For most entry level investment banking spots, the summer internship is increasingly becoming a prerequisite for landing a position. To some extent, these summer internships have become so coveted that they may demand brand name work experience and very high grades to be considered.
Why Investment Banks Hire Summer Interns
The summer internship is basically a trial period for investment banks to see whether or not they want to take someone on for a full-time position with very little risk. Over the course of a six-week to 4 month period, it becomes apparent whether or not someone is suited for the role. Also, given the hours worked and the strenuous nature of the job – drinking from the firehose – someone with even a few weeks of investment banking experience is miles ahead of someone who worked in the finance division of the government or a Fortune 500.
As banks have enough attrition as is, they want to ensure that a new hire can perform and knows what they are getting into. In my investment banking career, I have seen multiple new analysts land offers after immaculately rehearsed interviews referencing their ability to work hard and make sacrifices before being psychologically broken after a few consecutive nights being in the office until three in the morning and quitting before the two-month mark. I always find it somewhat droll as the build up is occasionally excessive with lots of celebratory drinking and tagging friends on finance meme Instagrams before the glamor dissipates rather swiftly.
Off-cycle hiring is expensive and having an analyst off the file is extremely disruptive to the deal process in investment banking due to the lack of continuity of labor. It also puts strain on existing resources as the analysts and associates in the pit will have to scramble to cover for the departing analyst, hurting morale and increasing the likelihood of other junior staff exiting. As such, someone who has seen the darker side of investment banking (the darkest, as summers are the bottom of the barrel) and is willing to sign on for a further two years is seen as a safe option.
One additional consideration is the relative affordability of summer interns or co-op students. Not only do they not receive the largest component of investment banking compensation – the variable component or bonus, which is famously a multiple of the base salary – but governments usually have initiatives for banks to take on interns. Sometimes banks will be reimbursed for the entirety of the summer intern’s salary beyond the tax deductibility of wage expenses alone.
Because of this, some banks actually overhire summer interns as free/cheap labor – you may want to be cognizant of which banks do this as it means that the number of return offers may be far less than the number of summer interns hired. As not being hired back as a summer is a definite negative for full-time recruiting, this should be considered if you have multiple summer offers.
Success Factors in Securing the Return or Full-Time Investment Banking Offer
We have compiled these tips for a successful summer analyst or associate – however, this may be helpful for all incoming hires that have or have not worked in an investment bank previously. If you are starting at a new firm, day one is still day one.
It is possible to get a return offer for full-time even if a summer analyst flounders in their first few weeks if they demonstrate improvement and noticeable changes in maturity towards the end of the internship. However, it is never prudent to put yourself into a hole in the beginning and remember – first impressions are hard to shake off.
Your First Week as an Investment Banking Intern
The week before you start, email your correspondent on what time your desk usually starts and show up 15 minutes before then. Your first day will usually be devoid of tasks while you go through a bunch of HR and compliance modules on the corporate intraweb.
At a good bank, your logins and workstation should be set up, but you will otherwise have a light day. Get to know all of the computer drives, how to operate the phone turret (so you do not screw up conference calls when the time comes) and tinker around with an excel model if you have time.
Also, wear a full suit and tie every day including Jeans Friday until you are being made fun of in a business casual office. When that happens, make sure you have your suit, dress shirt and tie in the office in case you are called last minute to go to a client meeting. Until you are a full-fledged member of the team, do nothing that would compromise the veneer of professionalism.
Hours and Face Time for Summer Analysts and Associates
During the orientation (which is usually 1-2 weeks for summers in the home base of New York or London), a variety of top-performing Managing Directors and senior management of the bank will pour the company Kool-Aid down the throats of the new hires. Amidst the fine food and drink, extensive presentations on the capabilities of the bank’s product and coverage groups and nice views from the corporate office’s highest floors (which you will likely never see again after you start), one or two MDs will include a few lines pertaining to “face time”.
“There is absolutely no face time in our groups. We respect your integrity as professionals to manage your work and expect a flawless finished product – however, there is no need whatsoever for you to stick around when you have taken care of your responsibilities.”
This is not necessarily a lie, but in practice it is never true – or rather, your responsibilities are never really taken care of. Technically, you need to be available in case something comes up – which means that you need to be there until everyone else leaves unless you are expressly dismissed.
If you leave before senior management, you are definitely not getting hired back. However, since they leave at 5, this is not as big of a factor as leaving before the rest of the pit. Which is an excellent segue to – don’t leave before the rest of the pit.
This applies thousand-fold for a summer intern. Until you are established and have real responsibilities, you should always be the first one in and the last one out.
