Carnegie Mellon Tepper GFA Recruiting Guide - BYU - Marriott ...


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Carnegie Mellon Tepper GFA Recruiting Guide - BYU - Marriott ...

  1. 1. Table of Contents Table of Contents.............................................................................................................................1 Introduction......................................................................................................................................2 Functional Overviews......................................................................................................................2 Sales & Trading...........................................................................................................................3 Investment Banking.....................................................................................................................6 Corporate Finance........................................................................................................................9 What Should I be Doing Now?.....................................................................................................14 Further Reading.........................................................................................................................14 What Comes Next?........................................................................................................................15 Appendix A: Selected Summer Internship Overviews..................................................................16 Banc of America Securities (BAS)............................................................................................16 Bear, Sterns, Inc.........................................................................................................................19 BNP Paribas...............................................................................................................................21 Campbell Soup Company..........................................................................................................23 Citibank......................................................................................................................................25 Commonwealth Capital Group, LLC.........................................................................................27 Cowen and Company.................................................................................................................30 Deutsche Asset Management (DeAM)......................................................................................31 Deutsche Asset Management (DeAM)......................................................................................33 Deutsche Bank- Global Markets................................................................................................35 Deutsche Bank- Global Markets, London.................................................................................36 Deutsche Bank- Investment Banking.........................................................................................38 Deutsche Bank – Global Markets..............................................................................................39 The Dow Chemical Company - Treasury Department..............................................................42 The Dow Chemical Company - Treasury..................................................................................45 The Dow Chemical Company – Business Finance....................................................................47 The Dow Chemical Company – Business Unit Finance............................................................50 Fisher Scientific.........................................................................................................................51 IBM............................................................................................................................................54 JPMorgan Securities, Inc...........................................................................................................57 KLA-Tencor...............................................................................................................................58 KLA-Tencor...............................................................................................................................60 Merrill Lynch & Co, Inc............................................................................................................62 Pfizer..........................................................................................................................................63 PNC Advisors............................................................................................................................66 UBS Securities...........................................................................................................................68
  2. 2. Introduction Members of the Graduate Finance Association: Welcome. It is with great pleasure that we introduce the 2006 – 2007 GFA Recruiting Guide to the incoming Tepper MBA and MSCF classes. This Recruiting Guide represents the collective wisdom of Tepper’s returning finance interns, based on the formidable experience and success they have enjoyed during their first year internships. It is a goal of the GFA to ensure that the placement success of Tepper students continues to grow with each successive class. The Recruiting Guide is a tool provided to help you begin. The Guide will lay the foundation for your finance internship search from day one. From basic industry overviews to tips on networking and resume preparation to detailed behavioral and technical practice interview questions, the Recruiting Guide will help you become prepared. In conjunction with the GFA’s extensive mentor program, the Guide will provide the tools necessary for each of you to successfully compete against students from the world’s top finance business programs. In these highly competitive fields, preparation is of the utmost importance, and yours has already begun. Logistically, the content of this Guide will be delivered in steps over the next few months, as you each reach milestones in your internship search. First, we have provided industry overviews, internship profiles, and recommended books and publications you should be reading. Later on, we will provide advice on informational interviews, resumes, and networking dos and don’ts. Together with the GFA Mentor Program and your own commitment to preparation, this Guide will equip you with the information necessary for any and all finance interviews. The GFA Recruiting Guide was made possible by the hard work of many current GFA members. If you really want to secure these internships (and careers), a thorough understanding of the material in this guide is a necessity. Tepper has some of the best finance professors in the world, and we believe that students will find the finance education they receive at Tepper is truly world- class. However, being taught by the best does not guarantee a great job or a career. Students also need intense preparation aimed at job/internship search. This is why GFA exists. The Graduate Finance Association – through you, its members – is helping complete the picture by guiding you in this job searching process. Best of luck to you all, and here’s to a successful year. Warm regards, Pauline Grinberg Wai Chan President Editor-in-Chief Functional Overviews Following are basic overviews of Sales & Trading, Investment Banking, and Corporate Finance designed to introduce you to the information you’ll need to understand in order to take part in GFA recruiting events and to successfully start the finance internship search. While these overviews are intended to provide you with a basic foundation of knowledge about finance careers, please remember that there is much more to learn about jobs in finance.
  3. 3. Sales & Trading What is Sales & Trading? In one word: liquidity. The Sales & Trading division of an investment bank provides its clients with liquidity in a number of financial products. Clients themselves come in all shapes and sizes and can be broken down into four main groups: public and private corporations (corporates), hedge funds, mutual funds (also called real-money, a somewhat outdated term), and other banks. Each client has different interests and needs. There are a few major categories (though this is not an exhaustive list): hedging, speculation, and arbitrage. Some may want to hedge1 a particular exposure while others are speculating, or taking a calculated one-sided position to make profits. Arbitrageurs attempt to exploit mis-pricings in the market for a nearly risk-free profit. Regardless of the type of client or the particular interest, each client needs the ability to execute financial transactions and providing that liquidity is the business of a Sales & Trading division. Sales & Trading divisions act as central market places for financial products and are constantly evolving to better meet the needs of its clients in any variety of financial transaction. What are the different roles encompassed in Sales & Trading? Sales – A salesperson is the link between the investment bank and the client. The salesperson’s job is to constantly communicate with and deliver the bank to the client by providing timely and relevant research, market opinions and commentary, flow reports, and trading ideas, to name a few. To add value, a salesperson must be an ideas generator and advisor to clients. A salesperson generally covers one type of client (hedge funds, for example) in a certain broader area, like interest rates, giving a salesperson a wide variety of products in which to be knowledgeable. Trading – There are two general categorizations of a trader: a market maker, or a proprietary trader. Both types of traders generally focus on a narrow group of products, like interest rate swaps. The market maker will provide markets in these products. They make money for the bank by buying on the bid and selling on the offer2, thereby capturing the spread.3 Proprietary, or “prop”, trading involves using the bank’s money to take a position in the market based on the trader’s expectations for the market. While banks will almost always have dedicated groups of proprietary traders, many of the market makers will also be performing some level of prop trading. Traders constantly face decisions about what risks to take and what risks to hedge. Structuring – Structuring is a growing field that creates, models, and prices tailored financial products. This work is generally project based. Structurers arrive at the office later, but they also stay later. Structurers commonly present new ideas and new products to clients. 1 Hedging: This is the term used for eliminating (or more realistically, reducing) risks associated with holding a position. For example, if an investor holds a US Treasury bond, the major risk the investor faces is that of rising interest rates, which act to decrease the value of the bond. There are a variety of ways that an investor could protect against, or hedge, this risk. 2 Bid and Offer: Generally speaking, a market maker will provide two prices for a given security; the levels at which he is willing to buy and sell that security. The price he is willing to buy at (the bid) is always lower than the price he is willing to sell at (the offer, or ask). 3 Spread: In this context, the spread is the difference between a market maker’s buy (bid) and sell (offer) price, and is what he makes on everyday transactions.
