Investment Banking Recruiting in Europe: London vs. Frankfurt vs. Milan
Will you really have to go through assessment centers and similar interviews in each place?
Are they only looking for locals or can you break in as a foreigner? What about language requirements and that all-important summer internship to full-time offer conversion rate?
Today a reader who has recruited across Europe – and won 2 internship offers – will share his experiences and answer all those questions, plus a whole lot more.
Q: Can you walk us through your background and how you first got interested in finance?
A: Sure. I was born and raised in Italy, and after high school I studied business administration and completed a BSc in Finance from a non-target Italian university.
During my 3rd year there, I took a few classes in corporate banking and first learned about investment banking, M&A, PE, and VC.
The professor was great and we had several financiers as guest speakers – I was most interested in private equity and how they look for small and mid-sized enterprises (SMEs) to invest in. There are so many SMEs here that I knew there would be a lot of opportunity if I could break into PE.
Q: So you tried to get into PE coming from a non-target university with no full-time experience?
A: No, not yet. I looked for information online and spoke with the guest speakers in our class and learned that most people in PE had MBAs, that you had to know accounting very well, and that you had to do investment banking, consulting, or auditing first to break in.
I knew I needed better access to recruiters and more accounting knowledge, so I looked for a 2-year MSc program in Accounting and applied to the only “target” university in Italy.
I moved to Milan to complete the MSc program and then found out about summer internships in investment banking – but my chances weren’t good since I was from a non-target university, hadn’t studied abroad, had no relevant work experience, and didn’t speak a 3rd language.
But I applied to all the banks anyway and ended up getting several interviews and assessment centers, and then won a back office internship in London – which I accepted, since I had no better options. I also figured that having a bulge bracket name on my CV would at least help me with recruiting in the future.
After finishing that internship, I applied to both full-time jobs and internships (internships work a bit differently here) in investment banking in the UK and continental Europe, and went through recruiting in London, Milan, and Frankfurt, finally winning 2 internship offers.
M&I Note: The audit to PE path is more common in Europe. It does happen in the US and other regions as well, but your chances are not as good unless you’ve done something like audit to Big 4 TAS first.
M&I Note 2: While I’ve been critical of the back office in the past, it’s not the end of the world if you accept a back office internship. It’s more difficult to move from the back office to the front office if you’ve already accepted a full-time offer.
Q: That’s quite a story – you must have had a great strategy for winning those offers, or at least something that made you stand out.
A: In high school I wanted to play football full-time at first, and I had also worked as a sports journalist for a local newspaper before.
That wasn’t prestigious, but it did give me something to talk about in interviews for my “interesting fact” – and I could reference that when they asked about leadership, managing stressful situations, and so on.
This story helped me get my first back office internship – I think the 2 IB internship offers were more about solid technical preparation, since I had focused on my corporate finance studies over the past year.
Q: That’s a good one – much better than those interviewees who tell you that their “hobbies” are learning Excel or doing statistical analysis.
So what was the recruiting process in these different cities like?
A: I always started by applying to London first – usually applications from continental Europe are checked by local offices first, even if you apply to London. Sometimes they’ll even call you and say, “There are no spots left in London – are you interested in Milan?”
Then, if you pass the initial CV / cover letter / competency question screen, you’ll get a first round in the local office (Milan in this case) and then the 2nd round in London, or maybe a phone interview and then the AC in London.
With one bank I did the 1st and 2nd rounds in London and was then sent to Milan for the 3rd round since they ran out of spots in London, but that was the exception and not the rule.
My overall experience looked like this:
- Bank A: Applied for the graduate program in London, did a phone interview, and then an assessment center in London (group work, then 3 interviews with 4 VPs).
- Bank B: Applied for the graduate program in London, did a 1st round interview there with 2 associates, and then also did the AC in London (business case and presentation to Director, then another 2 interviews with 2 other Directors). But then I was sent to Milan for 3 interviews with the local Directors there and also had to complete an Excel test as well.
- Bank C: Applied for summer internship in London and was then called and asked if I was interested in Milan – I did the 1st round in Milan with 1 analyst and 1 associate and then the 2nd round in Milan with 2 associates.
- Bank D: Applied for a 3-month internship in Frankfurt via email – they responded shortly after that, and I then completed 3 interviews in Frankfurt on the same day (with 2 associates and 1 analyst).
Q: Awesome, thanks for sharing that information – I’m sure everyone’s recruiting experience is different but it’s good to have data on what to expect in different places.
So it sounds like you didn’t do much networking to get any of these interviews?
A: That’s correct – I did not do much networking. I already knew one of the VPs that interviewed me at Bank A because I met him during my previous summer internship, so I spoke with him in advance and asked about recruiting, how to best position myself, and so on.
