Tuesday, November 10, 2015

MBA Recruiting, 2015-16: Ready, Set, Go

It's that time of the year at top business schools.  Recruiting season is about to be launched in full swing.

First- and second-year finance students must implement strategies they've devised to find the right job in the right sector at the right company. MBA graduates everywhere remember how recruiting is a full-time effort, a sixth course, an effort that requires massive amounts of time and worry.

The Consortium Finance Network, as part of its mission, hosted its fourth annual recruiting and interviewing webinar Nov. 5 for first-year Consortium students in finance.  Students from all 18 Consortium schools were invited to dial in to get advice from a panel of Consortium alumni in finance.

During the one-hour session, CFN hosts and panelists reviewed opportunities in several finance sectors (from investment banking to private equity) and provided step-by-step guidance on how students can sell themselves and convince prospective employees to extend an offer--for the summer or for full-time employment.

This year, in the webinar's second half-hour, CFN decided to focus on venture capital, private equity and financial entrepreneurship, partly because these sectors do not recruit formally on campus and because these sectors have abundant hurdles when MBA graduates try to get through the front doors.

CFN steering-committee members D-Lori Newsome-Pitts, Camilo Sandoval, and Tracy Williams organized and hosted the webinar.

Panelists included Consortium alumni Ed Torres of Lilly Ventures (Michigan MBA), Ben Pitts of MyFinancialAnswers (Virginia MBA), Eddie Galvan of Nomura (USC MBA), Mark Linao of Technicolor Ventures (Michigan MBA), Sinclair Ridley-Thomas of JMP Securities (USC MBA), and Enoch Karuiki of HIG (Dartmouth MBA).  (Karuiki and Galvan had participated in a previous CFN recruiting webinar and returned to volunteer their advice and experiences this year.) All panelists had thoughtful guidance and offered lessons learned from their own days in business school. They added special tips and encouragement, based too on their own few years inside the front doors and on the front lines.

Outlook, 2016

Webinar participants evaluated financial sectors and offered a rating outlook for employment in 2016 for interns and for long-term careers.  Opportunities are a function of many factors, including economic trends and cycles, companies' relationships with specific schools, companies' past success in hiring MBA graduates, and financial regulation.

Banks and other financial institutions' business opportunities are somewhat constrained or influenced by new regulation.  Limitations on balance sheet and leverage and new rules, for example, discourage banks from hiring in large numbers in sales and trading.

A "Positive" rating suggests major institutions in the sector project revenue growth and business opportunities that will likely require hiring ample numbers of MBA finance graduates to come on board in the next few years.

The following sectors were assigned "Positive" outlook ratings:

Financial technology (payments, processing, clearing, advisory)
Compliance and regulation
Risk management (credit, market and operations risks)
Asset management (all asset classes)
Private wealth management
Venture capital

Webinar hosts and panelists awarded a rating outlook of "Stable" for the following sectors:

Corporate treasury (financial management, non-financial institutions)
Investment banking (bulge-brackets and boutiques)
Corporate banking
Investment research (equity and credit)
Private equity
Community banking
Community development
Electronic markets (exchanges, market-makers)

Sectors receiving a "Negative" rating, based on constraints banks are experiencing and general performance over the past few years, include the following:

Hedge funds 
Sales and trading (at regulated institutions)

Galvan, an investment banker in the financial-sponsors group at Nomura, reminded students that within investment banking, certain industry groups are "hot."  There could be glowing opportunities in technology, health-care, energy and real-estate groups.

Torres of Lilly Ventures agreed that while the outlook in venture capital is as favorable as ever, the route to employment continues to be hard, unpredictable.  "Very few folks get hired by a VC firm right out of school," he said. The best way to land a good offer from a prestigious firm (like Kleiner Perkins or Sequoia), he suggested, is to have already racked up many years as a successful entrepreneur. "Been-there-done-that experience is what is attractive to VC firms."

Torres added, in venture capital, "It's not a recruiting process. It's a dating process."

Summer Goals

When an MBA student in finance wins an offer, another phase of hard work is about to begin. Student interns have less than 10 weeks to prove they can do the work, make contributions, and fit in. CFN panelists summarized the primary goals in an internship, which fall in many broad categories:

Technical skills
Industry knowledge
Work ethics
Firm culture

MBA interns and graduates on a new job should show they have expert technical skills and industry knowledge and demonstrate it everyday.  If they haven't mastered the skills, they should prove they can learn quickly.

The summer is also a chance for them to observe the culture around them and decide whether the company, the company's diversity commitment and the industry are right for them.  Work ethics count for much, too, and MBA students will need to show they will work hard, produce, show up, be eager, and contribute.

As they become more closely linked to the outcome of deals or transactions, MBA associates will want to show their comfort and rapport with clients.

