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If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview In a system with no gatekeepers and misaligned rule makers, it's no surprise that the world of finance recruiting pushes the boundaries of what candidates are able to deal with. All the top investment banks, private equity firms and hedge funds are guilty of one of the most miserable recruiting tactics: the exploding offer. Yes, recruiting for ultra-competitive finance jobs is indeed as bad as it sounds. It combines the general awfulness of recruiting with the intensity and general ruthlessness of finance. It’s also super competitive. Goldman Sachs has reported a 3% hire rate for its internship program and Morgan Stanley has reported a 2% rate. It’s tough enough getting a single offer. If you're looking for help landing one of these top offers, you should check out our Finance and Valuation Starter Kit. Getting an Exploding Offer Imagine the following common scenario. You spend your undergraduate years diligently grinding, working hard and building an amazing resume. By virtue of hard work, you go from a complete novice freshman to becoming an executive on your student investment club. When you graduate, your hard work pays off and you go to a great investment bank. You know your next goal: breaking into the buy-side. It won't be easy, but working hard has always worked out for you so far. When you end up going through the buy-side recruiting process, you know you at least have the minimum qualifications to go for a top mega fund. You know you'll have the chance to enter one of the most lucrative careers in finance. But then you get thrown a curve ball when you meet with an up-and-coming middle market firm on the first day of recruiting. They give you an offer and tell you: if you decide to leave this room, your offer explodes. You think to yourself, it’s a great firm… but is it really what you want? You know how tough recruiting is and you know that many candidates don’t get any offers, so how could you potentially squander one now? The Exploding Offer: Receiving a job offer that expires before you have a chance to meet with any other firms Top Factors to Consider for an Exploding Offer Getting an exploding offer is a weird double-edged sword. It’s an incredibly stressful position, but it’s also a very fortunate one to be in. But you of course owe it to yourself to make sure you’re making an educated decision to the best of your ability. The first time I got an exploding offer I was 20 years old, and it was an offer to move across the continent. I hope that you can learn from some of the information I’ve picked up over the years. Here are the top 4 things to consider when you’re debating on taking an exploding offer: What stage is the recruiting process currently in? Timing is perhaps the most important strategic factor here. The private equity recruiting cycle is extremely chaotic and rushed. If you get an offer before the process or on the first day of the process, you should feel really good about your candidacy. That means there are still comparable job offers to go around. This is also where intel really helps. To the extent possible, you should tap your network to see how many people the firm is trying to hire, how many comparable firms still have spots, and if the firm is in any rush to hire. If this is an off-cycle recruiting process, you may be more compelled to take the offer. You should always try to keep tabs on how many other firms might be recruiting. How do you compare with the remaining candidates? You have to be very honest with yourself here. Try to assess your candidacy objectively and think to yourself how many other similarly qualified candidates there are left in the market. Think about objective metrics like the quality of your bank, school, and resume and think if you can afford to take the risk on future opportunities coming up. This can also be an extremely helpful thing to keep in mind if you’re in the final rounds of a process and there are only a few candidates left. If you know the final candidates are likely to take other offers, then you might have more negotiation in pushing back an exploding deadline. Before recruiting, you should try to make a mental list of firms you would be comfortable working for. When you’re in the midst of recruiting, you’re going to be under insane mental pressure to do what other people want. If you get an offer, all the firm’s troops are going to start e-mailing you with “Congratulations!” and “I’m here to talk if you have any questions before you accept!” Even the most virtuous keener can have a tough time rebuffing so much praise. The antidote is to try to assess all the firms ahead of time with a set of objective criteria. You should have a high level idea of the specific firms you'd be willing to accept before the process starts. Your opinion will likely change as you go through interviews, but doing data-driven research beforehand can be a very helpful anchor when making decisions. How comfortable are you reneging on an offer? This is perhaps the controversial stance I’ve switched on the most going from a student to professional. As a student, recruiting gossip is rampant and if you renege, you’ll likely be socially punished for it by your peers. You’ll have burned a bridge with an important employer and that offer might not be re-extended to a peer of yours. But as a professional… I started to realize just how ruthless finance recruiting is. It puts an unfair expectation on candidates and I’m much more understanding of reneging. I’ve seen many people do it and honestly, there isn’t that much the firm can do. You’ll definitely get blacklisted from that firm and maybe that headhunter, but if you’re reneging for a superior offer, it doesn’t really matter. So generally, if you’re in school: bad idea. Alumni only a few years out are too tight-knit that it’ll come back to bite you. In the real world: there’s too much attrition and work to deal with anyways, so no one can punish you. Why do firms give exploding offers? I think there are a few very intuitive reasons why firms are so willing to give exploding offers: There is no tangible punishment or downside for them. Look, if they give you an exploding offer, what can you do? I mean, if you accepted the offer, and they then decided to take away your offer, what could you even do then? Write an angry message on Glassdoor? Sulk about it to your significant other? They honestly don’t care. They aren’t in the business of caring and chances are the exact same recruiting tactics were pulled on them. There are no centralized gatekeepers in recruiting. Some top schools have career teams that will try to defend its students, but in general, firms can do whatever they want. All of their incentives are to get the highest-quality candidates. They play to those incentives and nothing else. There are no formalized rules in the system. You generally have no leverage over them. You’ll develop more leverage as your career goes on and you open more doors, but generally, you have very little leverage at the start of your career. Especially if it’s an off-cycle process or if there are only a few other comparable firms still recruiting, they can pull all the tactics they want. Add to the fact that many competitive finance offers tend to expire within 24 hours or a few weeks. So even if you got another offer at some point, it might not actually be a tangible thing to use as leverage. You’ll learn over time that recruiting is extremely personal and only you have to live with the choice. You can ask for advice from others, but they won’t ever care as much as you do. Do your diligence, reflect honestly on these factors, and ultimately be confident in the decision you have to make.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Look, if you’re attending a non-target or if you have mediocre grades, there’s really only one thing for you to do. You’ve got to network and you’ve got to do it well. Even if you have the perfect resume, you’ll probably still want to invest a good amount of time into diligent coffee chats, because networking is what turns a perfect resume into a perfect candidate. For better or for worse, investment banking and finance as a whole rely a ton on word of mouth. Although there are formal gatekeepers for the most coveted jobs, there is so much attrition and new firms pop up so frequently that you can often grease your way to a great investment banking offer with pure will. The thing to note is that networking can be a double-edged sword. People are willing to take a chance on a misunderstood kid with potential, but they won’t hesitate to blacklist annoying kids who get their name wrong. If you want to learn the complete technical and interview skills to get a top banking offer, you should check out our Investment Banking Course. The Goals of a Coffee Chat So when you’re networking and doing coffee chats, you should have the following goals in mind: Impress the person you’re speaking to by being charming, respectful, knowing their work experience, and asking thoughtful questions. Learn about any potential opportunities, the status of recruiting processes, or any advice to succeed in the interview. Be introduced to other helpful contacts (HR manager, person running point on recruiting, person with a similar background to you). But you shouldn’t even bother thinking about #2 and #3 unless you feel like you’ve nailed #1. I’ve done my share of informational interviews and I can tell you – the difference between a good informational interview and an OK one is extremely noticeable. The difference between an OK call and a bad call is even more noticeable. Super smart