Why Lazard Interview Questions
How to answer the question "Why Lazard?"
If you have an interview with Lazard, Congratulations on getting an interview with one of the most prestigious Investment Banks in the world. Getting that interview and passing the selection criteria is an accomplishment in itself.
Technical questions are very important. However, technical questions usually have one discrete correct answer; in order to prepare for these types of questions, understanding various financial topics and knowing all the details regarding a Discounted Cash Flow (DCF) model is essential.
In addition, at the top positions at these very prestigious institutions, most people who have interviews would have studied the technicals extremely well, as you should too.
NOTE
Please note that the best way to answer technical questions is to study the financial concepts rigorously. Memorizing some questions will not be beneficial since the questions are random. You are better off understanding the concepts.
So to differentiate yourself from the crowd, having great thoughtful answers to the qualitative questions will give you an edge over the competition.
Some of the most asked questions in such interviews are:
- Why do you want to work at Lazard?
- Why Lazard and not other banks?
- Why Investment Banking?
These questions are very common to be asked during interviews, and there is a very good chance that your interviewer will ask one of these questions or something extremely similar.
Below, we will give you the steps on how to formulate an answer that the interviewer will remember. You can follow these steps to answer the “Why Lazard?” question whether you are interviewing in their Investment Banking, Private Equity, or any other division at the bank.
Researching the firm
Before you start, it is important to know the type of investment bank you’re interviewing at, whether it's a bulge bracket, elite boutique, or a regional boutique bank, for you to tailor your answer specifically to the bank you’re interviewing at.
If you’re interviewing with Lazard, which is an Elite Boutique, it's essential to show that you understand what makes the company unique and why it would be a good fit for you. Therefore, researching the firm is essential for you to get the information you need to answer the “Why Lazard” question.
We recommend you spend a decent amount of time researching the firm’s website and checking the latest news, annual reports, and major dealings they worked on to get an idea of a major event that happened in the firm.
Opening up a new office, a major financial deal the firm took part in, or even a partnership with another company that seems interesting to you are some examples of significant events the company could have gone through.
Preparing your answer
It is essential to mention that giving an answer where you make the company appear unique makes a difference. Since it shows you did your research about the firm, which can provide a positive signal to the interviewer.
To get better guidance regarding the “Why Lazard” question, it is extremely beneficial to ask alumni from your university who work at the bank about the reasons they chose this firm specifically instead of other firms.
Knowing what others think can give you inspiration and help you formulate your own answer. However, below we will provide you with a few key ideas to keep in mind while formulating your answer:
- Mention their global network and world-class reputation and provide evidence, whether it is a recent international deal they worked on or their global presence through multiple office locations around the world.
- Showcasing your knowledge of the company’s culture proves that you have taken the time to prepare and talk to individuals in the company to get a background regarding the work culture.
- Talk about their financial expertise in dealing with complex financial transactions.
- Additionally, try to demonstrate that Lazard is a company where you can grow both professionally and personally and how you feel that this is the place where you will learn the most and develop your skills.
NOTE
Remember, it's important to tailor your answers to your own interests and experiences. Use the information provided as a starting point, but be sure to add your own thoughts and insights to make your answer unique and memorable.
“Why Lazard” Interview Question
This question can generally be asked in different forms by any bank, and the preparation routine is consistent across all such banks. Ideally, you want to tie in and present an alignment between your interests and values with the firm's culture and support this with examples.
An exceptionally strong way of demonstrating this would be networking with current investment bankers at the bank.
Then, talking about the appreciation you felt towards the characteristics of those you networked with (refer to specific people wherever possible), and concluding with how that makes you feel the bank would be a great place to work for, may strengthen your answer.
A sample answer could be:
“From talking with people at the firm, I felt how positive and supportive the culture is, rather than being really cutthroat and competitive.
Along with that, the people I talked to really emphasized how much responsibility they were given at such an early stage. I see that as a really positive thing because being involved with a number of different complex deals at an early stage in my career will help me most to learn and evolve as an analyst.
Finally, I'm also really attracted to the generalist internship program. Since I'm interested in trying out both restructuring and coverage, and Lazard's program will give me a great way to do both”.
