What it is to work in investment banking, by a director at Deutsche Bank
We spoke to Xanyar Kamangar, a director in the Technology, Media & Telecom (TMT) team at Deutsche Bank in London. He offered some advice on how to become an investment banker, told us what an investment banking career entails today, why he quit his start-up to do an MBA, and how he gets by without drinking any caffeine.
Can you tell us how you became an investment banker?
I joined Deutsche Bank in 2007 after studying an MBA at London Business School. My background is pretty different to most MBAs who go into banking though. Before I went back to school, I was running a computer telephony company with 30 members of staff. I went from a start-up into an investment bank.
Plenty of people in banking would love to run a start-up. What made you decide to drop the start-up for banking?
I guess I’d reached the limit of where the company could go. I was 26 and I started wondering whether the company could give me the life I wanted. I studied an MBA to help broaden my perspective and then applied to McKinsey & Co., Deutsche Bank and Google. I got offers from all three and decided to go for Deutsche. I wanted to learn about the world of finance and Deutsche didn’t come across as a typical corporate bureaucracy. Even on my internship I was able to run with a business idea I came up with.
Can you say what your job in the investment banking division (IBD) involves?
There are three pillars to our work.
We start by strategizing with our clients – What do they want to achieve? How is their industry developing, what are competitors doing, are they positioned in the way that they want to be? What kind of mergers and acquisitions or financing strategy do they want to adopt?
When we’ve helped our clients solidify a strategy, we look at how they can execute that. Do they need to buy or sell a company, for example? Is there a merger that could transform their business? We will support our clients with all the processes and resources necessary to execute a deal.
Finally, we help with financing. In order to do the deal, does the company need to raise money through the equity or bond markets? Does it need a syndicated loan? We can help the company to raise the capital that would allow them to implement their strategy or make the deal happen.
In many cases, these functions happen at the same time – and often relate to different deals. For example, two years into my banking career, I found myself working on three live deals at once – one for a technology company that was selling one of its businesses, another for a private equity firm in the telecoms sector and the third for a very large Turkish telecom company which was preparing an initial public offering (IPO) and listing on the stock exchange for the first time.
So you don’t just work on M&A mandates? – You work across products: M&A, debt capital markets (DCM) and equity capital markets (ECM)?
Yes – although it depends upon the bank. Deutsche doesn’t have pure M&A teams. Instead, we’re aligned on an industry basis. Our clients are very sophisticated and I believe it’s necessary that the M&A advice you’re providing is coupled with detailed knowledge of your client’s industry.
What's the best thing about working in M&A?
For me, it’s the adrenaline and excitement of working on a few projects at the same time. Sometimes I’ll be working on three deals, sometimes I’ll be working on as many as five. I’ve worked on deals in the Caribbean, the US, Western Europe, Eastern Europe, the Middle East, Sub-Saharan Africa and parts of Asia. You get the opportunity and freedom to work across geographies on deals that you find interesting and exciting.
I also find it very rewarding when I’m asked for advice by my clients and I see them acting upon that. When I was just a third year associate I was in charge of executing an IPO. We did the book building, but at the end of the process the book wasn’t as strong as we wanted it to be. – The founder of the company - an entrepreneur, was forced to make a tough decision – to go to market with a relatively weak investor base, or to postpone the float. He asked for my advice and I suggested that every entrepreneur has to make difficult choices and that this was one of them – ultimately, I said it made more sense to wait until he had a strong set of investors. The next day he was interviewed by the FT and he used precisely those words to justify his decision to postpone the float.
And what's the worst?
The hours can be an issue. It’s tough when you’re working on five different projects, each of which is time-critical. You have periods when you’re very busy. However, you also have periods when you’re not so busy. It comes in pulses – unfortunately you can’t control them.
The good news is that what’s important in IBD at Deutsche Bank is getting the job done. If you’ve done the job and you’re not on a live project, then by all means you can take proper time off. People are very self-regulating. They work hard, but they do get breaks.
What's the most challenging thing you've had to do (at work) this week?
Well… I was in Miami for two days last week and during the nine hour flight back, I was running the latter stages of a live deal. It was very challenging, but the WiFi on the plane allowed me to stay connected and to keep communicating with my team throughout.
Which three things about your character make you suited to working in IBD?
This depends upon who you ask, but I’d say it really helps if you can build trusting relationships with your clients and colleagues.
You also need to be very detail oriented – a lot of what we do relies upon the details of both process and analysis. In a lot of jobs it doesn’t matter if the details aren’t perfect, but here if the details aren’t right it can jeopardise an entire deal.
At the same time, however, you need to be able to step back and look at the bigger picture. Some people get bogged down in the details and forget why the whole analysis is happening. You can have a presentation full of impeccable tables, but if the client can’t understand it and draw some conclusions, it’s useless.
And then you need to work well under pressure. You need to be able to juggle multiple projects at one time. I don’t drink coffee and I don’t get tired; I’ve always been like this! I’m always reading about the industry; I’m genuinely passionate about TMT.
What should every student who wants to work in M&A know before they step into an interview?
I’m the school champion for London Business School and I interview a lot of MBAs. The first thing I always want to know is whether candidates really understand what we do. They shouldn’t get their picture from reading an exciting story in the FT or Barbarians at the Gate – I want to know that they have a realistic picture of what working in IBD is really about. You don’t need to have advanced finance skills, but you do need to know exactly what people in finance do.
What's your favourite (graduate) interview question?
I don’t go for technical questions. I like to ask people to tell me about a time in their career when they stepped up to face a challenge or to do something extraordinary which they are proud of.
And what's your favourite answer?
I love stories and so I love it when someone comes along with a genuine story which shows their passion and how they tackled a challenge and had a positive effect on the world. I can see that they will have the same passion for future career challenges. I want to see the passion shining through!