Can you go from engineering to investment banking? The simple answer is that it’s complicated! But let’s see how complicated.
If you are an engineer with some prior work experience in finance or you have done internships, you may stand a chance. But you should have completed not one but a series of finance-related internships. Getting into investment banking (IB) cannot be an afterthought after your engineering graduation party.
As an engineering undergrad, you can prepare the ground for entering IB. But you need to make up your mind early. If you have not yet decided by the middle of your second year at college, you may already have missed the bus, says mergersandinquisitions.com.
If you have already graduated in engineering, you may have completely lost any chance of getting into any finance-related field, forget IB. The reason? You probably haven’t seen the inside of a Big 4 or valuation firm, let alone an internship, and you don’t have a Master’s in Finance degree.
Suppose you graduated from an engineering school a couple of years ago but did an MBA from a top business school. Now, that may help you. But have you done a full-time role in finance somewhere? Or at least an internship before your MBA?
What if you have worked in MBA positions for a long time? Again, there is little possibility of your being recruited as an associate or VP in a top bulge bracket investment bank. But if you’ve reached a top position in a tech firm, you might well be considered for a similar position at a bank or you can move to venture capital or venture debt.
As you must have assumed, not everything is in favor of an engineer entering IB. This is not because banks think you’re no good at math or attention to detail. They know you are. But they are worried about your social skills and your ability to put in 100 hours a week.
Banks will want to explore your motivations for “suddenly” developing a thirst for IB.
Where were you a few years ago? Did you think about IB when your banker friend recently told you how big a bonus she got?
[Read more on investment banking salaries]
Other concerns for bankers: did you try to get into IB earlier but fail? Why were you rejected then?
You need to be well-prepared for the obvious questions that IBs will ask you: do you want to move to IB for more money? Is it because you recently found that you want to “keep learning” or do client-facing work? Or that you want to be an “influencer” for the world in some way?
For you, these may be genuine reasons. Yes, IB offers a chance to meet great people and companies, you will learn a lot, and you will draw an excellent salary with the freedom to retire early. But they are not reasons why banks would hire you, warns askivy.et. Or the reasons why you should try to go into IB after engineering, if you ask us.
You are hired for advising companies on financing deals and mergers and acquisitions. And be warned: if you aren’t interested in spending time on Excel, PowerPoint, and Word working out details of a deal when you are at lower levels, then you aren’t cut out to be an investment banker.
The first step in your effort to go into IB after engineering is to lay a good foundation of knowledge about banking and finance, according to a blog on learnwithflip.com. Take a course. An online program will do. But master the topics.
You can also do an MBA in Finance at a top school. You can try to get some work experience by joining a big bank’s KPO subsidiary, to which research/analysis is often allotted. Join as an analyst, and if possible, try to get an MBA while at it.
Try to do internships or projects that will help you learn and improve your CV. Get an IB-centered certification, if possible; for example, CFA (Chartered Financial Analyst). You could start with financial modeling to understand investment instruments and analysis tools better.
If you clear CFA level 1, you could get a job at a small equity research firm. Keep building your knowledge and start trading in stocks, keeping a note of your analysis and why you picked up certain stocks over others. This will help you in your interviews.
Last but not least, read up on well-known IB people, roles, major deals, and industry trends. Subscribe to a good financial newspaper or magazine. Visit portals such as Investopedia and Money Control.
So why are you interested in IB, again? You can mention your very early forays into finance, such as launching a savings bank scheme at high school. Then, later, you perhaps met a banker or did an internship or attended a class that made you want IB?
You also read up a lot about the stock market and studied case competitions, which further fueled your interest. You stayed up whole nights poring over finance books and looking at webpages (this will show that you can work really hard). You finally want to combine your engineering and finance skillsets to provide financial advice to firms in the engineering industry. Now that sounds good.
Don’t write a cover letter that you will use for all companies and roles. Write each one separately.
In your resume, don’t talk too much about your technological skills at the cost of business skills. This won’t be appreciated. Give up geek talk (“I completed migration from ABC operating system to DEF system by using XYZ brand of microprocessors using this code…”).
