The Truth About Investment Banking Hours – Myth vs. Reality

For those that have been following this blog, you all know that I started my career a while ago as an investment banker working in an M&A industry group. I went through 20+ interviews and close to 10 superdays. Got rejected over and over again before somehow managing to land an offer during the last superday I had scheduled.

I remember the phone call as if it was yesterday. It was a Director who I had a number of interviews with, “If I gave you the offer right now, would you accept it.” I accepted on the spot.

I will admit, I cried right after I got that phone call. For someone like me who doesn’t ever express much emotion to begin with, it was a big deal. I knew from sophomore year of high school I wanted to major in business. I put years of effort to get into a top business school to ultimately break into investment banking.

Then it finally happened. My dream came true.

Internship

Of course, that initial excitement went away once I started the job. The internship wasn’t too bad. I knew that if I put my head down and worked hard for the summer, then I would most likely get an offer to return.

My senior year of college was right around the corner and I knew if I just grind out the summer and receive an offer right after, then I could live it up my senior year and not have to worry about landing a full-time job.

My expectations on work life balance in investment banking were so low heading into the internship, so life that summer wasn’t as bad as I expected. I was put on a $15Bn live deal so I ended up working most weekends and holidays. I remember watching the fireworks in the office out on the Hudson river during the 4^th of July.

There were definitely interns that weren’t on live deals and did not have to work that much. They still received offers. The hours are really a hit or miss depending on what you are working on.

• Live deals = more hours
• Pitch work = less hours

It is really that simple.

Full-time

After I graduated and started working as a full-time analyst, I began to realize how much different it is compared to when I was an intern. As an intern the work is a lot less stressful than a full-time analyst because you aren’t given full responsibility and you have others who are constantly checking over your work.

While people still don’t expect much from an analyst fresh out of college, you are still expected to learn quickly and be able take full control over models and presentations after your first year. The ramp up takes somewhere between six months to a year.

Imagine this: you lived your whole life having all the time in the world and virtually zero responsibilities. Then all of the sudden, you lose all your free time and start working in the most time-consuming career there is.

It is a tough transition for most people. That is why more and more people are asking whether investment banking is worth it to begin with. If you are so worried about working hard early on in your career, then investment banking is probably not for you.

How to survive the ramp up period

It is very intimidating when you first start working in the real world, especially at an investment bank. Everyone around you seems so much smarter than you. It takes you forever to get anything done. Here are basic tips to survive those first few months:

1. Become a master at Excel as quickly as possible – those first-year analysts that were good at Excel were the ones that stood out and were asked to be put on deal teams. You will get much much better at Excel over time, but if you are good from the get go, you are a highly valued commodity.
2. Google is your friend – Don’t ask your higher ups any stupid question that can easily be answered with Google. I promise you your coworkers will get annoyed at you if you ask questions about excel, basic accounting/finance, etc. That said, if there is something critical to any analysis that you are doing that you are unsure of, then don’t be afraid to ask so you don’t mess up. The key is to figure out as much as possible on your own. Being able to work independently is the best skill you can develop in finance.
3. Go through prior deals and analysis – I guarantee that during your two years as an analyst, you will likely not be asked to do something that has not been done before. Go through the company drive and find examples of work that people did before you. Models, presentations, formatting, valuation analyses: it has all been done before. Go through prior examples and just copy what has been done. Rinse and repeat.
4. Maintain a positive attitude – Yes, investment banking sucks at times, but you need to focus on the long game and know that this is just a two to three-year stint. If every day you wake up hating what you are doing and hoping to get fired, then you will never be successful. Be grateful for what you have accomplished thus far and keep reminding yourself of that every day.
5. Always offer to help if you have nothing to do – Don’t just sit around all day if you aren’t staffed on something. Be proactive and ask for more work. This is the time to learn as much as possible in as little time as possible, so the more work you do upfront the easier it gets down the road.

During your second year as an analyst, you should be able to do everything that is asked of you without needing much help from others. You will become much more efficient and be able to handle a much larger work load. After working as an investment banking analyst for three years, I learned a ton about how to stand out from your peers and be a top-bucket ranked analyst.