  4. 4. Research/Strategy – This field can range from long term equity research to more specific, short- term strategies aimed at specific trading ideas. Most strategists sit on the trading floor and are an integral part of servicing clients by providing expert opinions on a range of issues affecting the markets. This is only a sampling of the most common roles that are encompassed in the “Sales & Trading” title. However, this is not a complete list as many find other niches and cross- functional roles at banks. What products are traded? The main organizational division is between equities and fixed income. However, this division is becoming less formalized as some banks are integrating these two divisions. • Fixed Income – Most banks divide their fixed income divisions into three categories: rates, credit, and foreign exchange and commodities. • Rates – This group deals with products driven by interest rates, mainly government securities like treasuries and agency notes, bills and bonds as well as mortgage-backed securities (MBS). • Credit – The credit group deals with corporate bonds whose value is driven by the credit-worthiness of the corporate issuer and is further broken down into investment grade and high yield credit. • Foreign Exchange and Commodities – As you might expect, this group’s title is a bit more self-explanatory. • Equities – The equities business is divided broadly into cash, or traditional stock trading, and equity derivatives, consisting mainly of options. Again, this organization and structure is not necessarily the same at every bank. There are many groups that cross barriers, such as emerging markets (EM), and still others that are new and not covered by any one group. What does an intern in Sales & Trading do? Due to a lack of licensing, expertise, and experience, a Sales & Trading intern will not actually sell anything to clients or trade any sizable, live positions. So what exactly will you do over the summer? Experiences vary widely based on your experience and abilities, the product and function of the desk, and the desk’s needs. Activities can be more long-term projects or shorter- term, day-to-day tasks. Answering phones, creating databases to store trades and positions, strategic research, giving a sales pitch to the sales team, automating spreadsheets, watching positions, and preparing trade ideas represent just a few examples. Some grunt work and light hazing such as getting coffee, ordering lunch, and getting copies is still a part of the job. While this is not always the most exciting work, it often represents your first opportunity to show attention to detail and everybody has done it at one time or another. What skills do I need? There really isn’t one specific type of person that succeeds in Sales & Trading because of the
  5. 5. great diversity in functions. People’s backgrounds vary greatly. The one universal quality found is a strong interest in finance and the financial markets. Beyond that, competitiveness, intelligence, quantitative skills, people skills, and entrepreneurship are just a sampling of other traits that one might find on the Street. Traders must like taking risk and be able to handle the stress of those risks. They are also usually focused on a specific area or group of products. Salespeople, on the other hand, usually have a more high-level understanding and general knowledge across product groups. They must enjoy working with clients to manage relationships and convey information about market conditions and investment opportunities. Structurers enjoy creative project based work. Research requires an interest in becoming an expert in a specific industry sector or area. Those in that role must be able to convey important information both verbally and in written reports. How can I get a Sales & Trading job on the Street? We will get further into this in later meetings, but you should immediately start reading the Wall Street Journal if you do not already (especially Section C). Pay attention to news on specific markets and products and think about what forces drive them. Work on your resume so that is ready long before informational interviews start. Lastly, attend all GFA meetings and Investment Banking presentations on campus.
  6. 6. Investment Banking What is Investment Banking4? Investment bankers advise companies on financial matters including capital structure, securities issuance, and mergers and acquisitions. Investment banks are divided into product groups and coverage groups. Product groups execute one specific type of transaction for companies across industries. Product groups include Equity Capital Markets (ECM), Debt Capital Markets (DCM), Syndicated and Leveraged Finance (SLF or Lev Fin), and Mergers and Acquisitions (M&A). Coverage groups pitch deals to companies in a specific industry group. Coverage groups also execute transactions in conjunction with product group partners. For example, a deal team for a sell-side5 M&A transaction may include a Managing Director from the coverage group who maintains the firm’s relationship with the client, a vice president from M&A to provide execution expertise, and an Associate and Analyst from the coverage group to perform most of the execution, such as financial modeling, document drafting, preparation and maintenance of the buyer log6, and assembly of the data room7 for due diligence8. Types of investment banks Full service investment banks are clustered in New York City. These include the large pure-play investment banks9 (Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch), financial supermarket money-center banks (JPMorgan, Citigroup, Bank of America), and large foreign banks, (Deutsche Bank, UBS, increasingly HSBC). All of these firms hire large classes of Summer Associates and have structured summer programs. There are smaller investment banks in New York with summer programs. Two notable names are SG Cowen and Houlihan-Lokey. Regional investment banks also often have summer positions. If you are interested in investment banking, but not New York, look into FBR, AG Edwards and others. Regional firms generally work with smaller clients, but the skill set is basically the same. The Associate position Graduating MBA students are offered the position of Associate. First year MBA students are offered the position of Summer Associate. There are four levels on the investment banking ladder: the lowest is Analyst, followed by Associate, Vice President and Managing Director in 4 Within investment banks, the investment banking function is called “corporate finance”. This should not be confused with what MBA students call corporate finance, which is working in the finance function of a corporation. 5 Sell-side: The investment bankers are advising the seller of a business. This will typically include an auction process where potential buyers are invited to submit sealed bids. 6 Buyer log: List of potential buyers with history of contact and interest level. 7 Data room: Physical or virtual location of all data available to the potential acquirer of a company. 8 Due diligence: The process through which potential buyers review all available information about the company they are seeking to acquire. 9 Pure –play investment banks are not attached to large money-center banks.
  7. 7. increasing level of seniority. Analysts do not have MBA degrees and typically join the firm directly from undergrad. Associates are either MBAs who joined the firm after business school or former Analysts who have been promoted (they are known as “A-to-A’s”). Associates are responsible for deal execution and the preparation of pitch books and books for meetings. Associates are responsible for making sure that the Analyst’s work is correct and may work on projects with no analyst, in which case the Associate is responsible for financial modeling and page creation, and must make sure that his or her own work is correct. In this business, attention to detail is extremely important. The lifestyle Investment bankers, especially Associates, spend tremendous amounts of time in the office. It is not unusual for junior bankers to be at their desks past 2 AM. All-nighters happen occasionally. At bulge bracket banks in New York, Saturday and Sunday are workdays just like any other day of the week. When out of the office, bankers are beholden to their blackberries and their voicemail. As a junior banker, your schedule will be largely unpredictable. It is not uncommon to have no idea when you will be able to leave the office on a given night. The demanding work schedule is the result of demanding clients. Investment bankers are paid big fees for the work they do, so clients expect tremendous amounts of work. As an Associate, you will often find yourself waiting in the office for comments on your work from a senior banker. You will then have to “turn” these comments by the next morning. This can be very aggravating as there is nothing you can do but wait and senior bankers often have limited regard for your sleep schedule. Generally speaking, people in product groups other than M&A have slightly more balanced lifestyles than bankers in coverage groups. However, all investment banking hours are demanding. Why would someone want to do this? Investment banking is fundamentally a hard job. People who are attracted to the field enjoy the variety of work, the fast pace and the exceptionally good compensation. First year associates at bulge bracket banks have the opportunity to make total compensation approaching $200,000 and the pay increases rapidly as one moves up the scale. High producing Managing Directors make several million dollars per year. In addition, the job is entrepreneurial and offers the opportunity to work on lots of projects simultaneously. There is a tremendous amount of information to learn, so it is attractive to people that like to be slightly out of their comfort zone. Generally, investment bankers tend to be highly motivated and very hard working. The recruiting process The most difficult part about getting an investment banking internship is getting an interview. Not all banks recruit at Tepper, so you will need to establish your own channels of communication and become proficient in networking. Start to network by creating a list of anyone you know that works for an investment bank. Communicate via email and try to set up individual meetings in October. Build a relationship with people at that bank. Once you meet one person, try to have him or her introduce you to others. No one wants to stick his or her neck out for you. You need to build a network of support and make sure everyone you meet knows
  8. 8. that you have talked to other people at the bank. Once you get into the process, you will have a first-round of interviews that will be followed, if you are successful, by a final round of interviews, often called a “superday”. Your superday will feature 3 to 5 interviews that last between 30 and 45 minutes each. These interviews will be difficult. You will be asked standard behavioral questions as well as technical corporate finance and accounting questions. Your answers will need to be smooth and correct. The GFA will provide supplemental materials to help you prepare for these interviews as the interview season approaches. Long-term career options Not everyone who starts out as an Associate in investment banking becomes a Managing Director. Junior bankers develop highly transferable skills that often lead to positions in private equity, business development, corporate finance and treasury roles at large corporations, and hedge funds.
