and Market-Making Services

ThE FIRMS

An investment bank’s primary service is to raise capital for corporations, governments, and other institutions by selling those clients’ stocks, debts, or other financial papers. The bank helps the client determine a reasonable price for the stock or bond issue and then buys the securities and resells them to investors. The investment bank makes its money on the spread, or the difference between the price it pays the client for the securities and the price at which they’re resold.

The Industry

Capital Raising and Underwriting Services

To be an effective underwriter, an investment bank must have a wide distribution network and a knowledgeable sales force that can consistently find buyers for all of the stocks, bonds, and other financial instruments it underwrites. The bulk of the underwritten securities are sold to institutional investors such as pension funds, money management firms, mutual funds, and other large-quantity buyers. The institutional sales force advises and cultivates these important buyers (a job that requires a lot of traveling, schmoozing, and hand-holding) and executes the sales. In addition to these institutional salespeople, many banks have or are adding a retail sales force of stockbrokers plus online discount brokerage services that funnel offerings into the hands of the average investor. However, retail sales—sales to individual investors—is usually considered a completely separate business unit unrelated to I-banking.

At a glance The Industry The FIRMS On the Job The Workplace

Until recently, the research division has also played an important role in the underwriting process, both in wooing the client with its knowledge of the client’s industry and in providing a link to the institutions that own the client’s stock once it’s publicly traded. Indeed, in many cases, research analysts’ compensation was tied to I-banking revenue. However, in recent times banks have faced public and regulatory outcries over conflicts of interest inherent in having bankers and researchers work hand-in-hand. As a hypothetical example, consider Bank A, which counts Company X among its banking clients. Company X is facing financial difficulties, Should Bank A’s research team pan Company X’s stock? That would benefit investors who subscribe to Bank A’s research, but might upset Company X to the point that it drops Bank A and hires another firm to be its investment banker. Or should Bank A recommend the purchase of Company X stock? That would help Company X financially and keep the banking revenue from Company X rolling in—and pump up research analysts’ bonuses, which are based in part on the success of Bank A’s banking operations. In an effort to end the legal scrutiny of their operations, investment banks are now attempting to reinforce the separation between their banking and research arms. Some of the separations span continents: Citigroup, JPMorgan, Lehman Brothers, and Morgan Stanley all have moved some of their research operations offshore in the past year. Also, independent research houses (for example, JMP Securities, Needham & Co., and Sidoti & Co.) have benefited from a settlement between the Ibanking industry and regulators requiring investment banks to spend $432.5 million during a five-year period to fund independent research.

For Your Reference

Getting Hired

Careers in Investment Banking

10

W E T F E E T I N SIDER GUIDE

Emerging Industry Trends Hedge Funds Possibly the biggest story in the markets of late has been the hedge fund boom. A decade or so ago, hedge funds were known for being relatively conservative investments; typically, they involved hedging investments—for instance, short-selling baskets of stocks representing the entire stock market, while buying individual stocks thought to outperform the market as a whole. This way, the thinking went, investors would do okay whether the broader market rose or fell. More recently, though, hedge funds have become much more aggressive, vastly outperforming other forms of investments, often by involving more speculative investments as well as complex financial derivatives.

INSIDER SCOOP “The whole explosion of private equity deals is a bubble that’s going to have to burst. Big M&A deals are being made by private equity firms, and banks are increasingly lenient. At some point the banks will decide they have too much debt, and rates will rise and liquidity will dry up. That will have an impact on the ability of deals to get financed.” Today, hedge funds account for a major portion of business for many investment banks. Hoping to cash in on a good thing, the banks have created their own hedge fund arms. At the same time, many banks have taken to catering to outside hedge funds by offering them “prime brokerage” services comprising trading and financing services. While hedge fund arms have generated outsized returns, some observers believe investment banks are taking on too much risk by relying so heavily on them to generate bigger percentages of revenue. Today’s hedge funds, they

At a glance

Technology

> TIP

For Your Reference

11

Getting Hired

WETFEET INSIDER GUIDE

The Workplace

Markets are becoming more global with each passing year. The sustained rise in energy prices, for instance, has been due more to demand from emerging financial powers like India and China than to demand in the U.S. or Europe. More and more investors are looking to put money into securities and other investments originating in countries other than their own. Ibanking business is increasingly coming from new regions of the globe; in recent years, for instance, some of the largest IPOs in the world have been of shares of Chinese companies such as the Bank of China, China Construction Bank, and China Life Insurance. In response, several banks have opened offices in China and Shanghai. Cross-border M&As are becoming more commonplace, too. The NASDAQ stock market recently made a bid to buy the London Stock Exchange. In response to the increasingly rapid pace of globalization, banks are expanding their focus—and launching operations and forming partnerships— around the globe. What does this trend mean for I-banking job seekers? To be prepared for your interviews, you should understand what’s happening in global as well as local markets. And if you have the opportunity to get some international experience, it certainly won’t hurt your desirability among employers.

On the Job

Globalization

ThE FIRMS

say, are under-regulated, risky propositions. Just how risky was evident in June 2007 when Bear Stearns announced it had to bail out two struggling hedge funds. Bear Stearns will likely not be the only firm impacted by the recent subprime mortgage defaults since many others also invested heavily in mortgage originators in 2006.

Technology has changed the securities industry forever. The biggest sign of the times: the 2005 merger of the New York Stock Exchange (NYSE) with Archipelago, an electronic trading platform. Electronic stock exchanges typically work more efficiently than the NYSE’s traditional specialist system; many observers predict that system—and its hallmark, the floor of the NYSE with its bustling swarm of floor brokers—will rapidly become a thing of the past. But that’s not the only change being wrought on the Street by technology. Today a significant chunk of equity trades are transacted using computerized algorithmic trading systems. Typically, these systems are used to allow traders to move large blocks of shares without overly affecting the price at which they’re able to buy or sell them. (Think about it: If you were to suddenly announce your intent to sell hundreds of thousands of shares of a given stock, the price offered by buyers would probably drop just as suddenly. Algorithmic trading breaks up blocks of stock and times the trades of the portions in such a way that prevents the market from knowing how much stock you’re trying to move—meaning your stock sale or purchase affects your average price as little as possible.) In the past, investment banks used algorithms to make proprietary trades for their own accounts, but today they offer clients (usually institutional investors and high-net-worth individuals) access to these computer programs. Some observers claim that institutional sales and trading desks are becoming glorified investmentsoftware sales channels. But new software programs and Web platforms are becoming valuable tools for research departments as well. Bear Stearns was recently cited for a program that identifies and quantifies more than 60 macroeconomic drivers of global equities. New network technologies will also continue to fuel a business that will need to operate around the clock as it puts employees in place in new time zones.

The Industry

To be prepared for your interviews, understand what’s happening in global as well as local markets

At a glance The Industry The FIRMS On the Job

π The End of the Financial Supermarket? Five or six years ago, the trend among big banks was the “financial supermarket” strategy. That was made possible by the 1999 repeal of the Glass-Steagall Act, which separated investment and commercial banking activities. In the wake of the repeal, some I-banks purchased retail brokerage and lending providers, while some commercial banks tried to build up their I-banking services via M&As. The idea was to build one-stop shops where clients could get a full range of financial and investment products and services. That trend now seems to be reversing. Citigroup, for instance, swapped its asset management business for Legg Mason’s brokerage business, and sold its

Travelers life insurance business as well. Merrill Lynch merged its asset management arm with BlackRock, of which Merrill owns just less than half. Why are banks jumping off the financial-supermarket bandwagon? Because they haven’t been able to perform as well as companies such as Fidelity that focus on just one or two core lines of business. Several I-banks are using the sale of their assets to finance new practices in Asia and Latin America. A number of other large players—Bear Sterns, Friedman Billings Ramsey, Lehman Brothers, and Merrill Lynch—have made significant investments in mortgage originators.

For Your Reference

Getting Hired

The Workplace

Careers in Investment Banking

12

W E T F E E T I N SIDER GUIDE

New Relationships between Research and Banking I-banking research scandals in the early part of this decade weakened the link between research analysts’ compensation and firms’ banking revenue—a decreased role for research analysts in seeking banking business, and therefore increased objectivity in research reports. Most banks are enforcing new degrees of separation between bankers and research analysts. Some have even thought about spinning off their research arms into separate entities. The U.S. Securities and Exchange Commission (SEC) is now requiring research analysts to affirm in writing that the recommendations in their reports are truly what they believe, and that they have received no payment for specific research opinions. It’s also requiring firms to provide investors with independent research. The tricky thing about all of this is that separating research from banking makes it harder for banks to justify the costs of conducting research. Without revenue that is directly or indirectly the result of their own research departments, research becomes purely a cost center. As a result, banks are more likely to look to cut costs in research or move it offshore. That means some investment banks’ research departments could either have a fewer or greater number of companies to cover per analyst.

At a glance

At the turn of the century, it was relatively easy to assemble a list of the most important concerns for job seek-

Investment Banks by 2006 Revenue Number of employees

Morgan Stanley

76,551

55,310

Merrill Lynch

70,591

56,200

Goldman Sachs

69,353

26,467

Credit Suisse (USA)*

67,532

44,871

Lehman Brothers

46,709

25,900

Bank of America Global Capital Markets and Investment Banking

22,691

N/A

JPMorgan Investment Bank

18,300

27,000

Bear Stearns

16,551

13,566

Deutsche Bank Corporate and Investment Bank

15,568

68,849

The Workplace

Revenue ($M)

On the Job

Company

ThE FIRMS

ers to be aware of in I-banking. But since then, industry consolidation and deregulation have resulted in fewer pure I-banking and securities companies, and many more diversified financial services companies that include I-banking and securities services among their operations. The following list will give you an idea of some of the major companies engaged in I-banking around the world; for a more accurate idea of the top companies focused primarily on I-banking and securities, check out the league tables. In general, the bulge bracket is thought to include Citigroup Global Markets, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley.

The Industry

Industry Performance

Getting Hired

* Numbers for parent company Note: UBS Investment Bank and Citigroup Corporate & Investment Bank don’t release numbers for investment banking division. Source: Company websites; SEC filings; Hoovers.com; WetFeet analysis

For Your Reference

WETFEET INSIDER GUIDE

13

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired

Careers in Investment Banking

Industry Rankings To see who’s number one in securities underwriting, I-banking insiders look to quarterly league tables, which show overall industry underwriting activity by security type and the ranking/market share of the individual firms as measured by underwriting volume. You can find league tables in Investment Dealers’ Digest, which publishes and reports on the underwriting volumes and industry rankings each quarter. The league tables are produced by Thomson Financial. To see who’s number one in investment research, take a look at Institutional Investor’s All-America* Research Team rankings, published each fall. More subjective than the league tables, these are the result of I.I. polls of buyside analysts and portfolio managers. I.I.’s annual rankings are closely watched and often have a direct impact on an analyst’s compensation and/or job security. Following is a taste of how the firms stacked up in the league table results for the first half of 2006, along with the most recent research rankings available when we went to press. For more details on each firm, check out individual WetFeet Company Insider Guides.

Global Debt, Equity & Equity-Related, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Citi

398,120.4

8.8

1,047

JPMorgan

338,479.4

7.5

930

Deutsche Bank

291,203.8

6.4

878

Merrill Lynch

280,043.6

6.2

835

Morgan Stanley

272,052.6

6.0

822

Lehman Brothers

243,689.2

5.4

640

Barclays Capital

236,186.9

5.2

619

Goldman Sachs

205,210.7

4.5

527

Credit Suisse

202,725.2

4.5

640

UBS

184,804.5

4.1

710

For Your Reference

Source: Thomson Financial

14

W E T F E E T I N SIDER GUIDE

At a glance

Market share (%)

Number of deals

Goldman Sachs

29,967.0

8.8

99

UBS

29,180.4

8.5

162

JPMorgan

27,173.8

7.9

130

Morgan Stanley

26,292.9

7.7

119

Merrill Lynch

24,549.7

7.2

116

Citi

23,338.7

6.8

114

Credit Suisse

21,619.4

6.3

104

Deutsche Bank

21,119.7

6.2

93

Lehman Brothers

12,087.9

3.5

71

ABN AMRO Rothschild

7,343.1

2.2

49 Source: Thomson Financial

The Workplace

Global IPOs, 1/1/07–6/30/07 Market share (%)

Number of deals

UBS

11,441.5

8.5

57

Morgan Stanley

11,222.3

8.3

44

Goldman Sachs

10,052.5

7.4

32

Citigroup

9,463.0

7.0

42

Merrill Lynch

8,920.5

6.6

46

JPMorgan

8,749.9

6.5

44

Credit Suisse

8,572.0

6.3

41

Deutsche Bank

8,268.7

6.1

31

Lehman Brothers

5,536.3

4.1

34

Renaissance Capital Group

3,499.2

2.6

8 Source: Thomson Financial

WETFEET INSIDER GUIDE

15

For Your Reference

Proceeds ($M)

Getting Hired

Bookrunner

On the Job

Proceeds ($M)

ThE FIRMS

Bookrunner

The Industry

Global Common Stock, 1/1/07–6/30/07

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Global Convertibles, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

JPMorgan

14,220.1

14.6

50

Citi

12,299.8

12.6

42

Deutsche Bank

10,356.6

10.6

35

Morgan Stanley

8,968.0

9.2

21

Merrill Lynch

6,721.8

6.9

27

Credit Suisse

6,458.5

6.6

17

Goldman Sachs

5,220.9

5.4

21

Lehman Brothers

5,014.6

5.1

23

Banc of America Securities

4,921.0

5.1

21

UBS

4,217.5

4.3

26 Source: Thomson Financial

U.S. Common Stock, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Goldman Sachs

9,823.0

12.8

41

Morgan Stanley

9,818.4

12.8

53

Merrill Lynch

9,489.6

12.3

53

JPMorgan

7,646.6

9.9

50

Lehman Brothers

7,645.2

9.9

47

Citi

5,852.1

7.6

39

UBS

5,310.8

6.9

42

Credit Suisse

4,919.7

6.4

35

Banc of America Securities

3,040.9

4.0

26

Deutsche Bank

2,558.7

3.3

17 Source: Thomson Financial

16

W E T F E E T I N SIDER GUIDE

At a glance

Market share

Number of deals

Morgan Stanley

3,401.9

13.2

19

Merrill Lynch

3,384.8

13.2

22

Lehman Brothers

2,856.9

11.1

21

Goldman Sachs

2,599.5

10.1

15

JPMorgan

2,024.5

7.9

16

UBS

1,871.9

7.3

11

Credit Suisse

1,862.1

7.2

11

Citi

1,683.6

6.5

12

Deutsche Bank

1,227.6

4.8

5

844.0

3.3

8

Banc of America Securities

Source: Thomson Financial

Market share (%)

Number of deals

Citi

7,141.0

13.3

20

Morgan Stanley

6,988.9

13.1

12

Deutsche Bank

6,986.0

13.0

17

JPMorgan

6,891.3

12.9

27

Merrill Lynch

5,141.1

9.6

21

Banc of America Securities

4,921.0

9.2

21

Lehman Brothers

3,640.0

6.8

17

Credit Suisse

3,555.0

6.6

9

Goldman Sachs

2,852.5

5.3

14

UBS

2,196.9

4.1

14 Source: Thomson Financial

WETFEET INSIDER GUIDE

17

For Your Reference

Proceeds

Getting Hired

Bookrunner

The Workplace

U.S. Convertibles, 1/1/076–6/30/07

On the Job

Proceeds ($M)

ThE FIRMS

Bookrunner

The Industry

U.S. IPOs, 1/1/07- 6/30/07

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Global Debt, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Citi

362,481.9

8.9

891

JPMorgan

297,085.5

7.3

750

Deutsche Bank

259,727.5

6.4

750

Merrill Lynch

248,772.1

6.1

692

Morgan Stanley

236,791.7

5.8

682

Barclays

233,970.5

5.7

609

Lehman Brothers

226,586.8

5.5

546

Credit Suisse

174,674.3

4.3

519

Banc of America Securities

174,117.7

4.3

440

Royal Bank of Scotland Group

172,640.0

4.2

477 Source: Thomson Financial

Global Mortgage-Backed Securities, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Lehman Brothers

74,668.3

9.1

71

JPMorgan

60,025.1

7.3

66

Bear Stearns

53,384.2

6.5

55

Credit Suisse

52,128.0

6.3

69

Morgan Stanley

52,009.2

6.3

57

Royal Bank of Scotland Group

51,793.8

6.3

60

Citi

45,014.6

5.5

68

Deutsche Bank

43,319.1

5.3

60

Merrill Lynch

43,253.0

5.3

50

Barclays Capital

37,145.1

4.5

33 Source: Thomson Financial

18

W E T F E E T I N SIDER GUIDE

At a glance

Market share (%)

Number of deals

Citi

71,451.1

10.0

120

Merrill Lynch

61,533.1

8.6

79

JPMorgan

53,413.3

7.5

90

Royal Bank of Scotland Group

45,918.6

6.4

86

Barclays Capital

45,531.0

6.4

59

Deutsche Bank

45,328.4

6.3

91

Banc of America Securities

43,704.4

6.1

92

Morgan Stanley

38,035.6

5.3

90

Lehman Brothers

32,685.7

4.6

75

Wachovia

31,130.2

4.3

51 Source: Thomson Financial

Market share (%)

Number of deals

JPMorgan

39,561.0

9.3

152

Citi

36,199.0

8.5

110

Barclays Capital

35,951.4

8.5

106

Goldman Sachs

35,398.8

8.3

102

UBS

32,576.9

7.7

233

Lehman Brothers

27,625.7

6.5

146

Deutsche Bank

27,231.7

6.4

115

Merrill Lynch

25,010.8

5.9

249

Morgan Stanley

21,771.7

5.1

183

Banc of America Securities

19,891.8

4.7

121 Source: Thomson Financial

WETFEET INSIDER GUIDE

19

For Your Reference

Proceeds ($M)

Getting Hired

Bookrunner

The Workplace

All Federal Credit Agency Debt, 1/1/07–6/30/07

On the Job

Proceeds ($M)

ThE FIRMS

Bookrunner

The Industry

Global Asset-Backed Securities, 1/1/07–6/30/07

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

U.S. Investment-Grade Corporate Debt, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Citigroup

80,541.3

14.7

192

JPMorgan

63,158.3

11.5

174

Banc of America Securities

52,914.7

9.7

130

Morgan Stanley

51,415.5

9.4

134

Lehman Brothers

49,315.4

9.0

126

Goldman Sachs

46,183.6

8.4

122

Wachovia

40,067.2

7.3

104

Merrill Lynch

37,440.4

6.8

98

Deutsche Bank

30,921.5

5.7

91

Barclays Capital

22,050.3

4.0

105 Source: Thomson Financial

U.S. Mortgage-Backed Securities, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Lehman Brothers

59,560.5

10.7

62

Bear Stearns

52,893.7

9.5

54

JPMorgan

52,214.2

9.4

57

Credit Suisse

38,848.9

7.0

55

Morgan Stanley

36,881.1

6.6

46

Banc of America Securities

34,951.3

6.3

47

Washington Mutual

34,430.5

6.2

28

Royal Bank of Scotland Group

33,219.4

6.0

44

Merrill Lynch

30,520.6

5.5

40

Citi

30,045.2

5.4

51 Source: Thomson Financial

20

W E T F E E T I N SIDER GUIDE

At a glance

Market share (%)

Number of deals

Citigroup

66,177.7

11.4

109

Merrill Lynch

55,865.3

9.6

68

JPMorgan

48,999.0

8.5

80

Banc of America Securities

41,025.0

7.1

86

Royal Bank of Scotland Group

39,540.2

6.8

72

Deutsche Bank

37,741.9

6.5

79

Morgan Stanley

35,345.9

6.1

78

Wachovia

30,797.2

5.3

50

Lehman Brothers

30,726.5

5.3

68

Barclay Capital

28,222.7

4.9

49 Source: Thomson Financial

Market share (%)

Number of deals

JPMorgan

15,151.1

12.5

56

Credit Suisse

13,608.6

11.3

44

Citigroup

13,007.4

10.8

46

Deutsche Bank

11,989.5

9.9

48

Merrill Lynch

10,030.7

8.3

30

Goldman Sachs

8,174.4

6.8

32

Lehman Brothers

7,363.4

6.1

36

Banc of America Securities

7,048.4

5.8

40

Morgan Stanley

4,748.0

3.9

22

Wachovia

4,566.5

3.8

19 Source: Thomson Financial

WETFEET INSIDER GUIDE

21

For Your Reference

Proceeds ($M)

Getting Hired

Bookrunner

The Workplace

Global High-Yield Debt, 1/1/07–6/30/07

On the Job

Proceeds ($M)

ThE FIRMS

Bookrunner

The Industry

U.S. Asset-Backed Securities, 1/1/07–6/30/07

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

All International Bonds, 1/1/07–6/30/07 Bookrunner

Proceeds ($M)

Market share (%)

Number of deals

Citi

194,569.8

8.1

461

Barclays Capital

184,873.5

7.7

396

Deutsche Bank

182,943.0

7.6

469

Merrill Lynch

159,843.3

6.6

302

JPMorgan

154,315.4

6.4

349

Morgan Stanley

127,125.7

5.3

286

Royal Bank of Scotland

105,386.4

4.4

293

UBS

99,316.7

4.1

299

Lehman Brothers

92,391.6

3.8

172

Goldman Sachs

90,325.4

3.7

190 Source: Thomson Financial

M&A Advisory: Worldwide Announced, 1/1/07–6/290/07 Financial adviser

Proceeds ($B)

Market share (%)

Number of deals

Goldman Sachs

840.5

32.2

255

Morgan Stanley

762.9

29.3

236

Citi

742.3

28.5

283

JPMorgan

699.0

26.8

213

Lehman Brothers

581.7

22.3

159

Merrill Lynch

581.3

22.3

183

Credit Suisse

568.7

21.8

192

UBS

529.9

20.3

243

Deutsche Bank

424.7

16.3

138

Lazard

340.0

13.0

115 Source: Thomson Financial

22

W E T F E E T I N SIDER GUIDE

At a glance

Market share (%)

Number of deals

Goldman Sachs

507.5

41.6

158

Morgan Stanley

492.3

40.4

125

Citi

362.8

29.7

113

JPMorgan

349.0

28.6

110

Lehman Brothers

341.5

28.0

109

Credit Suisse

268.7

22.0

113

Merrill Lynch

237.3

19.4

104

UBS

162.0

13.3

99

Deutsche Bank

154.2

12.6

43

Banc of America Securities

149.9

12.3

59 Source: Thomson Financial

Market share (%)

Number of deals

Citi

35.3

16.1

324

Merrill Lynch

26.1

11.9

324

UBS

17.4

8.0

332

Bear Stearns

14.5

6.6

62

Morgan Stanley

14.0

6.4

123

Lehman Brothers

13.5

6.2

124

JPMorgan

11.9

5.4

177

Goldman Sachs

11.6

5.3

76

RBC Capital Markets

7.3

3.4

294

Banc of America Securities

6.9

3.1

171 Source: Thomson Financial

WETFEET INSIDER GUIDE

23

For Your Reference

Proceeds ($B)

Getting Hired

Managing underwriter

The Workplace

U.S. Long-Term Municipal New Issues (AT1), 1/1/07–6/29/07

On the Job

Proceeds ($B)

ThE FIRMS

Financial adviser

The Industry

M&A Advisory: Any U.S. Involvement Announced, 1/1/07–6/30/07

The Firms

3

The Big Picture........................... 26 Major Players.............................. 26

At a glance The Industry The FIRMS

The Big Picture Until the wave of consolidation and convergence

•

Firms beyond the bulge bracket were labeled boutiques or regionals. Boutiques are niche firms that focus on a particular industry, such as technology, or a financing vehicle, such as municipal bonds. Regionals, as the name implies, focus on financing and investment services in a particular geographic region.

