The standard and alternate journeys to the buy-side
– AMObserver, November 18 , 2024
Long gone are the days of The Graduate, when a 21-year old recent college graduate, living at home and drifting through life on an inflatable pool chaise, could avoid making career decisions in college and beyond and still expect to land a great job.
For undergraduates eyeing an investment career at a buy-side firm (private equity and debt firms, hedge funds), academic performance is essential, and a two-year sell-side stint (investment banking) is by far the most likely first step right after college. But if you haven’t completed at least two very relevant and coveted internships while in college—one in the summer after your sophomore year and another during the critical summer after your junior year—you’ll likely miss the boat on investment banking and subsequent buy-side opportunities.
And without a great personal connection in finance or identity traits that appeal to investment firms, there are few hacks left on the modern buy-side career path. Meanwhile, the old “Gentleman’s C”—the aspirational grade to land a top job without seeming like an overly focused academic grind—was reset to a B+ until about a decade ago. But it has since settled on the “Gentleperson’s A-” at an absolute minimum, for those four or five semesters before landing both pivotal summer internships.
Aiming for a post-college investment career requires a well-planned roadmap that begins early—often right after high school graduation. On this count, U.S. universities are increasingly resembling their European counterparts, where students typically know their intended career path and major before stepping on campus. In addition, U.S. colleges are seeing a trend of students pursuing pre-professional majors over liberal arts degrees, with humanities programs declining by over 30% in the past decade.
AMObserver data also reveals a greater number of college students with business and economics majors pursuing several finance-related internships year-round, starting in their first year of college, rather than relying solely on a single-season summer job, as they build their experience and credentials. This more evenly weighted classroom-to-professional work perspective embedded in the curricula and graduation requirements of a relatively small but growing number of “co-op” (cooperative education) colleges and universities, seems to have taken off among students throughout the country eager to create a competitive edge as they pursue their post-college buy-side dreams.
Below are key steps and timeline realities for students focused on the most direct buy-side path.
1st Year College Students: Laying the Groundwork, Grasping the Two-Year Framework
As a first-year student, it’s essential to familiarize yourself with recruiting events aimed at sophomores and juniors. Firms on some campuses begin their outreach early, even to first-year students, through employer information sessions, coffee chats, and “Insight Days”—events designed to introduce students to firms and help them start building relationships.
It’s also essential to recognize that the typical four-year timeframe to complete a college degree is much longer than the abbreviated timeline required to secure—or forgo—a seat at a buy-side firm.
Top academic performance and securing two great internships over the next two years are the necessary and in most cases sufficient ingredients for landing in a top-tier buyside firm two years after graduation.
Interviews for the most well-known investment banking or investment management post-junior year internships can start as early as the spring semester of your sophomore year—nearly 1.5 years before that internship begins — while most remaining interviewing processes will be in their final stretch in the summer after sophomore year and in the early fall, exactly two years from the start of your life as a college student.
Without the essential summer internship after your junior year your path to the buyside will likely stall since most full-time post-college investment banking analyst positions are reserved for return offerees from summer internships. And nearly all subsequent first year private equity associate roles are filled by those who’ve successfully completed a two-year investment banking analyst program.
By the second semester of your first year, students in business programs will already be positioning themselves for internships during their sophomore and junior years.
Students aiming for the buy-side typically major in finance or economics, often with a math or computer science minor. While a perfect GPA isn’t necessary, you’ll need to maintain solid academic standing—at least that “Gentleperson’s A-”—to remain competitive for these opportunities.
The first year of college is the last time you won’t be expected to have a business-related internship. Securing an internship at a bulge-bracket investment bank or major asset manager in the summer before sophomore year is primarily a function of exceptional personal connections, as many large firms don’t offer formal internship programs for freshmen or sophomores. However, opportunities at boutique firms—especially in regional markets—are more accessible.
Additionally, students should start to explore internships in all seasons—fall, winter, spring, and summer—along with early insight programs at large and small firms. A number of banks and investment firms also offer internships for students deemed to increase these firms’ diversity.
While summer internships remain the most important bridge to the most sought after full-time jobs, internships in other seasons have grown in both popularity and significance. These perennial internships offer valuable experience and also help students compete for top summer positions after their junior year.
Those who land finance internships in the summer after their freshman year recommend persistence, cold calling, and focusing on smaller, regional boutique firms. It’s also strongly recommended that applicants review their online footprint mindful that employers will monitor social media as part of their vetting process.
Bigger picture, one’s first year in college is also an important time to implement what will be a key life lesson, that peer learning and lateral networking, including with classmates a few years further along in college and already in their full-time careers, can offer insights and opportunities that are at least as valuable as those from professors or career services teams.
This peer learning is especially true at schools with strong undergraduate business classes or programs, where one’s classmates will have already led their high school investment clubs, run a real or mock investment portfolio and also have participated in high school stock and economics competitions including The Wharton Global High School Investment Competition and The Federal Reserve System’s High School Fed Challenge.
Some will also have come from high schools offering robust pre-professional programs designed in collaboration with industry experts and practitioners for their students to gain experience and insight into their prospective fields.
Finally, one should not rely solely on one’s own college for this outreach, as high school alma maters and affinity-based networks can be equally as meaningful.
Sophomore Year: The Internships
As students return to campus for their sophomore year, it’s crucial to start applying for both sophomore and junior summer internships. This is when many middle-market, independent boutique, and bulge-bracket investment banking firms make their summer analyst offers.
By sophomore year, some large private equity firms begin targeting students at select schools, advising them to “contact us once you receive your investment banking (internship) offer.” However, these firms typically won’t hire sophomores until they have completed their two-year investment banking analyst programs. Some private equity firms also onboard a smaller cohort of analysts, almost all of whom will have completed a summer investment banking internship, directly out of college.
A sophomore summer investment banking or asset management internship provides relevant experience, showcases your ability to secure competitive positions, and builds a network of industry contacts. Relevant internships, regardless of season, strengthen your resume and demonstrate early and proactive interest in the field.
Buyside professionals who recently secured private equity associate roles after completing two years as investment banking analysts acknowledge that landing a top-tier investment banking or buyside internship between sophomore and junior year is difficult, especially without major connections. While many large firms offer few positions for sophomores, not having a sophomore-year internship isn’t a dealbreaker. What’s crucial is securing a finance-related internship that positions you well for interviews in your junior year.
Meanwhile, mastering Excel, which remains the lingua franca of the finance world, is essential, along with learning relevant computer programming languages, especially those used to organize large data sets.
For interview preparation, use online resources as well as the collective experience of qualified peers, alumni, and career services personnel. These same resources can help ensure that you communicate your extracurricular and internship experiences meaningfully to potential employers and adhere to best practices for tone, content, format, grammar, and punctuation.
COMING SOON:
PART 3: Junior Year and Alternate College Paths to the Investment Buy-side
READ PART 1: How College Grads Land Lucrative Back-to-Back Finance Jobs a Month after Graduation
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