Investment Banking Internship, London
If you are a finance student, then your dream is probably to work in investment banking. If you are a European finance student, then your dream is probably to work for an investment bank in London.
But how can you land an internship in one of the most coveted sectors in the job market? We have spoken to former interns at top banks to give you all the information you need before trying to land a job in the City.
Front Office vs. Back Office
Investment banking is split into front office, middle office, and back office activities. Front office is generally described as a revenue generating role, and is the most sought after department by prospective interns. It is more widely assumed that the middle/back office internships attract students with inferior qualifications or less famous universities on their CV. However, the functions these departments carry out are vital to the functioning operations of an investment bank. In fact, risk management is a sector which is becoming more attractive than ever for prospective students, due to the effects of the credit crisis.
Front office is divided between the Investment Banking Division (IBD) and Markets. IBD is then further divided between industry coverage and product coverage groups. Industry coverage groups focus on a specific industry and maintain relationships with corporations within the industry to bring in business for the bank. Product coverage groups focus on financial products – such as mergers and acquisitions, leveraged finance, restructuring – and generally work and collaborate with industry groups on the more intricate and specialized needs of a client. Markets is instead divided between Sales & Trading, Structuring and Capital Markets. The most popular divisions are IBD and S&T, because they are also the ones where the biggest revenues arise.
“To get hired in IBD appearances and communications matter a lot, and prestigious university and work experiences on the CV can get you far”, is what one of our intern friends told us. You don’t have to have an exceptional knowledge of finance, as the first few years the work is very hard and dull, almost mechanical.
Markets is where people who think they are smarter, and most often actually are smarter, end up. It is more technical and harder, and the role that attracts more people is that of the trader, because if you are really good you make a difference and a lot of money. Structuring is where people with even stronger technical skills end up. To work in Sales you will instead need stronger communication skills. Some people see Sales as a way to get into Markets and then work their way up into Trading, but this is very hard. What you should really do if you want to work as a trader is to do a first internship in Sales and then come back the following year with the experience and get an internship in Trading.
That being said, these differences between sectors are reflected in the recruiting process. Every division tries to hire a certain type of person, so they will assess those abilities. So in M&A they want nice schools on your CV, interest for deals, excellent knowledge of corporate finance and accounting, and people who are very bright (maybe even a tad arrogant) who will not look bad if they are invited to a black tie event. They choose people with different majors, but finance and accounting are the best ones to get in.
In Sales you can see a bit of everything, but people are confident, good speakers (a high English level is fundamental unless you work on a desk that deals with your local country), very interested in news and market stories, with knowledge of financial products. Interns are chosen from a variety of majors, even humanities studies, however, the most common ones are economics, management, and general finance.
In Trading approximately 85% of interns study maths or engineering, while the rest studies economics. If you are a general finance student, you run the risk of being seen as having a background that is too general. The must-have skill for this position is being a war machine with numbers.