I-Banking For Dummies

“Master of the universe,” “indentured servant,” “shallow corporate raider”: Yale graduates working at New York City investment banks use these phrases on Facebook.com to sum up their professional lives which, for newcomers, typically consume 80 to 100 hours of the 168 hour week. Subtract out time for sleep, and investment bank analysts are lucky to have a day to themselves.

In her profile, one I-banking alumna whimpers, “I am a single girl living in NYC with a ton of interests, a great apartment, lots of clothes, and a job that leaves me no time to enjoy any of it!” A different alumna, who admits no sympathy for her overworked classmate, posts as her job description, “NOT CONSULTING OR BANKING, ASSHOLE!”

Yale students and alumni seem to sort themselves into two factions: those who, like the “ASSHOLE!” girl, scorn investment bankers, and those who want to be investment bankers.

The scorners pooh-pooh the finance industry, which they call “the whole money thing.” The I-bankers feel blessed even to get an interview. The scorners struggle at non-profits or grind through graduate or professional school. The bankers stay awake at night putting together mergers, acquisitions, and initial public offerings. Meanwhile, in a grocery store across town, their impoverished and idealistic classmates calculate whether generic brand wheat flakes or generic brand corn crisps cost less per ounce. And both groups make Mom and Dad swell with pride.

Yet ask the scorners what the “I” in I-banking stands for, and see them scratch their heads. Then ask the I-bankers what other career options they considered, and watch their faces go blank. So ask yourself, between the investment bankers and the people who disdain them, who are the dummies?



Along with stars and stripes waving in the languid August breeze, tanned children splashing around in the cool waters of broken fire hydrants, and an ice cream truck rolling down the street, junior Bert Ferrara is pure American Dream. Big and blonde, he strides into Berkeley dining hall after the last football practice before Saturday’s scrimmage with Princeton. Ferrara says his family as a collection of steel workers and teachers from Springboro, Ohio. His father is CFO of AK Steel. “In my wildest dreams,” he reflects, “I never thought I would be here. My mom cried when I got into Yale. It’s the biggest deal in the world to [my parents].”

Now, Ferrara is poised to become a Morgan Stanley investment banker. Ferrara’s father originally ignited financial curiosity in his first-born son and namesake. “In junior high, I was a little league umpire,” Ferrara says. “I didn’t know what to do with my checks so my dad said, ‘For every dollar you put in your brokerage account, I’ll put in two.'” As Ferrara invested more money, he started to wonder about the differences between convertible bonds, mortgage-backed securities, and the myriad other ways to get money from money. His dad showed him the ropes.

When Ferrara sits down with me for our interview, a nearby table of musclemen hoots, “Coach Ferrara! Yeah Coach!” Ferrara laughs shyly, and then he gets serious. “Those are such great guys,” he says. Before Ferrara’s sophomore year at Yale, he sustained a neck injury, making it impossible for him to play football again. Not formally bound to the team, Ferrara can quit at any time. But he believes that because he was recruited to Yale for his playing, he has a commitment to honor.

After his injury, Ferrara fixed on a future of investment banking. “I knew I needed to stay behind a desk,” he says, “but I pretty much knew freshman year that this was what I wanted to do.” He now counts himself on a short list of juniors who have already worked at investment banks. More typically, investment banks hand summer internships to rising seniors who could comprise next year’s analyst class. “I was early.”

During the interview, Ferrara takes about three bites of food; he’s way too polite to slurp spaghetti in front of me, even though I assure him I don’t mind. His teammates finish up dinner, pat him on the shoulder and file out with the other students. A dining hall worker rounding up the last few trays notices Ferrara’s untouched food and returns with his plates covered in plastic wrap. Unlike Ferrara, I’m actually in Berkeley, and I’ve never received such royal treatment. That’s the power of Ferrara’s charm.

Morgan Stanley, the New York City bank where Ferrara clocked 90 hours each week this summer, has already offered him a position for next summer. That means Ferrara will most likely spend the first two years after graduation working as an analyst. “It’s just my personality to have a ton of direction. I like to plan for the future,” he says.