kids will get on the phone and then be so obviously unpolished or disrespectful that it makes me wish they never even reached out. The most important thing is that you need to have very thoughtful questions. By thoughtful, I mean questions that won’t just be simply “yes” or “no”, but instead show that you’ve done some element of research. Thoughtful questions mean you’ve researched the nuances of a person’s job and doesn’t make the call feel like a waste. How to Ask Thoughtful Questions Asking thoughtful questions means: Trying not to answer yes or no questions without giving more room to elaborate. Not asking anything that you can Google. Asking things that are specific to that person’s career or job (i.e. things they are uniquely positioned to answer). Not asking anything too intrusive or antagonistic unless you feel like the call is going really well (e.g. why did you decide to go to Western instead of Harvard)? In an effort to really help you out, here’s the list of networking questions I used when networking with people for investment banking jobs. If the chat was over the phone, I would have this document open in front of me. If it was a sit -down, in-person chat, I would memorize a couple of key questions and try to structure the conversation flow around them. List of Coffee Chat Questions Their Experience and Perspective: Could you help me understand your specific responsibilities on a typical day? What tasks or responsibilities of your job do you consider to be your favorite? What would you say is the biggest surprise on the job from when you joined the firm? Has your experience matched your expectations in terms of responsibility, learning opportunity and pace? What were the main reasons you selected this firm vs. other opportunities? (this becomes perfect ammunition for your “Why this firm?” question) Could you tell me about an interesting deal or project you’ve had the chance to work on? What particular aspects drew you to your specific [industry group or function]? It may be a little early, but have you thought about the next steps in your career? Are there any career paths that appeal to you? Their Firm and the Firm’s Business Model: What stands out to you about your firm relative to its competitors? I’ve seen that your firm has grown a lot in [this geography or function]. What have been some of the key drivers behind that growth? What is the organizational structure of the firm? How big is the team you work with? What is the level of interactivity between different groups / offices at your firm? Does there tend to be a lot of shared resources? I’ve heard from friends and read online that your firm specializes in [this function]. Would you say this is true? How does your firm differentiate itself in this aspect? How would you guys describe your approach to win deals and new clients? I’ve noticed that your group has announced a number of [buy-side / sell-side] transactions. What do you think enables you guys to win deals like that? I noticed that your firm hired [this senior banker]. How has that impacted your role and what do you think it does for the firm’s strategic direction? Lifestyle (only if call is progressing well): How would you contrast your lifestyle vs. your previous roles? Can you give me a picture of what a typical work week is like? What level of autonomy have you generally seen at your firm? How would you describe the overall culture of the firm and your group? What activities do you do outside of the firm together? Recruiting (only if call is progressing well): What is the current recruiting process or system at your firm? What sort of preparation would you recommend for someone interested in your position? Are there any specific materials you would recommend? Who are the key people involved in the process / would you recommend me to speak with anyone else? How would you recommend to best position myself to pursue an interview with your firm? Closing: Knowing what you know about me and my situation, do you have any general advice for navigating the recruiting process? [Regurgitate 1 or 2 things they said and comment on how it’s a very interesting insight] “I just wanted to thank you very much for the chance to speak with you. I've been looking forward to talking to you for quite some time and appreciate you taking the time for me. Would it be alright with you if I sent any follow ups if they arise?” Pick and choose your favorite 10-15 questions from the first few categories and organize them into your own document to prepare for the call. Don’t expect to get through all your questions (some people in finance talk for hours), but it’s always better to be over-prepared with questions as opposed to the call ending awkwardly. And make sure that at the 30 minute mark, you do a check for time. Remember, your goal is to make a positive impression and to get high-quality information. You do that by being polite and asking high-quality questions.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Although IRR and MoM often reign supreme as the most popular private equity return metrics, Free Cash Flow Yield is also a very powerful investment metric. Free cash flow is a great tool to use for case study interviews and for returns analyses. And free cash flow can be distributed in the form of carry or dividends, increasing the salary paid to private equity employees. Free Cash Flow Yield measures the amount of cash flow that an investor will be entitled to. It is mechanically similar to thinking about the dividend or earnings yield of a stock. A higher free cash flow yield is better because then the company is generating more cash and has more money to pay out dividends, pay down debt, and re-invest into the company. A lower free cash flow yield is worse because that means there is less cash available. Let’s calculate the yield of a potential investment from the perspective of a private equity firm. If you're interested in working for one of these private equity firms, you should look into our Private Equity Recruiting Course. To do this exercise, we need two components 1) the Free Cash Flow of the company and 2) the Total Equity Invested. The purpose of this particular analysis is to calculate the yield for an equity investor. Check out this worksheet, which forecasts FCF Yield of an investment for 5 years: http://bit.ly/PF-FCFYield Free Cash Flow Free Cash Flow is the real cash available to a company after paying out everything to support typical operations. That means we have to pay down all expenses, we have to pay tax, and we have to pay capital expenditures to keep the business going. We like Free Cash Flow as a metric because it tries to get to the truest picture of cash. In contrast, net income is a slippery rascal that can be heavily manipulated by accounting magic. EBITDA tries its best, but often ignores crucial items on the cash flow statement. Different industries will have slightly different definitions for Free Cash Flow, but I find that this is a pretty reasonable definition: Free Cash Flow Definition EBITDA Less: Taxes Less: Interest Less: Capex Less: Increase in NWC = Levered Free Cash Flow Note that because we are doing this from the perspective of an equity investor, we also deduct interest. We are investing in equity, so we only care about what is available to equity holders. If we were investing in the company’s debt or looking at the overall enterprise value, we would not subtract interest. If we don’t deduct interest here, we have Unlevered Free Cash Flow, which is relevant if we are looking at enterprise value. We deduct Capex and any Increases in NWC because those are real cash costs that the business must make. Free Cash Flow is the cash that is available to the equity holder. We may decide to reinvest the cash in the business, pay down debt, or even pay a dividend to ourselves for being such well-educated and attractive private equity people. The formula can differ based on the industry. Just remember that you’ll want to deduct any real cash costs of the business. In software for example, we’ll definitely want to deduct capitalized software costs. We also need to be especially careful to use the right metric of free cash flow when dealing with preferred securities. We will typically use Levered Free Cash Flow when analyzing the yield to preferred securities, as these preferred securities will be lower in seniority than debt. Equity Invested Now that we have Free Cash Flow, let’s compare that to the size of our investment. To illustrate this from a private equity perspective, we’ll need to make some transaction assumptions. Recall that Enterprise Value is essentially equal to the value of an acquired company. In order to get to our Equity Investment, we’ll want to deduct the company’s Net Debt. In the below example, the company has a 6.0x Net Debt EBITDA multiple. On an EBITDA of $50, this is equivalent to $300 of Net Debt. The Enterprise Value is $500, so our Equity Investment is $200. Note that this is a simple transaction where we are buying all of the equity. If there were other preferred securities, we would have to pay out those securities first. Free Cash Flow Yield The last thing we have to do is simply calculate Free Cash Flow / Equity Invested. We’ll want to divide for each of the years we have forecasted. This gives us a sense of how the company’s cash flow profile develops over time. I’ll say that there are no hard and fast rules on what a great FCF Yield is – it often depends on the goal and risk profile of the investor. Below, you can examine the financial forecast and FCF Yield calculation of a company. The company grows at a revenue of 10% and has an EBITDA margin of 50%. I assume other standard operating assumptions and for simplicity, assume that no debt is paid down. Here, we see that the FCF Yield goes from 10% in Year 1 to 17% in Year 5. This looks like a healthily growing business and it’s a good sign that the cumulative levered free cash flow we are generating becomes such a large proportion of our investment. The business is expected to generate $136mm in cash, which gives us pretty good downside protection for our investment. If our target IRR is a typical 20%, then it’s also a good thing that we’re getting so much cash flow. We’ll still likely get the majority of our proceeds from the eventual sale of the business (which is based on an EBITDA multiple), but this high teens FCF Yield ensures that we’ll be able to pay off a lot of debt. Conclusion In conclusion, you should complement your returns analyses by throwing in a FCF Yield calculation. I included FCF Yield in most of the investment committee memos I worked on in private equity. The issue with IRR and MoM is that they tend to be very sensitive to your exit assumptions and it’s very difficult to predict what kind of exit you’re getting in 5 years. FCF Yield helps us answer a very important question: how much cash am I actually getting from this company?