But then another guy won the offer from Bank A, so it wasn’t too effective for me.
Q: What about CV differences? Is there anything that banks in Milan and Frankfurt care about but which offices in London do not?
A: The overall structure of CVs is not that much different, but in local offices they tend to care more about your grades.
In Milan and Frankfurt they asked me specifically for my GPA, while in London HR just scanned it quickly when screening CVs.
Another difference is that for full-time recruiting, they pretty much expect you to have had a previous internship in investment banking – whereas for internships you can get in just by having strong technical knowledge and some kind of previous experience even if it isn’t directly related.
All the candidates that received full-time offers in my final round interviews were former summer interns who had worked in IB at other banks.
Q: Right, so standards tend to be higher for full-time interviews, and it’s tougher to break in if you haven’t had that IB internship before.
What about the type of people who recruit in each place? How is that different, and what are the language requirements in those cities?
A: Overall there’s the least amount of diversity in Milan because you must be fluent in Italian. So it’s mostly Italian students who end up there – either voluntarily or because they didn’t get into the London office.
Most of these students are coming from schools such as Bocconi University, LUISS, Politecnico, or ESCP.
In Frankfurt, they didn’t care about language abilities for internships. I don’t speak German but still won the offer there – but for full-time positions it’s different and I was told that you must be fluent in German to do investment banking there.
In London you see the most diversity – people from all countries throughout Europe, Asia, and North/South America.
Obviously there’s no language requirement there except for English, but language skills are still viewed very highly and you’d be at a disadvantage if you don’t speak other European languages.
Q: What about differences with interviews? Did you find a different ratio of “fit” to technical questions, or were the questions themselves any different?
A: Overall, I had the most technical interviews in Frankfurt. They asked pretty much everything you could ask: standard questions about EPS, accretion/dilution, synergies, the control premium, the liquidity discount, what happens post-merger, how to value startup and bio-tech firms, how to adjust for pension plans, leasing, stock options, derivatives, and more.
They asked me to explain how a PE firm works, what the average debt-to-equity ratio in LBOs was, how to value a company, and then how to write down and change all the main items of a P&L, balance sheet, and cash flow statement.
In Milan they also asked a fair amount of technical questions (Beta, WACC, DCF, multiples, etc.) but they didn’t go nearly as in-depth as they did in Frankfurt. They also asked a lot of questions about consolidated statements – what the financial statements for a parent company plus its subsidiaries look like and how to combine them.
For more on this topic, please see our tutorial on the equity method of accounting.
In London, the technical questions were the easiest – everything was pretty standard and consisted of questions you can find in most interview guides. They focused more on your background and how well you fit in with the rest of the team there.
Q: Interesting – I’m sure we’ll get a lot of comments from readers there who experienced slightly different (or maybe significantly different?) interviews.
Earlier you mentioned that you won several internship offers even though you’re set to graduate shortly and you said that internships in Italy are “a bit different.” How does that work exactly?
A: In Italy we don’t have structured summer internships like you see in other countries.
You might find them at a bulge bracket bank with local offices in Italy, but local banks here don’t have such programs.
So 6 months before you graduate, when you’re writing your thesis and exams are over, you can apply for off-cycle internships. If you’re good enough to get in and do well there, they’ll just ask you to keep working after the internship, effectively turning it into a full-time offer.
That’s much different from London, where you usually do the internship just before your final year and then you start full-time one year later.
I don’t know what the exact “conversion rate” is in these 2 places, but your chances might actually be higher in Milan since pretty much all full-time bankers at local banks started out by completing post-graduation internships first.
Another difference here is that some banks only want students who have already graduated when they search for interns – and the internships themselves last 6 months rather than 10-12 weeks.
Since banks don’t have structured programs, they just post job openings on their website or on the business school careers page and you submit your CV and cover letter without completing competency questions or numerical tests or anything like that.
You also see that for some international boutiques with offices in Milan, but it’s more common at local banks.
Q: You mentioned before that you applied to both full-time jobs and internships but ended up with the 2 internship offers – do you think it’s harder to get full-time offers in Europe?
A: I think in general it’s more difficult to get full-time offers because people with previous IB internships have a huge advantage, so Europe is no different in that respect.
Q: I see; it’s definitely getting more competitive every year. 10 years ago the people applying to banks for full-time roles had far less internship experience.
So what’s next for you? When do your internships start?
A: Originally I was planning to complete one of my internships over the summer and then start the next one in September, before graduating in December or May.
Recently, though, some personal problems arose and because of those I couldn’t join one of the banks in the summer – so I’m going to focus on my thesis for now.
That would at least give me the option to move back into academia if I decide that I don’t want to do investment banking or can’t stand the hours.
Q: Great. Thanks for sharing your story – I learned a lot!
A: No problem, hope you enjoyed it.
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