Ferrara speaks with confidence and clarity about his dreams for the future. Having worked in Morgan Stanley’s Global Energy Group, a department that handles integrated and independent oil companies, oil refineries, and drilling companies, Ferrara knows oil. He says he wants to be the CEO or CFO of an energy company like Transocean Sedco Forex, which would be “real nice” because it drills off the coast of Barbados. Without flinching, he also mentions Halliburton, which starred as The Bad Guy in Michael Moore’s documentary film “Fahrenheit 9/11.” By the time Ferrara reaches 58, his father’s current age, he hopes to own a beach.



On a muggy Friday, giggling Yale seniors grab corporate freebees by the handful at a basketball court in Payne Whitney. The men compare their Corporate Career Fair booty like trick-or-treaters with a sugar high. The non-profits have cheap pens or baskets filled with lame candies. General Mills has cereal, and L’Oreal has shampoo samples, but to everybody’s disappointment, Miller Brewing has no beer. Skilled looters, having keenly avoided conversation with recruiters, stroll out of the gym after 20 minutes with yo-yos, fancy pens, towels, chocolate bars, paperweights and tote bags.

At the same time, another set of students employs the single firm pump handshake. These recruiting regulars, miraculously sweat-free in the steamy gym, wear navy suits and clutch leather folders with copies of their resumes printed on stiff ivory paper. They circulate between the tables for investment banks, which come equipped with only the standard corporate pen to attract attention. Michael Chan, a tall senior I recognize from previous investment banking events, shows up at the recruitment fair even though he already has an offer from Morgan Stanley. I watch him stride from company to company before I track him down. I’m not short, but Chan looks over my head, scanning the crowd. He’s baffled when I ask him about his networking technique.

“Well, the main thing is I wouldn’t just go in and ask a question for the sake of asking it,” he advises in a British accent. “They’ll know if you’re just in it for the money.” I ask what draws people to the job besides money, and he explains that investment bankers learn about finance. Since Chan eventually wants to teach history at his private British high school, it’s not clear why he wants to know about finance. He says he’s not yet ready to teach because he wants to impart to his students “what’s outside the books.” Not wanting to waste any more of his networking time, I thank him and wander off to find a tote bag.

Meanwhile, Philip Jones, the bearded Director of Undergraduate Career Services, is pacing through the gym making sure the four-hour event runs smoothly. Jones, who stresses that students should “acquire maximum information” before deciding where to work, has been anticipating the fair for several weeks. Yale may be a pipeline to Wall Street, as senior Mike Casino says, but Jones wants to give it a chance to be more.

Casino, a man whose name all but requires him to work on Wall Street, describes the path that led him to his summer internship at Credit Suisse First Boston. Casino says that freshman year, “you look at the seniors in your college. You say, ‘He’s a smart guy. Where did he go?’ You start thinking about it,” continues Casino. “Finance is the first idea people hear about, with the ads in the YDN. You see those leaflets on the tables, you pick those up. If you go to UCS on campus, they set you up with the interview program, and it doesn’t have that many non-financial corporations like your IBM or GE, so there’s not the convenience of going through UCS. But if you go on the Web site, you can apply for 50 jobs.”

Investment banking, to Casino, is “what everybody does, unless they become lawyers, management consultants or doctors. It’s the whole campus; it’s biased toward funneling people into finance for those who do not want to go to graduate school. So that’s where we wind up going.”

Jones says that’s not true. However, students may perceive this funnel effect because of corporate advertising and because “it is socially acceptable at Yale to talk about going into [investment banking].” Other jobs apparently net less hype. “I had a guy last year almost apologizing because he wanted to go into the ministry … He was shy about it, when in reality, that’s what [Yale] was created to produce.”

Here are the numbers: 30 percent of Yale students choose jobs in non-profits, 30 percent go to graduate or professional school, and 40 percent choose corporate careers in finance, consulting, publishing, communications, manufacturing, and even brewing.

Because of their presence on campus, however, financial corporations do have a particular hold on Yale students. Jones says this “doesn’t mean these other businesses are potentially any less attractive to our students, just that students actually have to do the work to find out about them, rather than have them parade themselves in front of you.”



Jones believes that UCS and Yale have a duty to help students discover several ways to fill the dark hole that follows graduation. “Our job is to expose students to about as many possibilities as possible,” he says.