Of course, the ultimate goal is to win a full-time offer, even if the intern has decided the fit at the company is not favorable or the culture is not ideal. It's ideal to at least have the offer in the pocket when the first days of second year arrive.

Interview Road Map

CFN co-founder Sandoval reviewed CFN's road map to interviewing successfully.  He reminded students they should have a strategy set for the season and asked, "What is your story?" New recruits should know their story, know what they want, and polish the story. "Think about why you want to work (at a financial institution)," he said. " Don't miss any opportunity to discuss who you are."

CFN's road map is based on the MBA interviewee being able to express clearly (a) background, (b) interest, (c) drive, (d) capability, and (e) insight.

Galvan from Nomura said, "There are two different routes to investment banking.  The non-core school route and the core-school route."  Galvan had gone to a non-core school (USC-Marshall), a school not necessarily on the primary recruiting lists at top investment banks when he pursued and eventually earned a job offer at JPMorgan.

"Show active interest and the 'want-to-be-there'," he added.  Coming from a non-core school, "I became the guy from USC that everybody liked.  I don't get the technical interview if I don't show interest."

Karuiki from the venture-capital firm HIG said that the interview process is sometimes summarized by the recruit answering a series of why's:  Why do you want to be a banker? Why do you prefer and enjoy finance? While he was at Dartmouth-Tuck, his strategy was to combine his science background with his interests in finance. (He worked at UBS before eventually joining HIG.)

Ridley-Thomas, a recent USC-Marshall graduate, was able to secure an internship after his first year with the private-equity firm Oaktree Capital.  He said he connected with the right people before the interview process started and he "benefited from referrals," getting to know people who could recommend other people.

Linao, who worked at Amazon during his MBA summer, explained how he pursued working for a start-up when he began to look for full-time opportunities, but ended up in venture capital in the process.

Pitts, while at Virginia-Darden, was able to gain offers from firms like Lehman Brothers (before its demise) and Goldman Sachs, where he worked after graduation before founding his own private-wealth firm. "Do what is genuine to you," he advised MBA students.  "Don't get easily distracted from your own goals. Be true to yourself."

Mentors matter a lot, panelists said.  "Seek out the most senior people you can," Pitts added. In school, "you have to be at all the corporate social events."

Torres advised students, "During the interview process, focus not just on the 'what,' but also on the 'how,' too."  Interviewers, he said, will want to know whether MBA graduates know how markets, finance, products and companies work or how to get a job or task done.

Galvan said, "The (recruiting) process starts really early, so be prepared."

Linao, an associate in venture capital, said, "A lot of it (the process, getting an offer) is being lucky. You'll want to force serendipity."

Pitts, the entrepreneur, encouraged graduates to consider the daring route he took after a few years at Goldman.  He started his own firm that offers wealth-management solutions.  "People think being an entrepreneur is this mystical thing," he said. "I think it's about just doing it. Motivation, relationships, and just do do it. The actual risk is less than the perceived risk."

Ridley-Thomas said, "Get focused as quickly as possible. Be relentless."

Focus on Venture Capital

Sandoval led a special discussion on venture capital, explaining major principles of how a VC firm is organized, how it raises funds, how it invests in companies, and what goals it has in the short- and long-term.

For the benefit of MBA finance students, Karuiki explained the primary difference between venture capital and investment banking.  Investment bankers have a transactional approach. Bankers work from deal to deal and seek to close them as quickly as possible. Venture capitalists, he demonstrated, have a long-term approach with clients (4-5 years typically).  They have a sustained, high level of involvement and get involved closely with people issues and senior-management hiring.

Torres, who has spent over two decades years leading Eli Lilly's venture-capital unit, said venture capitalists spend enormous amounts of time immersed in the operations of the companies they invest in.  There is a different pace and timeline when considering a deal, investing in a deal and monitoring it.  Unlike investment banking, where deals are birthed and consummated in short order, in venture capital, Torres said, "It may take three months just to decide whether to work on a deal and six months to complete a deal.  It may take four, five, six years before we exit."

In venture capital, there are winners and loses, home runs and duds, whopping gains and occasionally embarrassing losses.  "You've got to have perspective," Torres said. Venture-capital firms look at countless possible investment opportunities before they invest. "You're looking for reasons to say no. We look at 100, 150 deals for every one we do."

He summed up, "In venture capital, we're looking for the jockey, the horse, and a large unmet need." Strong management, efficient operations, and an interesting, novel product.

Tracy Williams

See also:

CFN:  Recruiting Webinar, 2013
CFN:  Recruiting Webinar, 2012
CFN:  Recruiting Webinar, 2011
CFN:  MBA Job-Hunting:  No Need to Panic Yet, 2012
CFN:  MBAs:  Second-Year Dilemma, 2010
CFN:  Opportunities, 2015
CFN:  The Finance Resume' and Recruiters, 2014
CFN:  Summertime, Summer Internships, 2010

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