These labels are still used, but as the rapid mergers and acquisitions (M&A) pace continues to alter the landscape, the traditional categories are becoming less meaningful. Large commercial banks that have acquired investment banks are bringing huge amounts of capital to the playing field along with a more varied mix of financial services than ever before.

For Your Reference

The Workplace

that started in the 1990s, the financial services playing field had changed very little and was easy to understand. Commercial banks and investment banks each had their own roles as defined by federal regulations, and seldom did the two ever meet. Within investment banking (I-banking), firms could be neatly categorized by their size and/or market focus: • At the top was the bulge bracket, which consisted of the six largest firms: First Boston, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, and Salomon Smith Barney. These firms still dominate the securities underwriting and M&A markets, though you’ll notice a few name changes.

Getting Hired

On the Job

Careers in Investment Banking

26

W E T F E E T I N SIDER GUIDE

Major Players Banc of America Securities LLC 9 West 57th Street New York, NY 10019 Phone: 212-583-8000 www.bofasecurities.com

Overview A subsidiary of banking giant Bank of America, Banc of America Securities (BofA Securities) is the second-biggest bank in the U.S. after Citigroup. BofA Securities was formed after the $64 billion megamerger between BankAmerica and NationsBank in 1998; its cornerstone is Montgomery Securities, acquired by NationsBank in 1997. Its Global Corporate and Investment Banking Group (CIBG) is known for its top-tier debt division and solid expertise in high technology. BofA Securities is on the move in other areas as well. Expanding beyond its roots in tech-centric San Francisco, the company is centering its business in New York and increasing coverage across the board, including M&As, convertible debt, syndicated finance, high-yield securities, and prime brokerage. Meanwhile, it’s bolstering its European equity business. In recent years, the firm has snapped up talent from the likes of Goldman Sachs and Morgan Stanley; it recently hired Alain Karaoglan, former managing director of Deutsche Bank Securities, as a managing director and senior equity research analyst.

At a glance

BofA Securities recruits for analysts at about 30 top U.S. campuses, and for associates at some 20 campuses. Campus recruiting typically begins with presentations in September, followed by on-campus interviews. BofA Securities will be an occupant of the new Bank of America Tower at the southern tip of Manhattan when that building opens in 2008.

The Industry

Recent Milestones



Completes merger with credit-card company MBNA.

“There’s never a bear market for great talent.”



Adds Internet sector research coverage.

Undergraduate and MBA students can apply for internships and entry-level positions in corporate and I-banking, debt capital markets, equity sales and trading, equity research, debt markets sales, trading and research, global portfolio management, and financial engineering and trading technology. Although not all areas are open to internships, a summer internship will give candidates a leg up when it comes time to apply for a full-time position at the bank.



Ranks as number–one prime broker for hedge funds in the U.S. with at least $1 billion in assets, and number–two globally, in the 2006 Global Custodian Prime Brokerage Survey.



Purchases 9 percent of China Construction Bank for $3 billion.

INSIDER SCOOP

The Workplace

Becomes the fifth-largest underwriter of U.S. debt, equity, and equity-related securities; ranks number one in share of both U.S. and global treasury revenue.

On the Job

2006

ThE FIRMS

BofA Securities has an advantage (at least theoretically) over its purebred I-banking peers: the backing of a top commercial bank, which means deep pockets and a broader array of product offerings at clients’ disposal. It has offices in approximately 30 countries around the world, including sizeable operations in London, Frankfurt, and Tokyo. Like other big investment banks, it sees China as a land of opportunity; it bought a 9 percent stake in China Construction Bank in 2005 and has the option to increase that ownership to 19.9 percent within five years. Like other big investment banks that need to replace departing analysts and associates every year, BofA Securities recruits consistently at the college and MBA levels for summer internship programs and some full-time slots.

Getting Hired

Key Numbers Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

22,691

9,009

9,046

Worldwide earnings ($M)

6,792

1,736

1,924

Number of employees

N/A

7,765

6,545

Note: 2006 numbers reflect Global Corporate and Investment Banking, formed when BofA Securities combined its Global Capital Markets and Investment Banking and Global Business and Financial Services; figures for 2005 reflect Global Capital Markets and Investment Banking. Source: SEC filings; WetFeet analysis

WETFEET INSIDER GUIDE

27

For Your Reference

Fiscal 2006

At a glance The Industry The FIRMS On the Job

2005

Named best overall derivatives provider by Treasury & Risk Management.



Along with subsidiaries Banc of America Capital Management and BACAP Distributors, agrees to pay $375 million to settle SEC charges that it allowed select large clients to make improper mutual fund trades. Agrees to pay $460.5 million to settle charges brought by New York State alleging it failed to perform due diligence when issuing bonds in 2000 and 2001 for WorldCom—which admitted in 2002 that it had been improperly inflating earnings.



2004

Launches electronic trading services group to develop and deliver electronic trading products to institutional investors.



Sells clearing and broker-dealer businesses to Automatic Data Processing.



Acquires trading-software provider Direct Access.

Getting Hired

The Workplace

Careers in Investment Banking

The Bear Stearns Companies Inc. 383 Madison Avenue New York, NY 10179 Phone: 212-272-2000 www.bearstearns.com

Overview Although Bear Stearns is smaller than many of its rivals, it’s still a significant player. With the largest clearing operation in the country, Bear Stearns handles approximately 10 percent of all trades that go through the New York Stock Exchange. The firm is also known for being an aggressive trader. Founded in 1923, Bear Stearns entered the I-banking arena in the early 1990s, concentrating on specific industry groups across all product lines. Like many of its Wall Street neighbors, it suffered through hard times during the market downturn of the early 2000s; the firm endured layoffs for the first time in its history, trimming 1,300 employees from its ranks in 2001. However, its losses were relatively minor, and in 2002 Bear Stearns’ mortgage-backed bond business helped it post a 42 percent increase in net income. Its new state-of-the-art Manhattan headquarters boasts a seven-story crown atop a 45-story octagonal building.

The firm operates three main segments:

For Your Reference

•

28

W E T F E E T I N SIDER GUIDE

Capital markets: Comprises fixed income (mortgage-backed securities, asset-backed securities, corporate and government bonds, munis, high-yield, foreign exchange, and fixed-income derivatives), institutional equities (domestic and international sales, trading, and research), and I-banking (underwriting, M&A, and merchant banking).

At a glance

Global clearing services: Comprises clearing, margin lending, and securities borrowing for short-seller clients.

•

Wealth management: Comprises private client services and asset management.

“There’s no white-shoe pedigree here. No one cares who your dad is.”

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

16,551

11,552

8,422

Worldwide earnings ($M)

2,053

1,462

1,345

Number of employees

13,566

12,000

10,961 Source: Hoover’s; WetFeet analysis WETFEET INSIDER GUIDE

29

For Your Reference

Fiscal 2006

Getting Hired

Key Numbers

The Workplace

INSIDER SCOOP

On the Job

Its international-expansion focus, however, could be derailed by some trouble Bear Stearns has recently found itself in with two of its hedge funds. In June 2007 the firm committed to shoring up the foundering funds, but some industry insiders say this investment will leave Bear Stearns vulnerable to a takeover.

ThE FIRMS

Bear has been growing key operations including prime brokerage services, asset management, and highyield and mortgage-backed securities underwriting. The firm is rapidly expanding in Europe and Asia; its international business grew 32 percent in 2006 from 2005. In addition to the requisite London office, Bear Stearns has offices in Beijing, Hong Kong, Shanghai, Singapore, and Tokyo, among others. In June 2007 the firm signed a letter of intent with a group of Saudi business leaders to form Bear Stearns Arabia Asset Management.

Entry-level hires come from a spectrum of colleges and backgrounds. Having fancy connections or academic credentials won’t necessarily help you. What’s more, though a finance degree is an asset, the firm strongly believes in hiring candidates from a variety of disciplines. “Once you’re in the door, they are quite blind to what you were doing before,” a former lawyer says. “They are willing to give you the time because they see you have the potential to climb the learning curve.” Undergraduates can apply for analyst positions in asset-backed securities, asset management, collateralized debt obligations, commercial mortgages, financial controlling (risk management), fixed income, clearing services, global credit, international equity, I-banking, mortgage finance, operations, private client services, and public finance. MBAs can apply for associate positions in asset management, financial management, I-banking, equity research, and sales and trading. Recruiting begins in September and interviews for first-year MBAs start in January; secondyear MBAs begin interviews in late September. Undergraduate and graduate hires in I-banking go through a brief rotational program before being placed in a group. All new hires go through structured training programs involving mentoring and internal classroom training. Bear Stearns does limited recruiting for summer internships (starting in December for the following summer); undergrads can do internships in fixed income, institutional equity, and I-banking, and

The Industry

•

At a glance The Industry The FIRMS On the Job The Workplace

internships for MBA candidates are available in asset management, financial management, I-banking, equity research, and sales and trading.



Named most admired securities firm in Fortune’s list of most admired companies.



Acquires a stake in Essex & Capital, a U.K. mortgage broker specializing in the subprime market. The company aggregates loans from brokers and consumers and places them with lenders.

2004

Sued in March by insurance commissioners alleging the firm helped financier Martin Frankel steal $200 million.



Expands coverage of large-cap companies in Eastern Europe, the Middle East, and Africa.



Bear Stearns asset management group acquires Measurisk, a provider of risk transparency and risk management solutions; the private equity specialty finance business of BDC Financial, which provides investment management and advisory services to private equity investors; and the fixed-income portfolio management group of Times Square Capital Management, a unit of Cigna.



Sells mutual fund management business to Dreyfus.

Recent Milestones 2007

Announces bailout of two hedge funds that are heavily invested in subprime mortgages.



Purchases subprime mortgage operations of ECC Capital.



Launches asset management firm in Saudi Arabia.

2006

A dozen equity research analysts earn number one positions in the 2006 Institutional Investor All America Team Research Survey.



Named 2006 Best Investment Bank in North America by Euromoney.



Agrees to pay $250 million to settle SEC and New York Stock Exchange charges that it allowed some clients to “late trade” (trade mutual funds after markets had closed).



Posts record earnings for third straight quarter in Q2.

2005

Launches Bear Stearns Residential Mortgage Corp., which extends the firm’s mortgage offerings by providing mortgage brokers with automatic loan underwriting.

For Your Reference

Getting Hired

Careers in Investment Banking

30

W E T F E E T I N SIDER GUIDE

At a glance

Overview

The Workplace

INSIDER SCOOP

On the Job

“Citigroup is a true meritocracy. We recognize accomplishments here.”

WETFEET INSIDER GUIDE

31

For Your Reference

After trying to become an all-things-to-all-clients financial supermarket under former CEO Sandy Weill, the bank’s management is now focused on improving margins by trimming costs and growing core businesses while divesting noncore businesses. The two most significant developments along these lines have been Citigroup’s 2006 swap of its asset management business for Legg Mason’s brokerage unit, which added some 1,500 Legg Mason brokers to Citigroup’s existing network of 12,000-plus brokers, and its sale of the Travelers life insurance business. Citigroup’s global corporate and investment

Getting Hired

Named by Fortune as the largest company in the world, Citigroup is indeed a financial services titan, with a presence in more than 100 countries and more than $1.9 trillion in assets. Citigroup’s range of services includes I-banking, commercial banking (mainly through subsidiary Citibank), financial planning, retail brokerage, and private banking for high-net-worth individuals. Its I-banking arm, Citigroup Global Markets (descended from Salomon Brothers) is one of the biggest bulge-bracket I-banking operations, and is first among its peers in terms of I-banking revenue. Its equity research group employs more than 300 research analysts and covers some 2,600 companies. Its brokerage business descended from Smith Barney, and makes Citigroup the number–two retail brokerage in the country. Its corporate and consumer lending businesses are mammoth in scale and global in reach. Citigroup has had its fair share of hardship since the turn of the century. Its vast operations were hurt by the U.S. bear market, the collapse of technology companies, and the Argentine economic crisis. Nearly 20 percent of its staff was laid off in the early 2000s. The firm’s reputation and pocketbook also were both hurt by a series of scandals. For example, Citigroup had to pay a huge fine because its research analysts publicly recommended stocks they did not actually consider good investments. Its I-banking group was charged with securities fraud because of its work with

ThE FIRMS

388 Greenwich Street New York, NY 10013 Phone: 212-816-6000 www.citigroupgcib.com

Enron and WorldCom (the bank ended up settling charges in the Enron case for $2 billion in 2005 and in the WorldCom case for $2.65 billion in 2004). In 2004 the bank’s private banking operations in Japan were shut down by the Japanese government after improper securities sales. The bank faced a class-action suit by shareholders of Global Crossing who charge that Citigroup engaged in misdeeds in its dealings with that company. Citigroup was also implicated in the Parmalat business scandal in Italy. And the firm’s London trading group got into hot water for alleged market manipulation in 2004. The bank is currently trying to rein in the aggressive, freewheeling culture long found at subsidiaries like its I-banking unit. It reportedly doubled its compliance arm in recent years, instituted firmwide compliance standards, set up regular reviews of compliance of the bank’s board of directors by audit committee members, mandated ethics training for every employee, and pushed the bank’s ethics hotline and employee-comment website on Citigroup workers. CEO Chuck Prince is trying to create a consistent culture across the bank’s many businesses, making the firm less focused on short-term financial results and more centralized and efficient. The result? Even more bureaucracy than usual, some Citigroup employees say.

The Industry

Citigroup Global Markets Holdings Inc.

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking bank hires undergrads into capital markets, sales and trading, public finance, quantitative trading and research, finance, operations, technology, global corporate finance, I-banking, and global transaction services. Training begins in August and entails four to eight weeks of classroom training designed to give associates an in-depth overview of the business; on-the job training begins in October.



Swaps asset management business for Legg Mason’s brokerage operations.



Acquires OnTrade, an electronic stock trading company.

2005

Settles charges related to the Enron scandal for $2 billion.

2004

Sells off the Travelers Life & Annuity unit, as well as all international insurance businesses except for the Mexican unit.



Opens 203 international branches, bringing the number of worldwide Citibank branches to 3,253.

Recent Milestones 2007

Acquires majority position in Japan’s Nikko Cordial bank.



Acquires ABN AMRO Mortgage Group.

2006

Acquires 20 percent of Guangdong Development Bank.



Settles charges related to the WorldCom scandal for $2.65 billion.



Purchases 20 percent of AkBank of Turkey.





Acquires 9.27 percent of the Housing Development Finance Corporation of India.

Announces the restructure of its global corporate and I-banking business segment into two main groups, the capital markets group and the banking group.



Beefs up its trade execution capabilities by acquiring Lava Trading in July.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

22,691

23,863

21,786

Worldwide earnings ($M)

6,792

6,859

2,042

Number of employees

N/A

N/A

N/A

Note: Numbers are for Citigroup; the company does not release figures for Citigroup GCIB. Source: SEC filings; WetFeet analysis 32

W E T F E E T I N SIDER GUIDE

At a glance

11 Madison Avenue New York, NY 10010 Phone: 212-325-2000 www.credit-suisse.com/us

“The best part about working at Credit Suisse is that I get to be involved in the kind of issues that require a CEO’s or COO’s attention, and I’m directly interfacing with these people.”

For Your Reference

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Getting Hired

WETFEET INSIDER GUIDE

The Workplace

Undergrads are hired as analysts in fixed-income sales, trading, and research; asset finance; leveraged finance; liability management; real estate finance and securitization; equities sales, trading, and research; I-banking; information technology; finance, administration, and operations; and alternative capital (for example, hedge funds, private equity, and fundraising for fund managers). In the U.S., I-banking, fixed-income and equities, sales and trading, and research start with training programs in New York. These programs include introductions to Credit Suisse’s products and services, presentations by senior management, seminars with external experts (NYU and Columbia Business School professors as well as individuals from leading training consultancies), and preparation for the Series 7 and other regulatory exams.

On the Job

INSIDER SCOOP

ThE FIRMS

Overview Credit Suisse (USA) was rechristened Credit Suisse Investment Banking Division in 2006 and reorganized into three distinct operation groups: Investment Banking, Private Banking, and Asset Management. At the same time it has been rebranding it has also been expanding, focusing on emerging markets in Latin America, where it acquired a majority stake in Brazilian asset manager Hedging Griffo, and in Asia, where it bought a 30 percent stake in Korean firm Woori Asset Management. Another significant international shift came in 2006 with the appointment of American Brady Dougan as CEO Credit Suisse is the result of the 1997 merger of investment bank First Boston and European commercial bank Credit Suisse. In 2000, the firm acquired Donaldson, Lufkin & Jenrette, a leader in underwriting high-yield bonds with a golden reputation in research. Credit Suisse (USA) has a long, worldwide reputation for excellence—it has some 57 offices in 27 countries—in M&A, equity underwriting, sales and trading, I-banking, and investment research. In 2004, for instance, the bank co-managed Google’s IPO. And between 2003 and 2005, it raised more money for mainland China companies than any other foreign bank. (Credit Suisse was the lead bank in China Construction Bank’s $9.2 billion IPO, the largest Chinese company IPO ever and the largest equity offering in the world in 2005.)

Still, the bank’s performance has lagged behind its competitors. Dougan’s strategy is to focus on the bank’s traditionally strong businesses, such as highyield, international banking, and M&A, and leave the all-things-to-all-clients stuff to other banks. He’s also trying to rein in the bank’s aggressive culture, increasing accountability among managers while pushing traders to take smart risks in an effort to reinstill a killer instinct on the trading floor. Credit Suisse is an ideal place for job seekers who want the breadth of opportunities of a large organization and the entrepreneurial excitement of a firm that continues to forge ahead. You’ll have more responsibility, client exposure, and international travel and living opportunities here than your colleagues at many other Street banks.

The Industry

Credit Suisse (USA), Inc.

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking I-banking and sales and trading analysts sign on for two years, with a possible third-year offer based on performance. After the first two years, many analysts leave to attend MBA programs, but some analysts stay beyond the three-year program without attending Bschool, moving up through junior- and senior-analyst levels. MBAs are hired as associates in asset finance, fixed-income research, fixed-income leveraged finance research, fixed-income sales and trading, real estate finance and securitization, securities quantitative analysis, equities research, equities sales and trading, I-banking, merchant banking, and private banking. Some new associates take part in the bank’s HOLT University program, a training and rotation program focused on “cutting-edge, strategic financial analysis” based primarily in Chicago but with possible rotations in New York, London, Hong Kong, and Tokyo. At the conclusion of the program, they could move into a number of areas within the bank, such as research, banking, or sales. Associates then spend three to four years in a group before being considered for promotion to vice president. The levels after VP are director and managing director. “Credit Suisse is a place where you can move very quickly,” says one insider. The firm also offers summer internships for undergrads and MBAs.

“We’re looking for people who are smart, diligent, team players,… We want to see evidence that you can be a strong leader and are comfortable in a high-risk, high-pressure, competitive environment.” “We’re looking for people who are smart, diligent, team players,” a recruiter says. “We want to see evidence that you can be a strong leader and are comfortable in a high-risk, high-pressure, competitive environment.” Candidates from all majors are encouraged to apply if you’re also good with numbers. “We hire a fair number of people with liberal arts backgrounds, because we believe we can train them here,” the recruiter says. “For all candidates, however, you’ve got to demonstrate strong quantitative skills.”

Key Numbers Fiscal 2006*

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

72,193.5

7,025

6,341

Worldwide earnings ($M)

9,412.4

127

2,042

Number of employees

44,871

N/A

787

* 2006 numbers are for the entire company; Credit Suisse doesn’t release numbers for the Investment Banking division. Conversion from CHF to USD based on 7/17/07 exchange rates. Source: Hoover’s; Yahoo Business; WetFeet analysis

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W E T F E E T I N SIDER GUIDE

At a glance

Even if you have a liberal arts degree, Credit Suisse will consider hiring you providing you can demonstrate strong quantitative skills.

Opens an office in Kazakhstan.



Hafiz Naseem, a Credit Suisse banker, is charged with divulging private information regarding the leveraged buyout of Texas power supplier TXU.



Named best investment bank in Latin America by Latin Finance magazine.

2005

Ranks third in global research, third in European research, second in research in Asia, fourth in Latin American research,



Begins staffing up at its new Research Triangle Park, NC, office, with plans to hire some 400 IT and securities operations employees through 2006.

2004

Dumps CEO John Mack in favor of Brady W. Dougan.



Announces plans to combine its Credit Suisse and Credit Suisse First Boston units during the next two years. Private clients and corporate and I-banking clients will be bundled into two distinct lines of business: Private Client Services and Corporate & Investment Banking. A third business line will comprise all of Credit Suisse Group’s asset management services.

Getting Hired

Frank Quattrone, a former superstar tech banker at Credit Suisse First Boston charged in 2003 with improperly allocating IPO shares during the tech boom, is acquitted.

Named best equities house in Central and Eastern Europe by Euromoney.

The Workplace

2006



On the Job

2007

Named best high-yield house in Europe by Financial News.

ThE FIRMS

Recent Milestones



The Industry

first in research in Brazil, and third in U.S. fixed-income research by Institutional Investor magazine.

> TIP

For Your Reference

WETFEET INSIDER GUIDE

35

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Deutsche Bank Securities Inc. 60 Wall Street New York, NY 10019 Phone: 212-469-4000 www.db.com

Overview Deutsche Bank Securities (DB Securities) is part of the Deutsche Bank Corporate and Investment Bank Group Division (CIB). Following the trend of European-backed banks such as Credit Suisse and UBS, DB Securities rapidly built a global platform in the 1990s through acquisitions. In 1999 it acquired San Francisco boutique technology investment house Alex. Brown to expand its I-banking unit. Today DB Securities offers clients I-banking, sales and trading, brokerage, financial advisory, and investment products. Parent company Deutsche Bank AG has gone through some difficult times of late. For a number of years, it struggled to increase revenue. Although one of the world’s largest financial institutions, the company

is only beginning to establish a strong U.S. brand. It has taken significant steps to cut costs, including stock buybacks, the sale of peripheral operations, and layoffs, particularly in the technology sector. CEO Josef Ackerman, a Swiss national, was recently acquitted of a charge of breach of shareholder trust for his role in Vodafone’s record-breaking $183 billion hostile takeover of German telecommunications company Mannesmann. Between June 2002 and the end of 2005, DB Securities cut more than 6,000 jobs, including a large number of underperforming brokers and support personnel in its Alex. Brown unit. Hiring, however, remains steady at the firm, especially for entry-level positions. DB Securities has been making a concerted effort to increase its share of U.S. I-banking and capital markets. It has recently focused on growing areas like technology, telecom, media, energy, health care, and leveraged finance. The firm has an entrepreneurial and unstructured atmosphere, says an insider. Management encourages employees to take initiative and opens its doors to those who do. “An analyst can walk into a managing director’s office to talk and there’s nothing strange about it.” That openness translates into long-term tenures at the firm, and some of those who leave end up coming back.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

15,568

18,854

15,888

Worldwide earnings ($M)

4,807

3,658

2,329

Number of employees

N/A

13,492

14,114

Note: Numbers are for Deutsche Bank’s Corporate and Investment Bank division, which includes DB Securities. Conversion from euros to USD based on 7/17/07 exchange rates. Source: SEC filings; WetFeet analysis

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W E T F E E T I N SIDER GUIDE

At a glance

Recent Milestones The Industry

2007

Named Derivatives House of the Year by Thomson Financial’s International Financing Review.

