Investment Banking Competitions: The Best Way to Make Up for Average Grades and No Work Experience?

Nicolas was a Financial Analyst at General Electric where he explored the world of Corporate Finance. He is now a CFO and Partner Wild is the Game.

So you’re not feeling very confident about your chances of breaking into finance…

• You’ve earned decent, but not spectacular grades.
• You’ve done a few internships but you don’t have any bulge bracket names on your resume / CV.
• It’s too late to win a major leadership position or to complete another internship, right?

So what do you do? Open your own personal trading account and demonstrate your interest like that?

Camp out outside an MD’s house and hope that he doesn’t notice you as you hide in the bushes?

No.

You participate in company-sponsored competitions and complete case studies, essays, and possibly even trading challenges or group activities.

And you use them to demonstrate your interest, network extensively, and make up for your lack of “real” work experience or solid brand names on your resume.

Just one small problem: you have to participate the right way, or you might as well not do it in the first place.

Here’s why these competitions can be so helpful, when they’re not helpful, the different types you can participate in, and how to come in 1^st place each time… or at least make them remember you.

Why Competitions?

First off, note that these competitions are most helpful when you’re an undergraduate or recent graduate; past that they don’t matter as much, and at the MBA-level banks will care a lot more about your work experience and where you went to school.

But if you’re earlier in your career, there are many reasons to participate.

First, they’ll help you stand out in interviews and will make your resume more attractive.

In fact, you can and should turn these competitions into “Work & Leadership Experience” entries because doing that lets you add a bank’s brand name to your resume/CV in a prominent position (yes, there’s even a guide on how to do that right here).

Everyone has generic student group-type activities and boring internships, but few people can describe a competition and how they approached it in a unique way. It’s the perfect way to wake up sleep-deprived analysts as they interview you and doze off in the middle.

Plus, it’s always good to stroke the egos of HR and show off how long you’ve been interested in their bank (assuming, of course, that you’re applying to the same bank that hosted the competition).

Sometimes recruiters even attend the events and you’ll get improved access to them – especially if you’re at a non-target school and would otherwise get very little attention from banks. You might even be able to win an internship out of it, or at least an investment banking spring week (huge in the UK for winning banking offers).

During the competitions themselves, you’ll have to work in teams and meet lots of other people… in other words, networking opportunities abound.

Not only can you meet bankers, get their cards, and stay in touch, but you’ll get practice becoming more socially savvy and outgoing for real interviews.

Assessment Center Training… and More?

These competitions are also perfect training for assessment centers, which are common in Europe and other parts of the world outside of North America.

You’ll get a mix of interviews, along with team or individual “games,” case studies, presentations, and so on. And if you can place well in a competition, assessment centers will be a breeze.

Also note that even in North America, case studies are becoming increasingly common, even in entry-level interviews. Maybe you won’t do a group exercise, but you may absolutely be asked to value a company or analyze a situation and recommend a course of action.

Competitions can also be a great way to get international experience because the final stages are often held at the firm’s headquarters… which, in Europe, may be another country altogether for you. Not a bad way to get a vacation and a good story out of it as well!

Oh yeah, and even if you don’t do well in the competition, you can always “spin it” around and use it as your “failure” or “overcoming a challenge” story in interviews.

And if you did slightly better, you can use competition examples to demonstrate your leadership skills.

What Types of Competitions Are There?

Competitions are a great way for a firm to recruit new talent and improve their brand image. There are tons of different events out there, and you have to pick the right ones to maximize your ROI.

Winning 3 trading competitions would look good on your resume, but if you’re trying to break into investment banking it’s not the most relevant experience you can have.

Here are the major categories of competitions you can enter:

Trading Competitions

This is the most common event. The rules are simple: the company provides you with a mock trading account and your goal is to get the maximum possible return with a portfolio of your choosing.

Sometimes it might be based on equity trading; other times it might be FX or commodities trading.

If hundreds or thousands of people enter the competition, the winner almost always achieves something like a 200% return for 30 days of trading – so it’s hard to finish in the top 10.

That’s why if you are interested in trading, you have to get involved in every challenge you can find – even if trading gold or Colombian pesos isn’t your specialty.

Obviously these competitions are the best if you want to go into sales & trading, asset management, or related public markets roles… but they’re also great if you’re a non-finance major and you want to demonstrate your interest in the field.