More on investment banking tips here if interested.

Why do investment bankers work such long hours?

The reason bankers work such long hours really comes down to a few reasons:

1. Client-facing work – you are getting paid by your clients, so you always have to make sure they get what they want when they want it
2. Volume of deals – More deals = more hours. When the economy is booming, expect to work more.
3. Inefficiencies – There were so many times as an analyst where I would literally do nothing until about 3pm and then be given work to be done by the next day. Banks have gotten better at prioritizing workflows, but I guarantee there will be times when you are asked to do something late in the day or on a Friday afternoon.

Bulge brackets versus boutique investment banking hours

As I mentioned before, the hours depend entirely on the amount of deal flow in your group. That is why you will tend to work more at the more prestigious investment banking groups on wall street. They attract more business, so there is more work to go around for everyone.

Given there are more bodies at bulge bracket firms, you will generally work less than at boutique firms. The work is spread amongst more people. That said, there are groups especially with Goldman Sachs and Morgan Stanley where you will get worked because there is just so much deal flow.

At bulge brackets, you will be put on more deals than at a boutique firm, but you aren’t as involved in each deal as you would be at a boutique investment bank. Boutique banks generally bring in less volume of deals, but that does not necessarily mean you will work less. There are a lot less bodies that are put on each deal team.

Here is a good example:

When I worked at one of the “elite” boutique investment banks, I was put on a $15Bn deal where our client was going through a strategic review process that led to a sale of the entire company.

There were two advisors on the deal: us and a bulge bracket. We were the lead advisors and only had five people on the deal team: one senior MD, one director, one associate and two analysts. The bulge bracket firm had ten people total on the deal: four from their industry group, three from M&A and three from capital markets. Despite all the bodies on their side, we were still doing 90% of the work because we were the lead advisor.

Those analysts at the bulge bracket were not really that involved and I am sure they had 3-4 other projects they were also working on in the meantime. For us, the $15Bn deal was all that we were working on for six months straight. One deal, that was it.

With just five people on the team (really four people since the senior MD wasn’t really involved except for high level meetings), I have to say it was an extremely lean team. We were working around the clock for six months straight. Yes, there were times when we were only doing 70-hour weeks (which I say only because relatively that is not that bad), but there were times when we were pulling 120-hour weeks.

It all depended on whether we were preparing materials for the management team or the board. Whenever there is a deadline for a meeting, you should expect your hours to be significantly longer in the weeks leading up to the meeting.

Overall, the experience at boutique investment banks is much better because you become completely involved in each deal that you are put on. You work on all aspects of the deal. There is no separate M&A group like there is at most bulge brackets. Valuation, industry work, all the Excel models and PowerPoint slides are all done within one group.

Do bankers work 100+ hour weeks consistently?

The answer is no. If anybody tells you they were working 80-100+ hour weeks for most of their time in banking they are lying to you. There are times where you will be super busy working crazy hours for a few weeks, but then there are other times when you work just 50/60-hour weeks because there is not much to do.

It iis all dependent on what you are working on and key deadlines. Can’t emphasize this enough.

Typical day during normal times

• 9-10am: Arrive at the office
• 10-12pm: Read WSJ, various online articles, work on updating various comp spreadsheets, catch up with Associate to figure out a game plan for the pitch work materials for a meeting the following week
• 12pm-3pm: Meet with MD along with the VP/Associate to discuss outline for the meeting, divide up the work and get started
• 3pm-6pm: Grab coffee with other analysts, continue working on completing various slides for the pitch work materials
• 6pm-8pm: Chat with other analysts, order dinner
• 8pm-10pm: Continue working
• 10pm: Call a taxi/uber home

