Typical Investment Banking/Asset Management Interview Outline

1. Housekeeping Items
   1. UVA GPA (may be asked for specific classes – accounting, finance, statistics)
   2. GMAT (usually for associate-level jobs)
   3. SAT/ACT (know your breakdowns)
   4. College GPA
2. Walk me through your resume
   1. Why did you choose … (everything you have ever done!)?
   2. What did you learn?
3. Why Asset Management or Why IB?
   1. How does asset management fit into your goals?
   2. Commitment (The interviewer wants to know that you will be excited about doing this job.)
   3. Knowledge of the industry
4. Why us?
   1. Programs – rotation versus group interest
   2. Firm culture – why are you a fit?
   3. Other factors – geography, specialization, etc.
5. Behavioral
   1. Strengths
   2. Weaknesses
   3. Examples of leadership and teamwork
   4. Personality and interest questions (the little things you put on the bottom of the resume)
6. Technical
   1. Accounting questions
   2. Finance questions
   3. Three ways to value a company
7. Any questions for me?
   1. Anything that shows interest/relevant research
   2. Close with a wrap-up of your credentials
   3. Make sure that your interviewer is comfortable with your story
   4. Next step in the process

Questions Categories

Tell me your story – Walk through your resume? Why did you choose X?  What did you learn?

Tell Me About Yourself

• Why did you go to X College?
• Why did you transfer?
• Why econ and not business
• Why did you go to Y Co. after school?
• Why did you change jobs?

Business School (may not be applicable)

• Why did you decide to go to UVA vs. a traditional business school?
• ​Why economics and not business?
• Why UVA?
• Where else did you apply?
• Where else did you get in?

Themes: Clear/Concise, Smiling/Positive, Decision-making/Judgment, Personality/Fit

Interest and commitment – Show me that you know what this is and why you want to do it

Banking

• Why do you want to do asset/investment management?
• What do asset managers do? 
• What would you do as an analyst/researcher?
• How do you feel about New York (or other geographic locations)?
• What do you see as the differences between firms?  (ex. culture, structure of program, ownership)
• What specific area of interest in asset management (group/product) do you think you would be most interested in?
• Where do you see yourself in 5 years?

The Firm

• Why this firm?
• Who is our CEO?
• What other banks are you interviewing with?
• What are your impressions of other firms?
• What do you think of our firm?
• Who are our competitors?
• What differentiates this firm from our competitors?
• If we gave you an offer right now, would you take it?

Themes: Commitment, Culture, Intellectual Curiosity; What do bankers do? Judgment,  Processing, Client Service

Behavioral – Strengths and weaknesses, examples of leadership, personality questions

• Leadership/Maturity
• Team Player
• Presence/Poise
• Overall Potential
• Behavioral Questions Aligned to Traits:
• Tell me about a time you had to motivate a group of people.
• Tell me about the biggest risk you’ve taken.
• Tell me about a time you had to deliver a presentation.
• Tell me about a time you dealt with someone who was dissatisfied with your work.
• When have you had to produce results without guidance?
• Talk about a time you had to stand up for what you believe in.

Technical Skills – Accounting and finance questions

• What is your GPA at UVA?  Grades in Finance, Accounting, Statistics, Economics? 
• What kind of quantitative skills do you have?  Prove to me that you have quantitative skills.
• If I gave you a $100,000, where would you invest your money?
• ​What stocks would you invest in?
• ​How would you value a company?
• Lead me through a Discounted Cash Flow valuation.  What is Free Cash Flow?  (How is it calculated?) See #1 below for suggestions in approaching this question.
• What is the average P/E ratio within the S&P 500?  Is Google’s P/E higher or lower?  What is it?  Is Black & Decker’s P/E higher or lower?  What is it?  Why is that? (See #2 below for suggestions.)
• Would I offer to buy a company at its current stock price? (Not typically.  There is generally a control premium above and beyond the value premium deemed appropriate. See #3 below.)
• Two companies: an oil/gas company and a consumer products company.  How do I look at them differently in terms of debt capacity? (See #4 below.)
• Lead me through the Statement of Cash Flows.  Where do I find Capital Expenditures on the Income Statement?  If Accounts Receivable goes up during the period, how does that impact cash? (See #5 below for resources.)
• What is Ö5,000,000?
• Mental math and brainteasers.
• Accounting 
  (1) What are the interrelations between the IS, BS & CS?
• Finance      
  (1) How would you value a company 
  (a) Comparables/multiples – No earnings?
  (b) Discounted Cash Flow – CAPM – Beta – What discount rate to use?
  (2) What are accretion/dilution?
• Other
  (1) Average P/E of the S&P individual company P/E ratios?
  (2) Where did the NASDAQ or Dow close recently?
  (3) What are some stocks you follow?  What deals are you following in the news?