  9. 9. Corporate Finance What is Corporate Finance? “Corporate finance” is an umbrella term for different finance-related positions that exist within non-financial services industry businesses. Because finance pervades every aspect of business, playing both supporting and leading roles at different times, positions in corporate finance are numerous and highly diverse. If you take away anything from this section of the Recruiting Guide, it should be that no two corporate finance positions are the same! Understanding and appreciating this is the key to gathering the information necessary to determine if corporate finance is right for you. Related to this point, it is important to emphasize that corporate finance professionals are generally much more involved in running and growing a business than are financial services professionals. This is a distinction that everyone contemplating a career in finance should consider in the light of their personal interests and goals. What are the different corporate finance roles? In general terms, corporate finance professionals evaluate and manage the money associated with their company’s businesses. This section provides a basic overview of the core set of functional duties of a corporate finance professional according to convention. The areas discussed are business unit, treasury, controller, audit, mergers and acquisitions, and strategy. Keep in mind that this list is not complete, and companies might refer to areas using different names. Business Unit—Analysts working in a business unit will generally work on cross-functional teams that focus on a common project or area. Duties involve determining financing needs, analyzing capital budgeting projects, long-range financial planning, analyzing possible acquisitions and asset sales, analyzing competitors, implementing financial plans, and monthly financial projecting and reporting. In a business unit, finance professionals must be able to analyze and understand their unit’s performance and communicate stories of success, failure, and risk to upper-management. Finance employees are affected by and must understand how their team manages relationships with supply-chain, marketing, R&D, sales, etc. Finance employees in business units (more so than in the other areas listed below) are more likely to work closely with employees in non- finance functions. Treasury—Treasury departments are involved in financial planning, raising funds, cash management, acquiring and disposing of assets, and identifying and hedging risk for the company as a whole. While experienced professionals in treasury spend time on setting strategy for the department and managing relationships with investment banks, rating agencies, analysts, and investors; new analysts in treasury will work on the details of individual areas such as credit risk, pension management, foreign exchange, debt management, leases, etc. Controller—Duties involve financial planning, accounting, financial reporting and cost analysis. Analysts will get involved in property, revenue, benefits, derivatives, lease and joint interest accounting. They may need to develop forecasting models to project revenues and costs and may be called on to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues or interface with auditors. This job is very accounting-
  10. 10. intensive. Internal Audit—Audit positions generally require a lot of travel. Employees visit company locations to test systems and processes to make sure that they are in sync with what has been reported to headquarters. Mergers & Acquisitions (M&A)—Companies vary a lot in this area, as some companies and industries are involved in a lot of M&A activity, while others are not. M&A analysts will be involved in identifying and evaluating targets for acquisition, and working with other groups (treasury, legal, investment banks, etc.) to discuss and negotiate deal terms. Strategy—Companies vary a lot in this area as well, in terms of what role strategy positions play and where they are located within the company. Some companies have finance positions within business units that are devoted to evaluating and setting strategy for their business units, while others may have separate strategy departments. Strategy finance positions step back from the day-to-day management and think about where the company should go in the future, evaluate how best to get there, and ensure that business plans adhere to strategy over time. In some way or another, all finance employees influence strategy, but there is a need for oversight from the top and from unbiased positions in this area to create and maintain a company’s competitive advantage. How do these positions vary by company? Even more important than understanding these generic corporate finance roles is to understand how companies think about finance (what and who drives their business), how they organize their positions, how they develop the careers of their employees, and finally—how big are the companies and what is the nature of their industry. Some companies rely upon certain areas of finance more than others, and it is important to understand this when talking to companies. The best way to determine what kind of environment you want to work in is to hear what people have to say about the companies they work for. That in mind, it will be helpful to note the following.
  11. 11. The role finance plays in the company makes a difference. The drivers of the business of the company—and business unit—you work for (finance, marketing, technology, R&D, etc.) will affect the type of work you will be doing in any of these finance roles, and more for some than for others. For example, a finance position in a business unit whose success is driven by marketing might look more like a marketing position than a finance position. There are finance professionals that would like this, and there are those that would not. Therefore, it is important to pay attention to how finance jobs may differ in this way. It is up to you to ask about this and try to get a sense of the differences between companies and industries. You might find that you care about how differences affect what you are doing, and you might find that you do not. But regardless, it is good to find out so that you can make an informed decision. How companies organize their finance positions makes a difference. In addition to there being so many types of finance positions, companies and company divisions organize the responsibilities of finance professionals in different ways—sometimes in ways dictated by convention, but other times according to the company’s own needs or the business relationships/politics that exist within the business. For these stated reasons, determining the characteristics of a certain finance position—and beyond that, applying for the job—can be extremely confusing! So, once again: ask questions. How (and whether) companies facilitate career development makes a difference. Because corporate finance roles differ so much from one to the next, a single company can offer one person a huge number of different work experiences and opportunities—without ever leaving the finance function. Most finance professionals want to be able to move around and experience different jobs during their careers, but not all companies facilitate this for their employees. Therefore, it is important to do your research and find out how people move around the company and what are the benefits and costs of doing so. Keep in mind that it is costly for a company to allow for a lot of flexibility in terms of employee mobility, but at the same time allowing that flexibility enables them to keep their employees happy. And after staying with the company for many years, long-term employees that have experience with several areas of finance will be better able to add value to the company. Some questions to ask on this topic are: • Does the company have a rotational program? • Is it highly structured or unstructured (there are pros and cons to both)? • Do companies offer training and what kind? • How easy is it to move from one position to another? • Do managers help new employees move? • Are internal moves handled formally (by application/interview) or informally? • How easy is it to move outside the finance function (if interested for long-term)? Company size and industry make a difference. Finally, a company’s size and its industry have a huge impact on what its corporate finance professionals do. As an extreme example, if you are working as part of a company of 50 people
  12. 12. —you might be working in all finance functions. If the company has 30,000 employees, there could be 20 first year analysts working just in a treasury function. Again—there are pros and cons to both, so it is important to keep asking questions to see what type of environment is best for you and your development. What skills do I need? The skills required for corporate finance vary from position to position. A few necessary for all are: • Clear and concise communication skills • The ability to persuade • Solid Excel skills • Good attention to detail & organizational skills • Good public speaking skills • Comfort with numbers • Comfort with making decisions when information is not complete • Ability to work well with others Where to start If you think you might be interested in corporate finance, the best way to start your job search is by talking. Contact anyone that has some experience, ask lots of questions, and then ask for more people to talk to. This will help you gain enough information to narrow your focus then ask even better questions. It might sound absurd, but these jobs can take on so many different forms that listening to people’s own stories is the best way to find out what you want, where to find what you want, and how best to position yourself to get it. You will likely find that most people you talk to about corporate finance careers will give you the same words of advice: talk to more people. This Recruiting Guide will provide you with the same piece of advice. Talk to people, ask questions, and ask for references to more people. There is no adequate substitute for the value of a good conversation with someone that is in the job you want to learn more about and potentially apply for. The information that you can get will be invaluable to you in your job search and interview process, both while in business school as well as afterwards. The easiest way to do this is to begin at school—all of your fellow students are there to help you learn. Talk to them. Call up alumni and see what they have to say about their companies and positions. Ask them what they like, don’t like, what surprises them, etc. At the end of the conversation, it’s always best to ask them if they can refer you to someone else. You can never learn too much. And of course, if you are interested in corporate finance, please attend the GFA Corporate Finance mentoring meetings. Long-term career options Generally people interested in corporate finance are either aspiring to be a general manager, VP Finance of a business unit, Treasurer, Controller, or CFO. Depending upon the goal, it may or may not be important for you to spend time in certain areas of corporate finance. For example, a CFO must have a solid understanding of both business unit finance and also corporate areas like the treasury and controller. A general manager managing a business unit might not have to have expertise in corporate areas. You will learn more about what is important to you by talking to
  13. 13. people and asking about their experiences. Also, it should be noted that corporate finance professionals with experience from highly regarded and well-known finance organizations (e.g. Fortune 50 firms) are generally in high demand by smaller, higher growth organizations.
