Wall Street Indiscreet

One Student Dissects Gordon Gekko

By Dan Haley

i-bankers don’t call it “i-banking.”

Roughly 20 minutes into our interview, that’s what Paul Owen told me. I had been excited to interview Owen, CC ’07, a campus celebrity and well-known partyer. Even before signing his $145,000 deal with a major bulge bracket investment bank, Owen was living a life most others could only envy: a member of one of the “athlete” frats (though not an athlete himself) and, if Facebook photos are to be trusted, the recipient of no small amount of attention from females.

I thought I was playing it cool by calling Owen’s industry “i-banking.” I thought I was showing Owen what an insider I was.
“No one in the investment banking industry calls it ‘i-banking,’” he snapped. “I mean, it’s not a fucking Apple accessory.”

Owen, by the way, is not really named Paul Owen. He was not comfortable using his real name for this interview; the pseudonym, however, was all his own. Paul Owen is the name of the fictional investment banker that Bret Easton Ellis’s American Psycho, Patrick Bateman, murders for having an apartment better than his own.

Senior year has treated Owen well. Upon completing his internship following junior year, Owen was offered an employment contract with the firm he had been working for worth approximately $145,000. This firm is one of the elite bulge bracket investment banks, meaning it is one of the largest and most profitable in the world of finance.

Locking up employment from an internship before graduating college is not uncommon—it is also crucial to breaking into the industry, emphasized Eleanor Coufos, associate director of planning and admissions at the Center for Career Education. Often, the junior internship, which occurs over the summer between junior and senior year, will lead directly to a job as an analyst at the firm. An analyst is an entry level employee that works long hours analyzing and compiling data for senior members of the bank to use in deals.

“Employers favor students with internship experience, as those students have demonstrated a commitment to the industry,” Coufos said. “It is becoming quite common in finance for employers to offer a significant number of their full-time offers through their internship program.”
Owen, however, is set. He belongs to a select group of seniors who know beyond a shadow of a doubt that they will emerge from college not only financially independent, but wealthy.

At Columbia, the yield rate for the financially secure is higher than at most schools, both because of its location in the city and the desire for a heavily Ivy-employed industry to stay that way. In a survey conducted by CCE of the class of 2006 and completed by almost 50 percent of the class, 29 percent of students from Columbia College and 31 percent of SEAS students said they were going into finance after graduation.

The consistent increase in profit margins for firms like Goldman Sachs has sustained interest in a secure industry—and the interest shows no signs of stopping. According to a Sept. 11 article in the Spectator, CCE’s ‘Super Saturday’ event last semester, which brings prospective interns together with current employees in the industry, drew around 400 students, nearly double from the previous year.

The majority of students who find employment in investment banks come from Ivy League-caliber schools. In the banking industry, these are referred to as “target” schools. Columbia is one. So is Cornell—but less so. Middlebury is not a target school. Don’t even think about Binghamton. In this sense, even the top law schools and medical schools in the nation cannot compete with the investment banks in terms of their students’ pure Ivy pedigree.

Many students come to Columbia with little knowledge of the industry, but this targeted recruitment and the guarantee of a secure, affluent lifestyle has swayed many. These students are willing to do whatever it takes to fit the profile—even if it means changing their wardrobe, their attitude, and their former aspirations.

With $145,000 in his pocket—projected earnings, it is not all actually in his pocket at the moment—Owen tells me that senior year has been “an absolute shitshow.”

“The best description of it I can give,” said Owen, “is that the third week of school I took Monday and Tuesday off from class to go to Puerto Rico.”

Of course, Owen’s current success was far from guaranteed. As an American Studies major, Owen’s education hardly geared him to practical matters of finance. Owen admits that he is “not much of a numbers guy” and “more of a writer.”

The beginning of junior year marked a turning point for Owen. College was more than halfway over. He realized that the choices he would make might hugely impact his eventual career and, indeed, his standard of living. He reasoned that there would be two groups of people coming out of Columbia: those who would be making money and those who wouldn’t. Many of the future moneymakers were those pursuing careers in investment banking.

Owen noticed a trend among high-achieving students: student council members, athletes, valedictorians­. “I looked around and I felt like the best people, the brightest minds, the most ambitious people at Columbia were going into banking,” said Owen. “I’m a really competitive person, and that was a huge motivation.”

Another huge motivation was the money, or, “exit opportunities.” Exit opportunities refer to the options a banker has after their initial two-year contract expires. And with the money accumulated during those two years and the skills developed, there will be a lot of opportunities.