That’s why the career fair puts Morgan Stanley and UBS Investment Bank in the same room as Teach for America and the National Institute for People with Disabilities, two non-profits that talk to plenty of interested students as the fair progresses. Recruiters from these two companies look a little puzzled when I ask them how they’d recruit students leaning toward investment banking. Josh Griggs, a Yale graduate and Teach for America recruiter, says he enjoys seeing the “immediate impact in my classroom” of his service work. He also tosses out some numbers that could stand proud next to investment banking entry salaries. “I think people choose to do investment banking because they think it’s going to be incredibly financially lucrative,” he says, and then rattles off a list of bonuses he has received through his non-profit work. And for students who use investment banking as a stepping-stone to other professions, Griggs points out that Teach for America alumni have become lawyers and doctors.

Students who have a flair for crunching numbers might not enjoy the classroom. For them, Lisa St. John Meditz of the National Institute for People with Disabilities says that her $100 million non-profit, a “Fortune 500 of the non-profit world,” has entry-level positions that let employees get their hands on Excel spreadsheets. The job, for Meditz, offers more “personal fulfillment” than do jobs in the business world.

Griggs and Meditz chat up students with the same skill and polish as the UBS Investment Banking recruiters. But as I watch people circulate through the crowd, I notice that those who talk to the investment banks rarely stop by the non-profit tables and vice versa. Jones can lead students to other career tracks through the Corporate Career Fair, but he can’t make them change their post-graduation plans. To students who never once, during their four years at Yale, considered an alternative future, Jones says, “Yale may have failed you.”



At a particular Sunday afternoon hour, the dust from the Manhattan weekend finally settles and, for a moment, the city is calm. That’s when Evan Porter (who requested that his real name and the company he works for not be used) stares at an Excel spreadsheet. A Yale graduate, he’s working at an investment bank, which he requests remain unnamed. Only half of his bank’s junior employees work on Sundays; the rest opt to sacrifice their Friday nights. This is Porter’s second and final year at his firm, where he clocks 85 hours a week. That means that on weekdays, he wakes up at 8:15 a.m. in his Midtown apartment, commutes for about half an hour to get into the office by 9:30 and works until 11:00 p.m. or midnight.

On Saturdays, Porter plays football or basketball and spends time with friends. “I also have a girlfriend, and she takes up most of my weekend time since I don’t get to see her that much during the week.” A special education teacher at a New York City public school, Porter’s girlfriend wants to know why he has to respond to e-mails on Saturdays when, as Porter says, “I’m not saving lives. It’s a common question from her.”

To talk to me, Porter transfers my call to a private office. This is our first conversation, so I don’t know if his hushed, raspy tone is typical or if he’s in some kind of stealth mode. At the end of the year, Porter will leave the investment bank to work at a private equity firm. Eventually he plans to leave finance and become a professor of economics, history, or both. “My plan is to do well enough in finance that I am comfortable enough to be able to teach without concern for my children’s well-being,” he says.

With these plans, Porter adds to the list of Yale students and alumni who plan to work as investment bankers before doing what they really want to do. Of the people I talked to, only Casino plans to start and finish his career in finance. Porter says the majority of his friends who have started careers in investment banking have already left, breaking their contracts before their promised two years. This substantial attrition within investment banking does not match attrition within the wider finance industry. Instead, people leave investment banking to find more lucrative and less strenuous jobs like Porter’s new private equity position.

And where are the teachers or non-profiteers who later become investment bankers? Certainly some senior investment bankers joined their firms after working in a different area of finance. But I couldn’t find anybody who entered an investment bank after leaving an unrelated field. That’s not just a reflection of the fact that only fresh graduates are capable of putting in the long hours; depending on their rotation, medical interns and residents, out of college at least three years, clock enough hours to rival investment bankers. Perhaps with age, though, people have a harder time giving so much of themselves to something as abstract as a financial model. Youthful energy, according to the online Morgan Stanley recruitment video, seems to be the primary food source of an investment bank.

In the business of predicting numerical trends, these banks are well aware that some of their analysts will drop out. But analysts must have proved themselves a sound financial investment or the banks would have restructured. So Morgan Stanley and friends pour money into recruiting by printing ads, holding sessions at UCS, handing out pamphlets, reserving conference rooms in the Omni Hotel, and catering its events with soda, juice, and finger foods. The banks attract enough people so that, even after attrition, they have their army of analysts. Aggressive recruiting, for investment banks, makes good business sense.

