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Investment Banking and the Liberal Arts

Panel presented by Goldman Sachs, October 25, 2006

Panelists:

Adam Levin, Investment Banking, New York Office

Jessica Linden, Equities, New York Office

James Brower, Fixed Income, Currency & Commodities, New York Office

Mindy Nguyen, Investment Management, Philadelphia Office

Todd Saligman, Investment Banking, New York Office

Moderator: Cindy Joseph, Firm-Wide Diversity Recruiting, New York Office

Q: Please introduce yourself and tell a bit about what you do.

AL: C’05, English- Although I only took a couple of Wharton classes while in college, I wanted early experience so I worked at Goldman the summer after freshman year with my uncle who worked for the company and continued with them every summer after. Now I work in Leverage Finance, which deals with corporations that want to issue junk bonds. The first year on the job there is a steep learning curve. It takes a lot of extra time to catch up with the technical skills. You will have a lot of communication with clients, with senior people in your division, and so forth. English actually helped me here as you have to be very detailed oriented in the research you do.

JL: C’02, Communications major and Psychology minor- I was a Summer Financial Analyst (FA) in 2001 in the Equity division. Now I’m in Prime Brokerage, which helps hedge fund clients become prepared to be clients of the firm. My day-to-day work is very different from those in banking. There are lots of opportunities outside of banking at Goldman. My role is to be a relations manager for hedge funds; I basically work to help my clients build their organizations. The summer program is a great opportunity to try out the different areas through a rotation within your division. You don’t necessarily need to follow the market to work at Goldman. I’m on the phone all day with clients and do nothing with investing.

JB:C’03, Economics- I began as a Summer FA in 2000 and continued for two more summers. I started in Fixed Income simply because that is where I got an offer, and luckily realized that I fit well. Now I work with the Special Situations Group, which is the principal investing interest of Goldman. We don’t have clients per se, Goldman is basically our client. We just take money and invest hedge fund-style by dividing into sectors, products, and investing styles. I invest in marketable security and liquid investments (high-yield bonds, distressed bank debt, derivatives, stocks, etc). My role is to be an investor, similar to a research role. I cover energy (except oil and gas), fitness, and gaming. My job is to know everything I can about those sectors and look for ways to invest money. Similar to writing a research paper, I talk to primary (the companies to invest in) and secondary sources, write it all down, come up with a thesis, and it pitch to the managers. My job is very similar to the analytical research process you engage in with the College.

MN: C’02, PPE- Political Science and Economics major- I worked for two years in Finance for AT&T doing a rotation. In my last rotation, I worked in the Fixed Income group, and really liked following the market. Now I work in Private Wealth Management, which manages the investments of individuals, foundations, and families with investments greater than $10 million. I work with all of the resources of Goldman Sachs to find the best place to put my clients’ money. I get to trade a little, so I follow the market daily. (The percentage of time you spend trading depends on the group you’re in.) You have exposure to the full client base (40 per team) the minute you sit on the desk because you are answering phones, everyone is sitting right there, and basically you get to learn by drinking from a fire hose all day. It’s an exciting, fast-paced environment.

TS: C’04, Economics major- I went abroad junior year to the London School of Economics, and consequently missed recruiting on campus. I found that I had access to the same type of recruiting at LSE, so I was lucky enough to interview while at home over Christmas and eventually got the summer internship. Going abroad is one of best experiences I had in school. Go abroad, even though it will make recruiting more difficult. I am currently a 2 nd year analyst in the Investment Banking division at the Convertible bonds desk, where I help companies raise money through convertible bonds.

i-banking is divided into two areas: corporate finance, which has the sector groups (healthcare, consumer retail, etc), and consumer finance (equities, convertible bonds, etc.). I spent my first year in Consumer Retail. You start in a sector group of Corporate Finance and then move over to your desk. My day-to-day is now very focused, but I had a broad focus for the first six months. With Consumer Retail, projects are much more long-term and you work very in-depth on a couple of transactions. Now, I work on many more companies and I find it exciting because it’s new every day. Even within i-banking at Goldman, there are vast differences in jobs you can have. Make sure you understand the differences in the areas before you delve in and be sure you are suited to the area.