Asking for Work as an Intern and Being Available
Work allocation is spotty in investment banking and the pit is usually very busy, which means that they will not necessarily approach you for work – or do not want to as it will take you far longer as an inexperienced worker and because they will need to check your work after. Despite this, you need to proactively ask for work as you need to be seen as someone who makes people’s lives easier.
This ask also has to be put delicately – “Hey Tom, is there anything I can help you with? I have some capacity right now.” Is very different from saying the same thing while having your coat on with shifty eyes towards the exit as you want to catch a few drinks and the rest of the ball game with some buddies, which is also very different from “Can you give me something to do?”
If your offers are rebuffed, you should be spending downtime going through models and presentations to make sure you know what to do when called upon instead of on ESPN or litquidity capital.
Also, your Blackberry/Corporate iPhone must be on you at all times. Whether it is during your gym session or at 4 in the morning, you need to be able to respond quickly. Generally a good rule of thumb is respond by 15-30 minutes on a weekday (or faster if you are involved in a critical process) and a few hours on a weekend (same expedited rule for live deals). If you are sleeping, you will need to know about calls with the Asia office at 4AM and pick up frantic messages from the relationship manager on the file.
Dinner Orders and Coffees for Investment Bankers
On the trading floor, interns are expected to get coffees. They have to get everyone’s order right – double cream no sugar, no cream two sugars, black, unicorn Frappuccino with four shots of espresso, red eye, dead cow, Ethos Water – whatever. Everyone throws in a few dollars and depending on the desk, sometimes interns can run a racket just from being the java mule.
Traders do not leave their terminals other than to pee, so interns go downstairs to the ‘Bucks and juggle a tray of 10 for their home desks. If you continuously screw up, people will get cranky and if they have a bad trade then out of the various extraneous factors for why that happened one will be you.
Investment bankers are a little different. Since they are at their desks for the whole day and most of the night while not sensitive to the minute by minute vagaries of the market, they usually will get coffee in packs. This usually happens twice a day (excluding after Starbucks closes, whereby bankers are forced to use the expensive Keurig monstrosities in their kitchens) and can be easily spotted in the concrete jungle as bankers will without fail throw on their jackets before they go downstairs to remind everyone that they are bankers. Everyone gets their own coffees so this ritual is not as important in the return offer framework.
However, investment bankers always stay late and will always order dinner online. Usually, the analyst pit will pool their dinner allowances and order together, allowing for any communal excess to be allocated towards appetizers and beverages that will otherwise make the miserable existence slightly less so. The aggregation and execution of the dinner orders is a task reserved for the most junior member of the pit, which is the summer analyst (and rotation of the summers should there be more than one).
A lot of summers underestimate the importance of getting this right and on time. If you screw up someone’s order, this can amplify a bad mood into a very bad mood. If you do this repeatedly, you will not be trusted with anything else. The other aspect that a lot of summers overlook is the search itself. Major investment banking hubs have a variety of delivery options, so an intern that is known for a rotation of unappetizing chain restaurants is going to be viewed negatively.
Positive Attitude for Banking Interns
As the most junior person on the totem pole, interns are expected to keep their heads down and work. Even if you have a shining personality, keep it shuttered until the group is comfortable with you and you are comfortable with them. Sometimes, the pit never actually warms up to you, which may be a sign to recruit for another bank because you are going to be seeing these people for 80 hours a week (sometimes more) for the next two years of your life.
There is no room for hubris and rejecting requests. This is especially important for interns with 4.0 GPAs that spend half their time writing on Seeking Alpha and reading Barron’s.
Until you have gone through a few models and deal processes, you do not know anything. Your first time pulling a share price chart on Bloomberg may take an hour without help when it would take an experienced analyst (more than a week) a few minutes. Keep your ears open and listen more than you talk unless your opinion is solicited.
MBAs who are theoretically higher ranked than analysts would do well to respect their de facto superiors as a second year analyst can run circles around an MBA student. Trying to push title around will get you massacred during roundtables where feedback for hiring decisions are made.
Also make sure to bring your notebook everywhere (except for getting coffee) to demonstrate you are attentive and want to absorb information. This is especially important during meetings where you are given explicit instructions – even for 3 or 4 simple steps in a requests, you may think that you will remember everything that was said but inevitably will miss one or two points, and this is extremely annoying to your superiors when you have to ask about them (and worse if you just forget to do them altogether).
People are generally stressed out due to the nature of the role – so absolutely no whining or negativity ever unless you have an outright abusive group (in which case time to find a new bank anyway).