by Brian DeChesare Comments (24)

Investment Banking in London: Equally Attractive Alternative to New York?

Investment Banking in London

In addition to Prime Ministers that serve for only 44 days and questionable weather/food, the United Kingdom is also known as a global hub for investment banking.

Many would argue that investment banking in London is second only to New York in terms of compensation, exit opportunities, deal flow, and “prestige.”

Banks in London advise not just U.K.-based companies but also firms across Europe and the entire EMEA (Europe, the Middle East, and Africa) region.

It might be the best place to gain diverse deal experience based on region, industry, and transaction type.

On the other hand, some have raised questions about the future of finance in the U.K. following Brexit, a much less valuable British Pound (GBP), the ongoing energy/inflation crisis, and more.

We’ll address these points here, but let’s start with a quick industry overview:

Investment Banking in London: Top Banks and Industries

Broadly speaking, the top 3 banks in the U.S. – Goldman Sachs, Morgan Stanley, and JP Morgan – are also the top 3 banks in London.

You’ll see them at the tops of league tables by M&A advisory volume in most years, and they tend to work on the highest-profile transactions.

After that are the top two elite boutiques in the U.K. – Rothschild and Lazard – and the other bulge bracket banks (BofA, Citi, CS (??), DB (??), Barclays, and UBS).

Various European “In-Between-a-Banks,” such as BNP Paribas and Société Générale, also tend to place well – with a much stronger presence than in North America.

The strongest middle-market bank – Jefferies – is usually in the top ~15 by advisory volume in the EMEA region, and other elite boutiques, such as Centerview and PJT Partners, round out the top ~20.

Below them are the Big 4 corporate finance teams and smaller U.K. or Europe-focused banks such as Numis and Jamieson.

If you drill down to other European countries, you’ll see other country- or region-focused banks show up in these lists (e.g., Mediobanca in Italy and France).

The main differences vs. the U.S. “rankings” are:

  1. Elite Boutiques – Rothschild is far stronger and is viewed as a real elite boutique; Lazard is still strong, and the other U.S.-based independents are weaker.
  2. In-Between-a-Banks – The European commercial banks mentioned above (BNP, SG, etc.) are stronger in EMEA than in North America.

In terms of industry groups and product groups, investment banking in London is highly diversified, so no single industry or deal type dominates.

The top banks are strong in the expected areas: TMT, M&A, consumer/retail, industrials, etc.

But as you move down the list, a bank’s specific strengths start to matter more.

For example, an offer in Restructuring at PJT Partners in London – the top team there – is very different from an offer in an industry group.

A Restructuring offer at PJT arguably beats a GS / MS / JPM offer if you want to focus on distressed deals, but an offer in Industry Group X does not.

Investment Banking in London: Recruiting and Interviews

The IB recruiting process in the U.K. is quite different from the one in the U.S., Canada, and most other regions – even other European countries.

The main differences are:

  1. Spring Weeks – These 1-week programs take place early in university and allow you to shadow bankers and, if you do well, get fast-tracked for a summer internship the next year. You don’t “need” one to win an internship, but it certainly helps. This article on investment banking spring weeks is a good introduction.
  2. Online Tests and Competency Questions – When you submit your application, you’ll have to take numerical, verbal, and logic tests and answer “competency questions,” which are written versions of the standard fit/behavioral questions. These exist to weed out candidates, and you could be rejected if you make even a small spelling or grammatical mistake. To succeed, practice as much as possible with sample tests.
  3. Timing – Applications for summer internships tend to open in August / September of the preceding year, so the timing is slightly less crazy than in the U.S., where banks might start their processes well over a year in advance. You must apply IMMEDIATELY when applications open because internships are first-come, first-serve.
  4. Assessment Centers (ACs) – Assuming that you apply online, pass the screening, and do well in your first-round phone interview or HireVue, the process ends with an “assessment center” (AC) rather than a Superday. At the AC, you’ll go through multiple interviews, you’ll complete a group exercise or case study (e.g., Should Client X acquire Company A or B?), and there may be other exercises such as “e-trays,” “in-trays,” or report writing. They might even give you the same numerical and verbal tests from the online application round to ensure you didn’t cheat!
  5. Candidate Qualities – Bankers still want students from top universities with good grades (2:1 or above) and relevant experience, such as internships at local PE/VC firms. But extracurricular activities are more important, and interviewers often focus more on “team fit” and less on technical skills. Also, knowing other European languages is important because of all the cross-border deals. It’s not “required,” but business-level proficiency in French, German, Italian, Spanish, etc., will give you a big advantage.
  6. Off-Cycle InternshipsOff-cycle IB internships outside the normal summer window are much more common in the EMEA region, and if you graduate without a full-time offer, you can use them to network and work your way into an offer eventually.
  7. MBA-Level Recruiting – It still exists in London, but it’s far less developed than in the U.S. Analyst-to-Associate (A2A) promotions are more common, and even lateral hiring from related fields may be slightly easier.