  14. 14. What Should I be Doing Now? • Read the Wall Street Journal every day. This is an incredibly useful way to begin to understand financial services and corporate finance. • Rewrite your resume. The COC has many resources available, and guidance from the GFA is forthcoming. Opportunities to “drop” your resume may come without warning over the next several months. You don’t want to have to choose between submitting an inferior resume or missing the deadline altogether. It is essential to have a newly developed resume ready as soon as possible. • Attend the corporate presentations. This is the best way to learn about particular jobs and organizations. Here is a sampling of companies that are currently signed up to give presentations for finance internships during the month of September (see EASE for more details):  United Technologies  Bank of America  Campbell Soup Company  PNC Financial Services  Citigroup  Federal Reserve Bank of  M&T Bank New York  First Data Corporation  UBS  Morgan Stanley  Barclay’s Capital  BNP Paribas  Hewlett Packard  Goodyear Tire & Rubber  Union Pacific Railroad Company  The Dow Chemical Company  IBM  KLA-Tencor  Merck  Texas Instruments • Read relevant books (see below). • Do not contact finance professionals at this time. Guidance on networking is coming soon. • Join the GFA!! Further Reading • Liar’s Poker: Rising Through the Wreckage of Wall Street, Michael Lewis • When Genius Failed: the Rise and Fall of Long Term Capital Management, Roger Lowenstein • F.I.A.S.C.O.: The Inside Story of a Wall Street Trader, Frank Partnoy • The Money Culture, Michael Lewis • The Predator’s Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders, Connie Bruck • Barbarians at the Gate: The Fall of RJR Nabisco, Bryan Burrough and John Helyar • Merchants of Debt: KKR and the Mortgaging of American Business, George Anders • The New Market Wizards: Conversations with America’s Top Traders, Jack D. Schwager • Infectious Greed, Frank Partnoy • The Vault Guides • Risk Magazine • The Economist
  15. 15. Finance Texts • Options, Futures, and Other Derivatives, John C. Hull • Principles of Corporate Finance, Brealey & Myers • The Frank J. Fabozzi Series What Comes Next? This guide and binder are designed to form the foundation of the GFA’s first year recruiting efforts, so make sure to keep it handy if you plan to pursue a finance-related internship. As the first two minis progress, the GFA will issue additions to this guide that will cover: • Resume Writing • Networking • Overviews of Investment Banking, Sales & Trading, and Corporate Finance interviewing, including more in-depth schedules • A collection of potential interview questions You will be able to insert those new sections into this binder for easy reference.
  16. 16. Appendix A: Selected Summer Internship Overviews Banc of America Securities (BAS) Patrick Scully, MBA class of 2006 Global Commercial & Investment Banking Division, Consumer Retail Investment Banking Group - Chicago Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. My resume was submitted to BAS through a family connection with a CEO whom BAS has a good relationship via an MD-interview with a VP was very technical in nature and revolved around public/private comps, DCF, FCF and LBO valuation. Two weeks later I was asked to fly to Chicago for a day of interviews. I was given 5 half-hour interviews. Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. The biggest help was the TTS. Absolutely need to memorize that information. The B-School Jobs black-book was also invaluable. Finally, read the WSJ every day for the previous couple of weeks and have general commentary on recent deals, macroeconomic and political happenings. Finally, check out TheDeal or other similar resources to have an understanding of recent transactions the bank has announced/leaked. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). Associate- graduated from Chicago and initially started in the LevFin product group. Absolutely brilliant with a tough demeanor – will be VP within the next year. Of Pakistani linage, with an uncanny ability to always ask the most pertinent and therefore generally most difficult question. Interview: Q: “OK, let’s skip the technical… Having only a single year of b-school, and no financial background, what do you possibly think you can bring to the table?” Repeated multiple times in different language – eventually he walked out of the interview early, obviously unsatisfied with my answers. Stress interview. Associate - coming from IT consulting (Accenture?) and a good guy to work with. Loves the work and is viewed favorably by management. Interview: After basic introductory questions: Q: “What do you think you will be doing here?” A: “Creation of marketing material (pitches), public/trading comp, accretion/dilution and DCF/FCF/LBO analysis, brainstorming of corp. fin. ideas, due diligence and accompanying bankers on sales calls.” Q: “Yep, that’s it. Except you probably wont have any client interaction until you’ve been here a couple of year. What questions do you have for me?”
  17. 17. Behavior interview with a focus on why he decided on banking and about his new baby. Being able to speak to what they do is key. MD - Late 40’s and a nice woman. Interview was behavioral with basic questions. Make sure you understand the different between commercial and investment banking. Principal - Interview consisted of him lecturing me on the difficulty of the position (hours) and his taking of several calls that appeared to regard an active deal. I listened (both his talking to me and on the phone), shook his hand and left for the next interview. VP - Initially started in S&T and made the switch to IB. David is a tough manager whom prefers front-loading assignments. David’s interview (over lunch) was pressed for time - he said he had other interviews to conduct that day. He encouraged me to look elsewhere (possibly a Tech. group with some other bank) which he felt I was better positioned for with my Consulting Tech. background. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. If not interviewing in NY, place emphasis on why you prefer the satellite office’s location. Make sure you understand the group’s clientele and why you wish to work there. Ex: C&R – “I like clients whose products are tangible.” – give examples. Description of your internship: Briefly outline your role for the summer. As multiple associates were out for various personal and work related reasons, the summer associates were assigned full-time roles instead of the usual shadowing of a senior associate. We would be assigned projects with complementing analysts. Briefly outline your actual day-to-day activities. Arrive at 9am Lunch at noon Day doesn’t really get going until 3-4pm Work on Pitch/Live Deal/Internal Projects: • Meet with your analysts and discover where they left off last night (hopefully they worked latter than you). • Provide guidance, take over and/or instruct on most difficult aspects of project • Meet with VPs/Prins./MDs overseeing project • Endless turns of product outputs • Brainstorm ideas for clients (research, historicals, etc.) • Check / Recheck / Triple Check numbers and sources. Then do it again with a calculator. After 7pm you are able to order dinner from SeamlessWeb for delivery Send any finished work to the Printers and triple check finished decks Update analysts and possibly send grunt work to India for overnight turnaround Leave between 12-4am Read Monkey Business for more detail
  18. 18. What was your supervisor’s position in the company? Vice President
  19. 19. Bear, Sterns, Inc. Mike Walton, MBA Class of 2007 Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. My first interaction with Bear Stearns was with a 2nd level family connection (i.e. friend of coworker of family member). I was put in touch with someone on the High Yield desk, who found me suitable given my Bankruptcy & Restructuring background. Before the interviews, I knew a bit about the firm through their reputation on Wall Street (the “scrappy investment bank”), so I came in to the interviews prepared to be eaten alive. Two rounds of interviews, 2 interviews first round, 3 second round. Each interview was 45-60 minutes. Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. Before the first round of interviews, I memorized the options greeks. I wasn’t asked anything about them. Before the second round of interviews, I memorized the options greeks again. I wasn’t asked anything about them. I was however, in each round, asked accounting questions -- from ratios to trick questions on capex and cash. Aside from the trick questions, interviews were more qualitative in nature than quantitative. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). Interviewers in the first round were young and aggressive. A few brain teasers and several accounting questions. Aggressiveness, integrity, and honesty were important qualities to convey. Interviewers seemed to focus on revealing indicators of stress and my performance under stress. Questions were not difficult, but you were expected to answer them accurately and quickly. Interviewers wanted to know that you were involved in the stock market (I was quizzed extensively on my past investments) and how those investments were doing now. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. Aggressive, honest, and hungry. Read Ace Greenberg’s book before interviewing at Bear. Be prepared for condescending interviewers, and aggressive lines of questioning. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm’s business. I rotated through several desks: Emerging Markets Trading, CDO Trading, CDO Structuring, Distressed Research, Credit Derivatives. Desks have individual heads (senior managing directors) that are connected to various areas of the firm.
  20. 20. Briefly outline your role for the summer. Bear is not as structured as most firms. “Entrepreneurial” really does hold here. You were expected to be hungry and humble -- seeking out projects and going from playing softball to creating your own pricing spreadsheets for equity tranches. Briefly outline your actual day-to-day activities. Days started at 6:30 and went to 4:30-8:30PM, depending on the desk. The program is “rotational” which means if you don’t seek out work, you won’t end up doing anything. Once you got a feel for the desk, you were able to find where they could use help. Asking questions and finding where your feet were during the day was optimal for finding projects you could work on. Once finding an underserved niche, you were busy for your whole rotation. In one rotation, I was working on 3 projects at once, coordinating with different SMDs across the firm. What was your supervisor’s position in the company? During your rotation, your supervisor was the desk head. Junior mentor that was a 2nd year MBA hire. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. Bear Stearns is a unique place, and favors a specific personality. Cursing, crude jokes, and aggressive behavior were the norm.
  21. 21. BNP Paribas Doug Dunn, MBA Class of 2006 Project Finance Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. • 1st round general interview on campus w/ COC. • 2nd round in NYC. Total of 2 hours w/ 3 people. Individual sessions. • 3rd interview in NYC for 3 hours w/ 4 people. Individual sessions. Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. Most of the interviews were behavioral. Research on BNP Paribas, Project Finance, and Energy and Commodities. Also, brushed up on high-level finance using the Vault Guide. All were very effective, especially the current situation w/ Energy prices. Most of the questions were behavioral but I tried to steer the conversation to these topics. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). Behavioral. Why BNP Paribas? Tell me about yourself? Why Project Finance? Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. Make contact as early as possible and practice the behavioral questions. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm’s business. BNP Paribas is an investment bank – 7th largest in world. Presence in US is small but plans on becoming largest organically grown foreign bank in US (so it will never be as big here as CSFB, UBS, or Deutsche). Briefly outline your role for the summer. Summer Associate. I would consider the tasks assigned to be on par with what an analyst would perform. Briefly outline your actual day-to-day activities. Reviewed existing projects and wrote annual reviews for existing projects. Worked on getting reviews approved by credit committee.
