NEWS

The ‘Why Investment Banking’ Interview Question Guide

Quick thoughts to help you knock off the single most common interview question for investment banking analysts and summer analysts

Along with technical questions, there is a near certainty that at some point you’ll be asked the ‘why investment banking’ question. This is the type of question that largely won’t differentiate you, but could easily get you dinged if you don’t have a tight answer.

This is actually good news, because, like technicals, you can focus your time on prepping for this question and know that it will definitely be asked, really justifying the effort you put in. Knowing technicals cold, why investment banking, and why you’re interested in a particular bank are probably the three most common questions to get asked and the easiest to prepare for.

How To Tackle It

To start, there are a few things you should definitely not say, namely that you want to make a lot of money, you’re interested in investing (investment banking analysts are not investors), or that you think it’s a great career path to optimize work-life balance. 

With those out of the way, it’s helpful to think of a few general points and then combine those points with bank-specific knowledge you’ve picked up through your recruiting process to help you stand out vs. some of the more rehearsed answers that interviewers will hear to the ‘why investment banking’ question. 

A general point could be that you studied M&A / Restructuring / Capital Markets / Private Equity in your freshman finance classes and really enjoyed learning about some specific transaction considerations included in case studies. From these case studies, you saw how exciting and stimulating it could be to work alongside clients advising them through pivotal periods for their business. 

Then you can tailor this based on the bank – for example, if you’re interviewing with Houlihan Lokey’s Restructuring team, you can tailor the course experience story toward restructuring and mention that you read up on the recent events at Luckin Coffee (a transaction that HL worked on). 

Background Work and Prep

Obviously, if you choose this approach, you need to actually read up on the transaction and make sure you are comfortable fielding any follow up questions (e.g. what was interesting about the transaction, what would you have done in their position, etc.). No one will expect you to have perfect answers, but the ability to show that you thought critically about it would go a long way. 

A Flexible Framework

This formula can be tweaked in whatever way works best for your situation. Switch out finance class for investing club, swap restructuring for sell-side advisory, and drop HL for a Perella Weinberg deal that you pulled from their website. 

The bonus with this approach is that you also have an opportunity to highlight other relevant background like your finance-focused coursework and extracurriculars that may not have already surfaced organically. Working this component in could open a pathway to a more conversational discussion about whatever topic you mentioned – which is definitely a great thing as long as you’re prepared to talk through it and field any other questions.

Last Thoughts to Crush it on Interview Day

The key to tackling the ‘why investment banking’ interview question is to show that you have a genuine interest in banking, and that you actually know what it is. If you can check these two boxes with a well-researched answer you will be miles ahead of the competition. 

The final thing to wrap up your preparation will just be practice and repetition. I find it helps to write out a general script so you have an idea of where your answer will head, then speak it out loud until you’re comfortable with a conversational delivery. Don’t read what you’ve written word for word, but use it as a framework for a natural delivery. 

Sam Hillier

Sam Hillier is a reporter at Transacted covering private equity and investment banking. He previously spent time as an investment professional focused on direct buyouts, as well as an earlier strategic advisory stint.