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Tired of a Dead-End Career Path? You Too Can Make a Mid-Career Transition Into Investment Banking

It’s actually a surprisingly well-worn path.

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BY Quora - 06 Dec 2017

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Is it possible to transition from a laboratory scientist to an investment banker with a top 5 MBA? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Jonathan Jones, Head of Investment Talent Development at Point72 Asset Management, on Quora:

The general question here is: "Can I get into investment banking via a leading MBA program if my professional experience to date is in an unrelated field?"

And the answer is yes.

Not only that, do you know what the least common pre-MBA career background is for newly minted MBAs entering the investment banking industry as associates?

Investment banking.

Well, it might not technically be the least common background - I'm pretty sure that former professional beer tasters are less well represented - but the point is that almost everyone going into investment banking out of an MBA program is a career switcher in some sense. Former investment bankers who pursue MBAs are almost invariably doing so specifically for the purpose of leaving the investment banking industry - not to jump back into it more or less where they left off (except with their pockets lighter by two years' worth of tuition, living expenses and foregone income).

So you're in good company, in short, because almost every one of your MBA classmates who will be pursuing investment banking opportunities alongside you will be, generally speaking, in a similar position to yours.

How about schools?

If your intention would be to pursue an MBA in a top-5 program, that would certainly the right impulse; if you can't get into a highly ranked program I would think very carefully about whether the whole scheme makes sense. It's going to involve a substantial investment of time and money on your part, and if it doesn't yield the result you want (a position in a well regarded investment banking firm), that could be a costly and disappointing outcome.

Frankly, though, 'top-5' may be a little too selective - depending on how successful you are in the MBA admissions process and what your options therefore end up being. You could probably expand the list out to 10-12 schools and be well positioned to get consideration from leading investment banking firms.

As you go about selecting schools, make a point of looking at their placement statistics. Which of them seem to send the largest proportion of their graduating class into the investment banking industry? That will give you a sense for which of them likely has a curriculum that will help prepare you most effectively - and which of them is therefore likely to attract the most recruiting interest from investment banks.

Preparing for the investment banking recruiting process.

Ok, so you've gained admission to a top MBA program and have a few months before the program begins. However, while it may be tempting to take it easy for a little while and recharge the batteries after all the exertion of writing application essays, studying for the GMAT and chasing down letters of recommendation, you have a lot of work to do before you even get to school if you want to put yourself in a position to land that investment banking job.

Why is that?

Simple: if you wait until you arrive on campus to begin preparing for the recruitment process, then you're already too late. The leading investment banks place great reliance on their summer associate programs to identify and vet prospective new MBA associates. Your defining goal as a first year MBA who wants to become an investment banker is therefore to land a top quality summer internship for the summer between your first and second year of business school. Firms dedicate 95% of their recruiting energies towards hiring interns, with the goal of then offering the best of them (typically 70% or so) the opportunity to rejoin full-time following graduation. Many of the top firms won't even hire second year MBAs on a full-time basis if they haven't been through that firm's own summer associate program. And even if you can find a firm that will hire you directly as a second year, if you haven't at least completed a summer internship in investment banking (albeit at another firm), you have pretty much no shot at being hired. Life as an associate in investment banking is no cakewalk, and firms simply aren't going to book the risk that you'll succeed and stay the course if you have no basis for knowing what you're opting into.

So it's all about the pursuit of the internship.

And here's the problem: the investment banking recruiting train will roll onto campus so soon after you arrive that you'll scarcely have unpacked your bags before you have to start impressing recruiters who are, at some level, keeping score.

And while having a non-banking background will be typical among those classmates pursuing investment banking opportunities along with you, you will nonetheless have to convey your interest in the field effectively. And that interest will need to be well-reasoned, thoughtful, and informed. Yet you've only been there for five minutes... and most of the finance courses don't come up on the schedule for several more months anyway.

You see the problem?

So as soon as you know where you're going to school, and preferably well before that, you need to begin working all the angles to develop that informed interest so you're as prepared as possible when you arrive on campus. I'll come back to this in a moment.

There's another good reason to invest time and energy in getting smart on the investment banking industry early:

You might find it doesn't interest you to the extent you expected.

And that's a problem, because the recruitment process for banking will place such great demands on your time that you simply won't have time to explore a variety of career tracks in parallel, with a plan to make your mind up later. Between the company presentations, endless cocktail receptions, recruitment dinners, informational interviews, company visits and the like (all multiplied by however many firms you want to be considered by), you'll have your hands quite full enough just maintaining your academic performance, let alone doing all the above across a range of industries.

And if you happen to be a woman, or a member of an underrepresented minority group, you'll find there's a whole extra layer of events just for you - the result of the banks' considerable efforts to diversify their incoming classes. While these events are typically smaller, allowing higher quality exposure to professionals from firms you're interested in, and therefore potentially valuable on several levels, they are nonetheless an additional burden on your already limited time.

So given all this, you'll see why it is that you need to have a lot of things extensively figured out before you even arrive on campus.

So, how to prepare?

  1. Get yourself an education on valuation and financial modeling techniques. Know what DCF means? WACC? If not, invest some time before you get to school getting up to speed. There are providers out there such as Wall Street Prep (Financial Modeling Courses and Investment Banking Training) and others that offer such training. Remember - you probably won't get to this material in your curriculum until after you need to know enough about it to be dangerous in the recruiting game. Prepare now.
  2. Network like crazy with people you know who have actually been bankers. That will become easier once you get to school, but you can't wait until then. Figure out who those people in your network are and connect with them. Have them tell you what they do. What they really do.
  3. Develop some focus on an industry or two. Depending on exactly what you've done up to this point, there is a good likelihood that you have a natural connection to a particular industry. If you've been doing lab work, for example, you may have a connection to the pharmaceutical (healthcare), energy or industrials sectors. Whichever one it is, that 'inside' perspective is useful if you're going to be an investment banking associate. It gives you a basis to understand a particular industry in a way that others, who haven't worked within it, will not. So double down on that. Spend time researching companies in that industry as extensively as you can. This will probably require you to step back from the vantage point you had in your prior role and examine the industry from above. How do the various players fit together? If there have been significant transactions in recent months (e.g., a large merger or acquisition), read about it. Understand why it made sense and what the organizations involved were trying to accomplish. You get the idea. If your plan, by the way, is to focus on a totally different area than the one you previously worked in - think carefully before going down that road. Your knowledge of that industry is part of your competitive advantage as a candidate. Don't abandon it lightly.
  4. Once you get to school, time will be somewhat short but make sure to sign up for the right pre-professional clubs. These are the conduits through which the employers you want to meet will connect with potential recruits. And network with students in their second year who have completed summer MBA programs in banking. There's plenty they can tell you about how they got there, what it was like, and what they wish they had known before. (By the way, pay attention to the issue of whether the 2nd years you speak to actually received and accepted offers to rejoin their summer employers full-time. You'll probably get a different point of view from those who did than from those who didn't. On the other hand, you can feel more free to ask all the 'dumb' questions you want to ask if the person you're asking isn't holding a contract from a firm you'd like to work at - since they won't be providing that firm with any feedback on you)

So that's the playbook. Good luck!

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