  22. 22. Built models, performed stress tests, and wrote sections of pitchbooks. What was your supervisor’s position in the company? Vice President Please add any other information about your experience or company that you think would be useful to an incoming GFA member. BNP Paribas is just starting to get their new analyst/associate program in order so their recruiting is not as organized as the other banks. I think that this can be taken advantage of by a 1st year if they make contact with HR as early as possible because they would stand out a little more than if they did this somewhere else.
  23. 23. Campbell Soup Company Jane Reardon-Anderson, MBA Class of 2006 Beverage Division (finance intern) Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. I submitted my resume through the COC in late December. The interview process consisted of one on-campus interview in early January with two representatives—one HR rep and the VP of Investor Relations. There was a dinner & cocktails the night before the interview. The interview was 30 or 45 minutes long. Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. I prepared first by talking to people that worked or had worked at the company. I also reviewed their website, annual reports, corporate presentation videos, analyst calls, etc. By the time I interviewed, I knew a lot about their full-time finance rotational program, their products, culture, etc. What was most important in this process was communicating interest in finance, Campbell’s and Philadelphia. By the time recruiters get to this point, they know they are getting smart people. Campbell’s wants people that are really interested in their company and city. Reaching out to alumni at the company helped as well. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). Interview was behavioral, low-stress. There were no technical questions—but for full-time interviews there will likely be technical questions. Questions were basically about how you work in teams, handle stress, manage your time, etc. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. Campbell Soup is a $7-8 billion food company. Beyond soup, Campbell’s owns Prego, Pace, V8, Godiva, Pepperidge Farm, Swanson, and various brands in Canada, Europe, Latin America, Europe, & Asia Pacific. I worked in the beverage division, which produces four products (V8, V8 Splash, V8 Splash Smoothies, and Campbell’s Tomato Juice). The division consisted of about 40 people, most of which were in a marketing function. There were also a few in sales, supply chain, and admin positions. There was a finance director for the division and two financial analysts. I worked on projects with all three of these people, plus a few outside the division—in the company’s strategy and licensing departments.
  24. 24. Briefly outline your role for the summer. I worked on two main projects, both of which culminated in a presentation to the VP Finance, Campbell USA, the director of the beverage division, plus a general audience of about 20 people. The first project was to evaluate a new product initiative and make a recommendation to the VP Finance for Campbell USA on whether or not, and how, to pursue the project. For this analysis, I examined the industry, our fit for that industry, possible companies to partner with in the venture, and assessed the risk and return tradeoffs for the project. The second project was to assess how profitability in the beverage division differed by channel and product pack size, and to develop a strategy framework for the division to target new and existing channels. Briefly outline your actual day-to-day activities. My day-to-day activities varied. I interviewed people inside and outside the company to gather information for both projects. I created a series of PNLs for both the new product initiative and also the beverage division by channel and pack size. I examined customer and industry trends (lots of data gathering, interviewing, reading) to provide information for both projects. Note: I was not involved in the day-to-day activities of a typical finance employee. My internship was more big picture and strategic in nature. It was similar to a special project that a finance employee at Campbell’s would work on occasionally in addition to their daily responsibilities. What was your supervisor’s position in the company? My supervisor was the finance director in the beverage division. She had been with the company in a finance role for about 8 years. Campbell’s allows for both formal and informal networking, people are generally very approachable. Everyone takes the internship program extremely seriously and is excited to meet its members. Formally, the intern group had 5-6 lunches with senior executives throughout the summer. Informally, I met with about 25 different finance employees during the summer, and about 5-6 of those were at the VP level or above. (Those at the VP level reported directly to the CFO). The rest were directors, managers, and analysts.
  25. 25. Citibank Naoyuki Iwatani, MBA Class of 2006 Summer Associate, Investment Banking Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. I had a career forum, which is for Japanese students who study at MBA program in the States, in Boston last October. Four people interview with me in two days. I could get an offer from the company at the last interview Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. Read the company’s homepage, relevant books on investment banking, and contacted my friends who did internships last year. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). Most questions were focused on the reason why I’m interested in the IBD even though I’m sponsored by McKinsey. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. I think that the process that I took is different from those for other classmates as the career forum is especially for Japanese MBA students. Therefore, I could support those who are Japanese MBA students or interested in working for investment banking in Tokyo Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm’s business. The company has following two categories: • Coverage-side such as Telecom, Financial institutions, etc… • Product-side such as M&A, Securitization, etc… I interned in the following three groups: • Advisory group which focuses on advisory and execution of M&As (Product side) • Telecom, Media, and Technology Group (Coverage side) • ECM (Equity Capital Market) which deals with equity services such as offering, IPO, etc…(though ECM belongs to Sales & Trading division) Briefly outline your role for the summer. • Advisory group: Developing a summary documentation on defense strategies against
  26. 26. hostile takeovers by considering coming change of Japanese commercial law. Also conducting valuation in several methods for an actual deal. • Telecom, Media, and Technology Group (Coverage side): Developing sales pitch for potential deals. Conducting valuation for a fairness opinion in an actual deal. • ECM (Equity Capital Market) which deals with equity services such as offering, IPO, etc…: Learning the basic process of equity offering and other products such as REIT and convertible bonds. Briefly outline your actual day-to-day activities. I was assigned to work by VPs in each group, conducted analysis, and discussed the output with them. What was your supervisor’s position in the company? My staffer, who coordinated assignments for me, is a VP in the Advisory Group. The MD who interviewed with me is also taking a role as both staffer and mentor.
