So you have already decided that you want to build a career in equity research.
You also know, perhaps from reading my previous articles or watching my YouTube videos, that a great way to get your foot in the door is by getting an equity research internship.
But the big question that arises now is - where do I start? How do I actually get an equity research internship? Will I qualify for it? Let’s try to answer all those questions!
Stock markets around the globe have always been a very crucial part of any economy.
Whether it is the money of corporates or individual investors at stake, many companies earn their bread and butter by working around the stock markets.
Also, it has been one of the largest contributors to the financial world in terms of employment.
Today in this article I’m going to tell you how to sneak your way through to equity research as an intern.
Let me start by explaining what equity research is.
And honestly, it is exactly what it sounds like.
Equity research is a discipline that tracks and analyzes stocks, stock markets, its movements, and its participants.
Equity research analysts predict the performance of stocks, companies and even industries, and present their forecasts of stock valuations and company performances.
It is done on both buy-side, and sell-side firms but the level of depth and analysis might vary.
The tasks of an equity research intern can be divided into three broad categories:
This is the primary task of any equity research intern, and this is where most of the opportunities lie when it comes to internships.
Firms hire interns to do the primary and secondary data collection on various companies.
The information required is usually available in the financial results reported by the company.
Interns have to collect this data in a synthesized format for further analysis.
This is the most crucial task of any equity research professional.
The data collected in the first phase has to be analyzed using various tools and techniques.
You need to know the basics of financial modeling to be able to find an internship in this profile.
You would either be using an existing model or in some cases, you might need to create your own model from scratch.
In either case, it is utmost essential for you to know financial modeling.
For more details on financial modeling, please refer to my earlier article How to learn financial modeling in Excel and Financial Modeling using Excel and VBA.
Usually, this is a task that will take the least of your time in equity research.
However, it is equally important as the rest of the tasks.
It involves writing reports in either word format or in PowerPoint presentation.
In most cases, the report is generated automatically using software, but still, there are some manual edits and changes that need to be made for the report to get published or sent to the client.
I’m going to start off this piece as positively as possible by giving you a tip right off the bat.
Most people in the industry focus on getting an equity research internship. This means they try very hard to apply to the right banks and companies, they prepare for the interview, and they build the best portfolio they can.
While that is crucial, what I suggest you do is not forget to make the most you can out of your internship. Simply obtaining it and then putting it on your resume for your future employer is not enough.
Equity research internship opportunities are, in reality, very scarce.
In other words, if you do get one, make sure you get the absolute best you can out of it.
Here are some ways in which you can do that.
Now that I have given you an outline of what to expect in an internship, let’s get down to business and talk about what to expect in your interview and how to prepare for it.
According to me, the questions that are usually asked in equity research internship interviews can be divided into the following categories:
This set of questions is common across all internship interviews.
There will be questions related to your interests, strengths, goals, ambitions and career path.
But one of the most common and dreaded questions to answer is “Why should we hire you?”.
This is dreaded to answer because of two reasons – one – there is no correct answer to this question.
And two, most of the time your selection and rejection depend on this answer, especially for an internship.
My suggestion here would be highlighting your interest in finance, backed up with knowledge and willingness to learn and prosper.
Try not to make up stories and be as honest as possible.
There will be a lot of questions testing your finance knowledge.
Prepare well, and revise your concepts before the interview.
If you do not know the answers to a few questions, it is not a problem.
You are not expected to know everything at this phase of your career.
But try and direct the interview in the direction of your strength areas.
For example, you are not so good at interpreting balance sheets, and the interviewer asks you a question related to that.
You should, in this case, tell honestly that I do not know how to interpret this, but I know how to interpret P&L accounts.
Well, this is just an example, the point here is that if you don’t know the answer to a specific question, tell the interviewer what you know and invite more questions on your forte.
Gone are the days wherein people were hired only on the basis of their core functional knowledge.
All companies these days want people who are dynamic and exposed to the outer world.
Industry awareness questions will typically test your knowledge of the companies, macro socio-economic factors, global trends and regulatory policies among other things.
I would suggest that start your preparation for the interview by reading financial & business newspapers at least a month in advance of your interview.
Also, take a subscription of weekly and fortnightly business magazines for improving your knowledge.
I recommend you to always read editorials in newspapers and cover stories in magazines.