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview So one evening you’re casually scrolling through LinkedIn, dutifully trying to chart out the next couple years of your life. All of a sudden, you stumble upon a profile with a truly immaculate resume. Non-target. Goldman Sachs. Mega fund private equity. But one detail about them puzzles you. You see that they’ve decided to hide the location tag for all their jobs. You instinctively do a quick Google search for their name and check their PE firm’s website to confirm your darkest fear: they work at a remote satellite office. The Satellite Office A Satellite Office is any office that is not the Headquarters. Although firms typically centralize their operations in one location, most leading investment banks and private equity firms are large enough that they need multiple offices. Many candidates use this knowledge to their advantage in order to recruit for less competitive offices. Satellite offices often exist for a few key reasons: Industry: Firms want to be closer to a specific industry’s deal flow (Houston / Calgary for oil & gas, San Francisco for technology). Geography: Firms often want a geographic presence in key countries to establish their global footprint (e.g. bulge brackets setting up small shops in Toronto or Hong Kong). Talent: If the firm’s Headquarters is not in New York, they may still want to have a large office there in order to be closer to the finance talent. Senior Partners: Senior partners who have enough pull want to move back home or get tired of living in a big city (more common on the buy-side as you don’t need to service clients). Going to a satellite office is not a bad career choice in and of itself. I technically worked at a satellite office when I was a private equity associate and I would definitely re-do that same decision. The factor of geography is one of the most important things to consider when evaluating which investment banking offer to take. There are many extremely logical reasons to prefer a satellite office: Personal Preference: If you have a personal desire to be in a specific city, then that could obviously trump explicit career benefits. In my case, I really wanted to stay in New York, while our headquarters was in the Boston area. Industry Specialization: If you want to further your own career in a particular end-market / industry, then city really matters. It is honestly a lot harder trying to be a top technology investor if you’re in New York (and you’re more likely to work on uncool hardware technology… like routers and switches). Sometimes, the path less taken opens up more job opportunities down the road. It becomes more a question of specialization, but angling your career early on to be the super badass oil & gas person can be a great career move. Less Competition: It’s generally easier trying to sneak your way into a firm through a satellite office, especially if it’s in an unglamorous city. Satellite offices tend to have less rigid recruiting policies and less competition. Working in Manhattan is generally the most popular option and that leads to some interesting job market inefficiencies. For example, did you know that Salt Lake City, Utah is one of Goldman’s biggest offices? It’s actually a very popular option for people to start their careers (and then lateral out of…). Small Office Culture: Maybe being a super finance bro isn’t in the cards for you or you really liked the partner in a particular office. Culture at satellite offices tends to be a little less intense (though it heavily depends on the managing partner there). The Headquarters The Headquarters is the company’s main office. It’s where the key leadership and management sits. Some firms will have dual Headquarters (e.g. some European banks will have both New York and their European capital as their main offices). Nevertheless, the majority of North American investment banks are unsurprisingly headquartered in New York. New York is the largest financial center in the world and I think it makes a ton of sense to start your career in the firm’s Headquarters. At the investment bank level, I’d say that the majority of firms probably have 50%+ of their global analyst class at the Headquarters. Most satellite offices probably have between 2-10% of the remaining analyst class. I view the primary benefits of working at a firm’s Headquarters as the following: Senior Management: If you’re interested in developing a long-term career with a firm, developing a relationship with senior management becomes key. When it comes to office politics, face time becomes pretty important and you’ll want to frequently interface with the company’s key decision makers. Cross Functionality: A firm’s Headquarters will often have the greatest number of functions and the widest amount of industry coverage. If you’re interested in working with different teams, understanding how different functions operate, or potentially lateraling to different groups, being at the Headquarters can be super important. Deal Flow: Generally speaking, a firm’s Headquarters will tend to have stronger deal flow. This is typically a function of having the firm’s senior management present and likely being a more established office. Deal flow is probably more important than being exposed to any specific personnel and it can be worth positioning your career trajectory around. Recruiting: Generally speaking, recruiting tends to be very geography dependent. This isn’t specific to a Headquarters, but you should try to be in the office that is closest to your desired exit opportunities. For example, if you want to go to a hedge fund, it can be hugely beneficial to start out at a New York investment bank. If you want to do VC, you’d probably prefer to be in the Bay Area. I think this is generally a plus for Headquarters as most finance recruiting jobs are in New York. Unless you have a strong industry preference, I generally recommend that you start your career at the Headquarters. It tends to provide stronger network-building and work experience opportunities. That being said, as you continue your career, some very important trade-offs begin to emerge that make the decision much less clear. As we’ve discussed, there are very discernible benefits to working at a satellite office. And in some situations, life will strongly push you to be in certain geographies. At the end of the day, you need to make a decision that you’re comfortable with. And remember, you can always just hide your location on LinkedIn if things go awry.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Perhaps the most reliable way to both improve your financial modeling speed and to win the love of your parents is by optimizing your Excel quick access toolbar. As the 2015 record holder of Training the Street’s vaunted Excel formatting challenge, you can 100% trust me on the importance of this list. July 2, 2015 is often still regarded as an important day in Evercore and Ivey history. The Quick Access Toolbar is the customizable toolbar that sits at the top of your Excel window. The advantage of this Quick Access Toolbar is that using it can be significantly quicker than the native shortcuts. You toggle each of the custom commands by simply pressing ALT and then a number on the keyboard: ALT + 1 = Toggles first command… ALT + 2 = Toggles second command… If you aren’t already familiar, ALT keys allow you to quickly access different Microsoft Excel functions. When you press ALT, you can navigate through the Microsoft Excel interface by pressing a follow-up letter. This follow-up letter will be displayed in a black square. Yes, this is how people use Excel without using a mouse. You can learn the shortcut for each of the window panels and the subsequent commands. If you're looking to learn the technical essentials for a career in investment banking or corporate finance, you should check out our Valuation and Finance Starter Kit. Below, you can see that after we pressed ALT, we only need to press 2 to get to the font color change. Editing the Quick Access Toolbar To edit the quick access toolbar, FILE -> OPTIONS -> QUICK ACCESS TOOLBAR Use << REMOVE to get rid of the default garbage that was clearly selected by some foolish UI designer. Use ADD >> to add commands. You may need to switch the menu from “Popular Commands” to “All Commands”. The Optimal Quick Access Toolbar Our goal in customizing our quick access toolbar is to select commands that a) we frequently use and b) don’t have a good native Excel shortcut. Below are the commands that I was taught to use in my investment banking analyst training. Here are the commands you should have: Font Size (ALT + 1) Font Color (ALT + 2) Fill Color (ALT + 3) Borders (ALT + 4) More Borders… (ALT + 5) I’ll make special note that the Borders commands save an absurd amount of time. Borders are the most annoying damn thing in Excel because each cell has its own Border characteristics and Excel doesn’t have an intelligent way of interpreting what you want. My advice is to not touch borders at all until you’re done with the analysis because of how time consuming it is to re-do borders. Size and Properties… (ALT + 6) This command is very important if you’re editing charts, which is way more than you’d expect in banking. Although there are Excel plug-ins that can help cut down a lot of the work, plug-ins will still always be inherently slower than native Microsoft Excel most of the time. And as you switch firms, you’ll find that not everyone uses the same plug-ins, so it’s good to have these particular commands as part of your habits. If you're focused on becoming a better analyst, I'll also strongly recommend that you optimize your Powerpoint Quick Access Toolbar.