With all that said, IB recruiting still isn’t that different because you still need to start early and prepare for similar interview questions (Your story, why our bank, strengths/weaknesses, basic technical concepts, etc.).

The main difference is that the process is broader and shallower, so your preparation should match that.

For example, don’t spend much time learning advanced technical material; make sure you know the basics well and spend more time practicing for the online tests and the group exercises they might give you at the AC.

Does Networking “Not Work” in London?

One final note about recruiting: many people claim that “networking doesn’t work in London,” so contacting bankers and setting up informational interviews is pointless.

They argue that the entire process is too impersonal and random for networking to make a huge difference and that it’s better to attend structured networking events when banks host them.

My quick thoughts are:

  1. Yes, traditional networking is probably less effective in London, but you shouldn’t ignore it completely (it’s still worth contacting a few bankers at each firm).
  2. And it is still helpful if you’re at a non-target university, you’re aiming for off-cycle roles, or you’re focused on smaller firms, where “who else you know” is a key question.

Don’t ignore networking, but don’t feel pressured to go “all-in,” especially if everything else in your profile looks good.

Investment Banking Target Schools in the U.K. and Europe

The “target school” list in London includes a mix of U.K. universities and top schools in other European countries.

Within the U.K., most would say that the target universities include Oxford, Cambridge, LSE, UCL, Warwick, and Imperial.

There are also various “semi-targets” such as Durham, Bristol, Nottingham, St. Andrews, etc.

Target schools in France include HEC, ESSEC, ESCP, and the top few engineering schools; in Spain, names like ICADE, ESADE, and IE are on the list; and in Italy, Bocconi is the main target.

In Ireland, there are UCD and Trinity; in Germany/Switzerland, it’s St. Gallen, WHU, and Mannheim; in the Nordics and Benelux, the names include CBS, SSE, NTNU, RSM/Erasmus, and Solvay.

This is not an exhaustive list. I included a few top names by country, but you could argue for others and include “semi-targets” as well.

As with the U.S., you don’t need to attend one of these specific universities to get into investment banking in London.

But your chances are higher, and you don’t need to stand out quite as much in all other areas with one of these brand names on your CV.

Investment Banking in London: Salaries and Bonuses

Salaries and bonuses are significantly lower in London than in the U.S.

Expect a ~30% discount to pre-tax compensation in New York, and sometimes more like 40%+ depending on your level and the current GBP/USD exchange rate.

You can get the full numbers in the Arkesden compensation reports, but the rough total compensation ranges at large banks as of 2022 are as follows:

  • Analysts: £100K – £150K total compensation
  • Associates: £200K – £300K total compensation
  • VPs: £350K – £450K total compensation

Salaries and bonuses tend to be lower because of:

  1. The Lack of GBP/USD Exchange Rate Adjustments – The large banks set their compensation levels a long time ago based on much higher exchange rates (1.5x – 1.6x or even near 2.0x back in 2008) and never bothered to adjust them even after the GBP kept falling.
  2. Lower Deal Volume and Fees – Google any league table and compare the total deal volume in North America to EMEA and see for yourself.
  3. The EU Bonus Cap – After the 2008 financial crisis, EU rules limited year-end bonuses to 2x base salary. This cap might be going away now that the U.K. has left the EU, but until it does, it’s still a limiting factor for senior bankers.

People often counter these points by saying, “But housing is cheaper in London! Also, the quality of life is better, and items X/Y/Z are cheaper/better.”

I agree that rents are cheaper in London, as are other items, but the effective tax rate is also higher, so you may not save more in practice.

We can debate the “quality of life” and the cost of living all day, but the bottom line is that you will earn less in London.

IB Lifestyle and Hours in London

But that reduced compensation comes with a benefit: you also work shorter hours and get more free time and weeks of vacation.

You might see a ~5-10% reduction in work hours at the junior levels, which could mean ~1 hour of extra free time per day.