“The appeal of this field is that after two years, I can do pretty much whatever I want,” said Owen. “I can move to France and become a painter, or join a private equity firm, or go surfing in Australia. It’s not just the money. Well, it is the money. But it’s also the freedom the money affords.”

It’s the prospect of exit opportunities, the prospect of trading two years or five years or 10 years of one’s life for the ability to pursue one’s “real dreams” in relative financial comfort, that makes investment banking so appealing. The i-banker doesn’t need be a corporate drone his whole life; if he so chooses he can retire at 30 and live in a designer apartment in the Village.

Though the exit opportunities are certainly attractive, Owen confesses that he’s taken to the i-banker lifestyle. He reports he just might stick with finance and rise through the ranks at his firm, cashing in more and more with each promotion.

“At first, as an analyst, you’re doing grunt work,” he said. “But then, as you go on, as you get to the vice president and managing director levels, it’s all about client relations. Expensive dinners, golf trips, schmoozing. I can’t say I would mind that at all.”

Okay, so Owen wanted a career in finance. But would an American studies major lack the necessary skills for the job? Not so, according to Owen.

“Investment banking isn’t this advanced math, these advanced quantitative techniques. There’s Excel for that,” he tells me. “Investment banking is really just critical thinking. They way I put it, if you’re good at Sudoku, you’ll be a good investment banker.”
CCE’s Coufos agrees.

“It is a myth that economics majors are suited to finance firms,” said Coufos. “Rather, firms are interested in hiring across all majors. A common denominator among Columbia students are their ability to think, read, and write critically—a skill set praised by all employers.”

Walking into the first of his first-round interviews, Owen was armed with little more than his ability to “think critically.” Out of more than 40 applications, Owen only netted four first-round interviews. The first interview mattered; in fact, this interview was with the most prestigious of the four firms that had tapped him. Owen walked in confident, but not cocky. He tried to remember that the guy sitting across from him was making at least $600,000 a year; he was a man who could buy and sell him. Then, he tried to forget about it. A thought like that could make a man nervous.

Owen came armed with all the knowledge of finance he could glean from his Vault Guide to Top Internships, the authoritative manual for moving up in the industry. Though Owen had read all 408 pages of it, this American Studies major understandably felt he was at a disadvantage compared with his economics-majoring, intern-experienced peers. Owen shook hands with his stone-faced interviewer, settled into a seat across the table, and steeled himself for what could have been a massacre of an interview.

Within minutes, upon relating his background, Owen learned that his interviewer was a Los Angeles native, like he was. Owen decided to take a gamble and see if the man was a Lakers fan. He was.

Owen had chanced upon a fellow Lakers fan the day after Kobe Bryant had scored 81 points in a game. Kobe kept them occupied for the first 20 minutes of the 30-minute interview. Owen later received notification that he had made it to round two in the interview process.

Of course, not everyone just falls into a great banking internship by way of bluffing and basketball. Take, for example, David Chan, CC ’08.
From an early age, Chan knew he wanted to study economics. Like Owen, Chan also decided to assume a pseudonym for this article. He studied economics extensively in high school and entered Columbia thinking he would earn a Ph.D. in the subject. Yet Chan, after little over a year at Columbia, also found himself enamored of the “exit opportunities” banking offers. He was a sophomore Economics-Mathematics major with a 3.8 GPA when he applied to a bulge bracket investment banking firm for a summer internship in their Asia-Pacific offices. Chan got the job, a Hong Kong internship usually reserved for juniors.

The perks for an intern who chooses to spend the summer in Hong Kong are impossible to ignore. Over the course of a summer, banking interns make a set amount of money, usually between $10,000 and $12,000 for 10 weeks of work. This might seem like a lot, but it amounts to even more in Asia, especially since some firms put their employees up in posh hotels, gratis. The perks don’t stop there—interns working in the Asia-Pacific offices also get their own secretaries.

“I was 21 and my secretary was about 15 years older,” Chan said. “I could ask her to fax stuff for me, or get me coffee, or pens, or even ask her to bring me my bank account statement.”

Even with a secretary, the workload proved intense. In any investment banking internship, the intern will take on the duties of a full-time analyst for the summer. These duties will often keep the intern in the office late into the night and sometimes straight through into the next day. There was a three-week stretch when Chan was only able to get three hours of sleep a night, weekends excluded. Chan’s boss told him that people only need four hours to function normally.

Chan remembers his third day on the job as one of the most taxing. Upon arriving at work at 9:00 a.m., Chan was put onto a deal by one of the vice presidents, which meant that he had to compile data for a client meeting that was to take place the following day. He began working on this project immediately and because of its pressing nature, opted to skip lunch and a training session that he was supposed to attend.