  27. 27. Commonwealth Capital Group, LLC Seth A. Mrozek, MBA Class of 2006 Description of the recruiting process for your summer internship: Name the company and group that you interned with this summer. Commonwealth Capital Group, LLC CCG is located on Pittsburgh’s North Side, very close to Heinz Field and PNC Park. Please describe the details of the process through which you got your internship. This internship was directly the result of my networking relationship with a second-year MBA student at Tepper. Following a few introductory conversations, this student passed my resume and contact information along to one of the principals at CCG, who I then proceeded to contact via e-mail, followed by a telephone call. We met for the first time in early December (Mini II) and we discussed our respective career backgrounds and my interest in the private equity business. At this time, the possibility of an internship was mentioned, and we did commit to speaking again during Mini III. Following a few e-mails and voice mail messages (private equity professionals are often tremendously busy and also traveling), the principal at CCG with whom I had originally spoken met with me at their offices on the North Side of Pittsburgh. This meeting took place during the last week of March and was the first of two interviews. The two interviews (one at CCG’s offices, the other at a bar on the North Side) each lasted 1 to 1.5hrs. There was one managing partner present at both. Please describe how you prepared for these interviews, what was effective and ineffective, and what you could have done better. I believe I was very well prepared. I was unsure how technical the interviews would be, so I spent a great deal of time reviewing the Training the Street Valuation Seminar materials, the Vault Guide to Investment Banking, plus the standard technical resources (Wall Street Journal, Barron’s, CNBC). I examined CCG’s website thoroughly to learn as much as I could about the fund’s portfolio companies and the managing partners. Most importantly, I spoke in great detail to each of the second-year students and alumni who have worked with CCG in the past. This provided the background information necessary to speak intelligently with and ask solid questions of the managing partners. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). The first of the two interviews was very informal and could be considered a standard “fit” interview. Much time was spent discussing my educational and career background, my studies at
  28. 28. Tepper, CCG and its history, and most importantly why I was interested in the private equity business. At that time, we also discussed what roles and opportunities a summer internship with CCG would entail. My second interview took place at a bar on Pittsburgh’s North Side and was again very informal. Through both interviews, I was struck by the sense that the principals were really interested in what type of person I was, and whether I was someone they would be willing to work with – the standard “8 hour airport test”. We talked about our backgrounds and the business – no technical questions were asked. I received a verbal offer from CCG for a summer internship position within the next few weeks. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. The CCG principals are very interested in meeting Tepper students (two of the principals are Tepper alumni) who are excited about both the corporate finance and operations management aspects of the private equity buyout business. To date, they have not participated in on-campus recruiting as each of the fund’s interns has resulted from introductions by second-year MBA students. Personally, I discussed a CCG internship extensively with their former interns (including second-year students and alumni). Networking and relationships are of paramount importance when it comes to working with this firm. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. Commonwealth Capital Group, LLC, is a $20MM private equity buyout fund which invests in primarily in established industrial businesses with revenues of $5MM - $30MM that are located in and around Pennsylvania. The fund consists of four managing partners, two of which are Tepper alumni. CCG has historically welcomed one intern per summer. Each of the four partners has distinct, though often overlapping roles. Three of the four are involved in daily management of the fund’s portfolio companies, while one partner focuses primarily on deal sourcing, legal activities, and negotiations with potential sellers. The four evenly split the duties of limited partner (LP) relations, fund accounting and financing, deal sourcing, plant visits, industry research, and financial modeling. Briefly outline your role for the summer. At the outset, I indicated my desire to learn about the sourcing, modeling, structuring, due diligence, and negotiation phases of leveraged buyouts. Therefore, I spent most of my time learning these deal processes as opposed to the day-to-day management of the portfolio companies. My role was akin to that of an investment banking associate, creating leveraged buyout (LBO) models for five different proposed transactions, conducting industry research as a part of the financial due diligence process, reviewing and commenting on document distribution, and attending meetings and calls where deal structure was discussed. Briefly outline your actual day-to-day activities. Much of my time was spent creating LBO and equity vesting valuation models. These models incorporated discounted cash flow projections, deal structure, and management equity vesting
  29. 29. metrics to not only value the business but also understand the potential fund IRR given a future liquidity event with either a financial or strategic buyer. I relied heavily on the skills learned during Training the Street’s Financial Modeling and Valuation seminars. Each of these models was constructed following lengthy conversations with the principal leading the deal. Each was submitted for review to the four managing partners, and revisions/updates were made based on feedback. Some time each day was also spent speaking with the four principals to learn as much about their personal experiences in the business as possible – please note that the experience gained simply from asking questions was personally one of the most important and beneficial aspects of the summer. I also participated in numerous additional activities during the course of the summer including a plant tour of a portfolio company, telephone conversations with legal counsel regarding deal structure, off-site meetings with local business brokers and bankers, deal pitches by local entrepreneurs and businesspeople, and presentations to groups of individuals (lawyers, etc.) with whom relationships could be beneficial for CCG. What was your supervisor’s position in the company? My direct supervisor was one of the four managing partners. However, I worked on deals and projects for each of the four managing partners, and I was responsible for reporting to each of them. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. I was prepared for the kind of complex financial structuring and analysis that my CCG internship required not only because of my coursework during my first year at Tepper, but also because of the additional skills gained through membership with the GFA. Namely, I would not have understood the business nearly as well had I not prepared as though I were entering an internship as an investment banking associate, and the skills learned through the Training the Street seminars were invaluable. Private equity, similar to the rest of finance, is not an easy industry to break into. But hard work, perseverance, and the skills learned both from Tepper and through the GFA resources can certainly point you in the right direction.
  30. 30. Cowen and Company Christopher Breig, MBA Class of 2007 Investment Banking Summer Associate, Health Care Group Description of the recruiting process for your summer internship: Name the company and group that you interned with this summer. Cowen and Company Investment Banking, Healthcare Industry Group Please describe the details of the process through which you got your internship. This was not a COC position. Through a contact I was able to talk to a summer analyst and worked my way up to a VP through referrals. The VP gave me a recommendation to the Director of recruiting which led to my first round of interviews in New York with 2 people for about an hour. I then had another day of interviewing later with 4 different people each between 45 minutes to an hour back to back. Please describe how you prepared for these interviews, what was effective and ineffective, and what you could have done better. Memorizing the black book in the recruiting guide made me feel more confident going in. Also developing a strong knowledge of the company through their website and conversations with employees made me feel better prepared for fit questions, as well as which groups I would like to work in. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). In the first round of interviews I had one technical and one behavioral, though nothing was terribly difficult. The questions seemed to be of a probing nature, just making sure that I was interested in the industry and was reasonably prepared. The second round of interviews was three behavioral and one technical. Here the questions were more pointed, more about Cowen. The technical interview was difficult; the questions were quick and intense with time limits. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. Show dedication and your desire to work there, Chip, the Director of recruiting is proud of the fact that most people who get offers accept. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. Cowen has two main industry groups: Health Care and Technology, Media and Telecommunications (TMT). Also, our private equity group is a significant contributor to the bottom line by itself. I was a summer associate in Health Care.
  31. 31. Briefly outline your role for the summer. As a summer associate in Health Care, I participated in a number of different product deals (PIPEs, M&A deals, and one IPO) within the industry. I did a little bit of everything this summer, including: scrub pitchbooks, do market analyses, perform due diligence and write offering memos. What was your supervisor’s position in the company? Neal Karnovsky, who was a senior associate during the summer, and will be a VP at the end of the year. Deutsche Asset Management (DeAM) Darwei Kung, MBA / MSCF Class of 2006 Summer Associate Getting the Job I got my internship from the standard COC interview process. Deutsche Asset Management is a part of Deutsche Bank. The Asset Management arm of Deutsche Bank currently has over 800 Billion dollars under management. Carnegie Mellon has a very strong relationship with Deutsche Bank. However, DeAM has not traditionally recruited MBA students for the internship program. This is the first year for DeAM’s MBA internship program. The job was posted around Jaunary, and the interview took place during the first week of February. The interview consisted of two rounds. Both rounds were conducted on campus. The interviews were conducted in two consecutive days. Both the first round and second round had two interviewers. Each interview lasted approximately 45 minutes. During the first round, I interviewed with two Directors from groups that had openings for interns. One director was from the corporate credit research group, while the other was from the Advanced Research and Quantitative Strategies group (AR/QS). The first interview focused on my resume, my personality, and my interest in financial services. In retrospect, I feel the interview was focused on confirming what they have already observed from my resume and my fit with the organization. The decision to select me for second round interview was made by 5 PM that day. The second round interview was with two Managing Directors. One MD is in charge of the North American Institutional sales for DeAM, and the other MD is the Portfolio Manager for the Technology Equity mutual fund. The second day was very focused on my analysis capability and very detailed questions on my background in business analysis. The main topic of discussion came directly out of the Wall Street Journal that day. An article about Starbucks appeared in the back pages of section C. We discussed the article, and used Starbucks as an example for earning estimate and valuation analysis. The decision to hire me was made by 5 PM on the same day as the second interview. The personalities and the background of the interviewers are very mixed. The first interviewers have been in the business for at least 8 – 10 years, and the second round interviewers have been in the business for over 20 years. It turned out all four people had internship positions and they were comfortable fitting me into any of the positions available.