But there’s also a wide variance between banks, with the U.S. bulge brackets requiring longer hours and the elite boutiques and European banks caring a bit less.

And although it’s difficult to quantify, many bankers would say that the overall culture in London is more relaxed, so it’s easier to maintain a semblance of a personal life.

Investment Banking in London: Exit Opportunities

If you decide you need to make more money, there are plenty of exit opportunities in London, and they’re quite diversified.

The most common ones for bankers are private equity and hedge funds, but plenty go into corporate development, venture capital, growth equity, private credit, and so on.

We’ve covered the London private equity recruiting process in a previous article, but to summarize: there is no “on-cycle” and “off-cycle” split.

Instead, the process starts when PE firms need to hire people, and you have more time to gain deal experience over your first few years in IB.

Past the first few rounds, interviews are less about rapid-fire technical questions and 60-minute LBO modeling tests and more about open-ended case studies and extended interviews.

All the U.S.-based mega-funds have a presence in London, as do the larger middle-market funds.

The biggest difference is that the European upper-middle-market funds, such as Ardian, BC Partners, Bridgepoint, Cinven, CVC, EQT, PAI, and Permira, have a stronger presence in London.

(And yes, I realize some of these could be considered mega-funds.)

One issue with PE exits is that you may be limited by your language skills.

Many of these firms want to hire candidates who know other European languages, so you may not be competitive if you know only English or non-European languages.

If that’s the case, you might have better luck recruiting at hedge funds because language skills are sometimes less important.

(But they still help if you’re recruiting for something like distressed debt funds that trade Spanish and Italian bonds.)

Overall, London is probably the best city for traditional IB exit opportunities after New York.

Other U.S. cities might come close, but they have much less hedge fund activity and are strong mostly in specific verticals such as tech (SF) or energy (Houston).

Investment Banking in London in a Post-Brexit World

Following the U.K.’s vote to leave the European Union in 2016, many pundits assumed that finance jobs would instantly shift away from London and into EU cities such as Paris, Frankfurt, and Milan.

And banks have been adding staff to their offices in these cities…

…but the predictions of 100,000+ financial jobs leaving London (out of 500,000+ total) haven’t held up; the actual number is more like ~7,000.

One issue is that the other cities can’t compare to London on other dimensions, so senior bankers don’t necessarily want to relocate.

Another problem is that there’s no clear, single top alternative to London, so the jobs have become more widely distributed rather than concentrated in one city.

In the long term, more jobs and deal activity will likely move to cities still within the EU, but there will still be a sizable sector in London.

Could a city like Paris or Frankfurt eventually have more investment bankers than London?

It’s possible, but I would not bet on this happening anytime soon because these things take a very long time to change (think: decades, not years).

Investment Banking in London: Final Thoughts

So, is London the best place to be an investment banker after New York?

It depends on your goals and other options.

I would probably rank other U.S. cities, such as Chicago and SF, above London based on compensation and overall deal flow.

On the other hand, I would put London above places like Canada, other European cities, and Asia/Australia.

You could argue that Hong Kong is better than London due to higher compensation and lower taxes, but HK is no longer a viable option unless you’re a Chinese citizen and you want to deal with all the ridiculous rules and restrictions there.

The main disadvantages of investment banking in London are the reduced compensation and the relative randomness of the recruiting process.

The long-term outlook is also negative due to Brexit, but I don’t think it matters much unless you plan to be a career banker.

The biggest advantages of IB in London are the broad exit opportunities and the diverse experience you can gain (and maybe the modestly better lifestyle/hours).

So, if you cannot work in the U.S. or do not want to, London is the next-best place to start an investment banking career in most cases.

And if banks finally adjust their compensation to the lower GBP exchange rate, London might become #2 globally after NY.

Want More?

You might be interested in:

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

We respect your privacy. Please refer to our full privacy policy.


Read below or Add a comment

  1. Hi brian i am a student wondering if i do an MBA in the UK will i be able to join a firm straight as a associate and not a analyst?

    1. Assuming you have several years of full-time work experience pre-MBA, yes. But note that MBA recruiting in the UK/Europe is not that well-developed, so there are fewer opportunities.

  2. Tigergutt

    Hi Brian,
    I see that NTNU is on the list for target schools and I wonder where that come from. In Norway NTNU is more a science and engineering school, and people that want to break into IB and Finance study at NHH or BI. So I wonder if it is a mistake or if you could tell me more about it.

