Investment Banking Internship

1. What Is an Investment Banking Internship?

Banks usually offer two internship programs: summer analyst for undergraduates and summer associate for MBA students. From now on, let’s focus on the summer analyst program.

In recent years, recruitments for internships have gotten rather crazy. In the spring semester of your sophomore year, you will start applying for the internship. Recruitments will last for a few months, with everything from resume screening, to interviews happening in the timespan.

If you successfully pass all the rounds, congrats, you are now an investment banking summer analyst! But you are not going to intern until the summer of your junior year!

Well now you understand why it’s kind of crazy: you are applying for a position you won’t work for until a year later. And who knows how the industry will change by the time you start!

This is a very general timeline. For more details, visit the bank’s websites to know more about the exact dates.

If you intern well, the bank will call you back to offer a full-time position, and you will start your new position after your senior year.

So, applying in sophomore year, interning in junior year, full-time in senior year, do you have to start prepping during freshman year?

That might just be the case. Preparing for interviews and networking as earliest as possible will guarantee your success. To break into investment banking is a whole process, and you’d rather stick to it, maybe you will get the chance.

Here’s a simple timeline so you can get the idea:

1.1. Investment banking internship allows students to work alongside real bankers

As an intern, you will live and breathe investment banking. For 10 weeks, you are a real banker, and will do what analysts do, from trivial tasks such as buying coffee, to modeling and pitching deals.

And yes, you will be working investment banking hours, so prepare to wake up to go to work in the dark and get home in the dark because you will spend some 16 hours everyday at work.

You may ask, doesn’t this sound brutal for an undergraduate?

And another undeniable yes, it is brutal for an undergraduate. In the end, banks don’t call it internship, it’s summer analyst! You are considered an analyst, and are susceptible to all the hardship of investment banking. The only difference is that unlike an actual analyst, you will be dismissed by the time you finish your internship.

1.2. Investment banking internship is the gateway to receive a full-time offer

If you happen to excel at your internship, then congrats, instead of being dismissed, you just might be able to get a full-time return offer. 

Of course, this is never easy. To successfully receive your full-time offer after your internship, you need a combination of hard work, dedication, and some human skills to convince bankers that you are the suitable choice to join their ranks.

Let’s touch this matter later, you’ll know more as you read.

1.3. Investment banking internship separates the theory from reality

One thing about internships is that they change your perception of that job. So now when you actually do it, banking is no longer what you think it only is: big paycheck, luxurious lifestyle. Banking is now also enduring hours and unimaginable stress.

And in recent years, competition has gotten a bit tougher since everyone knows all the possible interview questions and equips themselves with financial modeling as early as in their freshmen year. 

So they have the technical expertise and they can memorize and perfectly answer all the questions thrown at them, but can they work 80+ hours per week for ten weeks? Can they excel at their tasks while facing sleepiness, fatigue and the stress from those kinds of hours?

If they can’t, they don’t have what it takes to become a banker.

So don’t get cocky. Reality will be far from the theory you learn in classes.

2. Why Investment Banking Internship?

Students striving for investment banking internships for two main reasons as follows:

• Convert the internship into a full-time offer
• Build a foundation for later careers

2.1. Convert your internship into a full-time offer

As with any internship, your primary goal should be making a good-enough impression so that the bank will call you back and offer a full-time position.

Even if you don’t want to join the bank you are interning, you will still need an offer to get another offer. Other banks want this recognition of performance so that they can put more trust in you when you are reaching out to them.

So you worked as a real banker for about two to three months, so you probably have gotten the feeling of being one. You can then decide if the career is suitable for you.

If you can handle the stress, the tiring 80 hours of work every week for 10 weeks, you can excel at what you do even with that heavy burden. If you enjoy modeling, pitching to clients, and the big paycheck, then investment banking is definitely right for you.

But if you are begging to get out after just 2 weeks of your internship, you can’t handle the hours and the stress, and you get depressed every time you get to work. If you feel like the grand payday is just not worth the cost of your mental and physical health, then you should consider other careers.

You will realize this very soon during your time at the banks, because reality hits really hard. You either like it or just outright hate it.

