IBfacts

A good time to send your resume to an investment bank is in November and December. Hires are usually made around January and February. According to an analyst at Salomon Smith Barney "it's really crucial to be persistent. It's basically a numbers game. Contact lots of people. But at the same time, customize your approach to each person and bank. That means it's going to be pretty much a full-time job."

Don't forget to check back. Traditional recruiting is done by April. Lots of people also change jobs in the March to July period. This means that many banks are scrambling for personnel in July, long after the resumes have been thrown away. Somewhat surprisingly, the best time to find a full-time job is by screening your contacts in late Spring and Summer.

Electronic investment banking is emerging in a serious way. Companies like E-Trade offer online stock trading. Other organizations like DLJ and Deutsche Bank are offering electronic trading of stocks and bonds. There are tremendous opportunities for growth in this area.

Investment banking is seeing massive consolidation as firms merge at unprecedented speed. The mid-1990s have seen mergers of Citibank, Smith Barney and Salomon, Dean Witter and Morgan Stanley, Bank of America and Montgomery Securities and SBC, UBS, Warburg and Dillon Read. Expect this to continue.

Investment banks had a great year in 1998 with declining interest rates and growth in underwriting. This implies good hiring in 1999 if the world economy holds up. Investment banks have experienced rapid salary escalation as firms fight to try to keep good people. According to a recent McKinsey study, the average salary at a top ten US investment bank in 1980 was a little over $50,000. By 1998 it had more than tripled.

The investment banking business is notoriusly competitive. A recent Goldman Sachs research report finds that five large European investment banks (headed by commercial bank parents) have committed almost $17 billion in capital to the industry. Firms like CSFB, Deutsche Bank, Warburg Dillon Read and Banque Paribas are attempting to expand rapidly in the US and are putting salary pressure on other firms as they go after talent and business. A recent McKinsey study argued that many firms in the business will not be able to survive long-term (overcapacity situation). This argues that you should try to get on with one of the stronger players in the industry if you have a choice.




			Art Selender Director NatWest Securities

The Asia crisis has put the dampers on much investment banking activity in places like Indonesia, Hong Kong, China and Thailand. Yet hiring is happening because so many have quit in 1997 and 1998. Watch for hiring to expand in the next three years.

Investment banks are facing declining margins on bread and butter business like underwriting of investment grade debt and increasing capital demands in hi-tech areas such as foreign exchange and derivatives. Treasury bond trading is fast becoming one of Wall Street's least profitable area. This is putting downward pressure on salaries in certain less profitable areas.

Sometimes you will find yourself working for an egotistical jerk in an investment bank. What do you do? First, don't take the job in the first place. If someone mistreats you in an interview, get up and walk out (funny... you may actually get offered the job). Second, be sure to communicate your needs very clearly when it matters when dealing with an ego-creep. It might just be that someone is so busy and overwhelmed that they get abusive. Laying it out in a nice way may help. Finally, if you find yourself in a truly pathological environment working with dysfunctional people, bail out. Life is too short and the money isn't worth it.

Pick the first firm you work for carefully. People who jump from firm to firm too much are less likely to get hired into a great job because your loyalty will be in doubt. One leading global investment bank has a practice of minimizing hiring from outside to avoid "career jumpers."

Investment banking is seeing entry from traditional banks as the Glass-Steagall Act which restricts commercial bank activity in underwriting equity and debt. The following U.S. banks, for example, have entered securities underwriting in a serious way: BankAmerica, JP Morgan, First Union, BT Alex Brown

Investment banking is generally transaction driven. In this environment a single individual with good client contact can make an enormous difference for a firm. This is part of the reason that star investment bankers ("rainmakers") take home high bonuses.