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview I maintain the belief that work travel tends to be pretty bad. Some people like it because you get to live in nice accommodations and spend absurd amounts of money on planes, but in my experience, you’re almost always going to be busy during work travel. If you’re asked to go on the road, it’s because you’ll have to attend a meeting for the deal. This could be something like meeting with potential clients for a pitch or meeting with an engaged client to work on a CIM. The thing is, if you’re working on a deal, you’re more than likely going to be preparing materials for an upcoming meeting. That means that there’s a high chance that you’ll be turning comments on the flight, which almost instantaneously sucks the fun out of traveling. Depending on which office you're based out of, the amount you travel can fluctuate wildly. Plus, your other deals also won’t suddenly become quiet just because you need to travel. You’ll have to deal with all of your other workstreams even if you’re traveling for a different deal. Hours in investment banking are already tough, so adding the element of travel often makes things altogether more complicated. I’ve virtually never had the chance to explore a city I’ve visited for work because my schedule is always too jammed. If you want to learn the complete technical and interview skills to get a top banking offer, you should check out our Investment Banking Course. Traveling as an Investment Banking Analyst As an investment banking analyst, I actually did not travel very much. I find that most analysts generally only have to travel for live deals (IPO road show, sell-side process, etc.), which I would estimate happens on average once per quarter for each analyst. Analysts will work and support a number of different early-stage meetings, but oftentimes, it’s the Associate who will talk through the analysis at the meeting. I think this is the way it is for a number of reasons: Minimize # of Presenters: An investment banking deal team could consist of a Partner, MD, VP, Associate and Analyst. If it’s an important deal, it could be multiple Partners or MDs and multiple mid-level people. It can be clunky and awkward to bring 6-7 people to a meeting if the counterparty only has 2-3 top management people. Even when I was at an elite boutique, which are supposed to run leaner deal teams, I often found that analysts get excluded from meetings. If you’re pitching a private equity firm or hedge fund, you’re often just pitching the Partner and maybe one or two mid-level people. Analysts are Generally Less Polished: Although analysts could very well have the highest academic rigor out of the entire deal team, there’s a certain degree of polish and maturity that takes time for people to develop. Client-facing skills aren’t taught in school and if you’re solving to hire the smartest university students out there, there’s a decent chance they aren’t ultra-presentable yet. Analysts Contribute More by Being in the Office: An analyst’s highest utility and contribution to a team is going to be in preparing materials or putting together analyses. You can maximize your collective group’s utility by keeping the analyst at their desk and having the analyst produce materials for other projects. Banks Don’t Necessarily Care about Analyst Development: Analysts often have relatively short lifespans at banks, so banks don’t always need to invest in personnel development. You don’t necessarily need to give your analyst client exposure if they’re going to peace out to a PE firm in a year or two. Banks typically want to start building continuity and people skills at the associate level. For deal-specific work (i.e. excluding firm events, conferences and for on-campus recruiting), I personally only traveled outside of New York a handful of times. By virtue of being in New York, I was typically staffed on deals and companies primarily in Manhattan, which meant for me that most meetings were accessible by subway. Almost all of my clients either had an office in the NY area or would choose to hold meetings at my investment bank’s office. At most, you might be expected to walk through a model or answer questions about a particular analysis, but that sort of work is often relegated to calls. As an analyst, you might also help with administrative tasks like organizing rooms, making sure the Powerpoint is running properly, and physically carrying the decks to the meeting. I’m sure this tends to vary between different firms and groups, with smaller deal teams and firms leading to more client facing opportunities. But I think my experience was pretty representative of most elite boutiques and bulge brackets. Deal Team Traveling As you scale up the investment banking hierarchy, you’ll spend more and more of your time going to meetings. The business model of investment banking is inherently sales oriented. A Partner’s job is to go out and win business, which is accomplished by meeting with clients, pitching them on potential transactions, and helping them through the deal process. Face to face contact goes a long way when it comes to schmoozing clients. So Partners need to constantly be meeting with potential clients in order to fill the top of their deal pipeline. I would estimate that most Partners probably traveled once per week and that most Associates probably traveled once per month.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview If you’ve spent more than a few hours on an investment banking desk, you’ll know how much time you actually spend in Powerpoint. It’s honestly a little surprising. Excel is cool and has a much higher skill cap, but if you’re on a sell-side deal or if you’re the junior analyst on a project, you might spend significantly more of your time in Powerpoint. Just like in Excel, mastering the Quick Access Toolbar is a great way to improve your efficiency and save yourself precious time on the job. The Quick Access Toolbar is the customizable toolbar that sits at the top of the Powerpoint window. The advantage of this toolbar is that using it can be significantly quicker than the native shortcuts. You toggle each of the custom commands by simply pressing ALT and then a number on the keyboard: ALT + 1 = Toggles first command… ALT + 2 = Toggles second command… Pressing ALT allows you to quickly access different Microsoft Powerpoint functions. When you press ALT, you can navigate through the Microsoft Powerpoint interface by pressing a follow-up letter. This follow-up letter will be displayed in a black square. You can learn the shortcut for each of the window panels and the subsequent commands. If you're looking to learn the technical essentials for a career in investment banking or corporate finance, you should check out our Valuation and Finance Starter Kit. Editing the Quick Access Toolbar To edit the quick access toolbar, FILE -> OPTIONS -> QUICK ACCESS TOOLBAR Use << REMOVE to get rid of the default options. Use ADD >> to add commands. You may need to switch the menu from “Popular Commands” to “All Commands”. The Optimal Quick Access Toolbar Our goal in customizing our quick access toolbar is to select commands that a) we frequently use and b) don’t have a good native Powerpoint shortcut. Below are the commands that I was taught to use in my investment banking analyst training. Here are the commands you should have: Size and Position… Quickly edit the dimensions of the shape you’re editing with this tool. You can quickly and precisely edit the width / height of the shape. You can also check the important “Scale Height” and “Scale Width” percentages. Do you ever feel like one of your objects is bigger than another? Do you feel like certain objects are too pixelated or blown up? You want these %s to be close to 100% for them to look normal (typically 80 – 120% is fine). Set Transparent Color This is the biggest timesaving tool there is when dealing with logos. No need to open up a different photo editing software, just type Alt + 2 and click the color you want to make disappear. Crop Picture This is the second biggest time saver when dealing with logos and pictures. Easily crop photos to readjust what you’re trying to show. Align Objects The key difference between an amateur Powerpoint user and someone who’s gone through IB training is their ability to align objects. You want to make sure all of the different shapes you have on your slide are aligned or spaced properly. That means if there are shapes lined up in a row, the tops of the shapes are all at the exact same height. If you have multiple logos spaced throughout a slide, you want to make sure the distance between them is spaced evenly. Shape Width Shape Height Table Column Width Sometimes, you’ll have to deal with Powerpoint tables (as opposed to outputted Excel tables). In that case, the previous commands won’t always work and you’ll need to be editing “Table” dimensions. This is the quickest way to do so! Being good at Powerpoint is all about quickly formatting slides and having a good eye for design. It takes some time to develop a good eye, but with these tools, at least you'll be able to turn comments more quickly.