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Q&A: A former banker from Merrill Lynch says you must prepare yourself for the fact that M&A careers are a 15-20 year project

As part of our ongoing series of interviews with Russian-speaking financial services professionals, we caught up with Artem Tutov. Artem spent five years working on M&A transactions involving European energy companies at Merrill Lynch’s London office. More recently, he set up his own technology company.

Q: How did you get into investment banking?

A: I was born and grew up in a family of doctors in a small settlement in Chukotka. I never had any doubts about my future profession; I always knew I was going to work in finance. After finishing high school, I went away to study at the State Management Institute. I had several internships, and upon graduation I was hired by PricewaterhouseCoopers to work in the corporate finance practice.

Those two years at PwС were an excellent education: I worked with international colleagues, went on business trips, was involved in interesting projects such as the Novatech and NLMK IPOs. That’s where I saw real City investment bankers for the first time, and was inspired by them.

I decided to look for an entry-level position at a major international investment bank. I worked independently, without going to headhunters. Each bank has a careers section on its website where you can find information about their hiring process and contact details for sending CVs.

In the end I probably wrote to more than 20 banks; more than half did not respond, some replied saying that they weren’t hiring. Three banks, however, were ready to talk. About three months later I had two offers from London, including one from Merrill Lynch.

Q: How difficult was the interview?

They take job interviews very seriously at investment banks, and the hiring process sometimes takes months while you’re dealing with the bank’s HR department.

I went through two phone interviews, five interviews with colleagues from the Moscow office, and an hour-long case study. Then there was the final trip toLondonfor a full day of meetings with bankers from the energy department that I was being hired into. In my case there were 12 interviews scheduled in the final round, but as it happened, some people could not come because of meetings or business trips, and some others, conversely, brought colleagues with them. In the end I’d talked to about 15 people.

I suppose that this sort of hiring process may seem like a nightmare to someone who is not in the business. In reality, the interviews give you a chance to get to know your future colleagues, tell them about yourself and find out what the team is like. This is a great help when it comes to integrating into the new office in the first few weeks - by the time you start work you already know most of your colleagues.

Q: What kind of questions were you asked?

All sorts: from brain teasers and questions about valuation and financial analysis to psychological questions that appraised my motivation, ability to work in a team, and adaptability to the pace of life in a bank.

There were a few rather amusing questions, given my Russian background: “How many times a week do you drink vodka?”, “Do your parents own an oil company?”, “Is it true that Russian bankers are fond of brawls (prompted by the notorious incident with Peter Zhukov)?” But of course these were all asked in jest.

Q: What do they pay attention to most when you interview at Bank of America Merrill Lynch?

They assess your ability to express your thoughts in a logical manner and to give precise, well-structured answers to questions. They also check your knowledge of corporate finance and of specific sectors, as well as your general extent of knowledge about the occupation and about work at a major investment company.

In reality, the key question is as follows: “We know that you are intelligent and have a good academic record, but will you be good at working with us?”

Most of all, the candidate’s motivation is crucial.

Motivation is a very serious and important point of differentiation. It is something you must give a lot of thought to before the interview. Don’t just think about the advantages of working in M&A, but consider its drawbacks: you don’t want to join a bank and then become disillusioned and demotivated later.

Q: M&A bankers are rumoured to work crazily long hours sometimes, is this true?

Yes. Unfortunately, “sometimes” is an understatement. We worked long hours: that’s the industry norm.

However, you have to understand that working long hours doesn’t necessarily mean that people are constantly attached to their telephones or constantly pounding away on keyboards.

The nature of the work in M&A is such that a typical day will include a lot of different tasks, and their variability can be a source of psychological recreation.

Even junior bankers have some flexibility in planning and structuring their work. You need to try to be organised in everything you do – that way you no longer have the sense that you are missing something important.

If you’ve missed something, then it’s your fault for not having tried hard enough. Work in banking generally makes you more organised, and it spreads to other areas of your life, so you should strive to work harder and find time to do more.

Q: What should you avoid if you work in M&A?

Working those long hours becomes a challenge as soon as you start asking yourself why you’re doing it. Why are you getting paid less than others? Maybe you need a change? Etc etc.

Once this happens, you lose your motivation. Losing your motivation is dangerous as a banker’s job implies a large proportion of independent work and you need to be self-motivated to get it all done.

Q: What are the other drawbacks to working at a bank besides the long hours?

Issue number one is the universal desire to overcomplicate things, which a rather high percentage of bankers seem to be born with.

The investment banking industry is rife with perfectionism. This often manifests itself in a desire to try too hard and to do more than is really needed. The realisation that many things are much simpler than they seem only comes with experience.

The second big drawback is the extent of business travel. You need to understand here that going to Paris for a conference is completely different to going there for work as a banker.

Just because you spend half a day travelling, going through passport control and waiting for your flights, that doesn’t mean you don’t have to do the rest of your work too. You have to use every free minute you get. I’ve been to Scandinavia about twenty times for work, but I still dream of going to Stockholm as a tourist.

The third issue is that the upside of the job becomes apparent later than the downside. You need to be aware of this. Lots of work, lost weekends, unhappy friends: these are all issues that are felt almost immediately, while first-rate experience and professional reputation that you gain as part of your work take years to build.

Q: Does the salary outweigh all these disadvantages?

It’s a myth that bankers earn crazy incomes. Of course, every bank has 50-100 people who make millions, but you have to understand that these are usually quite senior people in managerial positions who have devoted themselves to their jobs.

The material component certainly allows you to feel secure, occasionally very secure, but a banking career is usually a long-term 15-20-year project. You need to prepare yourself for this.

Q: What did working for Merrill Lynch teach you?

I’ve always considered working at the bank a major step in my personal growth, and I used to say to my colleagues that if the bank hadn’t paid me for my work I would have been happy to pay for the experience. It really is a first-rate professional education that prepares you for future success. I’ve always wanted to start my own business, but work at the bank was an important step for my professional development.

Your colleagues are among the greatest assets: banking attracts intelligent and ambitious people, and you keep your contacts even if you leave for another company or sector. I believe that the alumni networks of major investment companies exceed the networks of top American business schools in terms of breadth and influence.

AUTHORGalina Osina Insider Comment
  • Lo
    25 June 2012

    I work as an invt manager in a hedge fund and those guys in M&A make me laugh.

    I graduated in 2006 and most of my schoolmates went to M&A at that time, in bulge-bracket banks. They worked like slaves during 6 years, for what?

    1/2 lost their jobs and do somethng else. Tell me, what's the point of working like a slave when you are young, wasting your life, and eventually not being able to benefit from the high pay as a senior banker????? They now work in consulting, corporates...ok their life is better but their pay probably average.
    1/4 are still on board, are at the associate 2/associate 3 level and still make long, long hours for small bonuses because times have changed. I'm sure most of them will not reach an MD position.
    1/4 have managed to leave to a profitabe hedge fund or private equity fund and have exploited the only advantage to be in M&A, ie the reconversion potential into a more profitable area. They did it after spending 2-3 years in M&A.

  • St
    24 June 2012

    This point is absolutely spot on: "Working those long hours becomes a challenge as soon as you start asking yourself why you're doing it. Why are you getting paid less than others? Maybe you need a change? Etc etc.

    Once this happens, you lose your motivation. Losing your motivation is dangerous..."

    The guys who are doing well, they don't question it for a second... I speak from experience too, experience of beginning to question it (led to lower bonus etc and exit)

  • Bu
    23 June 2012

    Get a life. Banking is over.

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