2006

Purchases Mortgage IT, an originator of residential U.S. mortgages.



Fined $11 million for U.K. trading improprieties.



Acquires United Financial Group, a Russian investment bank.



Parent Deutsche Bank announces acquisition of Germany’s Berliner Bank.



Ranked number one in emerging Europe, Middle East, and Africa research by Institutional Investor.



Buys out partner Ixe Grupo Financiero’s portion of Deutsche Ixe equity joint venture.

2005

Parent Deutsche Bank sells portions of Deutsche Asset Management to U.K. company Aberdeen Asset Management.

2004

Agrees to pay $87.5 million to settle SEC charges of conflicts of interest between its banking and research functions.



Launches a correspondent mortgage lending group in June.

ThE FIRMS On the Job The Workplace

DB Securities hires undergraduates into global banking, global markets, technology, operations, controlling and finance, risk management, HR, and private wealth management. Undergraduates apply for analyst positions starting in September each year; check the Deutsche Bank website for more information. MBAs come on as associates in global banking, global markets (sales, trading, and research), and asset management. MBA applicants should have three to five years of work experience. Deutsche Bank offers summer internships for both undergraduate and graduate students in each of its corporate and I-banking divisions. The majority of the positions are based in New York, with some slots in other regional offices. Opportunities also exist in the United Kingdom and Asia Pacific. All candidates, including campus recruiting candidates, must complete the online application on Deutsche Bank’s website. After its building in Lower Manhattan was severely damaged in the terrorist attack of September 11, Deutsche Bank relocated most of its operations in New York to 60 Wall Street.

Getting Hired For Your Reference

WETFEET INSIDER GUIDE

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At a glance The Industry The FIRMS

Careers in Investment Banking

Friedman, Billings, Ramsey Group, Inc. 1001 19th Street North Arlington, VA 22209 Phone: 703-312-9500 www.fbr.com

For Your Reference

Getting Hired

The Workplace

On the Job

Overview Friedman Billings Ramsey (FBR) Group was founded in 1989 with an initial investment of $1 million—the only major U.S. investment bank formed in the past several decades. Today it makes about $1 billion in revenue annually, and is a top–ten U.S. investment bank. Not one to rest on its laurels, in 2006 FBR formed a holding company, FBR Capital Markets, to own FBR’s I-banking, institutional brokerage, and fee-based asset management business. In February 2007, it acquired Legacy Partners, an I-banking firm formed by former employees of Donaldson, Lufkin and Jenrette. Four months later, FBR Capital Markets went public, giving the new company an initial market capitalization in excess of $1 billion. The successful IPO continues a short but energetic tradition of aggressive activity. FBR Capital Market’s institutional trading volume grew at a compound annual growth rate of 28 percent between 2001 and 2006, according to Dealogic. In 2003, the bank ranked fourth in U.S. IPO underwriting, behind Goldman Sachs, Credit Suisse, and Lehman Brothers, according to 123Jump.com. In 2005, the bank’s revenue was flat compared with the year before, but it still completed 134 banking assignments with a total transaction value of $43.4 billion, including 62 capital-raising transactions with a total transaction value of $22.8 billion. All this activity has meant more jobs at FBR; the number of employees rose 23 percent 38

W E T F E E T I N SIDER GUIDE

Founded in 1989, FBR is the youngest major investment bank in the U.S. and the only major U.S. investment bank formed in the past several decades. in 2006 alone, according to Hoover’s. In addition to underwriting, the firm engages in M&A advisory and private placements. It focuses on eight industries: consumer; diversified industrials; energy and natural resources; financial institutions; health care; insurance; real estate; and technology, media, and telecommunications. FBR covers more than 40 percent of the S&P 500 companies in these industries, provides research on a universe of some 620 companies, and trades or makes markets in more than 640 securities. The firm is also a player in the real estate investment trust (REIT), merchant banking, asset management, brokerage, and venture capital arenas. FBR makes markets in nearly 600 securities, and its research arm covers more than 550 companies. A major part of the firm’s current strategy is to broaden the kinds of assets it has in its REIT portfolio; in 2005 it acquired First NLC Financial Services, a Floridabased mortgage lender. In terms of asset management, FBR concerns manage a family of eight mutual funds, along with hedge funds and funds of funds. The bank’s private wealth management group offers a broad range of services to high-net-worth investors, institutions, and foundations, with particular expertise in addressing liquidity and financial planning issues for owners of privately held companies.

At a glance

Named number–one book-running manager of all common stock offerings for domestic mining, oil and gas, and utility and energy companies, with a market capitalization of $1 billion or less, according to Dealogic.



Named number–one book-running manager of all common stock offerings for U.S. and Bermuda finance and insurance companies with a market capitalization of $1 billion or less, according to Dealogic.



Sells FBR National Trust business.

Takes FBR Capital Markets public, giving the new company a market cap of $1 billion.

2005

Co-chairman and co-founder Emanuel Friedman retires after running the bank for more than 15 years.



Acquires independent I-banking firm Legacy Partners.



2006

Forms FBR Capital Markets.



Named number–one book-running manager of all common stock offerings for U.S. companies with a market capitalization of $1 billion or less, according to Dealogic.

Named number one in U.S. common stock for issuers with a market capitalization of $2 billion or less and number nine in all common capital raises for U.S. companies, according to Dealogic.



Acquires First NLC Financial Services, a Florida mortgage lender.

On the Job

2007

ThE FIRMS

Recent Milestones



The Industry

In addition to its Arlington, Va., headquarters, FBR has offices in Boston; Dallas; Houston; Irvine, Calif.; London; New York; Phoenix; and San Francisco. FBR typically offers student internships in areas including asset management, research, I-banking, institutional sales, accounting/finance, corporate communications, human resources, IT, and legal/ compliance. It uses these internships as a way of recruiting top students. Most of the openings are in the Virginia office. Students and other interested job seekers should check out the firm’s website for more information.

The Workplace Getting Hired

Key Numbers Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

1,007

995

1,052

Worldwide earnings ($M)

67

171

350

Number of employees

3,019

2,449

698 Source: Hoover’s; WetFeet analysis

WETFEET INSIDER GUIDE

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For Your Reference

Fiscal 2006

At a glance The Industry

2004

Announces plans to hire 60 new bankers during the year.



Announces intent to grow its capital markets business, with an emphasis on the technology, health care, and consumer sectors.



Ranked the ninth–fastest growing company in the U.S. by Fortune.



Completes 127 banking assignments with a total value in excess of $27 billion, including lead-managing 61 capitalraising transactions with a total value of $12 billion.

For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

Careers in Investment Banking

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W E T F E E T I N SIDER GUIDE

The Goldman Sachs Group, Inc. 85 Broad Street New York, NY 10004 Phone: 212-902-1000 www.gs.com

Overview News about Goldman Sachs was hard to miss in 2006. The firm had a record year: Net revenue increased 49 percent, profit was up 93 percent, and the monster bonuses it paid out spawned dozens of articles in business publications. Based on recent quarterly announcements, the firm looks to be on track for another banner year. Goldman Sachs was founded in 1869 when Marcus Goldman, an immigrant from Europe, began a small enterprise to provide an alternative to expensive bank credit. In the 1950s Goldman Sachs played a lead role in establishing the municipal bond market, and in the 1970s the firm formed the first official M&A and real estate departments on Wall Street. In 1999, it became the last bulge-bracket bank to go public, raising $3.7 billion in the process. Today Goldman Sachs is the most prestigious American name in I-banking and is known for its cult-like corporate culture. (The firm even has an online network of alumni, so current and former employees can stay in touch; 10,000 people have already registered.) This atmosphere translates into results: Goldman Sachs is consistently profitable and at or near the top of the I-banking league tables. Particular industry strengths are in telecommunications, financial services, energy, technology, and health care.

At a glance ThE FIRMS On the Job The Workplace

Although it doesn’t divulge its recruiting forecast, Goldman reduced its workforce by more than 14 percent in 2006. The firm focuses its on-campus efforts on the top ten graduate and undergraduate schools. The firm also recruits at Howard University and Spelman College, among other sources. “If you want to be with the best in the business, your resume is golden, and you don’t mind marching in step with like-minded colleagues, Goldman Sachs could be just right for you,” says an insider. “It is more straitlaced and rule-bound, but it’s a good fit for people who work to promote the firm rather than the individual.” Another insider points to the limitless opportunities after getting Goldman on your resume: “Once you’re a second-year analyst, you’ll receive lots of offers from hedge funds and other places.” Many Goldman Sachs alumni go on to important roles elsewhere in business, government and other fields. For example, CEO Henry Paulson left the firm in July 2006 to become the U.S. Secretary of the Treasury, former CEO Jon Corzine is governor of New Jersey, and former CEO John Thain is CEO of the New York Stock Exchange. This isn’t lost on Goldman Sachs and is reflected in its recruiting practices. While academic background is critical, the firm wants smart and aggressive candidates who are mature and polished. One insider says that not having the right pedigree can hurt you at the firm.

The Industry

INSIDER SCOOP “People here are very bright, but unfortunately they can also be quite arrogant, although it’s subtle and no one would admit it underlies the organization. Goldman is trying to do more to diversify its workforce through senior management, but you get a sense it hasn’t trickled down yet.”

Getting Hired

The firm is rapidly globalizing. In China, for instance, it has a joint venture, Goldman Sachs Gaohua, with a Chinese bank. The efforts in China are paying off; Goldman has been involved in underwriting a series of big securities issuances among Chinese companies in recent years and is currently lead-managing the Bank of China’s IPO. Goldman has offices in Chicago, Frankfurt, Hong Kong, London, Milan, Paris, Sydney, Tokyo, and Zurich, among others. Despite its reputation for secrecy, the firm has been publicly lauded for its workplace. MBAs perennially rank Goldman Sachs as one of the most desired places to work, and it’s foremost among financial services firms. Once in the door, people still love the firm; for the ninth straight year Goldman Sachs made Fortune’s ranking of the “100 Best Companies to Work For”—in no small part due to its high percentage of minority and female staff, its generous outreach efforts to ensure employee well-being, and things like 360-degree performance reviews, which mean that managers are evaluated by their subordinates. (The monster compensation packages don’t hurt, either.) However, without the carrot of an ownership stake in the firm since the bank went public, Goldman employees are much more likely to leave the firm for other offers than they once were. Goldman Sachs used to think of itself as “long-term greedy,” says one partner, in that it would gladly pass on short-term profits to cement client relationships that would lead to substantial future income. Indeed, when the bank went public in 1999, it said it planned to stabilize earnings by focusing on fee-generating businesses like I-banking and asset management. However, the main driver for the firm’s growth in recent times has been trading, in particular proprietary trading.

For Your Reference

WETFEET INSIDER GUIDE

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At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking Fitting in is especially important—the firm does an impressive job of recruiting people who subscribe willingly to the Goldman way. Insiders say that the firm likes to hire people with poise who have cultivated interests in art, history, and philosophy, in addition to current events. “People seem to be a little bit smarter and snappier here,” says an insider. Another insider urges new hires to assert themselves: “You have to fight the constant put-downs and show them you’re not going to take it.” Training is intense and compared by some to “a brainwashing period,” but offers a fantastic opportunity to network internally at social events before being dropped into the behemoth bureaucracy. Goldman Sachs recruits undergraduates and MBAs for positions in trading and principal investments, I-banking, and asset management in the fall with intensive on-campus and onsite interviews; insiders report traveling to New York three to five times for follow-up interviews. The average candidate interviews with 10 to 20 people before getting a job offer, and any person who interviews you can disqualify you from the process. The first interview, on campus, is a “firmwide” interview, designed to scout your general suitability. Offers for full-time positions generally are sent in November and December; summer internship offers are made in February and March. If you make it past the first round, you might be invited to secondround interviews with up to two different divisions within the firm.

Goldman plans to open its new world headquarters in Lower Manhattan’s Battery Park City in 2010. The building will house some 9,000 employees currently operating out of about ten different downtown locations.

Recent Milestones 2007

Announces a memorandum of understanding with National Commerce Bank of Saudi Arabia.

2006

CEO Henry Paulson leaves to become U.S. Secretary of the Treasury.



Ranks 26th on Fortune’s list of the 100 best companies to work for.

2005

Announces a new initiative in which it will promote eco-friendliness, and makes $1 billion in investments in alternative energy sources.

2004

President and COO John Thain leaves to run the New York Stock Exchange.



Spear, Leeds & Kellogg, the clearinghouse unit of Goldman Sachs, agrees to pay $45.5 million to settle charges that it violated New York Stock Exchange rules.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

69,353

43,391

29,839

Worldwide earnings ($M)

9,537

5,626

4,553

Number of employees

26,467

31,005

21,928 Source: Hoover’s; WetFeet analysis

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At a glance

520 Madison Avenue, 12th Floor New York, NY 10022 Phone: 212-284-2300 www.jefco.com



Acquires Longacre Partners, a leading European media and internet M&A advisory firm.

2006

Named middle-market investment bank of the year (2005) by Investment Dealer’s Digest. WETFEET INSIDER GUIDE 43

For Your Reference

Acquires Putnam Lovell, a global financial services I-banking business.

Getting Hired

2007

The Workplace

Recent Milestones

On the Job

The Jeffries Group is growing. In June 2007 the firm announced it was acquiring the Putnam Lovell I-banking business from Canada’s National Bank Financial Group. This is the fifth industry-focused M&A group Jefferies has acquired in less than five years. Founded in 1962, Jefferies serves small and middle market corporate clients. Originally focused on institutional trading, it’s developing a formidable M&A department. Other areas include research, asset management (it has some $2 billion in assets under management), equity and debt underwriting, sales, and trading. It’s probably best known for its high-yield debt underwriting, as well as its trading operations. Jefferies makes markets in more than 4,000 securities globally and trades securities of some 8,500 companies; its trade-execution subsidiary owns 15 seats on the NYSE and handles around 10 percent of NYSE volume. In 2002 Jefferies acquired Quarterdeck Investment Partners, a boutique bank specializing in M&As for the aerospace, defense, and federal IT industries. In December 2003 it acquired Broadview International, a global M&A adviser focused on the technology sector, and the fixed-income desk of Mellon Securities. In 2005 it added Helix Associates, which beefed up its private-equity distribution capabilities, and Randall & Dewey, which added energy-industry M&A expertise.

ThE FIRMS

Overview

Meanwhile, Jefferies has expanded existing business areas including M&A, capital-raising, and corporate restructuring, largely by picking up talent laid off by the bulge-bracket banks. Indeed, Jefferies has more than tripled its banking staff in the past six years. Today it employs about 520 investment bankers and more than 100 research professionals that cover about 1,000 companies globally in roughly 40 industries. (Three-quarters of the companies it covers have market capitalizations of less than $5 billion.) Its 150-strong equity sales force services 2,000 institutional investors. The growth has fueled impressive statistics: In 2006 Jefferies ranked number one in transactions of less than $500 million and was a top–ten adviser for transactions less than $1 billion, according to the firm. It also ranked as the number–one M&A adviser in technology, defense, and energy. Jefferies has offices in Atlanta; Boston; Chicago; Dallas; Denver; Houston; Jersey City, New Jersey; London; Los Angeles; Nashville, Tennessee; New Orleans; New York; Paris; Philadelphia; Richmond, Virginia; San Francisco; Short Hills, New Jersey; Silicon Valley; Stamford, Connecticut; Tokyo; Washington, D.C.; and Zurich. Its recruitment Web page promises a fast pace and lots of growth, and positions the firm as the number one investment bank for growing and midsize companies. Recruitment brochures are available on the company website.

The Industry

Jefferies Group, Inc.

At a glance

Careers in Investment Banking Six Jefferies analysts receive nine awards in recognition of their performance in stock recommendations and accuracy of earnings estimates in Forbes.com/StarMine’s annual North America’s Top Analysts Survey.

The Industry



Time ranks Jefferies research number one among investment banks, and number three overall, for annualized return on analysts’ stock picks among the Russell 2000 for the two years ending April 1, 2006.

The FIRMS



Analysts place in the top five in The Wall Street Journal’s “Best on the Street” research analyst rankings in the aerospace and defense, medical equipment and supplies, electronic and electrical equipment, oil equipment, services and distribution, and utilities sectors.

For Your Reference

Getting Hired

The Workplace

On the Job





Raises $125 million via a private placement of convertible stock with life insurer MassMutual.

2005

Acquires Randall & Dewey, an M&A shop with energy industry expertise.



Acquires Helix Associates, a private equity fund placement firm.



Has a record first quarter in terms of revenue and earnings.



Enhances equity options trading coverage by creating Jefferies Options Execution LLC, a joint venture with PEAK6 Investments.

2004

Awarded the “Media and Telecommunications M&A Deal of the Year” by The M&A Advisor for the acquisition of Kelkoo by Yahoo.



Helfant Group, Jefferies’ NYSE floor brokerage operation, changes name to Jefferies Execution Services.



Four Jefferies investment bankers are included in The Deal’s “Top Investment Bankers” special report; five Jefferies equity research analysts are ranked among the top five stock pickers within their industry; and five Jefferies equity research analysts are included in Forbes’ “Wall Street’s Top Analysts” special report for the accuracy of their earnings estimates and the performance of their stock recommendations.



Honored as “The Best Place to Work on Wall Street” by Institutional Investor.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

1,963

1,498

1,199

Worldwide earnings ($M)

205

157

131

Number of employees

2,254

2,045

1,783 Source: Hoover’s; WetFeet analysis

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W E T F E E T I N SIDER GUIDE

At a glance

270 Park Avenue New York, NY 10017 Phone: 212-270-6000 www.jpmorganchase.com

Getting Hired For Your Reference

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The Workplace

WETFEET INSIDER GUIDE

On the Job

JPMorgan Chase did not exist in 2000. But a series of M&As that began in 2001 resulted in the behemoth now known as JPMorgan Chase (though the Investment Banking division continues under the JPMorgan name). In 2001, J.P. Morgan, with its roster of refined clients and a strong investment bank franchise (renowned especially for credit derivatives, fixed income, and loan syndication), merged with Chase and its powerhouse consumer bank and budding investment bank. In 2004, JPMorgan Chase, the second–largest bank in the country, merged with Bank One, the sixth–largest. The new firm is a colossus that nips at Citibank’s and Bank of America’s heels, and is a leader in I-banking (currently number two in I-banking fees after Citigroup), financial services for consumers and businesses, financial-transactions processing, asset and wealth management, and private equity. The company’s subsidiaries include JPMorgan Private Bank and institutional investment manager JPMorgan Asset Management (with $1.3 trillion in assets under management). JPMorgan Chase also owns about 45 percent of mutual fund company American Century and has a stake in Chase Paymentech Solutions, a transaction-processing joint venture with First Data. In 2005 the firm spun off private equity investment arm JPMorgan Partners, which divided into two companies, CCMP Capital and Panorama Capital.

ThE FIRMS

Overview

The bank has experienced some growing pains as a result of these changes, such as the challenge of meshing cultures. When Chase and J.P. Morgan merged, Main Street and Wall Street were suddenly forced to ride the same elevator every morning. And JPMorgan Chase has paid a price for its involvement in some of the recent big corporate scandals, including a $135 million settlement for its role in the Enron scandal, a $2.2 billion settlement in a class-action lawsuit relating to Enron, a $2 billion settlement of a lawsuit alleging the bank committed misdeeds in its work for WorldCom, and a $425 million settlement of charges of IPO pricing improprieties during the tech boom of the 1990s. Adding to these woes: The bank’s performance hasn’t been up to par in recent years. Because of the difficulties caused by having many different legacy IT systems, for example, the bank’s costs per transaction have been among the highest in the industry. And its principal trading efforts have simultaneously earned lower returns and exhibited more volatility than have the principal trading arms of other big banks. CEO Jamie Dimon, who ran Bank One, is moving aggressively to right the ship. The bank has cut costs wherever possible; compensation is now based more directly on performance, and managers are managed much more closely now than before Dimon came on board in 2006. A deal it inked with Fidelity, which made JPMorgan Chase a primary supplier of securities to investors with Fidelity accounts, vastly increases the bank’s distribution capability. To get the commercial and I-banking sides of the business to work more toward common goals, the I-banking arm gives the commercial banking arm 25 to 50 percent of revenue from clients referred to the former by the latter. The bank is also spending billions to upgrade its technology systems in-house, and is growing core businesses like consumer lending, asset management, and debt underwriting. The bank is one of the first to have outsourced significant securities research functions overseas to analysts in Hong Kong, India, and Singapore. The move, a growing trend, saves money and allows

The Industry

JPMorgan Chase & Co.

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking JPMorgan Chase to present clients with freshly crunched numbers first thing each morning in Europe and the U.S. JPMorgan hires undergrads as analysts in Ibanking, asset and wealth management, sales and trading, operations, and research. Summer opportunities also are available for undergraduates, who are hired into specific groups as analysts. MBAs start as associates in I-banking, asset and wealth management, sales and trading, and research. Associates might be promoted to vice president after three or four years. Insiders say associates pretty much know if they’re a good fit for JPMorgan by the five-year mark. Those who don’t become VPs either opt for a position at another I-bank or change career paths altogether. The firm surveyed some of their top recruits to find out what drew them to JP Morgan. They pointed to: •

The scale, scope and prestige of the bank

•

JP Morgan’s reputation as a business innovator

•

The chance to make a personal impact

•

World-class training and development

•

Exceptional quality of work and deal flow

•

A spirit of cooperation and teamwork

Newly hired MBAs dive right into their group’s training programs. Like boot camp, according to some insiders, these are designed to prepare recruits for action on the front lines by filling in any remaining holes from B-school. Insiders say boot camp is both fun and demanding—spur-of-the-moment happy hours and late-night cramming for tests are important bonding experiences. JPMorgan hires a number of first-year MBAs into its summer associate program. This is an excellent way to get to know the firm and, if all goes well, get a full-time offer. “There is nothing that can beat a threemonth interview for finding the right fit,” says one recruiter, and that applies for both the candidate and the firm. Although an internship is never a guarantee of future employment, many JPMorgan summer investment-banking interns receive offers. The bank also hires undergrads and MBAs into a host of retail financial services, commercial banking, and corporate (for example, HR, accounting) positions. While JPMorgan Chase is headquartered at 270 Park Avenue in Manhattan, most of its New York I-banking operations are across the street at 277 Park Avenue. Approximately 7,000 I-banking positions will relocate as a result of the firm’s decision to build a new $2 billion headquarters at the rebuilt World Trade Center area in Lower Manhattan.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

18,300

14,578

12,605

Worldwide earnings ($M)

3,674

3,658

2,948

Number of employees

27,000

19,769

17,478

Note: Numbers are for the investment banking arm of JPMorgan Chase. Source: SEC filings; WetFeet analysis

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At a glance

Recent Milestones



Pays $1.5 million to settle SEC charges of auction-rate bond market improprieties.

