Interview: Investment Banking
Jian Wen is currently working in London as an investment banking analyst at JP Morgan. He graduated from LSE with a Masters of Science (Merit) in Finance and Private Equity and has prior work experience in various fields such as financial services audit and investment banking. He has kindly offered to share some insights on his job scope and tips on the job application process. A lightly edited transcript with him is as follows:
AIBC Research Team: What is your job scope as an investment banking analyst in JP Morgan?
Jian Wen: Starting out as an analyst, the work mainly involves research and analysis. Research work includes researching into companies, markets, industry trends, etc., while the analysis aspect involves taking datasets and turning them into conclusive explanations. Depending on the teams you are in, you’ll start meeting clients early during your time as an analyst and start learning how bankers pitch their products and ideas to clients while building up that relationship.
What advice would you give to aspiring analysts wanting to work in London?
Meet people and talk to people in the industry. Definitely, this is not a route to securing an interview, but an avenue to learn about the bank and the people. By asking good, sincere and well- prepared questions during these networking sessions, you will be able to leave a good first impression on the people working at the firm. Building that network is very important. Secondly, be well prepared for interviews. Technical information is abundant everywhere, be it interview questions, ground work, basic corporate finance technicals and analysis. You should not let this area get you down during an interview.
Also, it will definitely be helpful to read widely about the markets and industry. Having a good understanding and having a broad knowledge of these issues affecting different industries (both macro and industry specific) are key to showing you are well plugged in and have the ability to relate trends to companies and subsequently suggest what kind of actions can be recommended to clients.
Lastly, apply early as applications open in August. By September, you would have submitted all your applications to the key banks and boutiques, and then only applying to other small boutiques when opportunities arise. It is a numbers game, thus increasing the number of applications increases the possibility of an interview. Besides, these interviews come in handy in honing your interview skills and by the time you are interviewing with the firm you really want to work for, you will be comfortable and well advanced.
Could you tell us more about yourself and how you came to work at J.P. Morgan?
I was an undergraduate at Warwick and only decided to consider IBD in my final year before going into my masters. I did an internship in investor services, but did not enjoy it due to the lack of pace or content of work. Hence, I turned down the full time offer to do an investment banking summer internship the next year.
What motivated you to switch your career interest to investment banking after interning in the financial service audit (FSA) department of a Big Four?
My personal view was that it was slow paced, not as dynamic as I would have liked and the type of work felt really dry, which is a personal preference. I wanted to learn quickly, be exposed to as much as possible within a short period of time. When I was applying for internship at KPMG, I was not yet sure of what I wanted to do as a career and did not consider IBD at all. Being part of a firm like JPM affords you to take part in industry shifting deals, and of course, the occasional ones that hit the front page of the papers, which to some extent gives some form of tangible result to your work.
What was the greatest challenge you faced when starting out as an analyst?
There wasn’t really a challenger per se, but being in a large organization you are bound to deal with challenging personalities. Eventually, you will learn to navigate around these people and manage them to work for your cause.
What is the most exciting aspect of your job?
Being part of transactions that change the direction or shape of the industry is certainly exciting. There is always something to learn, a new company, a new product, a new way of engineering solutions. Working in the consumer sector has allowed me to understand what goes behind these shops you see on the high streets, products you consume on a daily basis, etc.
Could you describe the key differences between your previous experience in the debt capital markets and your recent role as a consumer and retail industry analyst?
A product group allows you to be an expert in a particular product and operate this across industries. In my personal experience, a product group exposes you to greater client interaction and allows you to hone this skill early in your career. It also gives you very deep technical debt expertise which has been undoubtedly helpful in my work in the consumer team. In an industry team however, you get exposed to items cross product, so you do equity, high- yield and M&A, but at a less in- depth level for each. You get a lot more depth in terms of learning about companies, the industries, trends, opportunities (both buy and sell side ), thus offering a slightly holistic view of corporate finance.
Do you get a lot of client interaction while working as an analyst?
Yes, but it varies according to the different teams or clients you cover. In DCM, you start out by doing client coverage, so at an early stage (~within 3 months), you are being brought to meetings and within 1-2 months, you are emailing clients about market updates. In industry, it is slightly more sporadic due to the nature of clients (you meet CEO or CFO levels versus treasury or CFO levels for DCM) so because of the level of clients, you tend to be brought for more DCM meetings. In both teams, however, you will be emailing and speaking with clients very often within just a few months of starting work.
What are some key challenges you have faced in the industry in recent years?
There are plenty of key global macro themes affecting industries, clients and the business.
Global growth slowdown: growing concerns of growth outlook, weakness in Eurozone, and the uninspiring performance from China adds to the growing uncertainty we face. There is no one particular industry or economy that is driving global economic progress, nor can we simply revert back to QE.
Recessionary risk: increasing probability of these, driven by lower consumer confidence, metrics like auto and housing sales, labour markets, have been trending towards that direction.
Geopolitical risks and uncertainty: US and China, Brexit and Europe are the key themes with an abundance of material out there.
Capital markets are bouncing all over the place compared to the same time back in 2018. Capital markets are another indicator of economic stability and for growth, and with nervousness comes with the question of what’s next for the economy.
All of these items while one way or another affect your clients, but still remain very broad themes.
Within the banking sector and on a personal level, a challenge would be fintech and brexit - uncertainty around your position and location, but that uncertainty is relatively muted. Fintech is always going to be there and be a key part of the future. Hence, being able to ride that wave and be part of it is definitely key.
What are some trends in the consumer and retail sector that have caught your eye as an analyst?
Without being too prescriptive, a few things affecting the consumer sector are:
CEO driving strategic direction - divestitures in non-core goods
The rise of activism
Acquisitions of challenger brands (brands which are very tailored to the evolving consumer needs)
Category diversification - acquisitions in adj. verticals to promote growth
Large-scale consolidation - still remains a theme where the economy is still holding, capital markets continue to fund (albeit more selectively compared to a few years ago), these large industry shifting opportunities still remain