This approach to human resources trickles down to workplace culture, and the Morgan Stanley video, which recruiters show at their Omni info session, gets me pretty jazzed. The employees, pushing themselves and striving to beat their records, talk about their work the way running backs talk about how many touchdowns they’ve scored. Analysts also work in teams with senior management. If they fail to design an accurate financial model or if they do not approach clients with the right strategy, they let the team down. But when the deal goes through and the bank makes a fat profit, the team celebrates, and the analysts achieve personal fulfillment.

That type of personal fulfillment is different from the kind non-profit recruiters get from helping others. But altruism and investment banking can coexist.

At the Career Fair, a Barbie doll UBS recruiter coos, “Seems like every week I get an e-mail to come volunteer with some kids somewhere. UBS is a great name, and we’ve got a great culture.” And Porter has discovered that most senior members of the investment bank are “very active in the community and very interested in taking advantage of the fact that they feel their financial security.” Several people in his bank’s senior management have taken time off to teach or work at non-profits. Still, “there’s certainly an element of greed and an element of opportunism,” he says.

When corporations engage in service activities apart from the actual work they do, they call it “corporate citizenship.” Because these actions are public, they may, at least partially, result from Machiavellian thinking. UBS and other corporate citizens sell their stock, so they legally can only invest money with their shareholders’ pocketbooks in mind. If a company spends money on a charity or pays employees to donating their time, it does so with its public image and therefore its dividends in mind. That does not discredit the dollars and hours banks donate, but it may affect the way employees experience the fulfillment of giving.

Casino and Porter believe that in addition to providing dollars for charities, investment banks provide a service to the community. “It’s invaluable to preserving economic efficiency of U.S. markets, which is something that is vitally important to having the financial base that we have,” says Porter.

Referring to what he calls “hostility to investment banking,” a common sentiment among Yale students, Porter says, “For a teacher or a doctor or serving in a foreign country, helping people learn English or something else, it’s much easier to see the benefit because it’s right there in front of you. Investment banking offers a much less tangible public service, so it’s easy to take that view,”

If Porter’s opinion sounds relatively sober, Casino sounds as if he’s channeling Adam Smith. “No one’s calling it nonprofit,” says Casino. “Few businesses are, aside from people directly working with the body, or literally saving a life. But this is the grease that keeps the economy going. Think about how important that ability is.”

“And growth. Growth! General growth hinges on the ability of that money to be where it needs to be. Investment bankers aren’t saving the world, but they’re the grease in the economy.”

Casino sits up straighter. “No one’s life is getting saved, but it’s the life blood of America. All of America’s workers and the whole infrastructure — it’s corporate America. You’re not a priest or a doctor, but you’re not performing a worthless task and if it were worthless, you wouldn’t be getting paid for it in a free capitalist economy.”



Senior Elena Grewal walks into the crowded Morgan Stanley meeting at UCS on a Thursday afternoon. The discussion topic, “Navigating the Interview Process,” has drawn a diverse crowd — women and men of various colors, majors, first languages and class years — but Grewal, with brown flowing hair and brown flowing skirt, displays a style apart from pearls and stiff collars.

The meeting enforces the importance of clocking face-time with bank employees, but it does not allow for any meet and greet. The speaker, a cuddly executive built for football, informs the hushed audience, “At the end of the day, it’s all about forming relationships.” By forming relationships, according to the speaker, students would ensure their place on the “closed list,” the group of names to which the recruiters pay special attention. Occasionally, the recruiter tries a joke: “That’s how you get a leg up against the competition, but what I call the competition, you call your classmates.” The audience barely laughs.

By the end of the 40-minute talk, which gives the impression that Morgan Stanley hires exclusively cuddly football players, some students have recorded reams of notes filled with phrases including “skill set,” “It’s all about you, and your resume is the ticket to the dance,” “the makeup’s off,” “the gloves are off,” “ideal candidate’s attribute kit,” and “NETWORKING!!” The speaker admits he is “throwing out a ton of cliches.”

But during a particular moment of the Q & A, Grewal’s ears perk up: a student asks if Morgan Stanley expects its entry-level analysts to stay at the bank.