2005

Acquires majority position in Highbridge Capital Management, a hedge fund firm.



Pays $2 billion to settle charges brought by WorldCom investors.



Pays $2.2 billion to settle charges of fraud in its dealings with Enron.



Acquires Vastera, a trade management and logistics software maker, and renames it JPMorgan Chase Vastera.



Acquires Neovest, a trading software company.



Sells online brokerage business.



Enters a joint venture with British investment bank Cazenove, called JPMorgan Cazenove.



Named to Fortune’s list of the “Best Companies for Minorities.”

2003

Purchases US Bank’s global corporate trust business for $720 million.

The Workplace

Pays $425 million to settle charges of improprieties in pricing IPOs during the tech boom.

On the Job

2006

ThE FIRMS

Named world’s largest hedge fund manager by Alpha magazine.

Acquires Chicago-based Bank One, the sixth-largest commercial bank in the country.

The Industry

2007

2004

Getting Hired For Your Reference

WETFEET INSIDER GUIDE

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At a glance The Industry

Careers in Investment Banking

Lazard LLC U.S. Headquarters: 30 Rockefeller Plaza New York, NY 10020 Phone: 212-632-6000 www.lazard.com

For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

Overview Lazard traces its roots back to 1848, when three French brothers started Lazard Frères, a dry goods company, in New Orleans. By 1852 the brothers had moved their firm to Paris, where they focused on providing clients with an expanding array of financial services. In 2005 the firm ended an era when it went public, making Lazard the last of the major Wall Street partnerships to do so. The IPO was completed at the urging of CEO Bruce Wasserstein, who joined Lazard in 2002. In December 2006 the firm completed a second equity public offering. In addition to resulting in a windfall for Wasserstein and the bank’s 200-plus managing directors, the deal allowed Lazard to buy out its French ownership and freed it to move in directions favored by Wasserstein. What does that mean exactly? It’s hard to tell given the contrast between Wasserstein’s reputation (“brash” and “aggressive”) and the firm’s traditional reputation (thrifty and close-to-the-vest).

π Strength in Numbers Together Lazard Capital Markets and Lazard Alternative Investments form a full-service investment bank, operating in securities origination, sales, trading, research, and I-banking, and other areas. Its reputation in M&A and corporate restructuring advisory is the bank’s greatest strength. It has advised on quite a few significant M&A deals in recent years, including the merger of the New York Stock Exchange and Archipelago Exchange, Bank One and JPMorgan Chase, and Pfizer and WarnerLambert. In addition, it has recently been adviser

to a number of big debt-restructuring deals, including those of WorldCom ($38 billion), Parmalat ($27 billion), and Daewoo ($50 billion). In the first quarter of its fiscal 2006, Lazard saw revenue jump by 68 percent over the first quarter of 2005 on strong M&A and asset management performance. The deals it closed during that three-month period included the $8.8 billion merger of MCI and Verizon, the $3.3 billion acquisition of Prentiss Properties by Brandywine Realty Trust, and Whirlpool’s $2.7 billion acquisition of Maytag.

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

1,598

1,380

1,328

Worldwide earnings ($M)

93

143.5

247

Number of employees

2,200

2,191

2,584 Source: Hoover’s; WetFeet analysis

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W E T F E E T I N SIDER GUIDE

At a glance

Recent Milestones

2006

Ends Italian joint venture with Banca Intesa SpA.



Advises activist investor Carl Icahn in a contentious proxy fight with Time Warner, recommending that the company be split into four parts.

2005

Raises some $850 million in an IPO.



Restructures European I-banking group into a single business.



Advises on M&A deals including Mitsubishi Tokyo Financial Group’s $37.8 billion acquisition of UFJ Holdings and Duke Energy’s $14 billion acquisition of Cinergy.

2004

Launches I-banking office in Australia.

Getting Hired

Announces a cooperation agreement with Raiffeissen Bank, an Austrian concern, to offer M&A activities in Russia and Central and Eastern Europe.

The Workplace



On the Job

Announces plans to buy 50 percent of the MBA Group, a leading I-banking and asset management firm in Central and South America.

ThE FIRMS

2007

The Industry

Before it went public, Lazard spun off two subsidiaries: Lazard Capital Markets and Lazard Alternative Investments. Capital Markets handles equity research, sales and trading; fixed income and convertible sales and training; and underwriting services. Alternative Investments is a merchant bank whose activities include venture capital investments in technology companies. Lazard is known for its entrepreneurial, nonhierarchical culture. In other words, if you need to be managed to be at your best or you want a clear career path, other places might be a better fit for you. In North America, Lazard recruits MBAs for its associate programs on-campus at Haas, Columbia, Harvard, Stanford, the University of Chicago, and Wharton. It also recruits undergrads for analyst programs at Berkeley, Claremont McKenna, Columbia, Georgetown, Harvard, Northwestern, Howard, McGill, Princeton, Stanford, the University of Chicago, the University of Illinois, the University of Michigan, the University of Virginia, Wellesley, Penn, and Yale. JD students are also accepted. Check Lazard’s website for information on opportunities and how to apply for them. Lazard has offices in Atlanta; Chicago; Houston; Los Angeles; Montreal; Minneapolis; New York; San Francisco; São Paolo, Brazil; Toronto; Amsterdam; Berlin; Bordeaux; Frankfurt; Hamburg; and Lyon, Germany; London; Madrid; Milan; Paris; Rome; Stockholm; Beijing; Hong Kong; Mumbai (formerly Bombay); Seoul; Singapore; Sydney; and Tokyo.

For Your Reference WETFEET INSIDER GUIDE 49

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Lehman Brothers Holdings Inc. 745 Seventh Avenue New York, NY 10019 Phone: 212-526-7000 www.lehman.com

Overview Lehman set records for its revenue in 2004, 2005, and 2006 in part based on its expanded activities in the mortgage and loan origination area. Expanding the mortgage capital business is a key strategic objective, according to the company’s website, and Lehman currently has more than 6,000 employees originating loans in the U.S., the U.K., the Netherlands, Japan, and Korea. In light of the subprime fallout, Lehman’s heavy commitment to the mortgage business could come at a price. Lehman Brothers traces its roots back to 1844, when German immigrant Henry Lehman opened a general store in Montgomery, Alabama. In 1850 two of his brothers joined forces with him, and the business became Lehman Brothers. The business accepted payment in the form of cotton, becoming a broker of the crop. After the Civil War, the firm moved its headquarters to New York, where it began to sell and trade securities and provide financial advice to clients; eventually it added merchant banking

and securities underwriting. In 1984 the company was acquired by American Express, but in the 1990s became independent once again. Thought of primarily as a fixed-income house a generation ago, today it is a bulge-bracket global investment bank with some 120 offices around the world and expertise in everything from M&A advisory and securities underwriting, to sales and trading and research, to private equity, asset management, mortgage banking, and real estate investment. Still, nearly half of Lehman’s 2005 revenue came from fixed income, so the bank hasn’t lost any expertise in that area. Like other investment banks, Lehman Brothers was severely hurt by the market downturn of the early 2000s. Under CEO Richard Fuld, though, it has fought back admirably. Lehman’s longtime emphasis on cost control has helped it recover—more strongly than many other firms—from the years immediately following the burst of the tech bubble. Today the firm is once again in hiring mode, especially in its asset management areas, and has been making a series of acquisitions to strengthen its asset management businesses. Lehman Brothers’ World Financial Center headquarters were destroyed in the September 11 terrorist attacks, leaving more than 6,000 Lehman employees without a workplace. In 2002, the firm opened new headquarters in midtown Manhattan. “Coming to our new headquarters was a galvanizing event,” an insider says. Lehman has a reputation for being a bit less refined than most other banks—and a bit more streetwise. The company links employee compensation directly

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

46,709

32,420

21,250

Worldwide earnings ($M)

4,007

3,260

2,369

Number of employees

25,000

22,900

19,600 Source: Hoover’s; WetFeet analysis

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At a glance

INSIDER SCOOP

Recent Milestones On the Job

2006

Recognized by the Securities Industry Financial Management Association for its innovative Encore™ initiative, which re-engages talented individuals, primarily women, who have left the workforce for a period of time and want to return.



Acquires Campus Door, a U.S. provider of private student loans.



Cited as “Europe’s rising star: most improved investment bank of the decade” by Financial News.



Named “best investment bank” in the industrial/chemicals sector by Global Finance magazine.



Ranked number one in Barron’s 500 annual survey of corporate performance.

WETFEET INSIDER GUIDE

51

For Your Reference

Establishes a strategic relationship with the Qatar Investment Authority and receives a license to operate in Qatar.

Getting Hired

2007

The Workplace

Lehman Brothers typically does business as if it has something to prove on the Street. “There’s an underdog mentality,” says one insider. Lehman’s banner years resulted in an increase in hiring activities; its workforce expanded by 3,000 in 2006 alone. Lehman pulled students from 170 countries in Asia, the Americas and Europe. Undergraduates can apply for analyst positions in equities and fixed-income sales, trading, and research; I-banking and private equity (the latter of which comprises merchant banking, venture capital, real estate, third-party funds, and fixed income-related funds); investment management; operations; finance; IT; credit risk management; and public finance. All of these (except for IT) are two-year programs, though in some areas high performers might be asked to stay with the firm after two years. MBAs are hired into rotational programs in I-banking and private equity; equities and fixedincome sales, trading, and research; public finance; and investment management. Most equities and fixed-income hires enter as generalists, which means the program gives them exposure to a broad range of activities and businesses. Those interested in equity research and analytical areas of equities and fixed income enter a program more focused on their specific areas of interest. MBAs also come on board in private investment management sales, credit risk management, and public finance. Insiders say there’s no set timeline for promotions. “The firm tries to espouse being a meritocracy as much

ThE FIRMS

“I’m astounded that this is an investment bank. There’s no room for attitude. People like that don’t survive here.”

as it can,” says one. Lehman wants its people for the long haul and helps them move around the firm to accommodate their interests. “Lehman hires you for the organization, so it’s an open job market,” says an insider, who switched from banking to venture capital. “You don’t have to risk being fired like at other firms.” The firm is flatter than many of its peers, with less bureaucracy, giving new hires plenty of opportunity. Lehman continues to offer summer MBA programs for all of its divisions except credit risk management, and summer analyst programs for all areas except credit risk management and public finance. Summer programs are a critical gateway into a job at Lehman and where the firm gets most of its full-time hires.

The Industry

to the firm’s profits, and employees own one-third of the firm. Insiders say office politics and internal competition are kept to a minimum. “There is an attitude of respect that is pervasive across the business units without question,” a vice president says. “It’s collegial and friendly,” says another insider.

At a glance The Industry The FIRMS



Named second most admired securities company by Fortune.



Named to BusinessWeek’s list of the 50 best-performing companies.



Places fourth in Institutional Investor’s 2006 All-Europe Research Team.



Wins 29 best-in-class awards in the Global Custodian Prime Brokerage Survey—more than any other firm.



Named “Best Investment Bank” in the power and health-care sectors by Global Finance magazine.



Named “Best Investment Bank” by Euromoney.

2004

Ranks first in Institutional Investor’s AllAmerica Equity Research and All-America Fixed-Income Research surveys.

For Your Reference

Getting Hired

The Workplace

On the Job

Careers in Investment Banking

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Merrill Lynch & Co., Inc. 4 World Financial Center New York, NY 10080 Phone: 212-449-1000 www.ml.com

Overview Merrill Lynch has been growing through a number of acquisitions and investments. In 2005 it bought the Advest Group from AXA Financial; that same year it acquired the retirement business of AMVESCAP (now INVESCO) and the pension business of Philips. In 2006 Merrill Lynch bought institutional brokerage Wave Securities from Archipelago Holdings. In 2007 it acquired National City’s First Franklin Financial Corp. mortgage unit, energy industry investment bank Petrie Parkman & Co., and First Republic Bank. Merrill Lynch was the first Wall Street firm to establish nationwide branch offices and the first to advertise on television; it became known as “the firm that brought Wall Street to Main Street.” One of the largest U.S. securities firms, the company is organized into two main segments: global private client (GPC) and global markets and investment banking (GMI). GPC provides brokerage services, banking services, credit cards, and investment products to individuals, small- and midsize businesses, and employee benefit plans. GMI offers I-banking, trading, transaction services, and investment products to institutions, corporations, and governments. Merrill Lynch operates out of offices in 36 countries and territories. In 2006 it merged its asset management arm, Merrill Lynch Investment Managers, with asset manager BlackRock.

At a glance ThE FIRMS On the Job

INSIDER SCOOP Want to work for Merrill Lynch? Check your ego at the door

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For Your Reference

WETFEET INSIDER GUIDE

Getting Hired

Merrill hires hundreds of undergrads into analyst positions in I-banking, global markets, and private client services each year. Opportunities also exist in IT, operations, HR, accounting and finance, credit, and investment management. The number of openings varies annually depending on departmental needs. MBAs join the firm as associates in I-banking, global markets, private client services, and research; resumes should be submitted September through November for those graduating in the spring. For these jobs, Merrill looks for candidates who have previous financial experience and a good personality fit. Candidates who have never worked on Wall Street need to be versed in the industry and its trends.

The Workplace

“While it doesn’t look like a Grateful Dead concert, individuality is tolerated at Merrill.”

Wharton,” an insider says. Merrill Lynch’s criteria for new hires are based more on skills than personality, which means less prescribed image and behavior. “While it doesn’t look like a Grateful Dead concert, individuality is tolerated at Merrill,” another insider says. Merrill Lynch recruits at colleges nationwide in the fall, but does the bulk of full-time hiring through its summer program. While a high GPA, top-tier schooling, and finance-related major are assets, recruiters want candidates who excel in outside pursuits. “You need to show how you’re best at something,” says one recruiter, be it physics or knitting. That said, Merrill Lynch doesn’t want selfobsessed people who aren’t able to work on a team. “We generally reject people who are egocentric,” an insider says. “Those individuals might actually be the most intelligent and qualified people, but if they have those characteristics, they won’t be successful in our culture.”

The Industry

Like other investment banks, Merrill is emerging from a difficult time. Its bottom line was deeply wounded by the bear market of the early 2000s, and the company’s image has been tarnished by its involvement in the financial scandals of the past few years, such as the ImClone/Martha Stewart insider trading scandal. In 2002 and 2003 it paid $200 million to settle charges of improper research. The firm also paid $80 million to settle charges that it helped Enron commit securities fraud. In addition, it eliminated more than 20,000 jobs in the early years of the millennium to cut costs. But Merrill Lynch has begun to reverse its bad fortune. It grew revenue by nearly 50 percent in 2005, and its first-quarter revenue in 2006 was a record for the firm, up 28 percent from the first quarter of 2005. “There is [now] a sharp focus on profitability—lasersharp,” says an insider. “Everybody is looking at what they’re doing and thinking about how to do it better.” On the plus side, the firm’s powerful brand name and phenomenal resources mean a stronger platform from which to sell. But its sheer size means navigating through red tape. “It’s very bureaucratic,” an employee says. “You achieve things in spite of, rather than because of, the massive infrastructure that exists.” With senior executives originating from the lowest brokerage ranks, Merrill Lynch exhibits less white-shoe attitude than other firms. “Out of my group of 70, no one’s a Harvard grad; a lot are from Chicago and

At a glance

Careers in Investment Banking

The Industry

Recent Milestones 2006

Named top European equity house by International Financing Review.



Named best global equities house by Euromoney.



Named investment bank of the year by The Banker.



Named top China equity house by International Financing Review Asia.



Acquires brokerage firm The Advest Group from AXA Financial.



Named Best Investment Bank of the Year by Investment Dealers Digest.

Acquires Pax Clearing, a Chicago options, futures, and stock clearinghouse.



Named one of 40 Best Companies for Diversity by Black Enterprise Magazine.

Acquires AMVESCAP Retirement, a retirement plan provider.

2004

Acquires Entergy-Koch Trading, an energy-trading company.



Ordered to pay $2.2 million after an arbitration panel found the firm guilty of discriminating against female stockbrokers.

Announces merger of its asset management arm with BlackRock, a fixed income-focused asset manager; Merrill Lynch owns just less than 50 percent of the venture. Named Best Derivatives House of the Year by Risk Magazine. Wins the Human Rights Campaign’s 2007 Corporate Equality Award for its commitment to employees and clients who are lesbian, gay, bisexual, or transgender.



2006



For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

2007

2005

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

70,591

47,783

32,467

Worldwide earnings ($M)

7,499

5,116

4,436

Number of employees

56,200

54,600

50,600 Sources: Hoover’s; WetFeet analysis

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W E T F E E T I N SIDER GUIDE

At a glance

1585 Broadway New York, NY 10036 Phone: 212-761-4000 www.morganstanley.com

million to settle the claims. During the accounting scandals that rocked Wall Street in the early years of the millennium, Morgan Stanley was among the first to adopt more stringent controls for its operations, including a new stock-rating system. Of course that didn’t stop regulators from investigating the firm, along with others on Wall Street, for touting tech stocks to woo Ibanking clients. Morgan Stanley eventually had to pay $50 million to settle charges against it—a mere pittance compared with what other top banks had to pay.

On the Job 55

For Your Reference

WETFEET INSIDER GUIDE

Getting Hired

in 30 countries. Like other big investment banks, it’s making inroads in emerging financial powerhouse countries. It was one of the first foreign banks with a presence in China via a joint venture with China Construction Bank in 1992. In 2005, it was the top investment bank in China, mainly due to its lead underwriting role in China Construction Bank’s listing on the Hong Kong stock exchange. Morgan Stanley has active recruiting programs for undergrads, MBAs, and IT professionals, as well as a range of summer internships. Competition is keen for all positions. Why? Because Morgan Stanley is, in the words of one insider, “a kick-ass name.” Employees and non-employees alike are impressed. One insider confesses to taking pleasure in the fact that “when people ask me where I work, they say, ‘Oh, wow!’ when I tell them Morgan Stanley. Goldman

The Workplace

Despite a prettier picture, Morgan Stanley is still getting black eyes in the press: In 2006 the firm agreed to pay a $15 million fine to settle charges that it didn’t produce documents and was uncooperative during SEC investigations. In January 2007 Morgan Stanley was hit with an age discrimination lawsuit by one of its former managing directors. And in April 2007, Morgan Stanley’s Global Wealth Management Group settled a class-action lawsuit that alleged discrimination against women brokers and trainees in promotion and compensation. The company set aside $46

ThE FIRMS

Overview The picture is finally brightening for Morgan Stanley, one of the world’s leading investment banks. In 2005 the firm experienced a very public struggle for control between chairman and CEO Philip Purcell and a group of Morgan Stanley executives. Following relentless criticism from the Street about Purcell’s 2005 spinoff of Morgan Stanley’s Discover Card business, the departure of key executives forced out by Purcell during the battle for control, and a spate of key staff defections, Purcell finally agreed to step down. He was replaced by John Mack, the former CEO of Credit Suisse. Events had come full-circle—Mack was forced out of Morgan Stanley by Purcell in the early 2000s. With Mack—who insisted on being paid based on his performance rather than receiving a guaranteed $25 million salary—at the helm, morale is on the rebound. Financials from the first half of 2007 seem to reflect that: Morgan Stanley’s profit grew three times faster than at Goldman Sachs, the biggest U.S. investment bank. Profit during the second quarter was stronger than at Goldman, Lehman Brothers Holdings, and Bear Stearns. And continued strength in corporate takeovers drove I-banking revenue to a record $1.7 billion, up 65 percent year-over-year. Morgan Stanley was formed in 1935 after the Glass-Steagall Act forced banks to cease underwriting and other I-banking activities. That’s when Henry Morgan and Harold Stanley left J.P. Morgan and established a separate I-banking firm. The 1997 merger with Dean Witter Discover gave Morgan Stanley access to that company’s extensive retail brokerage business. Today the bank has more than 600 offices

π Scratches on the Canvas

The Industry

Morgan Stanley

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking is probably the only other firm that will elicit that response.” But there’s a flip side. “People here are, well, how shall I say this? Competitive,” says a second-year associate. One first-year insider says that although they tend to be the exception rather than the rule, “you do find some ‘me first’ kind of people who won’t put their projects aside to work with you.” In other words, if you’re looking for a warm and collegial work environment where people look out for each other, the cutthroat mentality of some Morgan Stanley divisions might not fit the bill.

In 2005, it was the top investment bank in China, mainly due to its lead underwriting role in China Construction Bank’s listing on the Hong Kong stock exchange.

Getting hired at Morgan Stanley could be the toughest assignment you’ve ever tackled, so don’t wait to apply. “It’s imperative to get on the interview list at your school early,” says one recent hire. If Morgan Stanley doesn’t recruit on your campus, it’s still possible—and even more important—“to meet people at receptions, talk to them later, set up informational interviews in New York City, and call alumni from your school.” Morgan Stanley also offers an online application process. The summer associate recruiting process is particularly speedy, another insider says. The firm will often contact you the night of the interview to invite you back for a second round—or to ding you. Second-round interviews are usually at Morgan Stanley’s New York headquarters. A third round is possible. The process for full-time associates is similar, but could move a bit slower. The recruiting process for analysts often begins on selected campuses nationwide, but much is still done in New York. Interviews are notoriously rigorous. “

INSIDER SCOOP “Morgan Stanley was grueling—11 interviews in one day. They really grilled me and tried to get my wheels spinning.”

Key Numbers Fiscal 2006

Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

76,551

52,081

39,549

Worldwide earnings ($M)

7,472

4,939

4,486

Number of employees

N/A

53,218

53,284 Sources: Hoover’s; WetFeet analysis

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At a glance

Recent Milestones

Announces intention to open office in Egypt and expand business in North Africa and Middle East.

2006

Acquires Saxon Capital, a Virginia-based residential mortgage lender.



Acquires TransMontaigne, a Denver-based oil and gas transportation company, and Heidmar Group, a Connecticut-based marine transportation and logistics firm.



Pays $15 million to settle SEC charges that it was uncooperative while under investigation.



Named “Credit Derivatives House of the Year” by Risk magazine.



Named “FX Provider of the Year” by Global Investor magazine.



Ranked number one in ranking of prime brokerage operations by Global Custodian.

CEO Philip Purcell announces he is stepping down from his CEO and chairmanship positions; he is replaced by former president of the bank John Mack.



Announces plans to spin off Discover Card business.

2004

Spins off Morgan Stanley Capital Partners.



Subsidiary Morgan Stanley Capital International acquires risk management software company Barra to form MSCI Barra.