  32. 32. Overall, the interviewers were very thorough and prepared. They have read the resumes in depth. If a person put certain experience or knowledge on the resume, he or she should be prepared to demonstrate concisely that they truly know the subject, not just putting key words on the resume for attention. Most of the asset management jobs are in investment management, so if you are interested in this field, you should expect investment analysis and valuation questions. If you have experience in managing your own investment, make sure you can describe your stock or mutual fund selection process, and rationale behind your choices. Internship Experience The internship at DeAM was 10 weeks. Each internship sponsor had to create and structure a project or projects designed to evaluate the intern’s potential as a permanent employee and get some real work done. My project was to construct a pure-alpha U.S. corporate credit portfolio using mean-variance analysis. I won’t take too much time to describe alpha and beta. Suffice to say, alpha of a portfolio is gain / loss which is uncorrelated to the market. This project turned out to be very quantitative in the fixed income space, which is exactly what I hoped to get. I reported to a senior fixed income portfolio manager (Managing Director) with both retail and institution portfolios under management. The portfolio manager provided me with an outline of the project, but expected me to figure out exactly how to construct and implement the idea. I spend the first few days translating the high level objective into a project plan for the summer. I spent rest of the summer follow my plan to realize this portfolio. This includes gathering research data, learning all the tools and analysis methodology, and figure out how to fill the gaps. I implemented the portfolio using standard Microsoft Office software. After I figure the investment strategy, I had to back test it against historical data, and then determine the profit and loss of this portfolio. In terms of alumni networking, I met one CMU alumni who did his undergraduate degree at CMU. I believe there may be one Tepper alumni, but I am not certain. While CMU has strong presence in the Deutsche Bank Sales and Trading area, there is very little presence in the Asset management organization. My observation is CMU was targeted for its reputation as a strong quant school. Two of the three interns worked on quantitative investment projects, and both have MSCF background. Like Sales and Trading and Investment Banking, the other interns in the DeAM associate program are from top MBA schools with quantitative reputations. The other interns came from Columbia, Wharton, Sloan (MIT), Chicago, and BYU. The internship program was very well organized. Participants had many opportunities to network, and socialize together. I rate my experience very highly. The recruiters were very open about the summer internship as an opportunity for the bank to observe potential full time employee in action. The candidates are expected to evaluate their fit with the bank. Most of the interns were offered permanent position at the end of the internship, though details of the positions are yet to be determined. In conclusion, I highly recommend DeAM for people who are interested in buy-side career.
  33. 33. Deutsche Asset Management (DeAM) Henry Navnitlal, MBA Class of 2006 Summer Associate Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. COC, 2 round (2 day process), interviewed with 4 people (2 each round), approximately 45 minutes per interview Please describe how you prepared for the interviews, what was effective and ineffective, and what you could have done better. • I read the past quarterly and annual report of the company and tried to get a feel of the corporate strategy going forward • Also listen to the earnings call on their website. Pay attention to the Q&A at the end. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). While much of the interview was behavioral, there was a consulting type question asked in the second round interview. I presume this was done to get a feel for my thinking abilities. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. You have to understand the firm and REALISTICALLY want to work for them. They want to know how enthusiastic you are and how much you want to work for DB. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm’s business. I was given a position within DB Real Estate in NYC. I asked to work in the Chicago office for RREEF, a UBS acquisition made a little over 2 years ago. RREEF specializes in both the physical asset management and securities management (via mutual funds) side of the business. I worked within securities, specifically given the task of an equity analyst for the hospitality sector. Briefly outline your role for the summer. I followed and analyzed 20 hotel stocks. The other teams were apartment, storage, medical, and retail. In addition there were several large projects that I completed: terminal cap rates and updating the models to include incomplete components. Briefly outline your actual day-to-day activities.
  34. 34. Most of my day-to-day activities were centered on updating the models to include information from recent quarterly reports and other market changes. What was your supervisor’s position in the company? My direct supervisor was a partner at RREEF. His position, most of the time, is to authorize changes in positions for each of the strategies that are followed. In addition he serves as an analyst of last resort to double check and analysis done for each company, in each of the 5 sectors. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. This position was very Excel intensive. This required that I understand the underlying fundamentals of the business and be able to translate them into inputs/outputs in the corresponding models. One of the biggest mistakes other analysts make is choosing those inputs to create a justifiable output. Instead if justifiable inputs produce an unrealistic output, the model should be questioned. This requires quite a lot of industry knowledge and a drive to truly understand the business fundamentals.
  35. 35. Deutsche Bank- Global Markets Sandhya Gyanapathy, MBA Class of 2006 Global Markets Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. I got the job through campus placements. I had two rounds of interview, my first round with 2 people and second round with one person, all of whom were members of the senior management. The interviews lasted roughly 30-45 minutes. Please describe how you prepared for these interviews, what was effective and ineffective, and what you could have done better. I focused on three main things... knowing more about the firm, my personal ‘fit’ with the organization, its culture and values and technical questions. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). First round interviews were a combination of both behavioral and technical. It was relatively less stressful. Second round consisted a lot of technical question, some behavioral and quite a few brainteasers. It was relatively more stressful. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. I was in the Global Markets division of Deutsche Bank. This includes sales, trading, research, structuring and origination desks. I was in the London office of the bank. Briefly outline your role for the summer. Deutsche Bank summer program is a 10 weeklong program with two rotations. My first rotation was with the securitization desk where I got the opportunity to work on live deals as well as client pitches. My second stint was with the Debt Capital Markets team and here I essentially worked on client pitches in connection with bond issues in the European/Australian market and published a capital market update to be sent to all the clients. Therefore the role was more task- based rather than project based and this enabled me to learn more. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. I think an important part of my summer program were the networking events organized by the bank for us. These networking opportunities are a good platform to meet other people in the bank and know their teams and functionalities.
  36. 36. Deutsche Bank- Global Markets, London Rachel Duncan, MSCF Class of 2006 and MBA Class of 2007 Global Markets Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. The school captain who heads up Carnegie Mellon MBA/MSCF recruiting for Deutsche Bank London came to Pittsburgh in October and had dinner with several students who were referred to him by second-years. I had to submit a cover letter and resume by early December. My first- round interview was Wednesday of the first week of mini 3 in January with an MD and a Director for half an hour. That night, they invited me to a reception, and second-round interviews were the following day with the same Director and a different MD for another half an hour. I got the offer Friday evening. The recruiting process was through the COC. As much as possible, please list the names of the people who interviewed you for your summer job, and whatever you may know about them (age, position, alumni status, general personality and interviewing style, etc.). Christopher Davis, MD in Special Situations, not an alumni but is the school captain for CMU at Deutsche Bank London. Can be tough, but fair. Came up through Securitization in New York and transferred to London to help get the business going there. Aurelia Lamorre-Cargill, MD in Client Solutions Group, not an alumni but does a lot of recruiting for Deutsche Bank. Can be tough, but fair, and she’s fun and interesting to talk to. Came up through rates structuring, then credit structuring. Parisian. Greg Branch, Director in CDOs, undergraduate alumni of CMU. Super-fun personality, makes you feel comfortable and not intimidated even though obviously a brilliant guy. Please describe how you prepared for these interviews, what was effective and ineffective, and what you could have done better. I read Heard on the Street, which is absolutely essential for preparing for sales & trading interviews, but is only one piece of the preparation. I spent a lot of time learning about Deutsche Bank from alumni and second-years and by reading their strategy documents from their investor relations website. I prepared a coherent view on equity markets, interest rates, and the dollar/yen and dollar/euro. I read the Wall Street Journal, in particular any articles on Deutsche Bank, their Credit Markets update every day, plus anything on the markets in general. I prepared answers to the questions why Tepper, why sales & trading, why you, why Deutsche Bank. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). The interviews were two-to-one, and they did a little bit of the good-cop, bad-cop routine. They asked a mix of behavioral and technical questions. Behavioral questions were things like “What do you think are the three most important qualities for a trader to be successful?” Technical questions were things you would see in Heard on the Street, like if the spot interest rate is 5% for two years, and 10% for four years, what’s the forward rate for two years starting in two years?
  37. 37. Plus all the usual, tell me about your background, why do you want to be in trading, why do you want to work for Deutsche Bank, etc. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. Deutsche Bank’s Corporate and Investment Banking is split into Global Markets and Global Banking. I was in Global Markets on a rotational internship program. I spent four weeks in an equity quantitative products group and five weeks on an emerging markets illiquid assets trading desk. Briefly outline your role for the summer. Summer interns at Deutsche Bank are spending 10 weeks trying to get a full-time offer. I pitched in on a lot of different projects and tried to meet as many people as possible. I did a lot of powerpoint and some spreadsheet stuff, but I did not have one particular big project like some of the other interns did. Briefly outline your actual day-to-day activities Arrive around 7AM. Go to morning sales meeting. Get back to desk, where trader would expect me to talk to him about what went on in the meeting. For the rest of the day, balance work for the desk with sitting with people on other desks to get to know what goes on in as many parts of the bank as possible. Listen in on traders’ phone calls. If desk gets quiet later in the afternoon or early evening, read research reports and play with pricing models to try and get a better handle on what’s going on. Leave around 8PM. Who was you supervisor, and what is his/her position? Both of my supervisors were Directors that headed their desks – Frank Copplestone in equities and Pedro Mayrinck in emerging markets. List any other executives or senior managers you may have met, or at least became aware of. Deutsche Bank had a speaker series for the interns, where we got to meet or at least listen to Josef Ackermann, the CEO, Anshu Jain, the head of Global Markets, Anthony Burgess, the head of Global Banking, Mark Ferron, the COO of Global Markets, and Michele Faissola, the head of Global Rates. I met at least a dozen other senior managers over the course of the summer. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. Deutsche Bank provides a lot of exposure to their summer interns, and it’s a great way to learn about the sales & trading business. It’s also a very big internship program, and you have to take a lot of initiative to make the most out of it.
