This is where you'll find the most brutal banking interviews

If you're interviewing with a top tier investment bank, you've probably encountered the infamous "fit" interview questions. Especially common at the first stage Hirevue digital interviews used by the likes of J.P. Morgan and Morgan Stanley, they usually include things like, "Why do you want to work here?", "What's your greatest strength?", "Tell me about a time you worked in a team to achieve a goal". So far, so blah.

If you've interviewed with an investment banking division (IBD) job with a big bank and you go on to interview with a smaller boutique, you'll therefore be in for a horrid shock. While banks' interviews are like being struck with a lump of soggy cotton wool, boutiques' are like having your cortex probed with wire. It's still IBD, so you (probably) won't be asked the kinds of brain teasers now favoured by hedge funds, but you are going to have your knowledge examined deeply.

"I was never asked questions of the type, 'Tell me a time you showed leadership', when I was interviewing here," says one analyst at Perella Weinberg Partners in London. "At bulge bracket interviews I was asked some very trivial questions," says another Perella analyst: "Here, I was pushed much harder." An analyst at Moelis & Co. tells us his boutique interviews were of a different magnitude of stressfulness and complexity to his interviews at investment banks. A student interviewing with boutique Centerview Partners described the process as "brutal". And a student interviewing with Evercore described it as, "easily the hardest first round interview I had".

What makes boutique interviews so coruscating? It's partly the questions that are asked. Boutiques are a lot hotter on scrutinizing technical skills than banks. Before you go anywhere near an interview with a boutique, you'll therefore need to know everything about the valuation methodologies and their relative merits and demerits. You'll need to know especially about leveraged buyout (LBO) methodology and you'll need to know all accounting terms and how to calculate WACC.

"Boutique interviews centre around the technicals," says one of the analysts at Perella: "They'll ask you about valuation, accretion, dilution, financial statements and accounting."

Boutiques also require greater breadth of knowledge than banks. An analyst at one of the smaller and most prestigious boutiques in London says that because boutiques like his own don't have sector-based teams and researchers, juniors need to have much deeper knowledge than their counterparts in big banks. "It's critical that juniors here are aware of the macro trends (political, economic and regulatory) that might impact deal activity," he says. "For instance, I was asked about the impact of the Fed's decisions on company valuations at my interview." He says he was also asked to demonstrate an awareness of how private equity investors think and to discuss how investors can use derivatives to hedge their investments.

It's not just the depth and breadth of boutiques' questions that sets them apart. It's also the aggressiveness of their interviewers. Whereas banking interviewers can be gentle so as not to stress-out the student across the room, boutique interviewers have no such compunctions. If you hold an opinion, expect to justify it. If you produce a valuation, expect to explain how it would change under different scenarios. If you make it through the first round, expect some harsh case studies where you're asked to derive the share price from fundamentals like EBITDA and balance sheet figures, or advise on how to structure a leveraged buyout under different market conditions.

These are the kinds of questions banks more commonly level at candidates with a few years' experience, but juniors say boutiques ask them of analysts and even summer analysts who are still at university. "We don't have as many people in the intermediary layers between the junior and top senior levels," says one. "As a consequence, even an analyst here has to be able to directly interact with clients and to be very adaptable."

"Because you're joining a smaller team, your contribution is more important and the competency bar is set higher at the start," says another.

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