As the rep meanders toward an answer, he sways side-to-side, body language that says, “Aw shucks, you want to leave already?” Ultimately he decides, “We have the view of all analysts as future long-term players, so we’re looking to see whether you’re a long-term player.” The audience remains as silent as it has been throughout the presentation, and the rep takes the next question.

Grewal later tries to explain to me why she’s at an investment banking meeting. She’s not apologizing, but she’s also not convinced herself. “I feel like–” Grewal says, pausing. Eventually she continues, “There are a lot of different ways you can contribute to the world around you. Investment banking seems like it teaches you to organize data. It would give me some more skills.” I’ve known Grewal since freshman year, but only when she mentions her interests in public service and international development does she seem familiar. An Ethics, Politics, and Economics major, Grewal has worked as a public school intern at Hillside Central in New Haven.

With deep interests in areas far afield from Wall Street’s relentless stock tickers, Grewal professes a genuine openness to a career in finance. “I wouldn’t mind doing it for two years,” she says. “And if I really enjoyed investment banking, I would stay.” But remembering that Morgan Stanley wants long-term players, how likely does Grewal think that “if” is?

As the Morgan Stanley meeting wraps up, the audience learns, “Whatever you guys do, you’re going to be successful whether it’s at Morgan Stanley or Goldman Sachs, or wherever. There are a lot of variances between companies, and that’s what we’re here to help you learn about.” The comforting words seem lost on the other students, who either seem frightened or cock-sure they’ll nail this interview thing.

Speed walking, they hustle to the Omni Hotel where a vast team of Morgan Stanley analysts and executives wait to begin NETWORKING!!



On the way to the Omni, Grewal thinks things over. “I’m a confused person,” she says, reviewing her previous dreams to become a doctor, a science researcher and a sanitation worker. “My dad said that it was cool to be a garbage collector, so that was my goal as a small child.” But Grewal, whose father is an engineer and whose mother works at Yale Medical Center, has never before seen herself as a financier.

Without asking questions, one might think that Grewal has succumbed to the temptations of intense recruitment and social cache associated with investment banking. But she guesses that a desire to stand up to Wall Street’s long history of gender and racial inequality has something to do with her new interest.

Ferrara has a different take on gender inequity in the finance industry. Although “the top positions are mostly all white males,” he says, those numbers represent “yesterday, not today.” Nevertheless, people should neither expect nor strive for even representation. Ferrara’s summer analyst class was 77 men and 23 women, which he said roughly reflected the applicant pool. “It is what it is,” he says.

But might women resist applying to jobs where they do not feel welcome? Some official at Morgan Stanley obviously sat down with the info session rep and talked to him about his pronouns. When he catches himself speaking only to the men in the evenly divided audience, the rep tacks on an occasional “and ladies too.” But when he jokes, seems nervous, or speaks quickly, he loses his feminism quicker than I could lose a grand on the stock market.

As the rep makes evident, the banks are working hard to demonstrate their commitment to diversity. Goldman Sachs has a Global Diversity Task Force. UBS has summer internships especially for minorities. Merrill Lynch has employee networks for Asian Pacific Americans, Blacks, Hispanics, Indo-Americans, Native Americans and women, in addition its Disability Awareness Professional Network and its Rainbow Professional Network. At the least, every big bank devotes a web page to diversity.

Art Kao, who graduated in 2004, who works at a Boston bank, speculated in an e-mail that investment banking presents a particular challenge to women. He writes, “The culture at a typical I-bank is very aggressive and alpha-male dominated. I think it’s that way because when you’re trying to sell a company, it’s better to look and sound supremely confident when you tell your buyer that the company will hit a certain revenue target or the market is about to explode in a particular area.” Although this “higher level stuff” doesn’t concern analysts, Kao says, “That mentality of perfection and confidence trickles down all the way to the lowly analyst.”

Still, Porter sees “great advancement opportunities” at investment banks precisely because of their poor history. “They’re making a concerted effort to try to make the atmosphere comforting for women and minorities. There are significantly more men in senior positions, but my firm at least makes a pretty concerted effort to find opportunities for women in senior positions.”