Pays $54 million to settle sexual discrimination charges brought by some 300 employees.



Agrees to pay $40 million to settle SEC charges over improper IPO allocation practices.



Is co-lead manager of Google IPO.

Getting Hired

Acquires AMLI Residential Properties Trust.



The Workplace



Ordered to pay $1.5 billion to Ronald Perelman for withholding knowledge of accounting fraud at Sunbeam; in 1998 Perelman sold his company, Coleman, to Sunbeam for cash and stock; Sunbeam went bankrupt as a result of the accounting fraud, and Perelman lost a big chunk of change.

On the Job





ThE FIRMS

Completes spinoff of Discover Financial Services.

Sells aircraft leasing business. The Industry

2007

2005

For Your Reference

WETFEET INSIDER GUIDE

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At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Piper Jaffray Companies 800 Nicollet Mall, Suite 800 Minneapolis, MN 55402 Phone: 612-303-6000 www.piperjaffray.com

Overview Located in Minneapolis, Piper Jaffray is the number one technology underwriter. Its mission is to build the leading international middle market investment bank and institutional securities firm. Piper Jaffray traces its roots back to 1913, when Harry Piper and Palmer Jaffray founded a commercial paper brokerage house. The bank became an independent entity a couple of years ago after operating as a subsidiary to a larger institution. In 1998, U.S. Bancorp acquired Piper Jaffray in an effort to bolster its presence in securities businesses, but in 2004 the big commercial bank spun off the smaller firm. The bank, which almost tripled the number of its employees in 2006, according to Hoover’s, focuses on sectors including consumer, financial institutions, health care, and tech. Piper Jaffray’s equity business is focused on seven sectors of the economy: alternative energy, business services, consumer, financial institutions, health care, industrial growth, and technology. Its public finance business is principally focused on five sectors of the tax-exempt market: state and local governments, real estate and housing, health care, education, and hospitality. Piper Jaffray is headquartered in Minneapolis, and has 107 offices in 23 states, as well as London and Shanghai. Since most of Piper Jaffray’s employees work outside of New York, it’s possible that you’ll end up a long way from Wall Street if you join this firm. But insiders say that distance has its advantages, like a more easygoing work environment and better work/ 58

W E T F E E T I N SIDER GUIDE

life balance. “The hours are better, the pay is similar, and the workplace isn’t cutthroat,” says a Minneapolis insider. “People are just really nice, friendly, and supportive.” One former employee remembers the firm’s commitment to keeping family a priority in its employees’ lives. “What I found to be unique in the Ibanking industry at Piper Jaffray was that they strongly believed that family was number one,” the insider says. “There’s the understanding that if it’s your daughter’s birthday, someone will cover for you.”

INSIDER SCOOP Piper Jaffray pays particular attention to colleges in the Midwest when recruiting undergrads. Piper Jaffray recruits undergrads and MBAs at top schools nationwide, with an emphasis on Midwestern schools for many undergrad needs. In 2006 it recruited MBAs from such schools as University of California at Berkeley’s Haas School, UC Los Angeles’s Anderson School, University of Chicago, Harvard Business School, University of Michigan, University of Minnesota’s Carlson School, Kellogg, Wharton, and Stanford. It recruited undergrads at Berkeley, UCLA, Duke, Illinois, Iowa, Kansas, Michigan, Minnesota, Notre Dame, Stanford, St. Thomas, Texas, and Wisconsin. Recruiters look for highly motivated, dedicated, and productive applicants with diverse backgrounds. The interview process includes an on-campus meeting followed by a series of meetings at company offices. A finance background isn’t required for analyst positions, but strong quantitative skills are necessary. I-banking associates and equity research analysts generally have MBAs. The bulk of undergraduate and MBA hiring is in I-banking and equity research. Other undergraduate positions are available in product services and accounting. MBAs can also apply for positions in asset management and venture capital.

At a glance

Recent Milestones Signs a definitive agreement to acquire Goldbond Capital Holdings, a Hong Kong-based investment bank serving the Greater China region. Acquires Fiduciary Asset Management.



Five Piper Jaffray Equity research analysts honored in The Wall Street Journal’s annual “Best on the Street” survey of research analysts.

Matches employee donations up to $100,000 for Hurricane Katrina relief.



Becomes member of the London Stock Exchange.



Fined $280,000 and $275,000 for improper municipal bond securities trade reporting and mutual fund sales improprieties, respectively, by the National Association of Securities Dealers. Piper Jaffray is spun off by U.S. Bancorp.

Ranks sixth in equity research in The Wall Street Journal’s “Best on the Street” survey.



Completes senior-managed $309 million municipal bond underwriting for the Baltimore Convention Center Hotel Project, one of the bank’s largest deals ever by par value.

2004



Opens Nashville fixed-income sales office.

Research group begins covering the health care industry.



Fined $2.4 million for improper allocation of IPO shares.



Acquires Vie Securities.

2005

Spins off venture capital business.

The Workplace

2006

On the Job



ThE FIRMS



Ranks fourth in The Wall Street Journal’s “Best on the Street” survey, and ties for eighth in the Forbes.com/StarMine rankings of equity research analysts.

The Industry

2007



Getting Hired

Key Numbers Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

535

815

816

Worldwide earnings ($M)

235

40

50

Number of employees

1,104

2,830

3,000 Sources: Hoover’s; WetFeet analysis

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For Your Reference

Fiscal 2006

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

UBS Investment Bank Primary U.S. Office: 299 Park Avenue New York, NY 10171 Phone: 212-821-4000 www.ibb.ubs.com

Overview If you watch TV, then you’ve probably seen the UBS ads (“You and Us: UBS), which are in heavy network rotation. Between that and the fact that UBS handles one in nine globally traded shares, it’s a hard company to miss. UBS Investment Bank is part of UBS AG, which is the world’s largest private bank. UBS is based in Switzerland, so UBS Investment Bank has a wealth of valuable European and other international connections. The current incarnation of the firm was created through a series of acquisitions, starting with Swiss Bank Corp.’s (SBC) purchase in the 1990s of O’Connor & Associates, an equity-derivatives trading firm in Chicago. SBC next bought SG Warburg, a London- and New York–based investment bank, and then Dillon Read, a small, distinguished U.S. I-banking firm, to increase its presence in the U.S. In 1998 SBC merged with the Union Bank of Switzerland (UBS). In 2000, Paine Webber was added to the fold, enhancing the bank’s distribution capability as well as its business with high net-income individuals. And in late 2004 the bank acquired SoundView Capital, a trading firm, from Charles Schwab & Co., creating the new UBS Capital Markets LP business to house the acquisition. The business is a major provider of execution services for retail brokers; the acquisition made UBS the market leader in share volume traded on the NYSE and NASDAQ in 2005. 60

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The investment bank operates in three main areas: equities, I-banking, and fixed income, rates, and currencies. It has offices in 36 countries worldwide. The equity research group employs some 700 analysts, following nearly 3,000 companies as well as producing economic, strategy, and derivative research. The I-banking group employs 22,000 people and advises clients on M&A, strategy reviews, and restructuring. It’s known for expertise in cross-border M&A and capital-raising strategies. The fixed income, rates, and currencies group employs more than 2,000 professionals and operates in major markets around the world. UBS is especially strong in foreign exchange. The bank is a major player globally, particularly in Europe, but also in Asia. It’s rapidly expanding its U.S. operations as well. “Our plan was to expand domestically and to do so aggressively, and that plan is still on track,” an insider says. “We want to win.” UBS employees say their corporate culture is more relaxed than most Wall Street firms. “UBS isn’t your typical firm,” an insider says. “It’s the most European, laid-back culture you’re going to get on the Street, and it was business casual far before the dot-com era. It’s not all type-A people, and it’s not as cutthroat. We work together, not against each other.” Good employees move up quickly. With smaller deal teams than at most of the big firms, competition for key positions is minimized. There’s plenty of responsibility for those who want it, and that means a fast promotional track. “There’s more head and elbow room, which means there are fewer people fighting over deals at your level and there’s a lot more responsibility for the levels above you,” says one insider.

INSIDER SCOOP “I’m an impatient person, so I wanted to be at a place where I can ramp up faster than across the Street.” UBS aggressively recruits undergraduates and MBAs to staff its U.S. offices. Undergraduates can

At a glance



Ranked second in Institutional Investor’s “All-Europe Fixed Income Research Team” rankings.



Ranked number one for the fifth straight year in Institutional Investor’s “All-Asia Research Survey.”



Ranked number one in equity sales and research in Latin America by Institutional Investor.

2005

Loses a high-profile sexual harassment lawsuit brought by a former institutional equity salesperson, in which the investment bank was shown to have destroyed key email evidence.



Several African-American employees file a class-action discrimination lawsuit against UBS in the U.S.

Recent Milestones 2007

Announces purchase of Standard Chartered’s mutual funds management business, India’s ninth largest domestic mutual fund manager.

2006

Acquires Brazilian investment bank Banco Pactual.



Acquires ABN Amro’s global futures and options arm.



Ranked number one in pan-European sales force for the third straight year in Institutional Investor’s “Pan-European Equity Sales Rankings.”

Key Numbers Fiscal 2005

Fiscal 2004

Worldwide revenue ($M)

17,849

13,291

12,226

Worldwide earnings ($M)

4,882

3,938

3,504

Number of employees

N/A

18,174

16,970

Note: Numbers are for the parent company; UBS does not release numbers pertaining to its I-banking division. Source: SEC filings; WetFeet analysis

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For Your Reference

Fiscal 2006

Getting Hired

Acquires the private-client services arm of Piper Jaffray.

The Workplace



On the Job

Pays $54 million to settle charges by the NYSE and the states of New Jersey and Connecticut, which had accused the firm of allowing improper trades by some of its financial advisers’ customers between 2000 and 2002.

ThE FIRMS



The Industry

apply for full-time positions in asset management, client advisory, consulting and management support, debt capital markets, financial control and accounting, IT, I-banking, legal and compliance, marketing and communications, operations and services, research, risk management, sales, and trading. MBA opportunities include positions in asset management, client advisory, debt capital markets, I-banking, and research. Additional opportunities exist in overseas offices. UBS also offers summer internships for both undergraduates and MBAs.

At a glance The Industry



The Securities and Exchange Board of India charges UBS with contributing to the company’s Black Monday stock market decline in 2004.



Enters a “mutually beneficial strategic cooperation relationship” with the Bank of China to develop I-banking products and services in China.

2004

Acquires Schwab’s SoundView Capital Markets business for $265 million.



Buys out partner Brunswick’s portion of joint venture in Russia, taking full control of the joint venture’s operations.

For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

Careers in Investment Banking

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At a glance The Industry

Other Firms Headquarters

Website

Allen & Company

New York

AllenInvestments.com

Brown Brothers Harriman & Co.

New York

www.bbh.com

Canaccord Adams

Toronto

www.canaccordadams.com

C.E. Unterberg, Towbin

New York

www.unterberg.com

CIBC World Markets

Toronto

www.cibcwm.com

Cowen & Company

New York

www.cowen.com

Daiwa Securities Group

Tokyo

www.daiwausa.com

Dresdner Kleinwort

London

www.dresdnerkleinwort.com

Evercore Partners

New York

www.evercore.com

Fox-Pitt, Kelton

New York

www.fpk.com

FTN Midwest Securities Corp.

Cleveland

www.ftnmidwest.com

Greenhill & Co.

New York

www.greenhill-co.com

HSBC

London

www.hsbc.com

JMP Securities

San Francisco

www.jmpsecurities.com

Keefe, Bruyette & Woods

New York

www.kbw.com

KeyBanc Capital Markets Inc. (formerly McDonald Investments)

Cleveland

www.key.com

Merriman Curhan Ford & Co.

San Francisco

www.merrimanco.com

Morgan Keegan & Co.

Memphis, Tenn.

www.morgankeegan.com

Needham & Co.

New York

www.needhamco.com

Nomura Holdings

Tokyo

www.nomuraholdings.com

Oppenheimer Holdings

Toronto

www.opco.com

Prudential Equity Group

New York

www.cm1.prusec.com

Ragen MacKenzie

Seattle

www.wellsfargo.com/ragen_mackenzie/about

Raymond James Financial Services

St. Petersburg, Fla.

www.rjf.com

RBC Dain Rauscher

Minneapolis, Minn.

www.rbcdain.com

On the Job The Workplace Getting Hired 63

For Your Reference

WETFEET INSIDER GUIDE

ThE FIRMS

Firm

At a glance The Industry The FIRMS On the Job

Robert W. Baird & Co.

Milwaukee, Wisc.

www.rwbaird.com

Roth Capital Partners

Newport Beach, Calif.

www.rothcp.com

Ryan Beck & Co.

Livingston, N.J.

www.ryanbeck.com

Sanders Morris Harris Group

Houston

www.smhgroup.com

Sandler O’Neill + Partners

New York

www.sandleroneill.com

Sanford C. Bernstein & Co.

New York

www.bernstein.com

Sidoti & Co.

New York

www.sidoti.com

Stephens Inc.

Little Rock, Ark.

www.stephens.com

Stifel Financial Corp.

St. Louis, Mo.

www.stifel.com

Sun Hung Kai & Co.

Hong Kong

www.shkco.com

SunTrust Robinson Humphrey Capital Markets

Atlanta

www.suntrustrh.com

SWS Group

Dallas

www.swsgroupinc.com

TD Securities

Toronto

www.tdsecurities.com

Thomas Weisel Partners

San Francisco

www.tweisel.com

Wachovia Securities

Richmond, Va.

www.wachoviasec.com

Wedbush Morgan Securities

Los Angeles

www.wedbush.com

William Blair & Co.

Chicago

www.williamblair.com

WR Hambrecht + Co.

San Francisco

www.wrhambrecht.com

For Your Reference

Getting Hired

The Workplace

Careers in Investment Banking

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At a glance

The Industry

ThE FIRMS

On the Job

The Workplace

Getting Hired

For Your Reference

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On The Job

4

Overview..................................... 68 Corporate Finance...................... 68 Mergers and Acquisitions............ 70 Public Finance............................. 71

Sales and Trading........................ 72 Research...................................... 75 Support Functions...................... 77

At a glance The Industry The FIRMS On the Job The Workplace

Overview Everything coming into focus? Before you say yes, understand that while the services provided by investment banks are relatively standard, different firms can have significantly different market niches and client bases. It’s especially easy to get confused when you start paging through the corporate brochures because every firm has a slightly different way of organizing and marketing its activities. So as you’re reading, think in terms of the basic banking functions—and suddenly “capital markets” will reveal itself to be plain old sales and trading. Keep in mind that while most investment banking (I-banking) org charts look complex, there are essentially three major professional divisions to a fullservice investment bank: •

I-banking

•

Sales and trading

•

Research

The specific tasks for each division, as well as the skills and personalities of the people who work in them, are very different. You’ll be dinged if you walk into the interview cubicle without some idea of whether you want to structure deals, trade financial products, or do research. If you pursue and are hired for a position that you’re not really a good fit for, work will make you miserable. To help you avoid either fate, we’ll take you on a brief tour of a few of the basic jobs within a typical investment bank.

For Your Reference

Getting Hired

Careers in Investment Banking

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Corporate Finance The corporate finance group (frequently known as banking or CorpFin) serves the sellers of securities. The sellers could be Fortune 1000 companies that are looking to raise cash to fund growth or private companies that are looking to go public. Think of investment bankers as financial consultants to corporations. This is where CEOs and CFOs turn when they’re trying to figure out how to finance their operations, structure their balance sheets, or how best move ahead with plans to sell or acquire a company. The activities of the CorpFin department can range from providing pure financial advice to leading a company through its first equity issue (or IPO). As a result, industry or product knowledge is key; many investment banks divide their corporate finance departments into industry subgroups, such as technology, financial institutions, health care, communications, entertainment, utilities, and insurance, or into product groups, like high-yield, private equity, and investment-grade debt. As a whole, CorpFin does any and all of the following: •

Underwrites equity offerings. (Translation: The investment bank buys all of the shares of stock for sale from a corporation or government entity and then sells them on the market to investors.)

•

Underwrites fixed-income (debt/bond) offerings.

•

Helps firms analyze their financial needs.

At a glance

Sample Project

Determines valuations for offerings (for example, what the opening price for the stock should be).

Who Does Well

> TIP

WETFEET INSIDER GUIDE

For Your Reference

Whether you’re a grad student or an undergrad, try to get an I-bank internship—it’s the best way to secure an eventual offer.

Getting Hired

I-banking jobs in corporate finance require critical, detail-oriented thinking. If you have a knack for crunching and using numbers to understand patterns that influence business, you’re going to be valuable to a company. You should also enjoy and excel at solving problems and be able to think critically about the numbers you’re working with. CorpFin jobs also require excellent people and communication skills, to work both on banking teams and to build solid relationships with clients. Lawyers can be as good a fit in this career as MBAs, and experienced candidates with strong experience in a given industry make good candidates for I-banking positions. In fact, an advanced degree (MBA or other) is all but required to advance in this career, and some sales ability is necessary to sell banking business to potential clients.

The Workplace

•

On the Job

Helps firms devise and implement financial strategies (for example, how to structure their balance sheets, and when and how to proceed with funding initiatives).

ThE FIRMS

•

When a private company’s growth demands larger amounts of cash, management will often turn to an investment bank to develop a financing strategy that’s more economical than, say, the revolving stack of credit cards it has been using to meet payroll. By selling a portion of its stock to the public in an IPO, a private company can raise a significant amount of capital without increasing its debt burden. An analyst’s or associate’s role in the process begins once the bank has been invited to pitch for the underwriting business. First, you and your deal team (senior bankers from your group, plus the appropriate research analyst) put together a pitch book that includes a preliminary valuation of the company and a description of how the bankers will position the company to make its stock most attractive to investors. If your firm is selected as an underwriter, you and the other analysts and associates staffed on the deal will do most of the legwork to finalize the valuation, prepare and submit the prospectus to the SEC for review, accompany management on the road show, and coordinate activities with the company’s lawyers and other underwriters during the process. After the market has closed on the day the deal is scheduled to price, the deal team will gather for a conference call with the other underwriters and company management to decide on the final price for the offering. The next morning, the stock begins trading—and you start making plans for the deal team to gather with the company at a posh restaurant for a celebratory closing dinner.

The Industry

In CorpFin, industry or product knowledge is key; many investment banks divide their corporate finance departments into industry subgroups, such as technology, health care, and communications.

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At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking Job Tips

M&A groups will:

The CorpFin department generally hires a significant number of MBAs and undergraduates to develop financial models, create the offering memorandum (an important document that can run 200 pages), and facilitate the due diligence process. If you’re hired into one CorpFin industry group, think of your relationship with that group as dating rather than marriage. Don’t necessarily plan to spend the rest of your two or three years or career in that group. Market trends are ever-changing, and so are the compositions of specific industry groups.

•

Advise firms on M&A strategies.

•

Determine target company valuations.

•

Help the target of a hostile acquisition arrange a defensive strategy.

•

Conduct due diligence on a target or acquiring company (for example, examine the financial results and other business factors that will affect the value of an acquisition).

•

Negotiate price, terms, and conditions of an acquisition or merger.

•

Work with the other company’s advisory team and the lawyers to structure the deal.

Mergers and Acquisitions INSIDER SCOOP “You have to really like spending time in front of your computer with Excel.” The mergers and acquisitions (M&A) group provides advice to companies that are buying other companies or are themselves being acquired. M&A work can seem very glamorous and high-profile. At the same time, the work leading up to the headline-grabbing, multibillion-dollar acquisition can involve a Herculean effort to crunch all the numbers, do the necessary due diligence, and work out the complicated structure of the deal. Often, the M&A team will also work with a CorpFin industry group to arrange the appropriate financing for the transaction (usually a debt or equity offering). In many cases, all this could happen on a very tight timeline and under extreme secrecy. M&A is often a subgroup within corporate finance, but in some firms is a stand-alone department. M&A can be one of the most demanding groups to work for.

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Who Does Well Like corporate finance, M&A requires detail-oriented thinking, a knack for using numbers to understand business patterns, problem-solving skills, an ability to think critically about the numbers with which you’re working, and excellent communication and people skills. Corporate finance, lawyers, MBAs, and experienced candidates with specific industry knowledge make good M&A candidates. Undergrad and grad students should try to get an internship—it’s the best way to secure an eventual offer. An advanced degree (MBA or other) is all but required to advance in this career.

Sample Project IBM sees an opportunity to strengthen its hardware business by acquiring an innovative developer of communications software. It approaches an investment bank to get advice on the potential deal. The bankers help IBM secretly value the target company’s assets and the potential value of its products to IBM, which could be higher than their current value because of the

At a glance

The public finance group will:

•

Advise public entities on portfolio management.

•

Arrange project finance.

•

Help municipal entities restructure their debts.

•

Determine a valuation for a debt/bond offering.

•

Underwrite tax-exempt notes, bonds, derivatives, and other municipal securities.

Who Does Well

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For Your Reference

Public finance jobs require strong numbers skills, an excellent analytical ability, and solid communication skills because you’ll be spending a lot of time with clients. People with experience working in or with government are especially attractive when it comes to landing jobs in public finance, as are lawyers. An internship is the best point of entry for inexperienced candidates.

Getting Hired

Advise public entities on capital-raising strategies.

The Workplace

•

On the Job

Public finance is similar to corporate finance except that instead of dealing with corporations, it works with public entities such as city and state governments and agencies, bridge and airport authorities, housing authorities, and hospitals. Although the basic services (financial advisory and underwriting) and the financial tools (bonds and swaps, but no equity) are similar to those used for private-sector clients, numerous political and regulatory considerations must be assessed in the structuring of each deal. A particular key issue involves how to get and maintain tax-exempt status for the financial instruments the client will use.

ThE FIRMS

Job Tips The M&A department usually recruits under the CorpFin or I-banking umbrella, though within the group you might find further specialization along industry lines. The work here tends to be intense and very deal-focused, and the hours are unpredictable. “You might be staffed on five transactions and not much is happening. Then one turns live and you have to cancel your weekend plans,” says an insider. “Or you could be very busy, and the next day something happens and work gets pushed back a week and suddenly your weekend is free.” The job provides an excellent introduction to the high-stakes, high-power push and pull of the corporate world. Insiders tell us that personal ambition is a big success factor in M&A. “You can learn the technical skills like accounting and modeling,” says one first-year associate. “It’s not so easy to learn how to be driven and to take responsibility, to own the deal.” If you’re depressed by the thought of spending three or more weeks of your life crunching numbers for a deal that never happens, seek out another alternative.

Public Finance

The Industry

opportunities to link with IBM hardware and because of Big Blue’s marketing muscle. The M&A group then develops IBM’s acquisition strategy and makes contact with the target company. Once the offer is made, the target company will consult its own investment bankers to evaluate IBM’s proposal, determine various strategies for defending against or negotiating with IBM, and work out a deal that will be in the best interest of the company’s shareholders. After some back and forth, the sides agree on a price (usually a combination of stock and cash), sign the documents, and become one. Meanwhile, the advisers take their own hefty fees to the bank.