Q: What do your divisions look for in applicants?

AL: When applying, you want to think about how to position yourself. The main things are to get experience while at school or over the summer and network with alumni sooner rather than later. We really just want experience, enthusiasm, and a displayed interest from our interviewees. Also, you need to show that you are very dedicated to something, whether finance-related or not, and had some kind of direction in your time at Penn. The Leverage Finance division looks not only for quantitative skills but also someone who enjoys long-term projects, group work, and slower-paced work.

JL: We are looking for excited, energetic, detail-oriented, organized, quick-learning people-people. We look for a vibe that clients will like you just talking to you, not only while chatting about business.

JB: We employ sales people, traders, and research/finance people. Across the board, we look for applicants who are hard-working, driven, motivated, and excel in everything they have done. Specific for the sales position, we need people who are relationship driven and can maintain relationships with people through which to drive business. For traders, they should be market-savvy, enjoy a quick pace, dislike long-term projects, and have a risk appetite. For research, we need people who are analytical and like long-term projects.

MN: We look for self-starters with an entrepreneurial streak. An applicant needs to be innovative, hard-working, and like seeing projects through to fruition. You won’t be working banking hours, but you will be working hard not so much because you have to but because you enjoy it. We want to see a passion for a few clubs in which you took on leadership roles and helped to change the course of that club.

TS: We look for a good work ethic and an interest in learning. Nothing we do is that challenging, but we have a 7-8 week training program to teach you what is most applicable to the position. Most people in i-banking were liberal arts majors. People feel that everything is all the same at Goldman, but really it’s not.

Q: How much finance do you need to know to work on Wall Street?

JB: At some point, it’s good to have a lot of knowledge. But at the beginning, none is required. If you needed it at the start, we could only hire out of four or five programs nationally. Finance knowledge is helpful, but not at all required. Everything that you need to know to get started will be taught in the first two weeks of training. We condense everything that you need to know into a 5 week program.

AL: When you’re looking to work somewhere, the firm that offers you a position wants to invest in you. Goldman is confident that your background in arts and sciences has taught you how to learn on the job and you will learn everything you need to from us.

Q: What content is covered during division training?

JL: For a Summer F.A., training lasts 1 week. For a 1 st year Analyst, you go through a 7-10 week program. You will be required to take continuing education programs throughout your employment with Goldman, about 10 hours per year after that point. Education is a pervasive part of Goldman’s culture. Training is mostly learning about the products that Goldman has to offer. There is some team-building, but it is fun. Part of the point is to get to know people in your program. For an Associate, there is a 2 week program.

MN: You come to the office and work for 1-2 weeks before training, then you go as a division to New York for 3 weeks. For the first 2 weeks, you are getting acclimated to the team and figuring out who to go to with specific questions. It really is lots of fun; you are holed up in a hotel with the rest of your analyst class. The best connection you can make is with your analyst class. During training, you learn about all the aspects of Goldman Sachs and more about your role. After training, you attend Financial Analyst University, where current FA’s take two hours in the morning and night for a few weeks to teach you a practical crash course.

Q: What advice do you have for Liberal Arts students to get through the interview process?

TS: Don’t get stressed. Don’t worry if we will ask technical questions. I was never asked a technical question, and interviewed pretty extensively. Be confident in your ability to talk about what you’ve done. Know your strengths and weaknesses and be able to talk about them.

JB: We interview at the level we expect you to have. If you are a Wharton student with a 4.0 GPA and 3 concentrations, you will get lots of technical questions. If you are a College student to the extent you haven’t taken any finance classes (not necessarily recommended), it would be unreasonable for us to expect you to know how to answer high-level finance questions. Liberal Arts students actually have an advantage because you won’t be talking about a subject where the interviewer has more knowledge than you do. Take a few finance and accounting classes to demonstrate your interest, possibly pass/fail as a fifth class, but they are certainly not a requirement.

Q: In the process of getting a summer internship, when do you apply, when are interviews, and how does the process work?