Wrap-up

• Wrap-up of credentials – close with four or five themes

Helpful Reminders

General

• Go in on fire.  Impressions are made in first few minutes.  Be energetic.  The energy in the conversation must come from you.

• Know the 4-5 major points/themes you want to get across and make sure that you do.

• Remember - you need somebody to stand up and say, “We should hire this person!”

• Keep the goal in mind.

Be Prepared

• You know the questions they’re going to ask.

• ​​The more time you spend preparing, the more you will find out about yourself and the more sincere you will sound during the actual interview.

• Focus on your story and make sure you fill in the obvious gaps.  Know how they will respond to your story.

Know yourself well.  They will probe beneath the surface.

• If you have a weakness, they will find it.

• Do not be overconfident.

Be Clear and Concise

• Keep your answers short and to the point.  Bankers are conducting the interview!  Find a way to get across the information you want to convey to the people with possibly the shortest attention spans on the planet.

• It’s fine to structure your answers like an outline.  It helps you keep on track and it ensures that they will take away what you want them to take away.

Be Confident

• Think of positive reasons for everything.

• Don’t apologize for anything – GPA, SAT scores.

• t’s okay to say, “I don’t know, but this is how I think I’d do it…”

Keep Cool

• Remember – they’re asking questions to find out about your line of thinking and to find out how you’ll react under certain conditions.

• When in doubt, take a deep breath and talk it out.

Practice, Practice, Practice

• What sounds good in your head may not necessarily sound good out loud.

• Practice out loud – to friends, in the shower, while at the gym.

• ​Ask classmates to give you mock interviews.

Last Words

• Eat and sleep well.

• Relax and have fun.

Note:  Credit for this terrific mock interview guide goes to our friends at Smith College and Williams College.  It is with their permission that we are able to share it with you.  Approaches to answering below shared by our Economics faculty at UVA.

Things to Think About from Technical Questions Above:

#1 Free Cash Flow (FCF) is something specific.  First, student needs to calculate FCF for the firm.  Free Cash Flow = Net Income + Depreciation - Change in Working Capital - Capital Expenditures.  Then, discount it back using present value formulas (students should already know present value formulas).

#2 PE's change on a daily basis during the day.  It is Price / Earnings per share.  Earnings per share only changes quarterly, but as long as market is open the numerator (the stock price) is changing very frequently.  So, any number the student has is stale.  Right now, the S&P PE is around 19, Google around 39, Black and Decker around high 20's.  These numbers will be old, and should not be memorized.  You can find this data on: Yahoo Finance, CNBC.com, etc. (note data on sites are not always updated).  What they are probably looking for is: a) is the student in the ballpark - do they follow these things, and hence have an interest in this area, b) do they know Google (formal name of company is now Alphabet) is a growth company and hence has a higher PE (investors tend to pay more for growth/hot companies - hence higher PE).  

#3 There are many reasons whether or not to buy a company at its current stock price.  The most general reason you are buying the company at its current stock price is, if based on your valuation work, you think the company is trading at less than their intrinsic value (based on calculation in 1) ).

#4 What the person is saying is not necessarily true.  There can be oil companies with large debt, and consumer products with large debt, and vice versa.  Debt issuance depends on management, projects they are borrowing for, investors appetite for debt in different industries, etc, which all change over time.

#5 Actual financial statements of company's are long and complicated.  Here is a link  ( https://corporatefinanceinstitute.com/resources/knowledge/accounting/3-financial-statements-linked/) to simple versions of the different statements with talk about cash flows, capital expenditures and income statement.