Fueled by a breakfast of fruit and toast, Chan worked without pause until nearly 3:00 p.m., when he was approached by another VP. This VP had an even more important and pressing deal in the works and told Chan to stop what he was doing and begin working on the new deal. Along with another intern, Chan worked on this deal all the way from 3 p.m. to 7 a.m. the following morning. He took a one-hour break for dinner. After such a brutal shift, one would expect an employee to be able to score some sack time, maybe four or five hours until he had to get back to work. Not so for Chan. Chan had to go to a client presentation the next morning in mainland China. So at 7 a.m., after he was done compiling the data for the deal he had been working on, he took a company limo back to his hotel. He showered, dried himself off, pounded a Red Bull and went back into the limo. It wasn’t even 8 a.m. yet. The limo then picked up his associates and teammates and they headed down to the client meeting for the rest of the day. At the meeting, Chan had to stay alert and take notes. He gulped a lot of coffee.

Of course, it wasn’t all work in Hong Kong. On Friday and Saturday nights, with no work the next day, the bankers would cut loose. This meant hitting up one of the three big expatriate bars/clubs in the city. These clubs were usually filled with two groups of people: bankers and “models.” The “models” would get in without paying the cover charge and drink for free while the bankers would have to cough up $1,000 for a table, although sometimes the firm paid for them.
“A firm might book an entire club for a night, for a welcoming or departure party,” Chan said. And, of course, some “models” might just happen to find their way into the party.

When I asked Chan about the drug scene in Hong Kong, he said that the interns would occasionally go out on a yacht and cruise around and smoke marijuana. Chan insisted he had not seen anyone using cocaine.
Not so for Paul Owen. When I asked Owen what was the most prevalent drug among investment bankers, he gave a little laugh. Then, when he realized the seriousness of the question, his smile constricted. “Well, I mean, when you’re working 14 hours a day, when you’re working 80 hours a week, you’re not going to want to chill out with a joint when you go out. You’re going to do some bumps.”

Over the summer, whenever Owen would get out of work before 1:00 a.m. (which happened, according to Owen, not at all frequently enough), he would have his waiting town car—a standard investment banking perk if you work late nights—take him not home but to a bar, where he would meet up with friends from work and school.
“There were people who didn’t drink at all and came out just to keep up appearances,” said Owen. “And then there were people who would be downing tons of Macallan and Glenlivet and sneaking off to the bathroom for a bump—or 12.”

Owen paused for a second and then said, “I would definitely fall closer to the latter in my personal inclinations.”
Though Owen aspired to more economical spending habits, he occasionally found himself on the receiving end of a $200 bar tab. Owen’s spending, however, paled in comparison to that of one of his fellow analysts, who managed to blow $800 on lap dances at the Flashdancers Club in one night.

Owen would always try to make it home by 2:30 a.m., but more often than not he would roll back up to Columbia around 4:00 a.m. Owen would crawl into bed, set his alarm for 7:40 a.m. and catch a few needed hours of rest. He’d wake up to his alarm and then actually get out of bed around 8:20 a.m. He’d pound a Red Bull and make it downtown to the office by 9 a.m., ready to start the process again.
Chan and Owen both got into i-banking for the exit opportunities. Chan has voiced a desire to bring his i-banking skills to the nonprofit world, perhaps with some accumulated capital in tow from a two-year or five-year i-banking stint. Owen also savors the freedom only money can provide, not just in terms of career alternatives but also lifestyle. A self-proclaimed “guy who likes to buy his friends drinks,” Owen enjoys fine dining and expensive suits—he’s planning on buying a $3,000 Paul Smith when he gets his signing bonus. Investment banking is the only industry a student can enter directly out of college and have that be possible.

A recent Columbia alum, SEAS ’06 (who also wished to remain anonymous) working as a first-year analyst in an investment bank put it this way:
“I was planning on going to law school,” he said. “I had interned at law firms and everything. But, then I started thinking about studying for the LSATs and being a student for another three years. ... My friends were all going into i-banking or consulting. I decided to give it a shot.”
Owen insisted that his interest in i-banking was sparked by the fact that the “brightest” and “best” people he knew were going into i-banking.

Throughout elementary school, middle school, and high school, he had always been at the top of the class. But upon arriving at Columbia, the top becomes a little harder to gauge. Is the student novelist with the 3.2 to be included among the best? Is the Fulbright scholar living on grants and loans one of the best? Or is it the one with the most money to spend, the one working the longest hours?

Investment banks offer a clear solution to the student unsure of how to maintain his “elite” standing after college. But it also reads cynically into a society in which doctors and lawyers are defecting for paychecks. The desire for money and job security is reasonable, but is making six figures?