Trials by Fire & Water - Part II: Acing the Trials

After a bit of a gap, it’s time to get back to that elusive path to landing a job in finance. In Part-I of Trials by Fire and Water, you got the inside track on what typical investment banking and private equity hiring process are like and came to know of what you can expect in your interviews.

But of course, just knowing what hurdles you will be facing is not enough – you also need to know how to cross those hurdles and what mistakes to avoid. So in this post, I will attempt to help you do just that in Part II of Trials by Fire and Water – Acing the Trials.

There may be many websites out there which talk about how to crack job interviews. Doubtless you can even find training courses which prepare you for these interviews, and some even guarantee that you will crack any and all interviews that you may face if you just pay them their fees. I’m going to make no promises of the sort. There’s just no getting around the fact that finance is a fiercely competitive industry and in India, the small size of the industry makes getting in even more difficult than usual. What I can do, is tell you some of the tried and tested ways which can improve your chances significantly and give you an edge over other candidates. Again, in keeping with the theme of Bateman Begins as well as to save your time, I’m going to keep all the suggestions on here restricted to situations specific to IB and PE interviews. And now, tell me…

Do you even fit, brah?

I explained in Part-I of this series why it is so important to the interviewer to check whether or not you fit in with the culture of the firm and with your prospective team. But how can you make sure that your personality does fit in with their culture when you know close to nothing about your future colleagues? Here are a few tips:

Networking – Ah yes, the ever present, most repeated suggestion ever. If you happen to know anyone in the firm, use that to your favour. Request your contact for a meeting and learn everything that you can about the firm. Ask about what the culture is like, what your prospective team is like, whether they like to party after hours or are more of the laid back type, and anything else that springs to your mind. So when you go into the interview, you will already have a leg up over other candidates because you will know what answers the interviewer will like to the fit-based questions. Tactfully throw in the name of your contact (“I heard from XYZ here that you have bi-weekly professional development meetings, which is something that I would really look forward to…”) and you’re golden. As long as you don’t sound like you’re “throwing names” (The Indian classics “I’m the son of…” or “The VP here is a personal friend”), you will have a great talking point in the interview.

Your story – Your story is the answer to the question, “Why IB/PE?” It is, perhaps, the most important question that you will be asked during your entire hiring process and will likely be asked in multiple rounds. Every interviewer in every industry will ask why you are interested in that job. Difference is, in other industries there might be a myriad of answers to this question. But in finance, more often than not, it’s the money and the interviewer knows it. It’s common knowledge that with a job in IB or PE, you’ll be earning a lot more than what you would get at similar levels in other industries. So how can you convince the interviewer that you are not in it for the money? That’s where your story comes in.

Start with the spark – what got you interested in finance? Did you come across Bateman Begins? Read about all the Private Equity deals in the news and got interested? Got a high-flying uncle working as an MD in Goldman Sachs? Even if it’s something along the lines of that last answer, don’t be afraid to say it. Just put it in a way that takes the money and lifestyle out of the equation. For instance, you can say, “My uncle is an MD in investment banking and I talked to him about his job. What he does sounded extremely interesting to me, I loved the analysis and research aspects of the job”. Do not mention how you liked the part where he flies all over the globe to close deals – that implies that you are just fascinated by the glamour and the lifestyle.

Next, how did you follow up? Continuing the above example, you could say something along the lines of, “After talking to him, I went home and looked into the finance industry, read up numerous websites and talked to some more people who are in the industry”. You have to show that you proactively followed up on your interest, and no, merely applying on all finance jobs on Naukri.com does not count.

And finally, the conclusion – the path that led you to the interview. “I came across a vacancy in your organization and upon going through the job description, I realised that this is exactly what I had been looking for”.

Of course, the above are only examples and you should go ahead with your own reasons. If you honestly have a spark other than money, capitalize on it. Interviewers love honest answers – after all the generic answers they usually hear in a day, an interesting story can make them prick their ears. There’s nothing that screams “dishonest AND boring” than an answer like, “I want to learn a lot and want a challenge”. Such answers will only make the interviewer wonder why you don’t just join a Mandarin class.

So get your story down – now. Keep it short and keep it simple – all of the above should ideally take less than 2 minutes. It may sound impossible to do right now, but it is possible and unavoidable. The best way to start would be to write it down and filter and refine until you are down to an acceptable time. Practice telling your story in front of the mirror. Yes, I know it’s a huge cliche in India and every one of you must have heard it from your teachers but hardly any of us actually did it. But this is not a debating competition. It’s your life (and yeah, let’s face it, a lot of money is at stake as well).

DCF, WACC, LBO and the alphabet soup

In the developed markets, the general consensus is that acing the technical components is not enough. Between a modeling rockstar with no people skills and a guy with great stories but average modeling skills, the latter would get picked every time. But here we Indians are in luck. The finance industry in India is so small and so undeveloped that if you demonstrate excellent technical skills, you have a great chance at cracking the interviews as long as you can frame coherent sentences.

So how can you crack the technical interviews? In this case, I’m afraid there are no shortcuts that either I or anyone else can provide. As with interviews in any other industry, it’s just practice, practice, practice. There’s simply nothing better than knowing the relevant technicals like the back of your hand. Make sure that you have a firm grasp on basic financial management techniques like NPV, IRR, DCF and the rest of the introductory alphabet soup. The same goes for Case Studies and Industry Analysis – just practise like there’s no tomorrow. There’s no dearth of modeling courses online, so just pick one and start practicing. I personally would recommend M&I’s basic financial modeling course, which includes material on case studies also.

Excel monkey test

As far as Excel is concerned, one great way to get a leg up on other candidates is to practice working on Excel with the mouse disconnected. There’s hardly anything in Excel that cannot be done solely by the keyboard, so learn all the shortcuts that you can. It’s a great way to impress people, and even if no one’s looking, you still benefit by being lightning fast at Excel. If you have the time, take a look at macros. Writing macros may not be a piece of cake, but if you’re good at it, you may become as indispensable to the team as anyone can get.

And as for the modeling test itself, keep it simple and keep it clean. In a 1-hour modeling test, you will not be expected to put in all the bells and whistles like multiple scenarios and flexible funding options, so don’t try. Instead, focus on accuracy and clean, clear formatting. But in the longer modeling tests like those of 8-hours, at least multiple scenarios are a must. Again, a reminder – all the bells and whistles in the world are not going to matter if you miscalculate the WACC or mess up a Cash Flow Statement. In other words, make sure you have a rock-steady foundation before you move on to making the excel file look pretty.

With that, we come to the end of another long post. I hope it was time spent well and brought you one step closer to achieving your dream. If you feel there’s something else that should be on here, or if you are facing any problems, feel free to drop a word and I’ll be glad to help!