what to say when asked why fig investment banking

You've practical to over 100 banks, networked with 230 bankers, and accept been pounding the pavement since August.

And now you've lined up x commencement round interviews, almost of which are for the K&A and generalist pools.

Just so yous notice that you're besides set to interview with a mysterious FIG (Financial Institutions Group) banker, followed by 2 oil & gas bankers from the Houston office.

And who knows, peradventure yous'll land a real manor, mining, airlines, or healthcare interview to make things more than fun equally well.

So how volition it exist different? And how can yous become upwards to speed on all the accounting and valuation differences, contempo deals, and everything else if you only have a few days – or a few hours – to set up?

Definitions

Everyone lumps investment bankers together, just that'southward not really how banks operate.

Banks have product groups that focus on specific deal types – G&A, Leveraged Finance, Equity Capital Markets, and so on – then industry groups that practice all sorts of deals – simply all inside a specific industry, such equally technology, industrials, healthcare, financial institutions, energy, real estate, and then on.

At a bank, y'all might interview specifically for one of the product groups, or you might interview for one of the industry groups – or you might just interview for a "generalist" position, be placed in the generalist puddle, and then select your group subsequently.

Most investment banking interview guides focus on standard questions that you lot might make it whatever group.

But there are important differences when you interview with specific industry groups – and then allow's get started with the festivities.

Most of the Time…

Interviews are not dramatically unlike – if you're interviewing with a FIG banker, he's not going to say, "Since this is FIG I want y'all to build a detailed model and valuation for Citi right at present – you have 30 minutes."

You however need to know the standard "fit" and technical questions, and you volition however become questions on those.

You still need a great story, you nonetheless need to know why you want to practice investment cyberbanking, and you lot all the same need to know what it'southward like existence an investment banker.

Manufacture-specific interviews require you to shift your answers rather than come up upwards with completely new ones.

How to Shift Your Answers

Focus on these 4 questions (or categories of questions, equally in the final example):

• Why This Group?
• Tell Me About the Manufacture
• Tell Me Nearly a Contempo Deal in This Industry
• Manufacture-Specific Technical Questions

The kickoff iii are not terribly difficult as long as you're prepared – the technical questions tin can be more than problematic, but there are means to go up to speed quickly.

Why This Grouping?

Reply this ane by linking information technology to something in your groundwork: a schoolhouse project, an internship, someone you met while networking, family, friends, and and then on.

Allow's say that all your feel has been equally an engineer in the technology industry and there'south no obvious reason why you'd want to piece of work in an oil & gas group.

But maybe you accept a distant relative who is in the business organization, or possibly 1 of your friends started working at a big free energy company recently – you can have something small like that, spin it, and turn it into a "I had always been interested in tech, and withal am, but recently I started talking to [Person Name], who made me really interested in energy…" story.

If yous don't have something specific in your background, you could ever talk virtually industry news or recent deal activeness making you more than interested.

Once you've established this spark, give 1-2 solid reasons why you want to piece of work in the grouping later on someone or something made you interested.

Going dorsum to the energy example, you could talk virtually how it affects non simply everyone and every economic system in the earth, but also geopolitics. Yous could as well talk about existence interested in promising but controversial technologies like hydraulic fracturing and how quickly the industry is changing due to ascent free energy need in emerging markets.

They don't await you to be the adjacent T. Boone Pickens – they simply want to hear something intelligent from you.

Do not effort to BS something on the spot here – and don't say something silly similar, "I'thousand interested… because… it'south and so interesting!" (aye, I've heard that i before)

Tell Me About the Industry

It's easy to get "off the runway" and ramble with this blazon of question.

Use the following construction to draw an industry:

1. Give an estimate of the total market size if y'all can get it, and say whether information technology's growing, mature, or declining. Also mention a dominant recent trend.

Example for FIG: "Fiscal services are the biggest manufacture on the Due south&P 500, so it's a huge market place in the US – information technology is relatively mature, though there are pockets of growth in some areas such as take chances management. The major issue in the industry, especially postal service-fiscal crunch, is regulation and how capital requirements for banks volition change in the future."