It will help you in gaining a better understanding of the corporate world and economy as a whole.
These are the trickiest questions in an interview.
The interviewer will present a hypothetical situation in front of you and would want to take your opinion or plan of action.
Again, there is no correct answer to such questions, as there will be so many factors determining a solution in a real-life situation.
But that is what the interviewer wants to check – your ability to respond to situations.
Please do not be hasty in answering such questions, and think for a minute before you give your answer.
Also, differentiate between facts and opinions.
Your answer is a mere opinion of yours, so do not use extreme words like “must” and “always”.
Try to stay firm and confident but not arrogant. And a smile always helps!
This question is very easy to answer.
Look for every type of bank that has a research team. They are the most likely to offer an internship. This includes middle-market banks, bulge bracket banks, as well as some elite boutique banks.
You can try a few regional boutique banks, but since they don’t offer the service of equity research, to begin with, it’s not very likely they will put out an internship. The only reason I am mentioning them here is that sometimes they do and it won’t hurt to try.
As expected, most of the banks that will serve the opportunity for such a learning experience are in New York. This is why all your attention has to be focused on equity research internship NYC based.
With that being said, let’s take a look at some of the actual banks that do offer internships and learn more details about them.
The Equity Research Summer Analyst internship at Barclays starts in June and lasts for ten weeks.
The requirements for this internship is that you are an undergraduate student who is expected to graduate somewhere between December 2019 and June 2021.
Barclays states that everyone can apply to this internship, no matter their educational background. This essentially means that you do not need to have a degree in finance, per se.
Barclays offers amazing opportunities:
JP Morgan is, without a doubt, one of the titans or leaders of the industry. Therefore, if you notice they are offering an equity research internship, be it full time or part-time, do not hesitate to apply!
The internship in itself will have you assist senior colleagues when it comes to analysis, research, and preparatory work. But you will also get the chance to develop trade ideas, monitor markets, and get to know the companies your team is working on from the inside.
This can prove to be very valuable information in the long run, given the fact that this is JP Morgan.
If you perform well, JP Morgan might be tempted to offer you a full-time position within the bank.
However, if that doesn’t happen or if there are no open positions when the internship is over, you will still have the opportunity to further your career in an exceptional environment in one of the best banks in America.
Raymond James positions themselves as the perfect place where motivated and talented graduates can launch their careers if equity research is what they are interested in.
The reason is that even very early on, you are given the title of Equity Research Associate. This will guarantee a series of responsibilities beyond what other banks or companies can provide. Ultimately, this translates into experience.
Raymond James is the place where graduates are able to launch their careers, which is why they have created their Equity Research Associate program. Here are some of the benefits you will enjoy if you get admitted as an associate into this program at Raymond James.
Please be aware that the Raymond James Equity Research Associate Program requires you to commit for a minimum of 2 years!
At the same time, the program also asks for a minimum of 3.5 GPA, although higher is preferred!
This is yet another one of the leading financial entities of the world that you absolutely must have your eye on when applying for internships.
The great thing about Credit Suisse is that they offer equity research internships both for seasoned professionals and for college students and graduates. This means that you can spend some time either learning or refining your skills with this leader of the industry no matter what stage you are at in your career.
Credit Suisse does not require you to have a background in finance, but you will need to have a college degree.
At the same time, you are free to apply online by submitting a resume. You may attach a cover letter if you wish to do so, but it is not mandatory.
Please be aware that Credit Suisse does not allow you to apply to more than two programs. This is overall, across the globe.
It does not matter the region or type of business you are trying to apply to. Two is the maximum limit. So choose wisely before applying!
If you’re a recent graduate that is currently preparing for graduate school, then Analysis Group is the place for you. They offer summer internships as well as orientations and training programs pre-internship that prepare you for the career that will follow.
The great thing that you will love about Analysis Group is that they actually hire the people they accept as their summer interns.
According to their own statements, their interns often come back after they have graduated to occupy a full-time position within the bank. The positions Analysis Group has to offer are those of full-time Analysts.
The main reason why I would advise you to apply for an equity research internship is that it will give you the unique opportunity to see if this career in equity analysis is really the one you are looking for.
It will also allow you to gain real-world experience, and most importantly of all, network! That might be the biggest win of all!