    1. Sorry, I don’t recall where we found this, but it was in some article, online discussion, or student/candidate list. You might be right that NHH or BI are better for IB (not that familiar with the top schools in the Nordics). That said, I don’t think any of these are super-well-known internationally (so they probably wouldn’t work as well for NY-based roles). But I guess the exchange program options make at least NHH more valuable/useful for IB recruiting if you can spend time in London.

  3. Hi Brian,

    could you give me an estimate of how likely it is for me to land an IB/PE job in London?
    I did my bachelors at WU Vienna in economics and am currently finishing my Masters degree in Finance at WU Vienna. I have 2 years of full time experiene (1 Year Next 10 Audit and 1 Year Big4 TAS), an M&A and Corporate Development internship and lots of part time work next to my studies at a pharma firm and at a Family Office. I tried to secure IB internships for the summer of 2024 but was not able to get anything with real name value. I think I might have too much full time experience by know?
    Could I land full time analyst positions in IB/PE with such a profile in London? I have extracurriculars, lots of experience, alltough no real IB and I don´t have outstanding grades either. What do you think?

    1. I think it’s probably a combination of 2 years of full-time work experience, plus attending a university that is not exactly a target school for IB roles in Europe (or at least not as well-known as some others there). Also, if you focused on roles in Austria or Germany or another smaller market like that, it’s very difficult because they only want specific types of candidates, and there are many fewer roles than in London.

      That said, if you focus on roles in London, I think you should be able to win an IB offer somewhere, even if it’s not at a large bank. So if you’re OK with accepting something at a smaller firm, it could work. If not, you might have to consider something like an MBA or pursue non-IB roles for now.

  4. What about if you’re trying to do a Hail Mary? I’m getting older, to the point where I’m going to need to go the MBA route you talk about.

    What if I don’t end up getting into an M7 here in the US? Would it be better to go to Oxford/Cambridge for an MBA, and try to break in, in London, then transfer back to the US? For instance, if I got into a MBA program ranked 16th or 18th in the US…or even 11th. Cambridge and Oxford just sound like such heavyweights (It seems like people around here almost think of them like Harvard).

    Also, I might be wrong…but if I fail to get into IB all together, then an MBA from Oxford/Cambridge would probably look better once I came back to the states than an MBA from something ranked 15th, right?

    Cambridge and Oxford are also a lot easier to get into from my research. I’m currently in undergrad (UC-San Diego…and we also have some sort of agreement with them, too).

    1. Yes, an MBA from Oxford/Cambridge is better than an MBA from a #15 ranked school in the U.S.

      But I’m not really sure they’re “easier” to get into, especially for non-U.K. candidates. I guess it’s possible, but I would not just go by the simple admission rate – you have to dig in a bit and see how competitive the overall applicant pool is.

      1. Anonymous

        I came across the thread by accident and saw the above question. Might be useful for @Steven and others. While I am unable to disclose my relationship with the Universities mentioned above I speak with authority that one of the biggest misconception when it comes to admission is how difficult it is for foreign applicants to get in. Certain universities are well-known for a specific background (ie: finance; consulting; entrepreneurship). Therefore, the question boils down to what is your goal after? While it is imperative that you meet the minimum requirements, broadly speaking, the applications and processes are designed for these elite universities to assess how consistent you are with your plan and goal. Covering yourself with ‘jewelries’ will not be enough.

        1. Thanks for adding that, but it would be more credible if you could say something more substantial/concrete about the specific universities or applicants. But this is the internet, so I am not expecting much…


    KIndly tell us how to end up working in PE ,hedge funds in Europe (london for example). I am a mech engineer from a tier 2 college in India in my mid 30s.
    kindly tell us where is a good programme for finance so I can end up working in above roles.

    Thanks a lot.

    1. You should read the coverage of hedge funds and private equity on this site and also the articles on India. It’s a completely different market and possibly the worst starting point for finance careers of anywhere in the world. You don’t really have a great shot at these roles if you’ve only done engineering in India – you will probably need a top MBA degree and IB experience in another market to be competitive.