2. Next, sum up the major players and the sub-industries in one-2 sentences. Most industries have a few global, diversified companies that do everything so accept smaller companies that focus on more specific segments.

Example for FIG: "It'southward split into segments such as commercial banking, insurance, investment banks, wealth management, and investment firms. A couple huge banks, such equally BNP Paribas, RBS, Barclays, Deutsche Bank, and JP Morgan, operate in all these segments, while there are also more specialized firms similar Goldman Sachs that may focus on but i or but a few of these segments."

3. Shut with a contempo trend or recent news in the manufacture. This shows that you've been keeping upwards with deal activity and reading the WSJ, DealBook, and other news sources.

Example for FIG: "Recently as banks accept been recovering from the financial crisis, everyone is thinking about new regulation and the adoption of Basel Iii – that volition have a big impact on banks' capital structures, how they do business organization, and how they outcome dividends."

Bankers don't look you to know everything, but they do expect y'all to have done some research – otherwise you won't seem interested and they'll give the offer to someone else.

Where Practice You lot Find This Information?

Now I'm going to salvage yous 10 hours of time spent frantically searching online by sharing these resource:

• PricewaterhouseCoopers M&A Industry Insights
• PricewaterhouseCoopers Manufacture Inquiry
• Deloitte Industry Research

Yes, you lot read that correctly: Big 4 firms like PwC and Deloitte regularly publish industry and Yard&A research for free.

Some of the reports on those sites are too specific to exist helpful – the "Outlook" or "Overview" ones for unabridged industries are the best.

But that's the best way to get this data chop-chop assuming that you don't have admission to Capital IQ, Factset, or other tools that bankers have.

If you can't detect what you're looking for there, Google searches for [Manufacture Proper noun] + M&A or + "Market Size" also work, but take longer.

Yous can also look in industry-specific publications like the Oil & Gas Journal – only they're more useful for researching deals rather than industry trends.

Tell Me Nearly a Recent Bargain

G&A deals are the best ones to discuss and the easiest to detect data on, and so here's the structure y'all should utilise:

1. Proper name the buyer, seller, purchase price, and multiples.
2. Give background information – what does the heir-apparent do? What does the seller practise? How much acquirement and EBITDA exercise they have (or other metric if those are not relevant, eastward.grand. total assets for a banking concern)?
3. Explicate how the deal came together if information technology's public noesis, and why both parties were motivated to get it done.
4. Conclude by summarizing what Wall Street thinks about the deal, and how the manufacture will exist affected in the time to come.

You can notice all this data on the WSJ Bargain Blog – they do all the work for you with their "Deal Profile" reports that requite the relevant financial stats and multiples.

Allow'south say yous're looking for data on the Intel – McAfee deal for a engineering group interview. Do a Google search for "wsj intel mcafee deal profile" and you become the deal profile folio as the first consequence.

Most of the information is right there: Intel, the huge semiconductor company, was the buyer, McAfee, a security software company, was the seller. It was an all-cash deal worth $7.68 billion, with an EBITDA multiple of 17x and acquirement multiple of 3x (rounding multiples is less controversial than rounding your GPA).

This one'south non a great example considering the profile doesn't list anything besides the numbers – merely if yous practise a few searches you can find other articles on how most investors were scratching their heads at the deal – there were no obvious synergies and it came as a surprise to everyone.

The official rationale was so that Intel could target more than of the mobile chip market and become into network security, simply few others idea it fabricated sense.

Going forwards, more than companies might start to focus on security for mobile devices and solutions that protect everything from desktops to laptops and mobile devices to web-based applications.

But What About…

If y'all're having trouble finding recent deals, look in the M&A reports from Large iv firms I linked to to a higher place; simple Google searches for "[Manufacture Name] biggest 1000&A deals" tin can as well requite you names at the very least.

If the WSJ and searching online don't give yous good results, you could accept another approach and observe equity research instead.

Aye, y'all tin observe this research without working at a bank: just sign upwardly for a TD Ameritrade account and you can go gratis Credit Suisse reports on most large companies.