Cindy Joseph: Later in the fall and early in the spring, we will do information sessions specifically for internships. You can apply on our website [generally in the second half of November]. The information session and application deadline is in January. Interviews are conducted in early February. Resume books are produced in-house. The 1 st round, which is a behavioral interview with 2 interviewers on 1 applicant, is on campus. Generally, you will talk about your experiences and interests. The 2 nd round is in New York with a specific division. This can get more technical.

Q: As far as internships, when do you decide which part to work for? And how would you go about it?

JB: You apply firm-wide with a preference for up to two divisions in two locations, but no matter which division(s) you specify everybody will look at you. In the 1 st round you don’t need a very focused idea, as that round is a discussion of where you would fit in with the divisions. Through the interview process you will determine which segments you belong in. By the 2 nd round, you should have a fairly solid idea. Also, talk to your friends and people who work there already to see what seems interesting. Make use of the alumni base.

MN: It is really important to talk to people. Penn is the largest supplier of talent to Goldman. Make an effort to talk to friends to get contacts here. I’m always happy to talk with people about my job and have a dialogue about what they might be interested in. Most everyone would be willing, provided they have time.

Q: For Summer Analyst and full-time Analyst positions, is there any international mobility?

JB: Absolutely. I almost moved to London about three months after I began working, but decided not to because of a better career opportunity in New York. That’s an example, but we also have the 3 rd Year Process, where you can basically start over at any office in the world which is hiring. You apply directly to the division and would be hired on as a 3 rd year analyst if you and the division are a good fit.

Cindy Joseph: We have internships around the world. Asia offices do the bulk of their recruiting in the U.S. Europe is more difficult because they do largely local recruiting.

Q: What extracurriculars did you have in college and how would Goldman look at them?

JL: I spent a lot of my time on TV, on the board and as an anchorperson. I was also involved in Women In Leadership and served as a Peer Advisor. At one point I was a Peer Manager, basically in charge of the other Peer Advisors. Yes, I had leadership, but nothing Wharton or finance related. I loved being on TV and doing all that, and it has translated really well into my current job.

Cindy Joseph: We take a close look at your extracurriculars because it gives us a really good picture of how you are involved on campus, how you work with people, etc.

JB: They are really important for internships because that is what distinguishes you. Most people have not had much work experience, so this is how they differentiate themselves and prove themselves as applicants.

Q: Considering that I am a transfer student, how important is what I’ve done at Penn itself as opposed to college in general?

MN: Your college experience as a whole is important. We won’t discount you at all for having transferred and possibly foregone some leadership opportunities.

JB: I know some people who would love transfers because they read it as being really driven to know what you want and willing to take yourself out of your comfort range to get it.

Q: Is the experience significantly different at different locations?

MN: New York is really attractive; everybody wants to go to New York for the fast-paced life and the attractions of the city. There are benefits and drawbacks to regional offices. I love the atmosphere in the Philadelphia office. Everyone knows every single person, so having a baby or getting married is a really big event. Also, your analyst class gets really close. The drawback is that you aren’t physically networking with people in New York at headquarters. Regardless, everyone is still just a phone call or e-mail away.

Q: What are you looking for in cover letter?

JL: Goldman’s website has a section that asks why you want to work at Goldman Sachs. Answer the question asked and do a spell check. Actually read what you write.

MN: You have to do a spell check, read it over, and have a roommate read it over. If you dash it off in five seconds, that’s not a good sign. If you specify two divisions, say why you fit in both of those two divisions. Why are you right? What will you bring to the firm?

JB: I don’t weight cover letters very much. I skim through them and look for mistakes for fun. Don’t screw them up (no Dear Citigroup). Cover letters can hurt much more than they can help. Every once in a while we’ll get a great, well-written cover letter, which is very rare. For the most part, it’s not incredibly important.

Cindy Joseph: I manage the Scholarship for Excellence recruiting process. Sophomores and juniors of Black, Hispanic, Native American descent with a 3.4 GPA have the opportunity to apply for a paid internship and a stipend for Penn tuition. The applications are available in Career Services and online. It’s very important to network and talk to people you might be working with.