Typical day in the life during busy times

• 8am: Arrive at the office. Went home at 3am last night so running on four hours of sleep. Drink two cups of coffee right when I get to the office. Have a fairness opinion committee meeting later at 2pm today (where a bunch of big shots at the bank have meetings to discuss the fairness of a company’s valuation during an M&A deal). MD had a bunch of comments yesterday afternoon so need to finish up at 1pm so there is time to print the books before the meeting.
• 9am: MD comes in asking for an update on where the latest deck is. In my mind I am fuming because he gave us two days of comments to turn at 4pm yesterday afternoon. We give him the latest deck with comments on what hasn’t been finished yet.
• 9:30am-10:30am: It’s crunch time. Only a few hours left before we have to print the books. MD comes back with a few additional comments for us to turn.
• 10:30am-12:30pm: We finish the turn and give the latest copy to the MD. He notices a few mistakes and asks us to fix them.
• 12:30pm-1pm: Very focused right now. It doesn’t matter how little sleep I got. Adrenaline is pumping and we are almost done with the comments. Excel crashes and need to redo the work I just did over the last 20 minutes. Associate starts freaking out. Fresh from business school just six months ago, he doesn’t know how to handle all the stress yet.
• 1pm: Still not done. Need to call print center to make sure they are ready to finish our books in time for the 2pm meeting.
• 1:15pm: Finally done with the turn. I hope everything is all right, didn’t get a chance to check everything. Send the presentation down to print center.
• 1:50pm: Print center is done. I quickly run down, pick up the books. Associate and I flip through all the books quickly to make sure everything is right.  
• 2pm: Fairness committee meetings begins. Trying to keep myself awake so I don’t fall asleep in front of all these big shot bankers.  Associate kicks me when he notices I am dozing off.
• 3pm: Meeting is finished. The committee had a few additional changes to make to the presentation. Get started on those changes. Luckily the board meeting with the client isn’t for another couple of days, so have time to finish these final changes.
• 8pm: MD tells us good job and to leave and finish the work tomorrow. Grab a taxi/uber home to catch up on sleep.

You can see how different the day can be depending on if you are working on something important. During normal times when you aren’t working on anything important, life is not that stressful. You still work 12/13-hour days, but most of that day is spent waiting on other people and not focusing as intensely on work.

When you are on a live deal with deadlines, work can get very hectic. Associates/mid-level bankers who want to prove themselves can get extremely stressed out waiting for you to finish. You can go weeks working past midnight every day depending on what is going on.   

Investment banking hours each month of the year

Just like a lot of other industries, there are parts of the year that are generally really busy and other parts of the year that are slow. Typically, the summer is the slowest part of the year as management teams and MDs are out vacationing in the Hamptons. Labor-day until the end of the year is when work really picks up. Companies want to close deals by the end of the year. The holidays are usually slow then work picks right back up in the New Year through Memorial Day.  

How hours change as you get more senior?

To be honest the hours don’t get much better until you are a Vice President. It takes about six years to get to this level from starting as an analyst. Associate hours are basically the same as an analyst. Yes, you are more senior and have minions to do most of the work for you, but at the end of the day you have a lot more responsibility in making sure everything gets done properly.

Even when you reach VP, it is not like you will be working 9-5. When there are deadlines and important meetings, everyone stays late until the work gets done. Sure, you won’t be the one printing books and flipping through pages at 2am, but you will work past midnight a few times in the middle of a deal.

I have worked with Directors and MDs who have stayed past 10pm on numerous occasions. In general though, lifestyle does get much much better once you reach the VP level.

Life in investment banking

Since 2016 investment banking culture has changed significantly. So much talent has been pulled away from investment banks because of all the perks of tech these days. Banks were forced to treat analysts/interns as actually human being now. Higher compensation, protected weekends, social events, etc., the life of an investment banking is so much better than when I was an analyst.

I have written a ton about investment banking lifestyle before, so read here if interested in learning more.

Buyside work life balance

“Buyside is the promise land, work less, get paid more – that is the dream”

This is the MOST common misconception that every junior banker straight out of college has. If you want to be successful and make a lot of money in this industry, you will work hard no matter where you go. The vast majority of my friends who broke into the buyside ended up working consistently more than they used to in banking.

The thing about banking is that the hours are at two extremes: either you work a ton or you don’t work that much. And you aren’t really working all the time in banking. You sit there for half the day doing nothing and wait for work to be given to you.

Buyside hours are much more consistent. Be prepared to work throughout the day and have less downtime. Between private equity, hedge funds and venture capital, venture capital gives you the best work life balance.

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