Wall Street: Paradise Found?

"I had never heard of I-banking prior to [coming to] Princeton," said Jill Borst '00, who has worked at Goldman, Sachs & Co. since graduation. To many students arriving on campus, I-banking — which is often used, slightly incorrectly, to refer to the larger sector of financial services — is a mysterious, glamorous and relatively undefined world. What does the "I" in I-banking even stand for? The answer ("investment") offers little clarification. So we watch in mild confusion as a seemingly vast number of our older friends don suits and seek internships and then jobs in this world, secretly wondering if they even know what they're going to be doing.

In the last five years, about 520 Princeton students — about 40 percent of Princeton students choosing full-time jobs directly after graduation — decided to work in the financial services sector. In comparison, about 470 of their peers chose to pursue law or medical school.

In the simplest terms, an i-banker acts as an intermediary between a company and its investors: those who need money and those who have. They advise mergers and decide how companies who are clients at their investment bank should raise money in order to either merge or expand. This takes place in the issuing of either debt (through buying bonds) or of stock (what happens when a company goes public). Many students will also enter the capital markets area of the financial sector, where they are more involved in the buy-sell world of the stock market.

Of course, this offers only a very broad sense of what the financial world entails. As Pete Cioni '04, an analyst at J.P Morgan & Co., explained, "Every day, I'm amazed by what goes on within my building that I have no idea about." The major investment banks will employ anywhere from a little less than 20,000 to more than 100,000 employees, depending on their number of branches and services. While a college graduate will usually start off labeled as an "analyst," she or he could be working in any number of divisions within an investment bank. Though a large number end up in Mergers and Acquisitions or Financing, others may choose to go into Investment Management or Sales and Trading, to name just a few more popular options. The hours worked at these jobs will also vary, from what is considered a relatively humane 60-70 hours per week up to a more difficult-to-endure 100 hours per week rate.

The typical analyst will start out in a twoto three-year program with the rest of their "analyst class." It's a little like school, except you're working harder and they're paying you to be there. A lot. A first year analyst at a major bank can expect to receive a $50-60,000 starting salary, a $10,000 signing bonus and the potential to earn over 100 percent of his or her salary again in yearly bonuses. And then there are the perks. Many analysts receive around $25 for dinner and extra money for other meals — which are all delivered to their desk, to maximize work time. If they end up working after midnight, a company car may chauffeur them home. And if a young analyst is lucky, a close relationship with the firm's top brass could mean expensive dinner outings and V.I.P. access to Manhattan's most exclusive parties.

A Princeton senior who did not want to be named because he will be working at a major investment bank next year said, "You end up developing a cynical attitude towards the perks ... you feel the firm owes you."

"It's to keep you working," he added, "so it's in the firm's best interest."

Given that an increasing number of analysts do not enter the profession with strong economics or finance backgrounds, they will begin their jobs with several months of intensive training. This is often considered helpful even for economics majors, who are usually trained in theory. Like other investment banks, "Goldman Sachs invests a great deal of time training and mentoring their junior analysts, and the firm hopes that a high percentage of these employees will stay with the firm after the initial twoor three-year analyst program," Borst explained.

That is, of course, if the firm decides to invite the analyst to stay on after their initial two to three years. According to industry sources, more than a third of analysts find themselves without a job two or three years down the road.

Yet this limited time frame is actually one of the reasons the job is attractive to many people coming straight from college. An anonymous senior explained, "I don't have longterm career goals in I-banking but if you get an offer, I don't think it's a good idea to turn it down."

"I'm not a huge fan of it," he continued, "but I know I can do it for a few years." Cioni, who does plan to stay in the financial sector for his career, pointed out that "if you don't know what to do with yourself and don't have direction, I-banking can be a great place for you because it only takes up three years of your life and gives you skills that are applicable to any career."

Perhaps this is why it seems like such a popular field. Professor Swati Bhatt, director of Student Programs at the Bendheim Center for Finance, said that "we had a tremendous surge in applications [for a finance certificate] from the rising seniors." But this could be little more than a fluctuation. Nicole Snyder, the associate director for Recruitment & Employer Relations in Princeton's Career Services office offered support for this hypothesis: "I wouldn't say the jobs are more popular than in past years, but definitely as popular." A search on TigerNet shows that the number of Princeton alums entering the financial services sector has remained relatively stable over the past 25 years.

Get the best of the ‘Prince’ delivered straight to your inbox. Subscribe now »

Banks have, however, become more of a presence on campus. In the 1980s, only two or three banks would actually come to Princeton and recruit. Now more than 10 of the top investment banks actively recruit on campus, with a number of information sessions, dinners and other meetings to make the application process easier. Cleburne Wolford '05, who just began working at an investment bank he declined to name, explained that "the network here is already in place to help you. A lot of my friends who went to state schools back home unfortunately have no real 'in' to the profession."

State schools are not the only ones left out. While most alums interviewed said that they work with a diverse group of people from different schools and backgrounds, the banks only actively recruit at a handful of campuses — namely Harvard, Yale, Princeton and Wharton.

"Princeton teaches us how to learn and how to adapt and that's what the banks are looking for," Cioni explained. Katie Daviau '06, who interned at J.P. Morgan this summer and will work there next year, added: "They understand that interns come in knowing basically nothing — but if you're smart and personable, it's worth it to them to hire you."

Princeton students have the benefits of an extensive alumni network, and can post their resumés and cover letters online at Tiger Tracks rather than sending in a resumé to a firm in the hope that a recruiter will read it. John Mulvey, a professor in the Operations Research and Financial Engineering (ORFE) department, said he is used to getting phone calls from alums working in finance who ask him to recommend promising students.

There are also added bonuses for those with certain eating club and sports team affiliations. Some alums will hold recruiting information sessions at their old clubs, and former athletes have been known to offer help to undergraduates on their team. Wolford, who played football at Princeton, hinted at this. "Definitely my coaches, former teammates and alums of my team guided me and assisted me and I feel obligated to do the same for the younger kids," he said.

But you also can't expect to just fall into a job at a top bank. "Just because you're breathing and have a diploma from Princeton does not mean they'll hire you," Cioni cautioned. Daviau's advice was similar: "You still have to seek things out," she said.

Indeed, the competition for jobs and internships is intense. Daviau spoke about the tension of her last day of work, which is when J.P. Morgan offers each intern a job — or not. "We called it the rose ceremony," she said, referring to the practice on the TV show "The Bachelor" of giving the chosen women roses.

With resumés due by the end of this month for most I-banking jobs, another group of seniors will soon be on their way to New York, the financial capital of the world and the de facto home away from Princeton for recent graduates, many of whom continue living together even as they take on new responsibilities and lifestyles. If they pass their urine test, that is. People who you used to see drunk at the Street are now wearing suits and carrying Blackberries. The anonymous senior maintained that the I-banking world is "similar to Princeton in a way: you think it's going to be a whole different world in a way, but it's not really that different ... it has this allure of exclusivity but once you're there, it's not as sexy or mysterious." But even with the crutch of the Princeton in New York community and the ease with which grads can return to Princeton for Lawnparties and other events, a change is inevitable.

Cioni sounded a little surprised as he explained, "I do have some reality checks: a year ago I was at college and now I'm here, entrenched in work, and college is a part of my past."