  38. 38. Deutsche Bank- Investment Banking Katherine Donellan, MBA Class of 2006 Investment Banking Summer Associate Groups: M&A and Energy, Utility, and Chemicals Description of the recruiting process for your summer internship: Process to get my internship: I had 3 thirty-minute interviews. The first interview was with the Sales and Trading team, which was set-up by the COC. The second two interviews were at the bank with the investment banking group. Each interview I had 2 people interview me, and they were both technical and behavioral interviews. Preparation  Contacted people in the industry to get an inside into the details of the Investment Banking job.  Took both Training the Street courses.  Went to all the banking presentations on campus and in New York City.  Worked with second years to prepare for the technical and behavioral interviews.  Made sure to take advantage of the mock interviews.  Studied valuation, accounting, and the markets on my own time.  All of these things were instrumental in getting my internship and I would not change anything. I think the key is preparation and making as many contacts as possible. Interviews: The interviews were short and contained both technical and behavioral questions. All interviews were followed up by a question and answer session led by the interviewee. Description of your internship: Where I worked: I worked in the M&A group and the Energy, Utilities, and Chemicals group at the bank. My internship was split into 2 five-week rotations. Role: I work on a wide variety of projects during my ten-week internship. I worked on a sell side deal, an IPO, asset swaps, buy side, etc. Day to day activities: Built models, created pitch books, attended client meetings, worked on comps, etc. I had 2 supervisors during the summer. Both of them were VPs. I was also given a mentor at the Director level and a sponsor who was a Managing Director. All of these people were instrumental in making sure that my summer was successful. During the summer I was exposed to many Managing Directors throughout the firm. Each week we had a lunch with a variety of MDs. Plus I was introduced to other MDs through my groups and senior management.
  39. 39. Deutsche Bank – Global Markets Devin Anderson, MBA/MSCF class of 2006 Global Markets Description of the recruiting process for your summer internship: Please describe the details of the process through which you got your internship. • Had information interviews via phone in Nov/Dec • Went to corporate presentations in Dec • Interviews o First round interviews at CMU via COC  One thirty minute interview o Dinner for everyone who made it to the second round the same night o Second round interviews at CMU next day  Two thirty minute interviews • Got offer the following day, accepted • Attended a reception in New York in April to meet placement managers o THIS IS A CRITICAL, CRITICAL TURNING POINT o You really have to get in front of the desk heads that you are interested in working for. I learned after my internship that both of my placement managers were actually really bullish on hiring me FROM THIS MEETING ALONE, which is what got me on two great desks. o That means that you must have some direction on the products areas that you might like work with and have a plan of attack to find and meet the desks heads. o With out that plan you’ll end up meeting random people and end up with random placements in areas you might find boring or uninteresting. • Started in June Please describe how you prepared for these interviews, what was effective and ineffective, and what you could have done better. • Informational interviews – should have done more to get more exposure to people prior to interviewing. It worked out for me, but should have done more. • As painful as it is, memorize the solutions to the brainteasers in the Vault and WetFeet guides because even if you don’t get asked them during the interviews you might get asked them during. DB didn’t ask many brainteasers, but my other interviews (especially Bear Stearns) did. • It is difficult to remember the levels of the equity indexes and the yield curve during the stress of an interview. Do your best to memorize them, but write them down before the interview. In my DB interview, I actually told them that I had written them down and read a few off. Once I started at my internship, they told me how funny they thought it was that I had done that - no one had just written them down before and referred to them. They were like “he wants to be in sales and that is what sales guys do, good idea”. Would that work for everyone, who knows. • Read the obvious books for your interests (Monkey business, Liar’s Poker, Reminiscences of a Stock Operator, The Logical Trader, etc). One interviewer outright asked me what books I read to prepare for the interviews. • Practice with mock interviews, especially with brainteaser and technical questions. It
  40. 40. really does take some time to start trusting your knowledge enough to respond to the questions with confidence. Don’t think that because you know the material that you can communicate it effectively. This was a major mistake I made - I thought that since I got A’s and knew the material I would be able to summon it and communicate it clearly when needed and that wasn’t always the case. I wasted a few interviews up front because I wasn’t practiced. Please describe in as much detail as you feel is appropriate the interviews themselves (behavioral, stress, technical, the types of questions asked, the behavior of the interviewers, etc.). One interviewer is an alumni and associate in the equity derivatives strategy group. He asked many technical questions (how to find covariance, beta, alpha) and one brainteaser (sq root of . 1). He also asked me where the major equity indexes were and the current yield curve. While the most technical interview I had, it was fair at all times. Since the interview I’ve spent a lot of time with him and found him to be a great guy and fair interviewer. Another interviewer was the NA Head of Repo. He was very relaxed and much more interested in what I do in my time off and my personality than technical knowledge or raw brainpower. Because I was interviewed by these two together, they likely planned the types of questions that they were going to ask in advance. The first interviewer during the second rounds was a director and the Head of Equity Derivatives Strategy. He was very interested in my work history and why I chose to switch careers into finance at this particular point. He asked only one technical question (the difference between beta and statistical correlation). He is extremely intelligent and thoughtful- I had a hard time reading him during the interview until the very end because he just isn’t very expressive. The other second round interviewer was an MD and Head of Rates. He was mostly interested in my motivations for wanting to work in finance after I had already had success in another career. He did ask me a few lay up technical questions (where the 10 year is at, bond price/yield relationships). I felt as if he were mostly interested in seeing if I would fit in at personality level. The whole interview was very low key and comfortable. Please add anything that you feel might be of use to an incoming GFA member pursuing a summer internship position with this firm. DB really cares more that you made the effort to prepare, not the results of some technical question. I didn’t nail every question they asked, but what was clear was that I made the effort to prepare, had done informational interviews, and knew an appropriate amount of technical material. Putting as much effort up front into the informational interviews and networking prior to the interviews will pay large rewards during the interview. Description of your internship: Briefly outline the organization of the firm you interned with and where you were in that organization. Also, very briefly outline your firm's business. • Two Five-Week Rotations
  41. 41. o Global Equity Derivative Sales o Integrated Credit Sales • One-Day Rotations o Debt Capital Markets – Interest Rate Derivatives (Corporate Customers) o NA Structuring – Municipal Derivatives & Exotic Structures o Short Duration Sales (repo, mmkt ABS, <5 yr duration) o Equity Prime Services Sales Briefly outline your role for the summer. On both desks I spent about half of my time sitting with the people on the desk and the other half doing projects/tasks. The projects and tasks will come from sitting with people because they won’t ask you to do things until they are comfortable with you. So its important to spend as much time as possible observing and listening to calls as possible up front and over time they’ll ask you to do things or you’ll see opportunities to help out and you can speak up. The projects ranged from working on the desk’s trade log to pitching derivative trade ideas. Tasks ranged from setting up research access for clients and answering the phone to getting food/coffee. Of course it is important the easier the task the better it is executed- its ok to flub up a trade idea a little bit but its not ok to screw up the lunch order. Briefly outline your actual day-to-day activities. See above. Please add any other information about your experience or company that you think would be useful to an incoming GFA member. A lot of people cite luck in their search for a job on Wall Street and they are probably correct at some level. It does take some luck that you’ll meet the right people at the right time in order to make an impression. But keep this in mind, too: Chance favors the prepared mind. Louis Pasteur (the scientist) said that about his own work. Remember that the trading floor just isn’t that big a place. It likely that if you express and interest in something and the person you are speaking with likes you, they’ll make an introduction, maybe right even on the spot. And you have to be ready to execute on that in terms of being prepared to talk about products or the organization or whatever it takes to network with people at the bank. Every senior executive I got in front of was because I mentioned something to another person and they made an introduction for me to get me into their office. Luck? A little bit. But preparation is increases your probability.