But if you get an internship, try to do your best at it, no matter how you feel. It is indeed harsh, but not everyone has a chance of getting such an experience, and what you get from it will certainly help you in the future.

2.2. Build a foundation for later careers

This goal is for both continuing to pursue investment banking, or other careers. If you still want to stay in banking, but never receive a return offer, use this experience in your interview with the “Walk me through your resume” question, and in your networking efforts.

But in case you don’t like banking and you want to pursue other finance careers, then an investment banking internship will be an invaluable tool to impress employers. Employers will know that you are smart, hard-working, and achieving. 

And of course, these will only come if you do well with your internship. If you don’t, questions will be raised, like “why didn’t you get a return offer?”, and what’s supposed to be a career booster becomes a burden.

3. What Do You Do in an Investment Banking Internship?

As an intern, you will focus on deal pitching, deal execution, modeling work and trivial tasks.. But you’re mostly involved in the grunt work, the work that actual bankers don’t want to do, since a project may last for months, or years, and banks won’t risk letting a 3-month intern handle critical information.

Except for letting you do a little critical tasks, what you do is exactly what a full-time analyst does, because in the end, as mentioned, to banks, you are a summer analyst, not an intern

You can visit this BankingPrep’s article for more insight on what investment bankers do.

3.1. Deal pitching

For this task, you will research companies to create pitch books that present your bank’s proposal like how those companies should sell themselves, should they issue equity or capital, etc.

As an intern, you will mostly contribute a small portion of the pitch, such as data gathering, or editing PowerPoint presentations.

3.2. Deal execution

For this task, you will work on listing potential buyers and sellers, tracking their responses, creating confidential information memorandums (CIMs) and completing models.

Again, as an intern, you will be working on smaller parts of deals.

3.3. Trivial tasks

This is a combination of small tasks such as buying coffee, printing documents, looking at company background information and introductory presentations.

As an intern, you will spend the majority of your time on these trivial tasks, because deals are critical to banks, and they can’t risk an intern handling important tasks, then having them dismissed after 3 months. 

Also, associates and analysts are directly in charge of the interns. They will allocate the work load, and more often than not, assign you with what they don’t want to do.

You may ask, do actual bankers do these petty tasks? Yes, analysts do these all the time for their superiors. You want to appear reliable, and (to be honest) sucking up to your boss can be beneficial.

4. How Much Do Investment Banking Interns Make?

As an investment banking summer analyst, your salary is comparable to that of a first year full-time analyst, relatively speaking. That means you can make anywhere from $90K – $100K annual base pay, staying for just 3 months means you actually earn about $20K – $25K.

And as a non-permanent member of the bank, bonuses are unavailable. Your paycheck is base salary only. 

If you want to learn more about how much a banker gets paid, check out our article: Investment banking salary and bonus

5. Preparing For an Investment Banking Internship

This part will focus on two things: how to prepare to get an investment banking internship, and how to succeed in the internship itself. Do well and you will be all set for that internship position to kick-start your finance career.

5.1. How to get an investment banking internship

Getting an investment banking internship is just as hard as getting a full-time position. You have to tailor your resume, network to pass the screening round, and then complete the interviews. You will spend months, even years to prepare, especially when the recruiting process now begins much earlier, but with hard work and determination, anything is possible.

Step 1: Build an investment banking resume

The resume round is probably the most important round, because if you fail, your journey is over before you even begin, and 60% of candidates are eliminated here. Bankers only spend a few seconds scanning a resume, so find what the bank wants, and show that you possess the attributes of an investment banker. Normally in your resume, show that you have:

• Proof of academic excellence: You go to a target school, have great GPA, with multiple honors
• Qualities of an investment bankers: You have strong numerical and analytical ability, have great teamwork/leadership and communication/interpersonal skills
• Interest in finance: You’ve done multiple finance courses, earned finance certifications, traded stocks, participated in finance competitions, joined student societies, etc.

The key to get your resume passed is to make it stand out. For more on that, visit BankingPrep’s article on how to write a banking resume here

Step 2: Network to pass the screening round

One of the most important parts of networking is to push your resume through the screening round. There can be thousands of resumes just like yours: target schools, 3.7 GPA, and honors. Knowing someone personally from the bank can really make a difference.