At a glance

Careers in Investment Banking

For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

The Industry

Sample Project Let’s say the city of San Francisco wants to give the 49ers football team a new stadium. The city invites a number of I-banking firms to help it determine the lowest-cost financial structure to pay for the project. Each firm researches the financial, political, and regulatory issues involved in raising the necessary cash, develops a strategy for raising the funds through tax-exempt instruments, prices the deal, and prepares a proposal. The proposal will include a profile of the strategy and its cost, as well as reasons for choosing the presenting firm for the deal. Once a bank is chosen to execute the financing, it will prepare all the necessary financial and regulatory documentation and work with other departments in the bank to shop the offering.

Job Tips Public finance specialists tend to spend more time with each other than with the rest of the people in the bank. Because it helps to have an understanding of government, many people in public finance come from government backgrounds. Municipal positions were hot in the ’70s and ’80s when firms could earn fat underwriting fees for their work. However, as competition heated up and clients became more sophisticated, bank fees have fallen, causing the public finance business to become more of a marginal activity for many banks on the Street.

Sales and Trading Job opportunities in sales and trading—an

investment bank’s distribution arm—differ from those in the I-banking divisions. Think of sales and trading as you would the sales force for any corporation. This group is responsible for selling all of the financial products (stocks, bonds, and their derivatives) sponsored by the I-banking department. As such, it serves as the vital link between the sellers (corporations and govern72

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ment entities) and the buyers (investors). Depending on the firm, the buyers could be institutions (pension funds, mutual funds, insurance companies, hedge funds, and other asset managers), high-net-worth individuals, or private investors. Although frequently lumped together, salespeople and traders perform different functions.

Who Does Well Sales and trading jobs have many overlapping skill set requirements, such as verbal communication skills, sales skills, and a facility for numbers. But the people who do well in each area are not identical. For example, salespeople have to be good at building relationships with a variety of personality types, while traders only have to be good at building relationships with other traders. Salespeople have to be good at giving presentations, while traders have to be good at making snap decisions based on constantly changing information. Sales jobs typically require a lot more travel than do trading jobs. People in both careers have to be aggressive and self-starting. They also will have to take exams to become licensed in their area of specialty. For example, most salespeople have to pass the Series 7 exam. Unlike in I-banking careers, it’s not always necessary to get a graduate degree to move up the ladder in sales or trading.

Sales Sales professionals typically have a list of institutional clients to whom they pitch new offerings, offer portfolio management advice, and sell securities. The sales department could be divided by account size, security type (debt or equity), geography, or product line. The department is also typically divided into large institutional, middle market, and retail (or privateclient services) sections. In other words, a salesperson who manages a high-volume institutional account would not likely handle a smaller, low-volume buyer as well. Groups could be further divided based on the complexity of a bank’s financial products, such as government securities, corporate securities, asset-

At a glance

Sales pros typically perform the following:

•

Meet with economic and equity research departments to discuss economic and industry trends and their impact on the markets.

•

Work with the I-banking department to market new debt and equity issues.

•

Assist and advise clients in developing and executing investment strategies.

•

Watch company/industry/economic/political news and market activity, and advise clients about the likely impact on their portfolios. Attend company presentations and research conferences, typically with clients.

•

Arrange meetings between clients, research analysts, and company management.

Trading Traders are responsible for taking positions in the market through purchases and sales of equities (stocks), debt (bonds), and other securities. Trading functions are typically divided by the product lines offered by the investment bank. It’s not a job for the meek, timid, or easily offended. During market hours, all trading floors are loud, high-energy environments. Traders must juggle several phone lines, scan computer screens flashing headlines and quotes, and respond to orders from salespeople—all while executing trades with precision timing. The firm’s capital is on the line, and every second can be worth millions.

INSIDER SCOOP “My advice? Go into trading! Even when the market goes down, there’s always trading!”

•

Develop a solid knowledge of market, company, and industry information. (“A good trader is constantly on top of what’s going on,” says one insider.) WETFEET INSIDER GUIDE

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For Your Reference

Traders typically:

Getting Hired

Sample Project You’re sitting at your desk when suddenly the live news feed on your computer flashes an article about a Fortune 1000 company that’s firing its CEO and replacing him with a highly respected industry veteran and current board member. You immediately get on the phone to four of your major institutional clients who own big chunks of the company’s stock. You tell them that, because the old CEO was the one driving the merger discussions, this seems to indicate that the talks between the company and its rival have been called off. Two of the clients had been expecting a buyout and decide to sell a portion of their shares. The

Along with corporate finance, the sales and trading area typically hires the largest number of MBAs and undergraduates. This is a particularly desirable job for people who love to sell and make money. Along with the big bucks, however, comes a great deal of stress. Because salespeople are essentially account managers, they’re the ones who have to take the heat from a client who is irate that a particular stock in his portfolio is falling. It’s not easy keeping all of the people happy all of the time, especially in a down market. As you progress up the ranks, you’ll typically get more (and more important) clients to manage.

The Workplace

•

Job Tips

On the Job

Develop strong relationships with institutional investors.

ThE FIRMS

•

third client wants more information about the new CEO’s likely plans, so you bring in your head research analyst, who covers the company, for a conference call with the client. The fourth client wants to maintain its position unless there’s a further drop in the stock price.

The Industry

backed securities, futures, options, foreign exchange, and derivatives. Because a salesperson works largely on commission, major bucks can be made, especially with some of the high-volume accounts.

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking •

Evaluate market activity and supply/demand indications from salespeople and clients.

•

“Make markets”—maintain a position in a stock the firm has underwritten, quote bid-and-ask prices, and buy and sell at those prices.

•

Advise salespeople, clients, and research analysts on market activity and pricing for different stock and equity issues.

•

Put major trades together by negotiating with salespeople/clients and other dealers.

•

Perform valuation analysis of derivatives, convertibles, or baskets of stocks.

•

Manage the firm’s investment risk.

You know that a lower-than-expected number will send the lumber sector tumbling. You think the problem through, do some risk analysis, and decide the odds are good that the housing-starts number will not come in as high as expected. So you take medium-sized short positions for your bank in the few companies showing the greatest signs of weakness. Later in the day during a trading lull, you’re on the phone with a buddy at another desk about how bad the Lakers look without Shaq when the new housingstarts figure flickers across the computer screen in front of you. The number is lower than expected. Immediately, the phones in front of you are ringing with sell orders for the companies you trade. You say goodbye to your buddy, smile to yourself, and pick up a phone, knowing that as the market for lumber stocks tumbles you’ll be able to close out your short positions at a sizeable profit for the firm—and a sizeable positive impact on your bonus.

Sample Project

Job Tips

The life of a trader is less project-driven and more market-driven. For instance, let’s assume you’re at an equity trading desk responsible for trading the stocks of lumber companies. If you’re good at your job, you’re constantly reading the news about the economy and the real estate and stock markets. You’re also good at picking up the phone and chatting with others in the business about what’s going on behind the scenes in government and industry. From your reading, you’ve noticed a trend about some big homebuilding companies and anecdotal evidence that demand for their services in some regions could be slackening. Then, during your daily morning phone call with the research analyst covering the same companies you trade for your bank, you find out she has learned from her homebuilding industry contacts that a couple of the major players in the sector have experienced lower demand in recent weeks. You also know that this afternoon new-housing starts will be announced; this is a closely watched number, and the current consensus on the Street is that today’s is going to be a high one.

While the market is in session the action on the trading floor of an exchange never stops. (In case you haven’t seen a trading floor, it looks something like NASA’s Mission Control dominated by clean-cut twenty-somethings, most of whom have their sleeves rolled up and are often talking on several phones at once.) Most exchanges have different departments or “desks” focusing on different types of securities. While the market is open, traders are pretty much tied to their desks, which is an inch away from the next person and jam-packed with multiple computer screens. But don’t worry: Not every day is a hectic nightmare. Fridays in August will find the floor more concerned with Nerf balls and sports scores than frantic trades. Better yet, the job is essentially done after the market closes and all orders have been reconciled. Unlike your colleagues in most other areas of the bank, you’re almost guaranteed your personal time.

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At a glance

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Attending or organizing industry conferences.

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Speaking with the sales force, traders, and investment bankers about company or industry trends, and recommending positions on stocks.

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For Your Reference

Providing written and oral updates on market trends and company performance to sales and trading as quickly as possible.

Getting Hired

•

The Workplace

Meeting with company management and analyzing (modeling) the company’s financial statements and operations.

On the Job

The research analyst position involves: •

ThE FIRMS

Every full-service investment bank has a research department that provides analytical support for I-banking, sales, and trading activities. Research might seem less glamorous than some of the other departments, but these analysts’ industry knowledge (think Mary Meeker at Morgan Stanley) can often be the most important factor in winning a new CorpFin client or convincing Fidelity to buy shares in an unknown company’s IPO. Investment banks regularly lose and gain business as a result of the annual rankings of research analysts that come out in Institutional Investor magazine. Research departments are generally divided into two main groups: fixed-income research and equity research. Both types can incorporate several different efforts, including quantitative research (corporate financing strategies, specific product development, and pricing models), economic research (economic analysis and forecasts of U.S. and international economic trends, interest rates, and currency movement), and individual company research. It’s important to understand that these are “sell-side” analysts who in effect “sell” or market stocks to investors, rather than the “buy-side” analysts who work for the institutional investors themselves. An equity research analyst will become an expert on a particular group of companies in software, semiconductors, health care, oil and gas, or some other industry group. Unlike the deal-oriented work in I-banking, research is responsible for maintaining an ongoing relationship with corporate clients long after the deal is done. Researchers meet regularly with company management, analyze the company’s position relative to its competitors, and provide investors and the sales and trading departments with recommendations about the company’s stock (usually rating the stock according to some system, such as “strong buy,” “buy,” or “hold”). Depending on the number of companies in his universe, the analyst is responsible for writing one or two reports every

quarter on each company, updating interested clients on the company, and following market trends that could affect the company’s performance. Insiders tell us that those who hope to rank well in the Institutional Investor research team ratings tend to cover a small number of companies in great depth. One insider who covers the biotech sector regularly follows the eight companies with the largest market caps. When you hear on the news that “Microsoft exceeded Wall Street’s expectations,” newscasters are referring to the average of the earnings estimates published by all research analysts who follow Microsoft. Research analysts listen to presentations from the management of companies they follow, run the new information through their financial models, and relay the information and their predictions about the companies’ future performance to investors and the sales force. Their predictions are tested four times a year when companies release quarterly results, prior to which the research department works long days for several weeks (insiders refer to these periods as reporting or earnings seasons). Companies usually report earnings after the market closes for the day, so analysts must rush to prepare investment recommendations for their clients before the market opens the next morning.

The Industry

Research

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At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking •

Developing proprietary pricing models for financial products.

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Making presentations to clients on relevant market trends and economic data, and offering investment recommendations and forecasts.

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Staying on top of emerging new companies in the industry.

Who Does Well Research is a detail-oriented and analytical career. If you can’t bear studying something from all possible angles, research isn’t for you. Also, if you require a lot of external stimulus to get you through the workday, you’re better off looking into other career tracks in I-banking. Research could be up your alley if you have the skills to interact with clients, bankers, and traders (people skills); if you enjoy and are good at analyzing data and figuring out puzzles; and if you can make persuasive arguments orally and in writing (communication skills). If you have all of the above skills plus deep knowledge of a particular industry, even better. If you’re a biochemist, for example, and you’re interviewing for a position analyzing companies in the biotechnology and pharmaceutical industries, your resume could go straight to the top of the pile. As with a number of other positions in I-banking, many lawyers fit well into this career.

Sample Project Merck announces it has requested FDA permission to begin clinical testing of several anti-stroke medications. The research analyst who covers the pharmaceutical industry calls contacts at Merck and the FDA and makes a preliminary assessment of the likelihood that Merck will receive final approval for the drug. Based on this analysis and the prospect that this could blossom into a $300-million-a-year business within five years, the analyst issues a “buy” recommendation 76

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Research is responsible for maintaining an ongoing relationship with corporate clients long after a deal is done. on the stock. The analyst writes a report, including information about the drug and the impact a green light from the FDA would have on Merck’s business. Before the market opens the following day, the report will be distributed to institutional clients and the sales force. During the daily morning conference call, the analyst also will share her findings and predictions with the traders and salespeople and recommend they contact and encourage their clients to purchase the stock.

Job Tips The research field tends to be a relatively specialized group within an investment bank. Because the department usually hires for the long term rather than for positions that turn over every two or three years, there are fewer openings than in banking. Those who are hired generally start as associates and move up to become senior analysts after a couple of years. Associates generally work long hours, conducting research and working on financial models for an analyst who could be on the road, meeting with company management, or making marketing presentations to institutional clients. One insider tells us that the associates at his firm pull all-nighters on a weekly basis. Although research departments hire people from a wide variety of backgrounds, they especially appreciate those with financial analysis skills or experience in a particular industry. (PhDs, take note: The research department might be your best bet for breaking into banking.) “There’s an extreme requirement for trust and discretion,” says an insider. “I’m frequently

At a glance The Industry

privy to knowledge of upcoming events that will have a dramatic effect on stock prices. There’s a huge temptation to tell your cousin. Of course, you can’t do that.”

INSIDER SCOOP “You have to be a senior vice president before you start going home at a reasonable hour.”

Information technology

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Operations

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For Your Reference

•

Getting Hired

comprise the core activities, a number of other areas in I-banking could also be of interest to you. These areas essentially support the main activities of an I-bank. They are: • Controlling

The controlling function oversees the financial details of an investment bank from the micro level (for example, making sure trades are booked accurately) to the macro level (such as setting budgets for all the departments of the bank). It keeps track of the bank’s finances, overseeing the P&L and balance sheet for everything from individual departments and trading desks to the bank as a whole. It advises senior management on the financial state and performance of all the areas of the bank, as well as on ways to lower costs, manage risk, and increase financial performance. It also forecasts financial performance and budgetary needs, and delivers information to external entities such as shareholders, creditors, tax authorities, regulatory authorities, and the bank’s auditors. At lower levels, people in the controlling function are generally assigned to a specific department or sales or trading desk. They conduct activities such as producing daily profit and loss reports, checking the accuracy of bookings, creating reports that assess risk or whether the products they oversee are priced properly given market conditions, and updating balance sheets. At higher levels, people in the controlling function oversee more areas of the bank, develop annual business plans and budgets, and advise management on overall business strategy, risk management, and reporting processes.

The Workplace

While research, sales and trading, and I-banking

Controlling On the Job

Support Functions

ThE FIRMS

In research, there’s less movement between groups than in I-banking, and an associate must live and breathe the covered industry. A lucky analyst will get a good industry right off the bat. A mediocre analyst with a good industry will have an easier time collecting a nice bonus than will a good analyst covering a dog of an industry that isn’t popular with investors and shows no promising business prospects. If you take a job in research, you could find that your job description evolves as your bank takes steps to reinforce the separation of its research and banking functions. At the very least, you can count on having less of a role in selling banking business than your more senior colleagues have had in the past.

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking A controller in an investment bank requires the following skill set:

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Certification in or experience with the specific technology on which the job is focused

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Often, a bachelor’s degree or better in economics, accounting, or a related field

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Attention to detail

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Strong analytical and problem-solving skills

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Solid communication skills

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Strong attention to detail

•

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Excellent communication skills

The desire and ability to continuously update one’s tech skills

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Facility with numbers and an understanding of accounting

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Demonstrated interest in or understanding of I-banking

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Demonstrated interest in or understanding of I-banking

Information Technology IT is playing an increasingly bigger role in international I-banking, and many firms are investing people and capital to develop next-gen systems. This translates to new opportunities for IT experts. Technologies vary from internal sales and trading and accounting systems to corporate intranets, online trading systems, and big enterprise systems that manage everything from customer relationships to human resources. Investment banks employ software engineers, system administrators, Web developers, database administrators, and the like to fill these roles. Often the IT specialist in an investment bank will work closely with the specific department or departments that use or are developing the technology that the IT person specializes in. Many banks now offer internships to IT types; this is the best way to get a foot in the door. The specific skills required for I-banking IT positions vary according to the specific role. Most, however, require the following skill set: • A bachelor’s degree or better in a technology field •

Strong analytical and problem-solving skills

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Operations At the highest levels, people in operations help decide how to structure the bank so it performs at the highest possible level, advising management on things like where the bank should be based, who its vendors should be, which technology systems can optimize the bank’s various businesses, and what its employment policies, business processes, and accounting practices should be. At the lower levels, people in operations are responsible for activities such as transaction processing, handling account transfers, balancing daily entries, and other administrative functions. Lower-level operations professionals are generally assigned to a specific product, department, or sales or trading desk for which they handle the clearing and settlement of trades and funds transfers, accurately record security positions, ensure regulatory requirements are met, and so on. Lower-level operations professionals could also play a role in improving systems and processes for their department, product, or desk.

Required skills include: •

Bachelor’s degree or higher

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Strong analytical and problem-solving skills

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Strong attention to detail

At a glance

Excellent communication skills

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Facility with numbers and an understanding of accounting

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A demonstrated interest in and understanding of I-banking

The Industry

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ThE FIRMS On the Job The Workplace Getting Hired For Your Reference

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Lifestyle...................................... 82 Culture........................................ 82 Hours.......................................... 83 Workplace Diversity.................... 83 Travel.......................................... 84 Vacation and Perks...................... 84 Compensation............................. 85 Training...................................... 88 Career Path................................. 88 The Inside Scoop......................... 89

At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Lifestyle If you talk to people in the industry about what they really do, you’ll find that the life of an investment banker is both more mundane and demanding than Hollywood filmmakers would have you believe. No matter what area of an investment bank you join, you’ll need to make a substantial commitment to your work. But the particular nature of that commitment will vary according to the department you’ve joined. Work in trading generally revolves around the daily cycle of the market and is relatively predictable. The days start early and the work can be intense while the market is in session. The trading day, however, usually finishes shortly after the markets close. As a result, it’s possible for people in this area to make plans to get together with friends in the evening. In contrast, investment banking (I-banking), revolves around the deal of the moment, and can be completely unpredictable. When a deal is hot, everybody on the team will be expected to put plans on hold and grind away until the work is done. Before the champagne corks start popping, there’s a lot of heavy-duty quantitative analysis and extensive backand-forth with attorneys. There are indications, however, that this 24/7 culture is slowly shifting. Many banks hired women into the workforce in the ’80s and ’90s only to have a number of them retire when they had children— precisely because of the nonstop culture. Opting out was not limited to women: Many men also found that parenting and all-nighters at the firms were incompatible. In an effort to hold onto highly trained talent, some firms now are offering “opt-in” programs. Lehman Brothers made the biggest splash a few years ago when it launched the “Encore Program” to recruit financial services employees who had left to raise families. Lehman Brothers was singled out by the Securities Industry and Financial Markets Association for its efforts and other banks, including Goldman Sachs and American Express, have been quick to follow suit. 82

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The life of an investment banker is both more mundane and demanding than Hollywood filmmakers would have you believe.

Culture Investment banks are filled with young,

hardworking, intelligent people. Some find they’re also filled with arrogant, master-of-the-universe know-it-alls. So be prepared for the possibility of a few nightmare colleagues who try your patience. And be ready to be surrounded by people whose primary motivation in choosing their career was money. Indeed, a 2002 study by Wharton management professor Peter Cappelli and executive search firm Spencer Stuart found that 73 percent of I-banking professionals surveyed said getting rich was their primary career objective. Beyond that, culture depends on the firm and your particular group. Your managing director sets the tone. Some firms, such as Goldman Sachs and Merrill Lynch, are renowned for their team ethic; they are also sticklers for conformist behavior. Others have more of a star system that encourages individuals to shine on their own—or be cut from the team. Such an environment is often labeled “entrepreneurial,” but the word has a very different meaning within a huge corporate structure than it does at a hungry startup. A number of the big players, including Goldman Sachs and Morgan Stanley, have long been known as elitist, white-shoe firms, while Merrill Lynch is known as the firm that “brought Wall Street to Main Street.”

At a glance

> TIP

INSIDER SCOOP

Workplace Diversity The I-banking stereotype is the WASP male who attended a prep school and an Ivy League college. The stereotype is—and isn’t—true. “You don’t see a lot of black people and you don’t see a lot of Latinos, but there are a lot of Asians,” says an insider. “All of the top people are white men.” On the other hand, firms have an interest in changing, though most are evasive about specifics. Three factors are leading the change:

Getting Hired For Your Reference

Within a bank, the hours vary from department to department and depending on the time of year, the amount of new business a firm is generating, and the bull/bear market cycle. The longest hours are worked by I-banking/corporate finance employees. According to insiders, 80-plus hour weeks are the rule, and most people spend at least one weekend day at the office. Nearly all employees can tell war stories about periods they virtually lived out of a briefcase and didn’t see the insides of their own apartments for days on end. “Equity research is more civilized than banking, but it’s still a lot of hours,” says a research analyst, who told us the associates at his bank work all night on a weekly basis. “I pull very few all-nighters. But you have to be a senior vice president before you start going home at a reasonable hour.”

The Workplace

“My attitude going in for the first three years is that I want to be working long hours and learning as much as I can. I don’t consider 90-hour weeks bad.”

On the sales and trading side, the market drives the hours. When the market’s in session, you’re on. That means the sales and trading staffs arrive at the office early enough to review all the news and overnight developments before the opening bell, and then work intensely until the closing bell. According to our insiders, this makes for about a 60-hour week. A note for those interested in doing their sales and trading out of a West Coast office: You’ll need to be up and running by 5:00 a.m. at the latest (though you’ll usually be out the door by 2:00 p.m. or 3:00 p.m.). The hours can be even worse if you’re trading from a European or Asian desk.

On the Job

People who work on the Street tend to exaggerate how much time they actually spend working. For example, one insider claimed to work 110-hour weeks “regularly”—that works out to 15-hour days seven days a week. But even taking some exaggeration into account, the young minions of I-banking work an enormous number of hours.

Your ability to adapt to the company culture can determine whether you sink or swim, so think carefully about what aspects of the job matter most to you before you dive in.

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Hours

The Industry

They say “He who dies with the most toys wins.”

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Careers in Investment Banking •

Firms have realized they can be more effective if they look more like their clients, and more and more Fortune 500 companies have diverse management teams.

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Many departments at investment banks are meritocracies, particularly at lower levels and on trading desks.

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There is a glass ceiling, but it’s getting thinner. Wall Street is more open now regarding gender and other diversity issues than at any time in its history. If you bring in the clients, make winning stock picks, generate commissions, and get deals done, your gender or skin color shouldn’t hold you back.

Travel Travel requirements in I-banking can be signifi-

cant, especially on the banking side of the business. Unlike management consulting, however, where a consultant could take the same flight to Kansas City every Monday and the same flight back home every Thursday for six months, most people in I-banking tend to make shorter, less predictable trips. People in corporate finance, for example, might travel to visit prospective client offices or facilities. Or they might go on road shows, during which a team of bankers and client executives hit as many as 20 cities in a period of eight to ten days to “shop” an upcoming issue. Salespeople and traders visit clients, and research analysts visit companies and institutions around the globe. Get yourself a passport if you don’t have one; more than one investment bank employee has been ordered to be on the next flight to London (including one trading assistant we know of who had to courier IPO papers).