  6. Jahanzeb Tahir

    Hi Brian,
    Thanks for the article, its really informative.
    I understand the target and semi-target schools you have mentioned are for undergraduate programs. I wanted to ask will they rank similar for masters programs as well? For context, I am starting my MSc in Finance at Durham this Sep and would want to move into IB after graduating next year. I understand its very tough so would you comment on how much would Durham’s brand name help me in landing an IB job or a summer internship with a Masters in Finance?
    I currently have 2.5 years of industry experience of which I did 5 months as a Corporate Banker and the remaining majority time as a Treasury Analyst at a leading British Pharmaceutical company. Note that my experience lies outside of UK. Would you advise what should be the ideal way to eventually get into IB and what are my chances after graduation in London?

    1. The Master’s programs/rankings are slightly different. But I think even at the Master’s level, Durham is more of a semi-target. See:

      Durham is probably not a bad option, but it’s not the best one if you’re in the UK and targeting IB roles. If there isn’t much on-campus recruiting there, you’ll have to do a good amount of networking on your own and likely use something like an off-cycle internship at a smaller firm to get in eventually. I can’t say what your exact chances are because I would need more information, but you probably can get into IB with a reasonable amount of effort if you’re willing to do the networking and internship search/prep on your own.

  7. Hi Brian,
    This article was very informative and helpful. As you said, salary and deal flow in London pales in comparison to NYC. Unfortunately, this puts me at a disadvantage as a European citizen, since it is quite challenging to get hired in the US as an international applicant. Currently my plan is to study at a European target university (I’m in my last year of high school), the most likely option after that being London. But my dream is to eventually work on Wall Street. Do you have any tips on how to make the move? I wasn’t able to find much information about this specifically.

    1. Thanks. The best idea is usually to work at a large bank in London for 1-2 years and then ask about a transfer. Most banks don’t want to bother with the U.S. visa process if they can avoid it, but once you have a track record at the firm, it’s usually easier to transfer.

  8. Hey Brian,
    Thanks for the great article. I am a current student at USC and am actively recruiting banks in LA/SF for my junior summer internship in 2024. However, I was thinking of recruiting London instead for summer 2024 but am not sure what the disadvantages are, considering that I am in a school in LA and hold a non UK/EU and non US passport. I understand that recruiting begins in September for my junior summer for London and that will give me more time to prep but would love to hear your opinion on the situation.

    1. I don’t think London offers any advantages other than the later start date to the recruiting process. Also, if you don’t know European languages, you will be at a disadvantage. So I don’t think this is a great idea unless you are very far behind on recruiting and really need this extra time.

  9. Pakala papito

    I note that London Business School has not been mentioned as one of the target schools for IB, despite being in London for many years. Do IBs not target Masters in Finance candidates from LBS for Analyst positions?

    1. It is a target school, but at the Master’s and MBA levels. The list here was for undergraduate target schools in Europe, which is a bit confusing because a lot more candidates in Europe end up doing Master’s degrees… so there is some overlap in the lists, but also some differences due to schools that do not have an undergrad program or do not have one of the post-graduate programs.

  10. Re exit opps, something I’ve seen with European finance recruiters is an irrational reverence for “London experience”. I tried moving from a front office job with a local firm in Dublin but wasn’t having difficulty getting interviews and offers were below expectations. Instead, I went to a small boutique in London for 12 months and when I decided to come home I found I was interviewed for *every* job I applied to and offers were ~50% higher than agency recruiter told me “London experience is just viewed as in a different league than local experience.” That was earlier this year.

    So while the pay might be disappointing, the prestige is apparently still very much there.

    1. Thanks for adding that. Yes, London experience definitely carries more weight than other cities. I don’t really think the pay is disappointing since it’s still better than other European cities; it’s only disappointing relative to U.S. pay (and Hong Kong if you can actually work there).

  11. Hi Brian,

    Thanks for the article. I am going to be joining a bulge bracket bank in NY as an associate after I graduate next year. I spoke with some people there this summer who took advantage of a program to spend a year or two in London. I was wondering if you thought that the same benefits and downsides you outlined in the article apply to doing a program like that, or if there are other considerations one should keep in mind. Would it help/hurt/be neutral for one’s career?

    Thank you.

    1. Thanks. Yes, the advantages and disadvantages are about the same. It’s not the end of the world if you earn ~30% less for a year or two early in your career, and experience in other cities usually only helps once you move back to NY. The main advantage of the Associate role in London is that it’s a bit easier to recruit for PE and other buy-side roles because firms and headhunters don’t impose hard limits on who can apply to the roles in quite the same way as in the U.S. So if you want to leave for something like that eventually, it may be easier in London.

Leave a Reply

Your email address will not be published. Required fields are marked *