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Perhaps one of the most frustrating and inefficient facets of investment banking is the concept of face time. Face time is time spent at your desk when you have no work to do. It’s non-productive and effectively wasted time. Face time is one of the biggest contributors to the crazy hours in investment banking. Face time occurs when you’re still at the office after normal working hours and you have no assigned tasks, but you still can’t leave. It is a relatively common thing to experience as an intern or analyst and it’s a key factor that can make investment banking feel so demoralizing. But it’s not a phenomenon that exists without reason. If you have a severe face time problem at your workplace, it’s likely because of how your firm or group is culturally run. You can try to determine a firm's culture when networking with people over coffee chats. Many senior bankers grew up in big face time organizations and simply have it instilled in them that face time is required to provide high-quality work to their clients. I view this as a toxic and ugly reason for face time to exist. Banks have worked hard to eliminate these kinds of working conditions. By the way, if you want to learn the technical and interview skills needed to get a top banking offer, you should check out our Investment Banking Course. Inevitable Causes of Face Time That being said, even with the advent of mildly improved office culture, I think it’s unlikely that face time will ever be completely removed from investment banking. Managers can do their best to minimize it, but I think there are always going to be fundamental personnel reasons for it to persist: Hierarchy: Most people want to impress their boss. Most people in investment banking are naturally pretty try hard and will want to prove to their boss that they work hard. This has a strong trickle-down effect – if your Partner is here, you can almost guarantee that your staffer is here and that all the other analysts are here. Iterative Work Leads to Sub-optimal Schedules: The nature of investment banking work can be incredibly iterative. Consider the typical work cycle: you take the first crack at a deck, then you send it to your associate. Then you get comments from the associate. You turn the comments and then you send it to your VP. Then you get comments from the VP. This continues a couple more times up the chain. When you combine the heavy iterations involved with a number of different projects, there’s bound to be a decent amount of time waiting around for other people to review things. Sales Roles Require Responsiveness: If you’re on a live deal with a client, you unfortunately might have to wait around in anticipation for a work stream or deliverable to come in, particularly if the client is in a different time zone. Investment banking is inherently a sales organization with tons of client service and showing up can be a large portion of the battle. Woody Allen famously said that 80% of success is just showing up. Lateral Competition: This is at its peak awfulness when you’re a summer intern, but if there’s a high level of competition in your group, it’s likely that people will also want to try to out-work each other and stay later than each other. This is very true if you guys are angling for a full-time offer, buy-side recommendation, or particular staffing. Dealing with Face Time Some people will say that only cruel or outdated firms will make you put up with face time. I’m here to tell you that a) that’s a very idealistic perspective or b) most investment banks are cruel and outdated, so you should just learn to deal with them. Many of these organizations are filled with extremely competitive, hard-working people who are eager to outshine each other. There are also moments when it might make sense to put in a little face time to make a good impression and avoid future unwanted work. Here are some tips to effectively deal with face time culture: Confirm With Your Associate that You Can Leave: Some analysts delude themselves into thinking they have to stay late because they don’t have a clear working relationship with their associate. Before you leave for the day, check with your associate or direct report if there’s anything else that needs to be done. Make sure there’s no work stream you’re forgetting about or that there’s a chance something might pop up within the next hour. Find out if things are due that night or in the coming days. Don’t Leave Before your Staffer: Some groups won’t have an overt issue with you leaving early. When you’re not working, they don’t want you to waste their time at the office. The thing is, you leaving before others is a signal that you have capacity. A simple solution is to befriend your staffer and not leave before them. Befriending your staffer is one of the key things you should do as a starting investment banking analyst. Know where they sit, when they do their checks, and try not to leave before them. If you have to leave before them, then try to do it after the other analysts have already left or embrace the fact that you might get staffed. Befriend Your Partner’s Admin to Plan Your Schedule: After the staffer, the most important person to befriend to understand your schedule’s line of sight is your Partner’s admin. Are they gone for the night? Are they on the road tomorrow meaning you can probably come in a little later? Your admin has direct access to this knowledge because they run your Partner’s schedule. Save yourself some unnecessary face time by clearly knowing when it’s totally good to leave the office. Some face time is undoubtedly going to be inevitable as an analyst. You’re paid well largely in part because of your ability to handle insurmountable amounts of pain. Rather than bemoan it, just do it wisely and deal with it gracefully.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Deciding between two investment banking offers can be one of the most stressful decisions in your career. Especially if it’s a choice you have to make in college. You know that the earlier the career decision, the more likely it is to alter the course of your life. You know that both firms could lead to wildly different job prospects, industry focuses, and recruiting outcomes. What’s more, there’s more than likely going to be the imminent threat of time pressure working against you. It’s possible you only have a few days (or hours) to decide. Of course, it’s an incredibly fortunate position to be in. You did it! You get to choose between multiple high-paying jobs! But for some reason, when you’re actually in that position, it doesn’t always feel very good. The first thing I always say is that recruiting decisions are super personal. You need to try to extricate other people’s opinions from the decision-making process, because you’re the only one who has to live with the decision. Your peers might “care” what you do, but they don’t actually care about how it impacts you. Making career decisions purely based on the opinions of others can set you up for a lot of grief. If you're trying to learn the skills needed to get a top banking offer, you can start preparing today with our Investment Banking Course. With that said, here are the main factors (in relative order) I think you should consider when deciding between investment banking offers, as well as some of the main questions to ask yourself. 1. Exit Opportunities Is the firm supportive of buy side recruiting? What is the firm’s track record of recruiting like? Particularly as an analyst, I think this is probably going be the most important factor to consider. I personally think it makes sense to be laser focused on buy side exit opportunities, because in general, people are trying to minimize their time spent in investment banking. At max, you’ll probably (hopefully) spend 2 years in banking and I have the belief that it’s your second finance job that has a stronger determination on your career. Buy side recruiting for analysts also occurs so early that you want to make sure you have all of the traditional success markers on your side. In a chaotic process, the traditionally better banks will tend to perform better because headhunters and firms don’t have to take as big of a risk to hire you. Where do past employees typically exit to (do your LinkedIn searching)? Would you be happy to go to those places? I always try to do diligent LinkedIn research to support any hunches I have on buy side recruiting or recruiting in general. I think the trailing 3-5 years is a good indication of how that group or firm has been doing recently. The reputations of firms can change pretty rapidly and I tend to trust pure empirical data of where firm alumni have gone to recently. If for example, you have your heart set on tech investing, make sure you can point to a specific person who has gone down that path. It’d be the best if you actually spoke with that person and understood the support and help from being at that firm. 2. Firm Prestige and Branding What is