Within an investment bank, investment banking is only one of the available professions. Banks also have researchers and a testosterone-rich team of traders. Estimating that only 5 to 10 percent of traders are women, Casino says, “It’s like a fraternity where you talk sports, you go out at night and drink and smoke cigars. At work, there’s an open floor, and everybody is yelling.”

Besides women, other groups previously excluded from Wall Street are finding new opportunities through investment banking. Porter says that his trader roommate, a minority male, feels comfortable on the trading floor. However, Porter says trading floors have more white males than do investment banking floors. Kao says that investment banking draws many immigrants, children of immigrants, and people who grew up in poorer households, although he adds parenthetically, “Most Yalies aren’t that poor.”

At Morgan Stanley, Ferrara worked with a diverse group, which included people from the South, South Africa and Italy. “The person I worked for most closely was an Arab, and the analyst who helped me learn the most was a Chinese woman.” In fact, Ferrara only cited one requisite in terms of color or creed. “It’s hard not to be pro-market or pro-free trade,” he says. Perhaps that’s because, as Ferrara later says, “If you work 90 hours a week, you want to keep your paycheck.”

To the extent that Porter, Kao, Casino and Ferrara’s observations apply to all of investment banking, perhaps women, minorities and immigrants can sit in their cubicles, tabulate company projections on Excel spreadsheets, and contribute to the financial world’s growing demographic change. Even if money motivates this change, Grewal thinks she might want to be a part of it.

But beyond closing the gender gap, Grewal is attracted to investment banking for its challenging reputation. And the monetary reward, which Kao said is the most significant draw for most people? “I don’t really think that’s something I’m thinking about,” she says. “Still, a lot of people kind of look upon getting involved in finance as ‘selling out,’ but I’ve never really had that hang up.”

Some investment bankers emerge from the womb already calculating the value of the next company to go public. Some come to Yale and get swept up by the powerful currents of corporate recruitment and group-think. And some plan to use their time at an investment bank for what it’s worth if it’s worth nothing else – a blitzkrieg education in finance and a resume stamp that verifies “I Know How to Work.”

Ferrara, Grewal, Casino, Kao, Porter, and their future or current coworkers comprise a group with mixed genders, ethnicities, nationalities, races, creeds, political views, and life goals. White males with conservative economic views, well-diversified stock portfolios, and a business professional wardrobe may have an easier time, but they’re still working for 80 to 100 hours each week.

Kao plans to leave investment banking and switch to the finance industry’s “buy side” made up of institutions, like hedge funds, that invest their clients’ money. He tells me that his girlfriend, a Yale graduate interested in education and journalism, says that all he does is shuffle money around. To Kao and other financiers, this shuffling merits their lives’ work. At the Omni’s Morgan Stanley meeting, I mention to a rep that somebody I interviewed uses these words. The rep gives me an off-the-record answer and asks me to leave.

When all I did was parrot a source’s words, how did I manage to trigger this reaction? Porter says the investment banks believe that Yale has many students, like the “ASSHOLE!” girl from Facebook.com, who have little respect for investment bankers. These students cannot understand how their peers ignore or remain insulated from common concerns about free market capitalism. Can the invisible hand save the rainforest? Does it have compassion for people living in poverty? The anti-investment bankers read about corporate corruption, two words that too often slide together, and they can’t understand why their peers want in.

Porter believes because the investment banks perceive hostility from certain students, they concentrate their recruitment energies at Princeton and Harvard. “They’re looking to hire a larger portion of students from Harvard and Princeton, despite the fact that the number of applicants from each school is relatively similar,” he says.

With this knowledge, Yale’s proto-investment bankers might work to decode what’s behind this perceived hostility; if they can assuage it, they’ll have a better shot at getting hired. A conversation with their friendly dining hall hippie could also demonstrate to these mini moguls that investment banking may not be the right career path for them. The conversation could also benefit Yale’s banking badmouthers, who might want to buffer their arguments with more research. Or perhaps they just want to communicate with people perched on the opposite side of the paradigm.

Imagine that those who I-bank and those who don’t handled these wishful visions of friendship with the same efficient method they use to tackle a problem set or a paper. The campus would be singing Kumbaya by lunch tomorrow. But if the unexamined life is not worth living, the same goes for a life in which people cannot hold fierce and unresearched opinions or where they cannot choose a job for its salary, if that’s what they want most of all.



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