"What recent deals have interested you?"
You have to crush this, because a good answer here will show bankers you possess 2 qualities they love.
You find investment banking interesting - because who else is whacked out of their mind enough to read about M&As or IPOs in their spare time!
You can talk intelligently about it - assuming you give an answer the right way.
Unfortunately, this is a question aspiring investment bankers usually bomb on, so it's vital that you read our advice here very carefully.
What are the dangerous mistakes to avoid here?
First up, don't pick a deal that is on the headlines of every freaking financial paper.
Bringing up Apple's bid for Google looks lazy and it's an M&A deal your interviewers will be far too knowledgeable about for your analysis to be even slightly wrong.
On that note, don't pick a deal the bank has done - especially the group you are interviewing with - or any deal that is even remotely within their field of expertise.
Going to TMT to talk about Intel scooping up McAfee is as fine an example of insanity as one can find - as is attending an interview with Resources Supremo MD Larry Larryson and casually chatting about CVRD's bid for the zirconium deposits of Banwanaland Inc.!
You see one slip up on some random detail and you'll get taken to school. Avoid bankers' circle of core competency like the freaking plague and you won't get killer follow up questions or be found out on key analysis.
But... if you are insanely well prepped up on a deal in their circle of core competency and are ready to wax lyrical about it, then take the risk and talk about Intel v McAfee!
Although it's high risk - and something 80% of students shouldn't opt for - if you can nail it with intelligent analysis, then you'll slap bankers in the face with your raw passion and intellect for their area of work. You'll look like a ready made plug-n-play candidate.
How do you deliver a knock out answer?
For starters, hunt out and study a slightly obscure deal.
Just ensure it is sizeable enough that there are articles online or in print for you to extract facts, data and opinion from. No student I know has time to do 'primary' research after all!
Importantly, tell bankers why you chose this deal as this will strengthen your 'IB passion' claims.
Before sharing your thoughts on the deal, give bankers the background of it, even if you think they might know the deal. This involves a 15-second summary about the;
Parties - companies, advisers (including the banks)
Numbers - think price, valuation multiples etc; please distinguish between rumored or real
Outlook, or if it's done, the outcome
With them up to speed, proceed to share your thoughts on;
Whether it's a good deal and for who - company A, company B, stockholders, suppliers, customers etc. Importantly, ply the bankers with figures, data and expert opinions in support of your thoughts, otherwise you'll end up sounding about as substantiated as Perez "look at my shoes" Hilton!
The chances of the deal going through. If it's already done, talk about how successful the deal has been for the companies and the advisers involved.
Anything else of interest - e.g. how it will change the competitive landscape in that industry, how regulators have responded to it, material risks etc
Next, sit back and wait for the follow up questions.
Bankers will want to quiz you on all the material issues you didn't cover, but that's alright. In fact, it's wise not to share everything you know straight up because this will most surely heighten the difficulty of the follow-up questions.
Bankers may ask an alternative version of this question
"Tell us about a recent deal we've done that has interested you".
To prepare for this question you need to become really intimate with 1 or 2 deals the bank has done. Naturally this will stymie your chances of talking about a deal they are unfamiliar with.
Our advice then is to familiarize yourself with extra gusto (especially if you're attending an investment banking analyst interview) and be sure to preface your answer by saying "Although I am no expert on it, the Hebeijiu-Apple merger interested me because...".
Richard is the head writer for Inside Investment Banking - a one-stop shop of advice for students just like you who want to know how to Break into Investment Banking without a 4.0 GPA from Harvard or nepotistic connections on Wall Street.
Created by a team of 5 young bankers, Inside Investment Banking contains all the real insider advice you need to write killer banking resumes, answer tough interview questions, network with bankers and much more.
You can read more Free Tutorials on Investment Banking Recruiting just like the one above by visiting Inside Investment Banking now.
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