Other brokerage accounts can piece of work as well – Scottrade, for example, as well offers free research.

So if you can't detect analysis of a deal in the WSJ, find equity research on the buyer or seller just after the deal was announced and look up the multiples, numbers, and rationale in that location.

If you can't observe relevant metrics, simply get the buy toll for the bargain and go the fiscal metrics yourself past looking at the acquired company's almanac report on their investor relations site.

Technical Questions

Y'all'll find conflicting reports on technical questions for specific manufacture groups: some interviewees claim that they're uncommon, while others (especially in Canadian mining groups) merits that interviews tin exist extremely technical.

Then there is no universal rule – the only generalizations that utilise are:

1. It's good to be familiar with the basics and the high-level view of how companies in the industry are different.
2. Some industries are more different than others. Fiscal institutions (banks and insurance firms) are by far the most unlike compared to normal companies; oil, gas, and mining are as well unlike only less and so than fiscal institutions, and REITs are likewise different but less so than banks.

Engineering, consumer, and retail are the well-nigh "normal" industries because they take straightforward concern models; others like healthcare, industrials, and utilities are non quite "standard" but are besides far less unlike than the iii groups above.

Here's a quick run-downward of what you should know for the "most dissimilar" industries:

• Banks / FIG: Understand how they're different (balance sheet-axial, loan portfolio drives everything, traditional metrics like EBITDA are meaningless because Involvement is Revenue for a bank); also know how valuation differs (P / East and P / BV multiples and the Dividend Disbelieve Model) and why regulation and regulatory capital are of import.
• Oil & Gas / Mining: Sympathise how they're different (remainder sheet-axial, energy/mineral production drives everything, can't command prices or revenue); also know how valuation differs (Production and Reserves multiples and the NAV model).
• Existent Manor / REITs: Sympathise how modeling individual backdrop is different from REITs; know the key metrics and multiples like FFO and AFFO and key lingo such as NOI and cap rates and how the business model works.

I can't listing every single industry here considering I just don't know plenty personally – simply well-nigh other industries take much smaller differences, such as slightly different metrics and multiples and acquirement or expense projections.

For example, an Net company might project revenue based on unique visitors and conversion rates rather than # of products sold to customers; a cardinal metric might exist EV / Unique Visitors, especially if it's unprofitable.

Resource for Technical Question Prep

Everything useful I've constitute is listed below:

• Banks / FIG: Damodaran – Valuing Fiscal Services Firms, Updated Version, Bank Balance Canvass Overview – Bionic Turtle
• Natural Resource: Oil & Gas Company Valuations – HFBE (This isfantastic), Damodaran – Valuing Commodity and Cyclical Companies
• Real Manor: Definitions of Key Terms, REIT Overview, FFO and AFFO
• Airlines: Fiscal Models
• Company Models in Different Industries (Banks, Energy, Industrials, Insurance, Retail)

And so at that place are adept onetime books, but you probably don't have fourth dimension for that if it'southward three AM correct now and your interview is at 9 tomorrow.

Models & Models (and Interview Guides)

If you lot desire to learn these concepts in more depth, y'all can also check out the BIWS Bank & Financial Institution Modeling course, the Oil & Gas Modeling class, and the Existent Estate Financial Modeling grade.

These are not introductory-level courses. If you cannot build a 3-statement LBO model easily, stay away because these are both more complex than fifty-fifty the Advanced Modeling course.

And earlier you ask, if you're in Canada or Commonwealth of australia, mining is 95% the same as oil & gas and lessons specifically on mining will exist added in the futurity.

More?

That's how manufacture-specific interviews are different, the cardinal questions and concepts to focus on, and how to do the research necessary to answer the new questions you might get.

If you lot have whatsoever other skilful resource for these groups and these types of interviews, post a comment beneath and I'll add it.

And if you really made it to the end of this one, congrats – hopefully yous don't take also many questions, merely ask away if you lot practice.

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Source: https://mergersandinquisitions.com/industry-specific-interviews/

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