the firm’s reputation within finance? Does the firm have a history of success? Prestige is a funny thing because although it can be mocked as an explicit job criterion, it does tend to exist for a reason. I find that over time, the most prominent and prestigious banks still tend to be better offers. I was an analyst at Evercore, which I think is reputed to be a top elite boutique, and it’s my personal opinion that you will have overall better career options from a top bulge bracket group (i.e. a top group at Goldman or Morgan Stanley). I observed that the firm’s longstanding history of success and prestige generally opened more doors. I think at the outset of your career, it can be a better choice to go to firms with a long and successful history. Your firm’s reputation in finance is going to have a big impact on exit opportunities, deal flow, and ability to network and develop connections. What is the firm’s reputation outside of finance? If you leave finance, will the firm be helpful to your career? I hadn’t really considered the possibility I would leave finance back in college, but one big plus of bulge brackets is that they have a much stronger calling card outside of finance. The average person will recognize Goldman Sachs, JP Morgan and Morgan Stanley, but will give you a blank, slightly judgmental stare if you work at any of the elite boutiques. I think this tends to matter more if you want to go to corporate or do something more public facing. How much do you intrinsically care about traditional markers of success? Do you want to be at a top firm? Look, some people just want to work at the sickest firm and have people look up to them. I don’t think that’s a bad thing and if you think that’s you, it can be more helpful to be honest with yourself. If you want to chase the big brands and be a shining beacon of prestige, then don’t be ashamed to do it proudly. 3. Office and Industry What office will you be placed in? Is it the headquarters or a satellite office? I think there is generally a tangible benefit to being in a firm’s headquarters, which I’ve explained here. You get superior networking opportunities, get more face time with key decision makers, and likely have more lateral and industry opportunities. I would still take a superior offer in a satellite office vs. a declining bank’s headquarters, but it can help settle debates of similar quality firms. Will you be placed into a specific industry group? Similarly, if you want to angle your career to a specific industry or specialization, your banking group actually can matter quite a bit. There are certain industries like natural resources, real estate, and infrastructure that tend to be slightly more funneling. 4. Salary What salary will you be paid? I think salary isn’t the most important factor at the investment banking level, because unless you’re thinking about going to Centerview, the banking salary is going to be relatively similar across all firms. It varies between 10-20%, which in my opinion is not enough to sacrifice the other aforementioned benefits. I think it can be a good final deciding factor, but in truth, the real divergence comes in your subsequent jobs, so it’s not going to make a material difference on your net worth. 5. Culture What is the firm culture like? What are the hours going to be like? I think culture is a nice sweetener, but it’s my view that most investment banks are very similar and you’re going to get a relatively similar experience at the majority of places. It’s very difficult to try to select for a lifestyle-oriented firm because firm personnel changes quickly and how busy you are often depends on factors outside of your control (e.g. deal flow spikes up in a given year, the firm hires a new partner to your industry group). You’ll have your ups and your downs working with different teams and on different projects. As such, unless you’re deciding on a firm with a horrible sweatshop reputation (like Moelis or… that’s probably the worst one actually), you can probably rest assured knowing that your experience is going to be within one standard deviation of everyone else’s. I think this becomes a more important factor if you’re thinking about associate recruiting or thereafter. Then it becomes less of a 2 year thing you can grind through and more of a determinant of your potential lifespan. What is the attrition of the group? Attrition is a helpful factor that can indicate to you what the culture and morale is like in a certain group. Attrition is often a product of the remaining factors. It can indicate that places are extremely sweaty to work at, there’s not enough deal flow, or that the exit opportunities are not great. In some cases, it can indicate the exit opportunities are actually very good (i.e. a bunch of analysts leaving to go to hedge funds), so make sure you do your research behind the driving factors. I wouldn’t stress it on the highest importance, but if you see people are leaving to go to other investment banks, it’s probably kind of a crappy place to work. Summary In summary, here’s how I would personally rank the different factors when deciding between investment banks: Exit Opportunities Firm Prestige and Branding Office and Industry Salary Culture Once you've decided on your offer and are ready to hit the desk, there are a handful of strategic things to be aware of to succeed as an investment banking analyst.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview A career in finance is akin to a game of musical chairs. Whether they like it or not, people in finance tend to spend a lot of time either nervously sitting in their own chairs or waiting for the chance to squeeze someone else out of a better chair. This results in constant, industry-wide attrition – even at the most coveted and prestigious firms. I know plenty of people who started in satellite offices at regional firms and made a couple of well-timed moves to catapult the trajectory of their own career. Through careful positioning and informed decision making, they took full advantage of great lateral options and ended up at significantly better banks. Coming from Canada, I know plenty of Canadians in Toronto who worked at much smaller Canadian firms, switched to a bulge bracket in New York after a year, and then successfully pursued buy side recruiting the following year. And if you missed out on the private equity recruiting on-cycle timeline, your only option is the off-cycle. The point is that the value of recruiting intel is extremely high. When hiring for lateral positions, firms are more concerned about hiring people quickly. That’s because lateral positions typically open up if someone just left or if there’s a lot more work to go around than expected. The frantic nature of these lateral processes leads to great opportunities for well-positioned candidates. Here are the channels you have to keep tabs on in order to stay the most informed about new opportunities. Networking Newsletters New Funds New Senior Hires 1. Networking Let’s just reference this quickly because it’s super obvious. You need to have an extremely strong pulse on your own network and take diligent steps to keep expanding your network. Don't be afraid to talk to people across different geographies. It’s all about frequent touchpoints, finding reasons to keep in contact, and keeping people updated so you’re the first person they think of if an opportunity comes up. If you’re trying to lateral, you absolutely need to be doing the following things on a consistent basis: Keep in contact with all of your key professional contacts every 1-2 months: By key professional contacts, I mean whoever has some decision-making ability or who would be in the know about a relevant opening. So if you’re a college student, this means a 2nd-year investment banking analyst or hiring manager. If you’re an investment banking analyst, this could mean PE senior associate or VP. Try to talk to one new stranger per week that you don’t know over coffee or over the phone: Even when I wasn’t actively recruiting, I always found it to be a good idea to try to expand your network by meeting 1 new person a week. 1 new person per week is sustainable and not too draining. Check your LinkedIn every day to see which of your peers took new jobs: If you know people that moved firms, that means there could be an opening at their old job. It gives you a sense of which firms are hiring. 2. Newsletters There are some great, free finance daily newsletters out there that track specific personnel movement. Sometimes, I’m actually shocked that it’s free and publicly available, but I think it’s an amazing place to look for potential leads. Fortune’s Term Sheet for example has a section at the bottom of their daily newsletter that mentions people that were hired to new firms. This is a great source of free information. If someone joined a new firm, that means there’s more than likely going to be an opening at their old firm. This is the game of musical chairs. Every spot taken means a spot has opened up. If I was trying to lateral, I would look up the people on Term Sheet on LinkedIn and try to get in touch with someone from the firm they just left. Vlaad & Co. also runs a similar newsletter focused on the Canadian markets called Bill’s Buzz. 3. New Funds Similarly, any time a new fund is created, you know they need warm bodies to fill out their ranks. Every time you hear a new fund is being raised or has just launched, it’s worth reaching out to people at those firms to see if they’re hiring. You could again use Fortune’s Term Sheet, which explicitly breaks out which new funds were raised. Another way to efficiently do this is to set up Google alerts for various finance and funding news sites. If you search: site:[website.com] fund If you do this search, you’ll be able to see all of the new articles that news site post about funds being raised. For example, searching the following in Google will get you all of Techcrunch’s articles that mention funds. site:techcrunch.com fund You could repeat that with many different news sites, e.g. Wall Street Journal, NYTimes’ Dealbook, Bloomberg to keep easy tabs on the market. A great example of new funds hiring is a couple of years ago when Softbank started its legendary Vision Fund. I’m pretty sure Softbank saved a bunch of people’s careers by hiring them in the off-cycle or as lateral hires with nice titles. 