Try to focus on your school’s alumni first so both have a connection. Find them on LinkedIn and your school database, and email them to ask about the recruitment process or conduct informational interviews. 

Cold calling and cold emailing can work, but should only be used as a last resort. 

Start your networking effort as soon as possible, since now the recruiting process is so accelerated it’s crazy how early you have to get ready for it.

Though extensive networking can give you an edge over other candidates, you should not depend heavily on just networking. Since the recruiting has been becoming hyper-accelerated in recent years with the first round starting much earlier, you still need to submit your applications. In other words, networking and submitting your application to banks should be conducted in tandem. There’s no guarantee that only networking could help you win an interview invitation or an internship offer. 

For more networking tips, visit another BankingPrep’s article: here

Step 3: Complete the interviews

Investment banking internship interview process is similar to full-time position interview process: You will face two rounds of interview: the HireVue and the Superday. HireVue will focus on “fit” questions like why investment banking, why us, your strengths and weaknesses, etc. Be professional and articulate and you should be able to proceed to the next round.

The final interview round is called the Superday (Assessment Center in Europe). This is where your technical abilities and your mental stamina are tested to the limit. Candidates will have to get through an intense interview day (simulating real working pressure of a banker) with a myriad of questions hinged on their respective division. You may have to face up to 10 interviews in just one single day, so be well prepared for that.

5.2. How to succeed in an internship and win a return offer

The key to succeed and win a return offer is to have a good initial impression right from the start, be professional, proactive, and maintain good relationships with the bankers. Your job as an intern is to make bankers’ lives easier so they can get home a bit earlier, so if you mess up, and instead, make them more miserable, don’t even think about coming back there for a full-time position.

#1. Make a solid first impression: come early and be responsible for what you are assigned

Having a good initial impression is important, because this sets the tone for your entire internship. Remember that bankers have never met you before, some might just have read your resume, and they will automatically assume that you are what you show them initially. So, don’t be late, do what you are asked to, and be reliable right from day one. 

#2. Show that you are professional, result-oriented and reliable

After that, maintain a level of high professionalism in your internship. Abide by the concrete rules of business attire, punctuality and humble attitude. Don’t sleep at work, and focus on your duty instead of doing something else like gossiping. Those are the least you could do to show that you are office-worthy.

Next, be result-oriented and reliable. If you are assigned a task, try to get it done, quickly and correctly. And remember to leave after everyone has left. If someone insists you to go home, insist them back: ask them if everything is done, and if there is anything else you can do.

#3. Be proactive, progressive and open-minded with everything you do

What happens when you’ve finished your tasks and have nothing else to do? You ask for more tasks. That’s being proactive. But try to sound more passive, and subservient when you’re asking for work, like “is there anything I can do for you?”. Avoid being pushy like “What else can I do?”, or “Do you have other tasks?”, some bankers won’t appreciate it.

Be progressive and open-minded. Show that you are willing to learn, and are ready to take any constructive criticism for your mistakes. Ask for occasional feedback from bankers, but try not to do so too often to not appear as annoying.

#4. Maintain good relationships with bankers, especially analysts and associates

At the end of the internship, there is a roundtable process, deciding who will be given a full-time offer based on their performance during the internship. The HR department will invite analysts and associates with whom you work mostly to join the selection process. They will give their evaluations about you so the HR departments have more materials to come to the conclusion.  

That explains why keeping good relationships is of utmost importance. Everything you do there serves one thing, make bankers like you. 

Try to get involved with them in projects, but don’t overload yourself. You don’t need 10 bankers to vouch for you, 1 or 2 is enough, so focus on 1 or 2 projects instead of 5 or 6, do well, earn their approval, and you should be good.

And avoid conflicts at all costs. You don’t want any trouble with any of the bankers, since an approval by one but disapproval by another still means you’re out.

If you can be all of the above, at the end, your chance of getting a return offer will improve drastically. So try your best, and who knows, maybe the dream of becoming a banker will no longer be a dream.

To be fair, none of these are rocket science. None of these require a significant amount of brain power. Just do what you are asked, be reliable, be open, and don’t mess up, then you will be fine. Isn’t that the least thing you could do?