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The good news? You’ll get to stay in nice hotels, your firm might pay for business class, and you will collect so many frequent-flier miles that you may never pay for a plane ticket again. One research analyst told us that in one year he put 100,000 miles on his frequent-flier account for one airline and 50,000 on another. “And that was with no travel to Asia and almost none to Europe,” the analyst says.

Vacation and Perks Vacation? Are you kidding? Actually, it’s rumored that most investment banks do offer employees at least two or three weeks of vacation a year. However, you’ll have a hard time taking it all. Moreover, no matter where in the world you go, you can expect to have to check your voicemail multiple times a day and be ready to take the first flight back to New York at a moment’s notice. (You might start preparing your potential vacation partners for this as you get ready to interview.) Do you relish the thought of unlimited longdistance calls, free takeout dinners at the office, and a prepaid limo back to your apartment at 3:00 a.m.? These are regular perks in the world of I-banking. But don’t expect a luxurious office. “It’s amazing to me that you can go into the office of someone you know is making more than $1 million a year and it’s no bigger than that of an insurance agent,” says an insider who made the switch from another industry. Employees can set up any investment or other type of financial account with the firm without the usual fees; in fact, you’re usually required to do so.

At a glance

•

Getting Hired

One other useful point: Firms often have different methods of calculating employee bonuses. Some allocate a portion of profits to a particular department while others divvy up the proceeds among the departments according to performance. Others use a commission structure based on revenue instead of profit. Some firms are more generous than others, and policy can change, too. A final note: I-banking opportunities exist outside the bulge bracket and outside New York. But if you go to work for a boutique or regional bank, don’t expect your compensation to match that of your bulgebracket peers.

The Workplace

Third, base salaries tend to be relatively low at the entry level and bonuses are discretionary. As a result, your take-home pay from year to year can go through swings of more than 100 percent, especially when you move up in seniority.

Summer Hires Dreading another summer as the office flunky— fetching coffee, smiling and filing, all for a measly wage? Luckily, it isn’t like that at investment banks. Many firms use intern programs to attract future analysts and associates, offering challenging work and substantial pay to college sophomores and juniors in hopes of being at the top of their lists come recruiting time. Undergrad interns usually earn about $1,630 a week with a signing bonus of about $726. The price tag for this juicy summer salary is often your social life; some interns report working 70 hours to 80 hours a week.

On the Job

•

Second, bonuses are determined at the end of each year and are based on the performance of Wall Street, as well as the performance of your firm and department and your contribution to them. (If your firm has a year like Goldman Sachs did in 2006, those bonuses can skyrocket.)

MBAs According to a WetFeet survey of new graduates published in October 2006, new associates hired in the bulge bracket that year had average starting salaries of about $95,000 with an average signing bonus of $17,000.

ThE FIRMS

All right, like any good banker you want the bottom line. Exactly how much are these guys going to pay you to sign your life away? We’ll get to the numbers in a minute. But before we do, there are three things to keep in mind: • First, salaries at investment banks, even for nonprofessional staff, almost always consist of a base salary plus a fiscal year-end bonus.

Undergraduates According to a WetFeet survey of new graduates published in October 2006, the typical new analyst hired in the bulge bracket that year received an average salary of $48,000 with a signing bonus of about $2,900.

The Industry

Compensation

For Your Reference

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At a glance The Industry The FIRMS On the Job

Average Annual Salaries of Professionals at Investment, Securities, Private Banking, and Broker-Dealer Firms Average annual salary range ($) Position

2006

2005

Chief financial officer/chief operating officer/financial operations principal

130,000–225,000 + bonus

120,000–200,000 + bonus

Vice president, fixed-income sales and trading

150,000–260,000 + bonus

150,000–250,000 + bonus

Senior fixed-income trader

145,000–195,000 + bonus

135,000–180,000 + bonus

Director of trading equities

162,000–245,000 + bonus

162,000–245,000 + bonus

Trader

100,000–220,000

100,000–220,000

Vice president, institutional sales

100,000–250,000 + bonus

100,000–250,000 + bonus

Sales trader, equities

150,000–225,000 + bonus

150,000–225,000 + bonus

Director, research

150,000–225,000

150,000–225,000

Sales/distribution manager

125,000–160,000 + bonus

125,000–150,000 + bonus

Portfolio manager

135,000–220,000 + bonus

115,000–200,000 + bonus

Vice president, private banking (domestic)

125,000–170,000

125,000–170,000

Vice president, private banking (international)

120,000–200,000

110,000–195,000

Source: 2006 Adams Annual Financial Services Industry Salary Survey of the New York Tri-State Region, 2005 Adams Annual Financial Services Industry Salary Survey of the New York Tri-State Region, Adams Consulting Group LLC, New York

For Your Reference

Getting Hired

The Workplace

Careers in Investment Banking

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At a glance

7,000,000–9,000,000

Head of swaps trading, Americas

3,500,000–4,000,000

Investment banking, managing director

2,200,000–3,300,000

Investment banking, head of Europe

5,500,000—6,000,000

Global head of emerging markets debt trading

4,000,000

Head of information technology, Asia

1,200,000—1,400,000

Director of fixed-income proprietary trading

1,000,000–1,200,000

Head of agency bond trading

2,000,000–3,000,000

Global head of volatility sales

2,500,000 - 3,000,000

High-yield bond sales, vice president

350,000

Municipal derivatives trader, three years’ experience

170,000–215,000

Hedge funds, portfolio manager

900,000–1,000,000

Investment banking, first-year associate

250,000–375,000 *Data for employees worldwide at top-tier banks. Source: 2006 Global Financial Market Overview & Compensation Report, Options Group, New York

The Workplace

Global head of commodities trading

On the Job

2006 Salary ($)

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Title

The Industry

Average Expected Total Annual Compensation of Wall Street Executives

Getting Hired For Your Reference

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At a glance The Industry The FIRMS On the Job The Workplace Getting Hired For Your Reference

Careers in Investment Banking

Training Given the highly technical, jargon-laden nature

of jobs in an investment bank, the training program is critical for most people. The specifics of training programs vary from department to department and firm to firm. Many resemble a mini B-school experience, with case studies, work projects, lessons, and post-case discussions all designed to help new employees better understand how the bank functions. Some banks conduct their programs, which could last anywhere from a few weeks to several months, in a highly structured classroom setting. Others start people off with a few classes and then let them do on-the-job learning. Another difference between firms: a generalist vs specialist approach to training. That is, some firms use the training period to give you experience on as many desks in as many divisions as possible, so that you (and the bank) can determine where you fit best when it comes time to commit. Other firms start you off in one group and focus most of your training in that area; if you’re not happy after a few months, you can ask to try something else. Your training will almost surely include help in preparing for the National Association of Securities Dealers’ (NASD) licensing exams. The basic Series 7 general securities license is required for most people who will be involved in selling securities, including corporate finance and research professionals, salespeople, and traders. Take these seriously; you could be given a limited number of chances to pass. Keep in mind: Your fingerprints will be taken and checked by the NASD as part of the registration process. We know of a mutual fund employee who lost her job when her prints were run and it turned out she had been convicted of felony shoplifting; on her job application, she lied and said she’d never been convicted of a crime.

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The Series 7 general securities license is required for most Ibanking professionals.

Career Path Undergraduates All investment banks are looking to hire the best, the brightest, and the most motivated undergraduates they can find because the work is extremely demanding. Undergraduates are usually hired as analysts. Note the first four letters of that word: anal. Anal is important because you have to dot all of your Is and cross all of your Ts carefully and twice. Banks typically hire undergraduates with some background in accounting, finance, or economics because those majors teach you many of the basics you’ll need and show that you’re actually interested in the industry. However, if you’re an engineer or a liberal arts major from a top school, or if you have experience in a hot industry such as pharmaceuticals or technology, you’ll find yourself in good company on Wall Street, too.

At a glance

Be ready to present a strong case for what you have to offer and why you’re interested in the bank you’re courting

The Inside Scoop What Employees Really Like Experience

The Workplace Getting Hired

The world of high finance is, like New York City itself, fast-paced, high-energy, and go, go, go. It’s no place for loafers or the sensitive, hesitant, or meek. Insiders tell us that the experience you gain in I-banking comes at twice the speed of many other professions. That could be because investment bankers put in twice as many hours as those in other professions, but other factors are involved as well. There might be times in your first year that you’re juggling four projects for four different people at once. “You work with lots of different personalities, fight a lot of fires, and get a crash course in time management,” one insider says. Furthermore, you might have the opportunity to meet and interact with the CEOs and CFOs of major public corporations. Be on your best behavior. It’s not uncommon for an impressive young investment banker to be recruited into a client’s finance or business development department.

On the Job For Your Reference

Each year investment banks hire significant numbers of MBAs from programs across the country. Although the banks also take people with advanced degrees in economics, law, math, computers, and other less obviously related fields, it’s less common for people to enter I-banking midcareer. If after a few years elsewhere, you suddenly realize I-banking is your true calling, chances are you’ll have to start on the ground floor with all of the new MBA recruits. One possible exception: People with wide industry experience or specific skills (or a Rolodex full of rich and powerful connections in government or industry) might be able to fill a specialized function, such as research analyst or product specialist, higher up within a firm. Although a pedigree from a top university could help you get a foot in the door, becoming a partner or managing director depends much more on your performance and endurance. Interestingly, only 10 percent of the CEOs running the top 500 U.S. companies graduated from an Ivy League institution. In fact, insiders tell us that people from lesser-known institutions often outperform people from brand-name schools. “You gotta really want it to give up your life the way they want you to,” says one former banker. “The people who came out of second-tier schools and worked hard enough to get a spot with a firm are often the hungriest.”

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MBAs and Other AdvancedDegree Holders

The career trajectory of an investment banker usually follows one of two paths. Those who grind away on the career track move from associate to VP to managing director in about four to eight years. Others will tire of the work, put in enough time to collect a bonus or two, and then leave the industry (or be fired). I-banking experience can open many doors to future opportunity. “You certainly have a great Rolodex when you’re done,” says one insider. “You can go work with a company, with venture capital, with funds on the buy side, or you can go off and write a novel.”

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Education Many insiders tell us that the education and skills you gain in I-banking are invaluable. There is no better way to learn about finance, the inner workings of Wall Street, and how the business world generally works. When you read a headline stating that IBM is acquiring a hot, new software developer, you can be sure a team of I-banking analysts is grinding out spreadsheet models to tell IBM how much it should pay and what return it will get on the investment. Those analytical skills, in conjunction with the introduction I-banking gives you to the world of finance, provide a great launching pad for almost any career path you might ultimately choose.

> TIP Although it’s common for people to move around the industry, insiders recommend that new MBAs spend several years with their first firm to establish a track record.

your life comes second to your job. Though this varies both by firm and department, insiders tell us you can generally plan on working at least 12-hour days—and count yourself very lucky if that’s all.

Money

Three Ps

Okay, let’s face it. You’re not considering a career in I-banking because you want to save the world. If you’re an undergraduate or MBA steeped in debt, or you want to be at the top of your peer group in terms of salary, I-banking is a good choice. Even with big-city rents and restaurant prices, you’ll almost certainly build up a hefty savings account. Although starting salaries and bonus packages are similar for both consultants and bankers in the first two years, when business is good investment bankers usually continue up a steep salary curve while consultants don’t.

I-banking revolves around the three Ps—power, politics, and personalities. Most of the investment bankers you’ll work with will be hardworking, goaloriented, and young, but when you have a lot of motivated, competitive type As jockeying for their shares of the year-end bonus pot, political skirmishes are bound to erupt. “The politics and personalities in investment banking are not the easiest to deal with, particularly as an analyst,” says one undergraduate I-banking insider. “This is ultimately why I left investment banking.”

Watch Out!

INSIDER SCOOP

Hours

“First-year analysts deal with hazing, practical jokes, and the worst assignments. Second-year analysts delegate their own grunt work to the first-years and horde the more challenging work. And management often doesn’t manage. You don’t move up the ranks of an investment bank because you’re a good manager but because you work hard, understand finance, and bring in deals.”

Has anyone seen my social life? I seem to have misplaced it. Being an analyst or associate at an investment bank is like being a doctor on call. That doesn’t just mean you’ll regularly be working 60 hours to 80 hours a week. It means canceling vacations, receiving phone calls between 4:00 a.m. and 6:00 a.m., and having the new hotshot banker come over and add an urgent item to your “to do” list just when you’re wrapping up your mellow day around 6:00 p.m. or 7:00 p.m. By the way, hotshot needs it before tomorrow’s 8:00 a.m. flight to Chicago. You go back to your desk, order dinner, and settle in for the night. In the banking business, 90

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One insider from a non-top-tier business school tells us that some firms can get arrogant about whom they interview. If you run into a firm that interviews candidates only from top-tier schools and you’re not, consider it a reason to think twice about working there. “If management is a bunch of Harvard guys, you have to wonder how many jokes you’d have to take about not attending Harvard,” the insider says. “And what are the odds the choice assignments would go to a Harvard guy?” Others, however, tell us firms are easing up on this a bit.

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The Work

On the Job

It might be sacrilegious to say this in the company of corporate recruiters, but insiders tell us the work you do as an investment banker isn’t always interesting. Don’t be blinded by dreams of a Wall Street job filled by constant excitement, glamour, and wheeling and dealing. All insiders tell tales of coma-inducing spreadsheet work that would threaten analysts’ lives if they weren’t jolted back to reality by the endless blinking of their voicemail lights. In most offices, the assistants go home at 5:00 p.m. or so, and who do you think handles copying and faxing after that? Not the senior managing directors, that’s for sure. The adrenaline junkie in you ought to be pleased.

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Recruiting Overview................... 94 The Recruiting Process................ 94 Interviewing Tips........................ 96 Getting Grilled............................ 98 Grilling Your Interviewer............ 99

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Recruiting Overview Being hungry for an investment banking (I-bank-

ing) job is at least as important as having a top-tier school on your resume. Wall Street firms see a lot of flashy pedigrees, but what really makes a candidate stand out is enthusiasm and commitment to work. An internship in the field is an extremely smart idea if you want to break into I-banking. Banks take this as proof you’re dedicated to working in the industry and as an opportunity to see whether you have what it takes to make it. Make landing an internship a top priority. In addition, be sure to research the banks you interview with. With increased competition for each open position, you won’t stand a chance if you don’t know the ins and outs of the way each bank works and has been performing, or if you haven’t networked your way into talking to some of the professionals at the banks you’re interested in.

π Six Degrees of Separation Looking for an I-bank “in” Play the “six degrees of separation” game. Ask a professor for the name of an alumnus in the field with whom you can speak. Call up old friends and relatives you rarely see and ask if they know anyone

you can contact. Set up a call and ask for a referral to someone who can set you up with an interview or might know someone else who can. Keep going until you make a contact. You’ll be one step closer to bringing home the bacon.

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The Recruiting Process The I-banking recruiting process begins with

the scheduling of a first-round interview. All of the bulge-bracket investment banks recruit analysts and associates from top colleges and universities across the country, usually in the fall for MBAs and in the winter for undergrads. Research the firms and find out who’s hiring and who’s laying off. (Piper Jaffray and Lehman made big hires in 2006 while Goldman reduced its numbers.) Some firms might be downsizing in the U.S., but growing in London and Shanghai. Typically, banks make most campus hires for their I-banking departments, such as corporate finance or mergers and acquisitions (M&As); fewer hires are made for sales and trading, and fewer yet for research (though MBAs stand a chance if they have the right skills and demonstrated interest in the field). If you attend a school at which the big firms recruit, sign up for an on-campus interview. Firms typically fill their schedules through a combination of closed- and open-schedule interviews; if you’re signing up under an open schedule, bid a lot of points. If the firm you want isn’t scheduled at your school, check the website; many hold open houses onsite for interested students. You might have to travel, but it can be worth it. Increasingly, investment banks post their schedules and a lot of other useful information on their websites. Make those websites the first stop in your research. WetFeet also has a rich array of information on Ibanking at its site: www.wetfeet.com.

At a glance

•

Why do you want a job with this firm in particular?

π Beyond the Ivies find you a spot in the interview cycle. The name of the game when you’re not recruited is to find any way to make your resume stand out from the thousands of others that investment banks receive every week. It’s important to get in sync with the firm’s recruiting schedule, so be sure to start contacting alumni early in the fall. Most firms fill their new-hire rosters by early spring. Friedman, Billings, Ramsey Group in Virginia, and Piper Jaffray in Minnesota are two rapidly expanding firms that recruit outside the Ivies.

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Getting Hired

What happens if you’re not currently a student or the firm you want to join doesn’t recruit at your school? Well, your job is going to be a little tougher, but try this: Use your alumni network to identify a colleague within the firm who can serve as your advocate. First, ask lots of thoughtful, informed questions about the firm and demonstrate your commitment to an I-banking career, then ask for the colleague’s advice in pursuing your job search. Perhaps he or she can persuade the appropriate recruiting manager to watch for your resume and

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It can’t be said enough: Do your homework about the firm before your interview. Know where the company is expanding, and know what its most recent milestones are plus what the media is saying about them. If you make it through the initial round, you’ll be invited to second-round interviews in New York (or in a regional office if that’s where you’re applying). These are half- to full-day affairs often held on a Saturday (called “Super Saturday”), during which you’ll be grilled by at least a half-dozen people with varying degrees of seniority. Sometimes you’ll be interviewed one-on-one, other times two-on-one. Some firms sit you in a conference room while the interviewers cycle through. Others will send you out to meet your interviewers on their turf, whether that’s the trading floor or the analyst pit. Don’t bother packing a sandwich; you’ll probably be taken to lunch by an analyst or associate. Some firms also conduct thirdround interviews before extending their offers.

On the Job

Some I-banking insiders have told us if you’re serious about getting a job on Wall Street and the big firms don’t recruit at your school, your best bet is to go to them. “You can drop your resume and play, or you can take fate into your own hands and go to Wall Street and kind of load the deck,” says an insider who used this strategy to garner seven Wall Street offers. It might cost you a few bucks in flights and hotel overnights, but if you land a job on Wall Street, your salary will more than pay back the investment. Schedule a job-hunting trip to New York and set up as many appointments as you can with the firms in which you’re most interested. Making the effort to arrange interviews and visit the firms on your own demonstrates your commitment to landing a job on Wall Street; anyone can send in a cover letter and

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Take the Bull by the Horns

Regardless of your specific interests, your first-round I-banking interview will typically be a traditional, 30-minute resume review and informal get-to-knowyou session. Many firms send alumni of schools they recruit at to conduct first-round campus interviews, so interviewers will often be familiar with your classes and school activities. Insiders tell us your interviewer will be looking for you to communicate two points very clearly: • Why do you want to go into the I-banking business?

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The Interview Cycle

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resume, but relatively few go the extra mile. Make sure to schedule your visit during the recruiting cycle so you’re front and center of the process. One insider tells us he made regular trips to New York (it helped that he went to school nearby) for informational interviews. He said people rarely turned down his requests. “The same five people get calls every week” he says. “Instead, try for that senior person who most people don’t know about. You want that person to write ‘good guy’ on your resume and forward it to HR.” He says the informational format helped prepare him for his actual job-hunting trip. “By the time you have your first real interview you’re much more polished,” he says, “You’ve been asked those questions ten different times. You have a battle-tested response.” Extra initiative will also be required of all candidates who want to work at one of the smaller boutique banks. For the most part, smaller firms don’t have the recruiting budgets to support an extensive on-campus recruiting program, so contact them on your own. Also, since I-banking is a meritocracy, you might be able to start in a clerical position and move up. There’s more potential for that happening in trading and less in corporate finance. Be nice to everyone you meet, do a knockout job, and make it clear that you don’t want to be the receptionist or mailroom clerk forever. A lot of firms encourage ascent from below, in part because they like the idea of well-scrubbed, nicely dressed college graduates answering the phones. Ace Greenberg, who until recently was the longtime chairman of Bear Stearns, started in the mailroom. The

> TIP Be nice to everyone you meet, do a knockout job, and make it clear you don’t want to be the receptionist or mailroom clerk forever.

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whitest of the white-shoe firms are probably least open to such back-door entry, while smaller and regional firms (and Bear Stearns) are more open.

Honesty Is the Best Policy Whatever you do, don’t lie on your typo-free resume. Get caught (finance is a small world) and you’ll do irreparable damage to your potential Wall Street career. Do people do it? Yes. “We once had a guy who claimed he was a Navy SEAL,” says a recruiter. “We checked it out because it seemed so interesting. It turned out he had never even been in the military. Needless to say, we didn’t hire him.…You expect a 15 percent exaggeration factor on resumes, but some people just go crazy.”

Interviewing Tips Experienced Wall Street insiders tell us the

recruiting process should begin before your first-round interview. The first step, before you sign up for that interview, is to determine whether you’re applying for a corporate finance, sales and trading, or research position. It’s true that the content of first-round interviews will be similar in any case. However, insiders tell us that a lack of focus will earn you a ding. If you’re an undergrad, are you interested in being a sales and trading analyst or a corporate finance analyst? MBAs, are you gunning for a research associate position, or is public finance your top choice? Pick one as early as possible and be sure to clearly communicate your choice to your interviewer. A great way to learn which area of I-banking turns you on most is to participate in a “Day on the Job” program. When the banks visit your school, ask about it. Or approach alums from your school or friends already in the business and ask if you can shadow them for a day. (This is a great way to get your foot in the door if you want to work at a firm that doesn’t

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Showcase your assets: If the firm has an office in Brussels and you speak French, tell the recruiter. If you have experience in a hot industry, like technology or health care, let the interviewer know how your experience can benefit the firm.

