5 Things To Know Before Interning at a Bulge Bracket Investment Bank
Last summer, I interned at a bulge bracket investment bank in their 10-week Risk summer analyst program. My role specifically was within Leveraged Finance Credit Risk, covering mostly Tech, Media & Telecom (TMT) names and some Consumer & Retail (C&R). In general, my day-to-day was split between participating in credit sanctioning of deals, managing regulatory risk/requirements, and attending intern events. The internship itself was a great experience as I was given as much responsibility as I showed merit for, and exposed to people in roles across the function and the bank through numerous networking opportunities.
I believe that while consistently building business knowledge or studying financial modeling can help prepare you for an internship at a bank, the average intern will continuously find that the depth of each team’s work is far greater and more complex than they could possibly imagine or read about. This can quickly get overwhelming, as you will get caught up in just trying to keep up with and do the tasks in front of you, while trying to figure out who to network with. After reflecting on my own internship experience, I’ve identified 5 important lessons from my summer experience as an analyst that can help any student preparing for an internship at a bulge bracket investment bank:
Prepare for the internship by learning to research quickly.
If you’re interested in a role within an investment bank, I’m sure that you are currently holding an expectation that you need to get as good at modeling as possible to excel in an analyst role. You can prepare all the valuation methods and financial technicals you want, but typically these can be learned quickly on the job. The tougher skill to pick up is how to research and understand a company and its industry based on available information, and then quickly draw insights from your research to help build model assumptions, identify key risks, or argue the business case. This is especially important for companies that have unique or new business models which aren’t proven yet. Most of the deals you will be working on have very short timelines to close, so the better and faster you can get at this, the more helpful you will be. Even if you aren’t directly assisting with a deal, there will be several opportunities to sit in on calls and ask questions after. The ability to research and learn quickly will serve you well in any role.
Keep in mind when researching that it isn’t about finding answers (i.e. figuring out exactly what a company might do), it’s about finding the important questions or problems. This all can’t be done without a basic context of the industry you are working in, so start building a strong knowledge base as soon as you have accepted an offer. If you don’t know how to read/research business news but want to get started, check out this article.
There are no dumb questions, but there are smart ones.
On your first day at the desk, you will find there are a lot of resources to read (both guidelines and decks). Some of those resources will be boring, but will help you avoid time-wasting questions as well as give general insight on how different teams and functions of the bank interact with each other. Ask around your team to see if they have any other training decks, as these will often detail the step by step of your tasks and explain systems you may need to use.
The key is to try and build questions on top of each other once you have grasped the basics. For example, if you are interested in a specific problem/area, show an increasing depth of understanding as you go deal by deal instead of asking the same general questions. As a guideline, questions should move from “How do I do X?” to “Why do we do Y within X?” and eventually “Can we change Y within X?” as you understand more about a concept. Using the topic of free cash flow as an example, your questions could evolve like this: “How should I model FCF out 7 years?” to “Why do we start from EBITDA versus CFFO?” and finally “Can we change the add backs to calculate EBITDA from those on the term sheet?” This evolution of questioning can be done with processes too, to try and find new efficiencies in workflow or knowledge management.
Network with a purpose in mind.
One of the greatest advantages of interning at a large investment bank is the sheer amount of knowledge and experience everyone around you carries. Because time is limited – especially given work should always come before networking – it will be most efficient to create a roadmap of who to network with. I approached this by coming up with three questions and using conversations to continuously find the right people to meet with for each question. These exchanges should become more specific as you go as well. For example, one of my questions went from “What do you see as the future of credit risk?” to “Why it is hard to build models/automate credit risk for larger companies versus small medium businesses?” and ended with discussions on how to use alternative sources of data to segment markets and understand credit patterns.
Try to schedule two or three coffee chats a week. People are very busy, so it is likely you will have meetings pushed around multiple times in a day or cancelled for a few weeks. If you only plan one in a week then it likely may not happen. Look at the team calendar for who will be on vacation and try to factor this in as well. With the help of my mentors, manager, and internal search tools, I was able to meet with more than two dozen colleagues across front and back office and internationally.
Final Project: Work from what you learned to what you know, not from what you know to what you’ve learned.
Most interns (across banks and roles) will have some sort of individual final project finish alongside other work assigned to you during the summer. While everyone has different strategies for time management, I believe that time isn’t the main challenge for a final project. The following advice may not apply as strongly to traders or product specific roles.
Many interns may have strong background knowledge in one industry or topic, so it will be tempting to show that expertise off and build out a deck on a related work assignment. However, working this way will mean cramming too much into the time allocated and likely losing the audience by the end. I made this mistake in a mock presentation, and lost two days fixing and essentially remaking my deck. These presentations are short relative to the amount of time you are given to work on them, so the more unnecessary information you include the more convoluted it gets.
I recommend you start by detailing the process (or problem) behind a specific skill or methodology you have learned in your internship, and then expand outwards to incorporate your knowledge base. This way you will end up with only the necessary information included in the presentation, leaving less room for difficult questions.
Being proactive doesn’t always mean asking your line manager for another assignment.
There is a limited amount you can do as a summer analyst, so it is important you maximize what you do with down time between assignments. A close colleague of mine advised that when free, it is good practice to review deals you have worked on so far to understand what was done each step down to every email, folder made, file saved, and phone call. This will not only help you figure out what to learn next or do better, but also help you understand your line manager’s priorities so you can predict what they will need next and save them time.
Remember, as much as you are there to get a full-time offer, being an intern opens up avenues and conversations that may not be as accessible when you start full-time. Be confident, have fun, and try to make as many friends as you can along the short journey!