4. New Senior Hires The last source of fresh new lateral jobs would be to follow new senior hires at firms. If a firm hires a new very senior person to lead a new practice, you can bet that they’ll bring in a bunch of new people as well. I found this to be an extremely reliable channel in investment banking, when hiring away the competition’s biggest rainmaker is extremely par for the course. Fortune’s Term Sheet does a good job of showing these hires, but it also helps to follow finance news pretty closely. One example from my own career is when Evercore hired Bill Anderson from Goldman Sachs to lead the Activism practice. When Bill was hired, Evercore ended up building a group from scratch and hired a bunch of new investment banking analysts and associates. I saw my analyst class size increase by 10%+ out of no-where. All in all, recruiting for lateral jobs is very much about grit and determination. It’s about identifying opportunities when others are too lazy to. Pure networking is important, but it’s a much better use of your time to reach out to people where you know there’s an opportunity. It’s not only about reaching out – it’s about reaching out to the right people.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview Without a doubt, one of the scariest aspects of a career in investment banking is the sheer brutality of the hours. It’s easy to be attracted to a career like banking because of how lucrative it is (even at the junior level), but sooner or later you’ll have to confront the grim reality: investment banking requires a lot of work. There’s no way around it – getting any deal done takes a crazy amount of firepower and energy. There are a large number of moving pieces in even the simplest of financial transactions. As such, mergers and acquisitions require large amounts of effort to complete and they are typically accompanied with tons of analysis. I do think, however that there tends to be a brutal exaggeration of investment banking hours. I personally don’t think anyone consistently averages 100 hours or even 90 hours over the course of months. There is a limit to the human soul and it breaks well before that point. I find that many bankers (mostly post-MBA associates and college students with <2 months of work experience) often view the hours they work as a vanity metric and are tempted to exaggerate about how much they work. It’s not necessarily intentional; the grim nights are what people remember and the memory of grim nights often leads us to believe that we’re working harder and longer than we really are. If you're an investment banker trying to break into private equity, you should really check out our Private Equity Recruiting Course. In this post, I’ll summarize observations from my own experience in banking and the experience of many of my peers. Distribution of Hours Worked I was an investment banking analyst at an elite boutique in New York for two years. I did my best to keep track of the hours I worked back then (using taxi and Seamless receipts as a reference). Below is how I would generally chart out my experience in investment banking. I think the median of my hours worked was around 70 hours per week. The vast majority of my weeks were spent in that 60 to 80 hour range. I would say that this distribution is probably true for most analysts and associates across most bulge brackets and elite boutiques. What 60 Hours per Week Looks Like 60 hours is tough, but it’s still pretty doable for most people. Many non-banking professions require you to do 60 hours of work (consulting, scrappy startups, some accounting firms). In fact, most private equity and hedge fund people probably average 60 hours. Although the buy side tends to be a much more grueling 60 hours, the point stands. 60 hours means you get home between 8-10pm (depending on your start time) and you have a few hours to yourself before you have to go to sleep. Considering you’d probably have to cook and eat dinner if you worked a normal job, you’re not losing that much free time compared to a 9-5 gig. You’re probably losing 1-2 hours of pure free time a day and you’ll have to do a little bit of work on the weekend. At 60 hours per week, you can still celebrate a glorious work-free Friday night. You can get off around 5-6 pm and not touch your laptop until Sunday. At 60 hours, you can have one full free day off and generally only have to do some light work on the other day. You might not get to choose exactly when that time is, but in general, this is survivable. You’ll see from the schedule that most people get into work around 10am in banking. This is the hidden gift of banking… the days can sometimes start super late. This is partially because people don’t always know when you stopped working the night before. You typically start way later than other professions. I’ve seen some banking groups have people stroll in at 11am or noon. What 80 Hours per Week Looks Like The difference between working 60 and 80 hours is pretty dramatic. And the difference is often based on whether you’re on a live deal or not. You can get to 60 hours just being on pitches and doing face time, but getting to 80 hours often means you have consistent deadlines or you’re pushing towards a deal announcement. I do think 80 hours is the point when your physique starts to noticeably erode. You have time to maybe go to the gym once or twice per week if you're willful. You’re generally getting less than 6 hours of sleep and you don’t have a single day off, so you almost never feel well rested. And let me tell you, the difference between 2 days off and 1 is already enormous. But the difference between 1 day off and 0 is even bigger. I’ll note that for me at least, I still always needed an hour or 30 minutes at least after I got home to decompress, watch TV or have a lonely drink. Regardless of the hour, even if I got home at 3am, I still generally needed some amount of time to myself, even if it was coming directly out of sleep. Secondly, I do think that Friday nights are still sacred. Even during super busy seasons, people do their best to honor Friday nights as best they can. Consistently Working 100 Hours is Torture I think people tend to gravitate to the 100 hours trope because 100 is a nice round number. 100 hours is not a nice round way of life. I can tell you that 100 hours is pure insanity, far past what the human psyche can typically withstand. It takes an extraordinary level of commitment to consistently work at this level, because this is well past the point where you start infringing on your sleep, your social relationships, the gym, eating, and basic hygiene. I probably only worked 100 hours when I was either in the peak of a live deal, I had two projects blowing up at the same time, or I was working on some cross-border awfulness. I would estimate that I probably had a 100 hour week only about once every few months. Quiet Periods Don’t Last Long On the other end of the spectrum, there still tends to be a floor to how much work you’ll have. Non-deal mode doesn't mean you get to completely slack off. The bittersweet part about having a chill week in banking is that you know in the back of your head that it won’t last. Not for long. If you consistently have less than 60 hours of work, that generally means you’re not on live deals and your group’s partners are about to start pitching. Partners try to operate their groups like efficient teams and if there’s a lot of excess capacity, they’ll take on additional projects. I found that whenever things were getting too quiet in the office, our firm’s partners would just ramp up the amount of pitching and client servicing they did. There would always be a steady amount of work to do. The weeks when you can most reliably get to 40-50 hours of work are around the holidays. I would say the week of Christmas, the week of the holiday party, and that last week in August when all of the senior people go on vacation are times when you can perceivably get to 40 hours. Second Year and First Year are Different Beasts Another important distinction is that your schedule can be completely different as an analyst in your first and second year. This is extremely bank dependent, but I’ve observed some groups having a very strong “pay your dues” culture, when the first years get grinded like crazy while the second years waltz around like aimless cherubs. I’ve also seen the reverse, where the second years are the only ones that can be trusted with the actual work to do and so they’re the ones who get grinded. This can be hard to predict and difficult to make career decisions around, but it’s a trend worth noticing. Summary In summary, I think you can generally expect most of your weeks in investment banking to be between 60 and 80 hours. I’d say 60 hours is doable, while 80 hours will really start to push you. I think anyone who says that they work 100 hours on average is probably lying.