No one at IB cares for a tech lecture. Instead, say “I reviewed the client’s operating system and achieved 25 percent optimization of processes and $25,000 savings for the client in the first year.” Now, you’re talking finance, and that kind of talk turns heads at IB, says an article on WallStreetMojo.com, a site that offers investment banking courses such as financial modeling, stock analysis, valuations and other finance skills.
What did you learn from internships? Highlight three or four key takeaways, along with your IB certifications.
But finally, however you spin it, it is your GPA (in the US, 3.5-4, depending on the school’s reputation), the prestige of your school, and the profile of the firms that you have worked for that will clinch it for you.
As mentioned, you need to tell your story nicely, you should be able to answer the IB technical questions, and you should come across as being a proper “fit” for the company.
There are probably tens or hundreds of candidates for each IB role, and your technical knowledge of IB should be above par. The fact that you have graduated with a non-finance degree is no excuse for being unable to answer questions related to finance/IB. If you have to, opt for self-study and adopt some good, hard self-discipline to do so.
We already mentioned good grades. Don’t say engineering awards lower grades than finance. Your interviewer is not going to swallow it.
Be ready to face questions about your social skills. Talk about your interests and activities that also involve others in them. Mention your ability to work half way into the night and be back again at your desk before the market opens the next morning. It doesn’t count if you had to put in one or two nights at your old firm. Have you done it for months or for a year continuously?
The importance of networking cannot be overemphasized. Start with cold calls/emails using your alumni base and try to get informational interviews. Eventually, if you can get in touch with an insider, that will be great.
Don’t insist on focusing on just one industry or sector, because you already have a heavy burden on your shoulders trying to make a successful career change. So, try any type of IB.
If you are keen on finance, you could initially join a tech firm and move on to a finance role. You could also look at venture capital firms and invest in a tech company that you think will go places.
If you have excellent knowledge about the tech industry, how about studying your sector further and taking up equity research? If you would rather use your coding skills, you could take up a sales and trading role and look at quant research or quant hedge fund, says mergersandinquisitions.com.
If you fail completely, don’t think of going back to engineering, warns an expert. Consider equity research, corporate banking, or a coding position at a hedge fund. After a couple of years, do a Master’s in Finance program to renew your efforts to get into IB.
Or try to see IB’s negative side: hundred-hour weeks almost continuously at the start, at least, stress, and job insecurity at a whiff of a slowdown. Starting a business or trading in the stock market may be better options. Or how about offering your coding services or product management?
Engineers have a few advantages over other candidates when they apply for IB roles. The first is their technical aptitude; second, engineers can easily pick up the calculus and programming used by banks—they are tech experts in their sectors and can add value to equity research about companies from the same or similar sectors, says an article on proschoolonline.com.
A managing director at a top IB affirms that an engineer’s skillset is extremely relevant to many roles at an investment bank. Their ability to quickly grasp complex tasks and problems is useful to IB’s mergers and acquisitions (M&A) and global capital markets (GCM) teams.
Banks know that they can depend on engineering graduates’ numerical ability, and engineers are ahead of other applicants on this score. The only challenge for engineers is to be able to transfer their skills to finance and business.
An associate in the tech division of an IB, who holds an engineering degree, agrees that IB is often seen as too much of a leap for engineering graduates. But for him, working at a bank allowed him to write great software and familiarize himself with the financial sector. He says the best advice to engineering graduates is to ignore misconceptions about IB.
Another engineer-turned-banker employed in the operations division of an IB says mechanical engineering, for example, as a team discipline, teaches you the important of communication and teamwork essential for IB roles. Being good with numbers and having a logical thought process help both in engineering and in finance.
See, it’s not that complicated.
– Investment banking resume with no experience
– The dark side of investment banking
– Investment banking vs management consulting
– How I got an investment banking internship on Wall Street
References: 1, 2, 3, 4, 5, 6, 7, 8, 9