On the Job

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toward evaluating her people skills, particularly those related to negotiation, relationship building, and persuasion. In a corporate finance interview, expect to be asked about relevant coursework (economics, finance, accounting) and professional experiences. Before your interview, walk through your resume and identify an experience or two that required your supreme powers of analysis—even if it was just writing an investment plan for your summer job earnings. “Even if you’re an undergrad without previous experience in the financial industry, emphasize the analytical aspects of those things you have done,” says one insider. In a sales and trading interview, demonstrate your ability to persuade. Expect to be asked questions regarding your sales experience, negotiations you’ve been involved in, and why you should be hired. All candidates should be prepared to discuss how to value a company. Know which numbers to look for. If you’re an MBA, elementary concepts like discounted cash flow and the weighted average cost of capital should be as familiar as the back of your hand. You should also be prepared to work with a few numbers without breaking into a sweat. Undergrads won’t be expected to perform quantitative Olympics at an MBA level, but they should be familiar with the basic concepts of valuation. Have a look at WetFeet’s Beat the Street® and Beat the Street® II Insider Guides for a succinct, how-to overview of these and other interview questions, as well as a first-person perspective by a student who snagged several job offers. Insiders tell us it’s obvious when candidates are prepared for their interviews; they typically come

The Industry

recruit at your school.) Most of the major Wall Street firms have regional offices where you can spend a day observing traders, bankers, or researchers at work. Even if you don’t live near a city where a major bank is represented, visit a smaller bank. If you choose correctly, the work and atmosphere will be similar. Taking the time to do a “Day on the Job” will not only be highly informative for you, it will demonstrate to your recruiter that you’re serious about your job search. If your recruiter casually asks, “So, which other firms are you interviewing with?” it isn’t a trick question. However, here’s a bad answer: “Well, of course an M&A job with your firm is my first choice, but I’m also talking to Lehman Brothers about a trading job and Credit Suisse about a job in the research group.” Remember, focus is important. Pick one area of concentration and stick with it. And don’t underestimate the power of that question: “You’ve got to build momentum for yourself,” says an insider. “If you answer with names they’ve never heard of, they wonder if you’re just grabbing at whatever’s out there. You need to know the hierarchy of the firms and what it means when you answer that question.” If you’re serious about a career on Wall Street, you’ll be talking to a lot of firms; your recruiter wants to hear that. The fact that you’re talking to other firms is fine, but don’t drop names unless you’re really interviewing there. “When someone tells me they’re talking to Merrill, Goldman, and Lehman, I call my buddies at Merrill, Goldman, and Lehman and ask if they’ve heard of the guy,” says an insider. “We all went to school together and keep in touch. Once you get the really competitive candidate, you stop talking to your buddies, but in the informational phase, we talk across firms a lot.” Your recruiters will be looking for different skill sets depending on the type of I-banking job you’re pursuing. One insider who worked in corporate finance after college and pursued a sales position after B-school says that in her corporate finance interviews, the recruiters focused on her analytical skills and experiences, while her sales interviews were weighted

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Careers in Investment Banking off well-polished and committed. Those who aren’t prepared come across as wishy-washy. Wall Street insiders also tell us that liberal arts majors have a bit more selling to do to land a finance job. It’s not that the banks don’t hire English majors, but they hire a lot more economics and finance majors. So if you followed your bliss in college and are now deciding to explore career opportunities on Wall Street, be prepared to demonstrate your analytical skills. Play offense. Tell your interviewer that though you have a liberal arts background, your analytical skills are sharp as a tack because of X, Y, and Z experiences. Don’t forget, investment banks are all aggressively building their foreign operations, so speak up about any overseas work experience or foreign language skills. Just don’t exaggerate. If you claim to speak Japanese, for example, don’t be surprised if a native speaker conducts your interview in that language.

Getting Grilled We interviewed industry insiders and asked them what questions an I-banking job candidate can expect—and prepare for—before an interview. Here are several representative questions. Be prepared and you’ll have an easier time with the unexpected material as well. • What most excites you about a corporate finance/ research/sales/trading job? •

What can you tell me about a couple of stocks that you follow?

•

Why do you want to work for this bank versus our competitors?

•

What do you think of Ben Bernanke?

•

Who is our competition (in the major categories)?

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Sales/trading: Pretend that I’m a portfolio manager for Fidelity. Explain to me why I should buy the latest IPO the firm has underwritten.

•

Research: You’ve just been hired as our firm’s new XYZ industry analyst. In two weeks, you’re scheduled to address a growth-stock conference on industry trends. How would you prepare?

•

Corporate finance: In a merger discussion, Moon Microsystems says Plum Computing is worth $23 per share; Plum says $34 is more in the ballpark. Who’s right, and how would you arrive at a valuation?

•

Tell me about your leadership experience.

•

Tell me about a high-stress situation you’ve been in. How did you handle it? What could you do better the next time?

•

What did the stock market do last week?

•

The Fed recently raised interest rates. Do you think the move will hurt the stock market? Why or why not?

•

In which areas is our firm the strongest? The weakest?

•

What other banks are you interviewing with?

•

What career opportunities are you exploring other than I-banking?

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You know it’s coming: that moment when the

Medium •

Beyond the league tables, what differentiates your firm from others?

•

How is an analyst/associate assigned from the generalist pool to a project?

•

Can one request specific teams, industries, or product groups?

•

How well do the firm’s different divisions work together?

•

How long does it take most people here to become managing directors? What’s the path? Are there specific benchmarks you have to hit?

•

What are the firm’s biggest challenges and opportunities in the next two years?

•

What aspect of your job do you find most frustrating?

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Well Done •

How has increased consolidation in the industry affected your firm, both positively and negatively?

•

What makes a person successful in this business?

•

•

What made you choose this firm over other firms?

If the company has merged: What new business has resulted from the merger? How well have the two cultures mixed?

•

What is a typical career path in the (corporate finance/sales/trading/research) department?

•

•

How much of an analyst’s/associate’s time is spent pitching new business?

If the company has not merged: Do you think the company needs to acquire or merge with a competitor in the near future?

•

•

Is there a formal mentoring program for new analysts/associates?

What percentage of the managing directors are female or minority?

•

How would your firm fare relative to the

For Your Reference

What kind of person are you looking for? (This question will provide you with useful information on personal characteristics you should emphasize.)

Getting Hired

•

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On the Job

Rare

If I were a CEO, why would I choose your firm to take my company public?

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interviewer turns to you and says, “Okay, do you have any questions for me?” Ostensibly an opportunity for you to learn about the company and the recruiting process, it’s also an opportunity for the interviewer to learn how much you know about the firm, how well you’ve prepared for the interview, and whether you’re really interested in working for the firm. The following are good generic questions that will fit most I-banking interviews. However, you’ll want to think of additional ones that apply specifically to the company with which you’re interviewing. One important reminder: If you’ve already covered any of this material in your interview, don’t revisit it. You’ll appear inattentive and unfocused. Another word to the wise: We’ve grouped our questions according to our sense of relative risk. Those in the “Rare” section are meant to be boring and innocuous, while those in the “Well Done” section will help you put the fire to your interviewer’s feet. But beware: They might also turn you to toast!

•

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competition if interest rates suddenly skyrocketed? If oil prices plummeted? (Or whatever else you can think of along these lines to help you gauge how prepared the firm is for future possibilities.) •

How committed is the firm to building its XYZ business? (Investment banks are known to eliminate entire departments when they underperform against expectations. If you happen to work for one of those departments, that means bye-bye.)

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Investment Banking Lingo........104 Recommended Reading............ 108 Online Resources...................... 109

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Investment Banking Lingo To become an investment banker, you’ll need to

talk the talk. What follows is by no means a complete list of the terms you’ll encounter on Wall Street, but it’s a good start.

Bakeoff A meeting where groups of Hermès-tied and -scarved bankers (with analyst minions trailing behind, furiously scribbling into their Treos) parade into a company’s boardroom to pitch their underwriting or advisory services as the only choice for the company’s upcoming deal. Also known as a “beauty contest.”

Bulge bracket The top five to ten full-service investment banks on Wall Street. The name derives from the top bracket on a tombstone ad in The Wall Street Journal (see tombstone, below).

Bloomberg Also known as Pandora’s Box or the black box. This funky little computer, used daily by almost every investment banker, is a one-stop shop for a very wide range of company, economic, and market news, provided you can learn its idiosyncratic navigational commands. Bloomberg (the name of the company that sells the service) was one of the first providers of real-time stock quotes, news feeds, and economic reports. It was developed by Michael Bloomberg, now mayor of New York. Increasingly, other online services are encroaching on its turf, but some banks still prefer Bloomberg’s “closed” system and encourage using it in conjunction with other Internet resources.

For Your Reference

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Buy side and sell side “Buy side” refers to institutional buyers of securities, mutual funds, and pensions—in other words, your clients. At an investment bank, you’re working on the sell side, providing research and selling securities to investors.

Chinese wall These are the boundaries that separate research, corporate finance, and sales and trading, with the aim of preventing transmission of inside information. The wall could be physical (different departments on different floors of the same building), or an intangible series of procedures to control documents. When a research analyst is finally told of a deal, usually right before it’s announced to the public, the analyst is “brought over the wall” and becomes restricted from commenting on the stock. (See insider trading, below.)

Comps Also known as comparable company analysis and competitive pricing analysis, comps are an endless part of an analyst’s work. Comps are spreadsheet models (generally done in Microsoft Excel) that compare the vital financial statistics of companies in the same industry, such as Nike, Reebok, and Converse. Comps help bankers value a company’s financial position relative to others in the same industry by comparing such data as stock prices, earnings, and financial ratios. An analyst can expect to run comps for just about every deal.

CYA Roughly, “Cover your posterior region.”

Deals The process and completion of a security issuance or merger/acquisition of a company. The number of deals completed in a year is one of the most important measures of success for both a bank and an individual banker.

At a glance

Bonds to which Moody’s or Standard & Poor’s gives low ratings. They produce high yields, unless they go into default. Also called junk bonds. (See investment grade, below.)

Due diligence

Dutch auction

Face time

Hedge fund

LBO Stands for Leveraged Buyout, which occurs when a corporation is purchased at a low price, its assets are sold off at a much greater value, and the bank in charge makes a handsome profit.

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For Your Reference

Describes a private investment partnership. Unlike mutual funds, which are sold to the public, hedge funds aren’t regulated by the SEC and cannot advertise. Consultants who specialize in hedge funds review and disseminate the information to potential investors. A share of profits/losses is allocated to all partners based on their percentage ownership; the general partner is paid an additional incentive fee.

IPO Stands for Initial Public Offering, which occurs when a privately owned company sells shares of stock to the public for the first time and the shares are then publicly traded through a stock exchange.

Getting Hired

The time after 8:00 p.m. when you choose to stay at work just because others, particularly senior others, are there, even though you don’t have anything to do.

Investment-grade Low-risk bonds, as determined by Standard & Poor’s (AAA to BBB) or Moody’s (AAA to Baa). Both Standard & Poor’s and Moody’s provide independent credit ratings, research, and financial information to the capital markets. (See high-yield, above.)

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A highly objective process for selling an offering. Interested investors place bids indicating the number of shares they want and the price they’ll pay. The deal closes at the lowest price at which all the shares would be sold. Bid too low and you don’t get any shares; bid too high and you risk driving up the price more than necessary.

Investment banker A term used by outsiders only. If you’re in the business, you’re a banker as opposed to commercial banker.

On the Job

A process in which bankers and their lawyers sit down with management and their accountants and ask them every question they can think of that could uncover possible risks in a deal. (See CYA, above.)

Insider trading Acting on information to which you’re privy for profit. Imagine, for example, you were part of the team advising IBM in its acquisition of a publicly traded software developer. Knowing that IBM would be offering a 30 to 50 percent premium above the going market price for the company’s stock, you buy shares of the company and sell them a month later after the deal goes through, making a tidy profit. Unfortunately, this is illegal, and if you’re caught, you could be banned from the securities industry for life, fined, and/or thrown in jail. (See Chinese wall, above.)

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High-yield

A financial instrument with no inherent value other than what it derives from some other underlying asset. For example, one type of derivative is an interest rate cap. Let’s say a company has a floating rate loan. To manage its interest rate risk, the company might purchase a 7 percent interest rate cap from the issuer for $200,000. The issuer of the cap assumes the risk of an increase in interest rates above 7 percent. If rates exceed 7 percent, the issuer pays for the excess cost owed by the company. If rates stay below 7 percent, the issuer pockets the whole $200,000. Other types of derivatives include swaps and reinvestment products.

The Industry

Derivatives

At a glance The Industry The FIRMS

Careers in Investment Banking LTM

OTC

Stands for Last 12 Lonths. For example, a senior banker could say to you, “Get me the company’s LTM revenue and earnings numbers.”

Stands for Over-the-Counter securities, which aren’t traded on an organized exchange. A broker-dealer will “make a market” for OTC securities.

Lucite Brand name for a durable clear plastic; also refers to versions of tombstones encased in Lucite that are distributed to members of a deal team. Lucites are highly coveted knick-knacks among bankers, and different firms compete to see which one can create the cleverest designs.

M&A Make the quarter

Printer

When a publicly held company meets or beats an analyst’s quarterly or annual earnings estimates.

A company that prints financial documents for a deal. Young bankers and lawyers spend a lot of time here before a deal, checking and rechecking the progress of a prospectus or proxy statement.

Municipal bond Debt issued by local or state government body; “muni” for short. Usually the interest is exempt from federal (and sometimes local and state) taxes.

NASD Stands for National Association of Securities Dealers, which is the parent company of the NASDAQ stock market. NASD is responsible for operating and regulating NASDAQ and other over-the-counter (OTC) securities markets. (See NASDAQ, OTC.)

NASDAQ A decentralized network of competitive market makers or firms that stand ready to buy or sell securities at publicly quoted prices.

For Your Reference

Getting Hired

The Workplace

On the Job

Stands for Mergers and Acquisitions.

PE multiple Stands for Price-to-Earnings multiple, an important ratio on Wall Street that can tell you if a stock is overvalued or undervalued relative to its historical performance and to other firms. To get it, divide the market price of a share of common stock by the earnings per share of common stock for the past 12 months. A forward PE uses estimated earnings in the denominator.

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Pitch book A slide presentation or bound stack (or “deck”) of bullet-point pages and charts that calling officers (top two or three levels of bankers) takes to a meeting with the management of a potential client. The pitch book discusses the client’s industry and why your bank is the best one for the client to use in any deal it contemplates. One of your initiation rites as an investment banker, the upside of putting one together is you’ll learn a lot about a company and an industry. The downside? Insiders tell us putting together pitch books can be pretty dull and repetitive, especially for low-on-the-totem-pole analysts.

At a glance

Tombstone

The preliminary prospectus on a deal, noted in red ink along the side of the front cover. Once a firm is cleared by the SEC to “print the reds,” a road show starts. (See road show, below.)

Big box advertisements in Section C of The Wall Street Journal declaring, “Company X completed the issuance of X hundreds of millions of shares/dollars/ debt” and then listing all of the investment banks involved in the deal. The size and grouping of the bank names show the level of involvement each had on a particular deal.

Road show

Share of voice

The Workplace

The amount of credibility a securities analyst has with respect to a particular stock. Usually earned by making accurate calls on the stock’s price movement. The analyst with the most share of voice is often called the “ax” on a stock.

White-shoe Anachronistic (but still often used) characterization of firms that see themselves—or would like others to see them—as upper-crust and above activities as distasteful as hostile takeovers. The term comes from an old Ivy League tradition of wearing white buck shoes (in the summer only) in elite fraternities and clubs.

On the Job

Secondary offering When a publicly traded company offers more stock on the market after its IPO. Also known as a “follow-on.”

Wallpaper Worthless securities. The issuing company has gone bankrupt or defaulted.

ThE FIRMS

A sales trip around the country (and sometimes other countries) with the upper management of a company during the month or so before the company’s securities issue. During the road show, the company management, investment bankers, and research analysts on the deal team will visit institutional investors to tell the story behind the company and convince them to buy into the offering.

The Industry

Red herring

Synergy

Getting Hired

What happens with two companies, neither of which can reach its full potential on its own, become wellpositioned, strategic partners and achieve the stuff dreams are made of.

For Your Reference WETFEET INSIDER GUIDE 107

At a glance The Industry The FIRMS On the Job The Workplace

Recommended Reading Barbarians at the Gate: The Fall of RJR Nabisco The ultimate inside story of the largest takeover in history, this book also provides an insightful look at the culture and personalities of Wall Street. Ross Johnson, CEO of RJR Nabisco at that time, needed a new PR agent after this book came out.

Bryan Burrough and John Helyar (Collins, 2003) Bombardiers

A black comedy about life on a trading desk, this story cuts mighty close to the bone. Bronson worked as a fixed-income sales analyst at First Boston’s San Francisco office.

Po Bronson (Penguin, 1996)

Goldman Sachs: The Culture of Success Hagiography, but still interesting. If you’re interviewing at Goldman Sachs, or even one of its competitors, you should read this for more information about one of the Street’s biggest names.

Lisa Endlich (Touchstone, 2000)

Heard on the Street: Quantitative Questions from Wall Street Job Interviews This book is indispensable if you’re a PhD or other job candidate vying for a quantitative position (for example, derivatives analyst) on Wall Street.

Timothy Falcon Crack (Timothy Crack, 2002)

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance At 720 pages, this is a surprisingly readable history of J. Pierpont Morgan and his empire, which still operates as the modern firms Morgan Stanley and JPMorgan Chase. This book is also a history of investment banking in Europe and the U.S. We highly recommend it for anyone interviewing with one of the houses of Morgan as well as anyone interested in financial history.

Ron Chernow (Grove Press, 2000)

Liar’s Poker: Rising Through the Wreckage on Wall Street This fun, easy read provides tremendous insight into the culture of Salomon Brothers, sales and trading, and Wall Street in general during the boom of the ’80s. You’ll also learn a fair amount about how investment banking works. Though much has changed since this era, the personality types remain exactly the same.

Michael Lewis (Penguin, 1990)

Monkey Business: Swinging through the Wall Street Jungle This book takes readers behind the scenes at Donaldson, Lufkin & Jenrette (absorbed in 2000 by Credit Suisse First Boston), depicting the ridiculous lengths to which entry-level grunts on Wall Street can go to cope with long hours, stress, and despotic managers; fit in with their peers; and stand out in the eyes of those who can advance their careers.

John Rolfe and Peter Troob (Warner Books, 2000)

The Predators’ Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders Today, Michael Milken is a philanthropist, raising money to fight prostate cancer. This is the story of Milken before he was enjoined from working in investment banking—when he was hot and investment banking was about junk bonds and raids. A nice slice of the ’80s.

For Your Reference

Getting Hired

Careers in Investment Banking

Connie Bruck (Penguin, 1989) 108 W E T F E E T I N SIDER GUIDE

At a glance

Finance Site List

Thomson Financial www.thomson.com/financial/fi_investbank.jsp The firm that compiles data for the underwriting league tables. You can find the latest month’s tables here along with commentary.

Careers in Business

Knowledge@Wharton:FinanceandInvestment

www.careers-in-business.com This site provides descriptions of job opportunities in investment banks, some salary information, and industry trends. Careful with the data, though—it’s a bit outdated. The site includes a career reference section, which directs you toward help with cover letters, resumes, interviewing, and so on.

knowledge.wharton.upenn.edu/category.cfm?cid=1 This online journal, put out by the Wharton School of Business, offers timely content regarding news and issues of interest to people on the Street.

The Workplace

Investor Words www.investorwords.com Some of that industry jargon still have you confused? Try looking it up on this online glossary of finance.

On the Job

www.cob.ohio-state.edu/fin/journal/jofsites.htm It’s hard to imagine there could be a more comprehensive list of finance links than this one, maintained by the Journal of Finance. It’s neatly categorized, too, which makes it manageable.

www.sifma.org A new industry trade group resulting from the merger of The Securities Industry Association and The Bond Market Association. Download the Securities Industry Briefing Book, which offers a history of the capital markets and a summary of the markets’ performance last year.

ThE FIRMS

The Web is loaded with information on investment banking and the securities industry, but most of it exists to attract the interest of individual investors. Trying to find information relevant to your investment banking job search can be a frustrating experience— plugging the term “investment bank” into a typical search engine produces more than one million hits. So we did some legwork and found the finance sites that are worth a job seeker’s look.

Securities Industry and Financial Markets Association

The Industry

Online Resources

Getting Hired

The Options Group www.optionsgroup.com The Options Group is a global executive search and consulting firm for the financial markets and technology services industries. Options Group has placed 2,000 mid- to senior-level professionals since 2000.

Investopedia.com Financial Dictionary www.investopedia.com/dictionary This site provides an extensive dictionary of terms used by the investment community. If you want to sound like an insider and use terms like “guns and butter curve,” “big uglies,” and “Bo Derek,” this is a good site to check out.

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At a glance The Industry

Careers in Investment Banking McKinsey Quarterly: Financial Services and Corporate Finance

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Institutional Investor: www.dailyii.com

www.mckinseyquarterly.com/category_editor. aspx?L2=5 The McKinsey Quarterly, a product of one of the pre-eminent strategy consulting firms in the world, offers in-depth analysis of news and issues of interest to bankers and potential bankers.

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Investor’s Business Daily: www.investors.com

For Your Reference

Getting Hired

The Workplace

On the Job

The FIRMS

WetFeet Online Resources www.wetfeet.com Visit our site for related career and industry profiles, interviews with recruiters in the industry and real people in investment banking jobs, articles, and more.

Finance and Business Publications Most major business publications can be found on the Web. Some are free (Euromoney is a great source), some offer current issues free but charge for archive searches, and others require paid membership to access any part of their sites. The Wall Street Journal Interactive Edition is one that requires a membership but is definitely worth paying for. You get a personalized version of the Journal, plus access to Barron’s Online, SmartMoney interactive, the WSJ career site, the Dow Jones publications library, and the WSJ online business glossary. •

The Wall Street Journal Interactive Edition: www. wsj.com

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BusinessWeek: www.businessweek.com

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The Economist: www.economist.com

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Euromoney: www.euromoney.com

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Financial Times: www.ft.com

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Forbes: www.forbes.com

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Fortune: www.fortune.com

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At a glance

Ace Your Case - Consulting Interviews Ace Your Case® I: Consulting Interviews, 3rd ed. Ace Your Case® II: Mastering the Case Interview Ace Your Case® III: Market-Sizing Questions Ace Your Case® IV: Business Operations Questions Ace Your Case® V: Business Strategy Questions

Financial Services Careers 25 Top Financial Services Firms Careers in Accounting Careers in Asset Management and Retail Brokerage Careers in Investment Banking Careers in Venture Capital

Industries and Careers: Specific Careers in Advertising and Public Relations Careers in Pharmaceuticals Careers in Brand Management Careers in Consumer Products Careers in Entertainment and Sports Careers in Health Care Careers in Human Resources Careers in Information Technology Careers in Marketing Careers in Nonprofits and Government Agencies Careers in Real Estate Careers in Retail Careers in Sales Careers in Supply Chain Management

Getting Hired

Financial Services Companies Deutsche Bank Goldman Sachs Group JPMorgan Chase & Co. Merrill Lynch & Co. Morgan Stanley UBS AG

Industries and Careers: General Industries and Careers for Engineers Industries and Careers for MBAs Industries and Careers for Undergraduates Million-Dollar Careers

The Workplace

Job Hunting Getting Your Ideal Internship The International MBA Student’s Guide to the U.S. Job Search Job Hunting A to Z: Landing the Job You Want Job Hunting in New York City Job Hunting in San Francisco

Career Management Be Your Own Boss Changing Course, Changing Careers Finding the Right Career Path Negotiating Your Salary and Perks Networking Works!

On the Job

Resumes & Cover Letters Killer Consulting Resumes Killer Cover Letters & Resumes Killer Investment Banking Resumes

Consulting Companies Accenture Bain & Company Booz Allen Hamilton Boston Consulting Group Deloitte Consulting McKinsey & Company

ThE FIRMS

Interviewing Ace Your Interview! Beat the Street® I: Investment Banking Interviews Beat the Street® II: I-Banking Interview Practice Guide The Wharton MBA Case Interview Study Guide: Volume I The Wharton MBA Case Interview Study Guide: Volume II

Consulting Careers 25 Top Consulting Firms Careers in Management Consulting Careers in Specialized Consulting: Information Technology Consulting for PhDs, Lawyers, and Doctors

The Industry

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For Your Reference WETFEET INSIDER GUIDE 111