Make sure you document your strategy in detail. That is the key mistake people make – they enter a competition, they might do somewhat well, but then when it comes to interviews they forget all the details of what they did.

And in S&T interviews, there is a 99.9% chance they will ask about it if you’ve listed it on your resume.

Be able to explain the following points:

1. What, specifically, your strategy consisted of.
2. 3 reasons why it worked, backed up by qualitative and quantitative metrics.
3. The potential upside you estimated from it, and then what you achieved.
4. The potential risks and how you could hedge / actually hedged against them.

The Case Study

Yes, it’s time to make fun of consultants once again.

No, not really: these “case studies” are very different from the typical consulting / market sizing ones.

Normally at finance firms these case studies will focus on questions like:

• How do you value this firm / how much is it worth?
• Should they pursue an acquisition, expand organically, or try to sell to a bigger company?
• Should they raise debt, equity, or sell off assets to finance an expansion effort?

I don’t have enough space here to go into case studies without turning this into a 10,000 word article, but you can click here for a guide to how to approach case studies in interviews.

Note that there are some differences between what’s in that guide and how I recommend approaching case studies in competitions, which I’ll get into in the next section here.

Essays

Essays get a bad reputation because they are considered “boring.”

Don’t be so quick to judge, though, because ranking well in an essay competition about ethics in finance or a related subjected is a good addition to your resume.

This event can be solo or team-based and you usually have significant time (several weeks to months) to complete your essay.

This is a great event for any type of finance position because it improves your written communication skills. So be sure to enter essay events even if the subject isn’t clearly finance-related.

Many people think that finance is all about numbers, but you will be writing a lot, at least in IB and PE, so you better get used to it.

Others?

I’ve described above the “classic” events, but some banks are imaginative and do slightly different things.

BNP, for example, has a mixed event with Investment Banking Cases and Trading Competitions.

You may also encounter debate challenges, which I highly recommend to everyone – or interview challenges where you are given a random resume and you have to “sell” it to the recruiters.

The possibilities are endless, but remember that no competition will ever set you back in the recruiting process!

How Do You Win a Company Competition?

“Eighty percent of success is showing up.”

– Woody Allen

Most people fail to take advantage of these competitions simply because they do not apply to them.

This may seem ridiculous, but remember one of the themes of this site: never overestimate the competition. No matter how good people seem “on paper,” no one is perfect… and many people give up without even trying.

Usually when an email about a competition circulates, the attitude is: “Well, everyone else will apply / I don’t have time / I have no chance of winning” – which kills your chances before you even get started.

Take a Crazy Bet and Do Something Risky

Let’s say you have two options at work:

• Option A: You can rank 5^th 100% of the time.
• Option B: You can rank 1^st 10% of the time and 100^th 90% of the time.

In your daily job, you would always go with Option A because you are risk-averse and being the best just 10% of the time isn’t worth it.

If you’re at a bank-sponsored competition, on the other hand, you have to go for Option B.

No one ever wins these competitions just by being “above average” or by having nicely formatted PowerPoint slides that explain their view point coherently.

They win by making original choices to stand out and get noticed by the jury.

So if it’s a trading challenge, bet hard on the underdog; in a case study or an essay defend a wild position.

If it seems reasonable that the company you’re analyzing should raise debt to pay for an acquisition, you can bet that everyone else will say the same thing.

So take a more “creative” position and argue for an asset sale, an unconventional type of financing, or something else that will get them to remember you.

Now, you still have to back up your choice with logical reasons… you can’t just be different for the sake of being different.

But decisions like this are rarely 100% straightforward, and as long as you don’t recommend something that’s clearly a bad idea (e.g. liquidating and selling off all assets just to “reward” shareholders) then you’ll come out ahead.

What Next?

The next time you get an email about bank competitions or case studies, answer it and enroll right away.

Don’t obsess over researching it and coming up with ideas beforehand, but do spend some time looking into it and see how people have approached it in the past.

Then when the competition actually arrives, win by being as different as possible and coming up with unique solutions that no one else will have.

Even if you don’t win the competition, you’ll get a great story out of it that you can use and re-use in interviews – and there’s always another competition around the corner that you can win.

Leave a comment below and let us know how it goes when that day comes.

[Edit]: I found one competition that you could be interested in. It’s a financial modeling challenge that starts in October 2012 with cash prizes and interviews to win (plus an improved resume). The first two rounds will take place online so everyone can participate. Go to the Modeloff website for subscribing!