If you're interested in breaking into finance, check out our Private Equity Course and Investment Banking Course, which help thousands of candidates land top jobs every year. Overview It’s relatively easy to categorize who the top investment banks in the world are. There are roughly 10 or so banks that consistently dominate the M&A and IPO market share. All of the leading bulge brackets and even many of the elite boutiques are enormous, worldwide, financial giants. These 10 or so banks consistently attract the brightest minds out of college and there’s little reason for a top finance prospect to go work for a meaningfully smaller bank. The world of private equity (and hedge funds) is not quite as simple. Private equity firms are relatively lean companies, which can make it difficult to climb the ranks at a well-established, traditional firm. Above the junior level, a lot of your compensation is going to be tied to how well your specific fund is doing, which can make recent fund performance much more important than brand name. If you're interested in working for one of these mega funds, you should check out our Private Equity Recruiting Course, which will teach you how to build a model, do a case study, and answer technical questions. Candidates with top investment banking experience and strong resumes will often be motivated to work for the mega funds. If you’re in college or not on the buyside, it’s unlikely that you can distinguish between, let alone name, more than five or so private equity firms. The opacity and secretive nature of private equity leads a lot of people to gravitate to the names they do know: the mega funds. I think it’s a little taboo to try and demarcate who the mega funds are, but in this article, we’re going to do so. We’re also going to talk about the key characteristics and considerations of working for a mega fund. For reference, our advisor Patrick Fong worked at TPG Capital, which per our below guidelines, we’d refer to as a mega fund. I’ve worked at Providence Equity and Silver Lake Partners, and despite them being some of the largest private equity firms in the industry, I would classify them more as tech / media specialist funds. Characteristics of Mega Funds It can be hard to set definitive parameters to define what a mega fund is, because it will invariably change over time. But over the past few decades, the mega funds have generally shared these traits: Mega Funds have the Most Amount of Money: The most obvious quantitative metric is perhaps the easiest to rely on. When discussing funds, we frequently use the metric Assets Under Management, which refers to the total amount of capital a private equity fund has raised since its inception. Assets Under Management is a cumulative figure, including all money raised by the firm. Mega funds have raised the most amount of money over time and have the most amount of capital to deploy. Mega Funds Invest in the Largest Companies and Assets: As a result, the main funds of private equity firms will typically buy the largest assets on the market. These private equity firms have the firepower to do deals that no one else can. They can purchase whole public companies and deploy billions of dollars at a time. Act as Diversified One-Stop Shop for LPs: One other defining trait of mega funds is that the firms invest in many different kinds of asset classes. The biggest funds don’t just invest in private equity, they invest in real estate, infrastructure, venture capital, etc. Part of the lifecycle of all asset managers is to keep raising more money and offering your investors every kind of investment opportunity. Asset managers generate a fee based on the size of their assets managed, so they are compelled to continue accumulating assets. For LPs, the idea is that instead of going to many different investment managers, you can just go to a single mega fund. Historically Receive Best Recruiting Options: In my opinion – from my mostly anecdotal observation – mega funds typically have better recruiting options than other firms. It’s not a surefire thing, but I think the combination of stronger brand, worldwide network, and institutional relationships will generally get you better recruiting options. For example, HBS and Stanford GSB will send MBA representatives to mega funds every single year, a luxury that many middle market firms do not have. It's hard to say that mega funds decisively have better recruiting options across the board though. There are other pure private equity firms that only invest in private equity (e.g. Hellman & Friedman, Advent International) that also have amazing recruiting options. Assets Under Management as a Filter To better categorize who the mega funds are, I filtered a list of private equity firms using two criteria: 1. Which firms have the most assets under management (i.e. who has raised the most amount of money over time)? Below is a rough list of the 20 largest private equity firms based on a Pitchbook screen conducted in 2019. This is not perfect data, but I think it’s sufficient for our purposes. I scrubbed the list for investment managers that barely focus on private equity and I know that some firms are out of order (e.g. TPG and Bain Capital are definitely higher because their credit firms were grouped under separate entities). From this list, it’s extremely clear who the biggest players are. There’s a huge AUM gap below $200B and there’s a huge gap below $80B. 2. Which firms are raising the most money in private equity? After our Pitchbook screen, I did a manual search of each firm to see how big the latest funds were being raised at. I did this because AUM includes all money raised since inception and across all asset classes. That is potentially overly favorable to older firms and firms that focus more on other asset classes. I looked at the firms’ latest “flagship funds”, i.e. the main vehicle that these firms would be investing out of. The largest players in private equity today have at least $15B in their flagship fund. This gives a sense for how the mega funds have been doing lately and helps us arrive at a truer definition for private equity mega funds. I used this filter as a reason to exclude asset managers that focus more on other asset classes, including Brookfield Asset Management (more focused on real estate and infrastructure) and Ares Management (more focused on credit). Here’s who I would personally categorize as mega funds: Blackstone Group Apollo Global Management Carlyle Group KKR & Co TPG Capital One thing to realize is that there are actually a handful of firms that have raised in excess of >$15B. I think it’s extremely impressive that an industry-focused fund like Silver Lake Partners can raise $18B, more than many of the mega funds. But alas, many of these firms stick to what they know and focus on private equity. These players don't act as one-stop yield shops, which I think is a defining characteristic of mega funds. One-Stop Yield Shops BCG published an article discussing the rise of “One-Stop Yield Shops”. Their list of the biggest firms is quite similar to who I just mentioned as mega funds. The notable difference is Bain Capital, who I’ve decided to exclude, as their AUM is meaningfully lower than the others and their latest private equity fund is quite a bit smaller. Considerations of Mega Funds There are a number of reasons to not want to work for a private equity mega fund. Despite having the biggest worldwide brand recognition and generally having better recruiting options, there are some things for you to consider before signing with one: Large Organizations Don’t Always Have Clear Advancement Opportunity: Many of the mega funds have been around for decades and have extremely crowded mid and upper-level leadership structures. As an associate at one of the biggest firms, you might have to work for several years before getting a title promotion (Blackstone notoriously has firm-wide title deflation). Many large organizations make you go to business school before even considering a promotion for you. Private equity jobs are extremely desirable and there is good reason for top leadership to never leave their spots. Firms Tend to be Slightly Older and More Traditional: Culturally speaking, these mega funds tend to be slightly more old school. Many require you to dress up in a suit and tie and consistently dress formally. Private Equity Practice May Not Always be the Firm’s Main Focus: At a mega fund, the CEO has to balance the growth and success of many different geographies and asset classes. It’s not just about private equity, it’s also about real estate, emerging markets, etc. As a result, private equity is not always in the strategic direction of the firm. The mega funds also do not necessarily have the highest returns. Correlation Between Fund Size and Grindy-Ness: I would say that mega funds typically have grindier cultures and environments. I’ve witnessed this while in investment banking staffed on private equity deals, while working at different private equity firms, and it seems to be an accepted consensus when talking to my peers. The large firms tend to attract (even more) intense people who have accepted a culture of extreme hard work. All things considered, there are great reasons why people end up coveting mega funds. They’re consistently great for your career and it’s unlikely any of them will be displaced any time soon. That being said, if you want to remain in private equity or want to work in a specific specialization, there are many more pure-play firms that could open more relevant doors. I also think that this career decision is quite different if you’re contemplating whether to just be an associate, or if you’re interested in climbing the ranks. A mega fund is even less attractive for someone who is trying to quickly advance to the MD or Partner level.