Other Lazard Interview Questions
Below we will provide you with a mix of technical and behavioral questions that were asked during interviews at Lazard to give you an idea of how the questions might look like.
Other Lazard Interview Questions
The answer to this question should be tailored uniquely to you and to the firm you are interviewing with. However, highlighting three main components of why you chose Investment Banking can be extremely beneficial to come up with a great answer. For example:
- Talk about the work and how you genuinely find it interesting and fulfilling; you can also provide evidence from your past extracurricular activities.
- Mention the experience and how you will learn from the brightest minds in the financial industry at an early stage in your career and how that will help you grow professionally.
Dial-in a cohesive 90-second resume walkthrough that focuses on the positive and motivating factors behind every transition (school to job, job to better job, or most recent job to grad school).
Some quick tips could include:
- Be deliberate
- Don't be negative
- Every move you have made should have a reason (preferably you initiated)
- Never say you left because you were bored or “wanted to try something new”
Talk about a skill that is unique to you (something that makes you memorable) and that cannot be documented on a resume. Think about things like your communication skills, teamwork skills, etc., not your math skills, which can be seen in your GPA or SAT scores.
Once you decide on the quality you want to present, illustrate it with a story from your life. A common variation of this question is, "What differentiates you from a person who studied at your school and has the same GPA as you?"
Sample answer:
“Ever since my freshman year of high school, I have loved to perform. I was in the musical each year of high school and have had a lead role in a play each year in college.
This has allowed me to develop a comfort speaking in public situations and with people, I don't know or have just met. I think that this will be an extremely valuable skill in finance, speaking with clients, on the phone, and when presenting my work to my coworkers.”
A reasonable answer to this question is the cash flow statement because it shows the actual liquidity of the company and how it is generating and using cash.
The balance sheet just shows a snapshot of the company at a point in time without showing the performance of the company, and the Income statement has several non-cash expenses that may not be affecting the company's health and can be manipulated.
Overall, the key to a great company is generating significant cash flow and having a healthy cash balance, both of which are disclosed in the CF statement.
- Project out cash flows for 5 - 10 years, depending on the stability of the company
- Discount these cash flows to account for the time value of money
- Determine the terminal value of the company - assuming that it does not stop operating after the projection window
- Discount the terminal value to account for the time value of money
- Sum the discounted values to find an enterprise value
- Subtract the present value of debt (this is generally the market value of debt) and then divide by diluted shares outstanding to find an intrinsic share price
Beta is a measure of the volatility of an investment compared with the market as a whole. The market has a beta of 1, and hence, investments that are more volatile than the market have a beta greater than 1, while those that are less volatile have a beta less than 1.
These are just a few examples to give you an idea of what the questions might look like. Remember, preparing for technical and behavioral questions is key. Also, doing mock interviews with your fellow classmates can help with easing the intensity of the interview.
Unlevering beta allows us to remove the effect of debt in the capital structure. This shows us the beta of the firm's equity had it not used any leverage in its capital structure.
The effect of debt is calculated by multiplying the debt-equity ratio (DE ratio) with (1- tax rate) and then adding 1 to its value.
You can then calculate the unlevered beta by dividing the levered beta by the effect.
Also, if we are trying to do a market comparison with a company that's not on the market (so no beta is available), you can take a comparable company and unlever its beta and use this unlevered beta as a proxy for the unlisted company's beta.
Some Final Tips
Finally, we will provide you with some tips on how to give a comprehensive and well-thought answer to the questions.
In general, your answers should:
1. Be 30-60 seconds in length
This prevents you from taking a long time to answer and allows the interviewer to ask to follow-up questions.
2. Be described in 2 to 3 points
This amount of detail will be enough for your answers to be comprehensive. Be aware not to talk for too long to allow the interviewer to ask you follow-up questions.
3. Mention points about the firm's business
Mentioning things about the firm that actually matter, like recent deals or any big events the firm took a part in, can convey that you did your research about the firm.
You should also be respectful at all times
- A simple “Nice to meet you” with a “Thank you for your time” is a great way to say hello and goodbye.
- Be aware of coming off as overconfident or overly enthusiastic, as it can send a bad sign, and the interviewer might be annoyed. Remember, humility is important.
- Finally, don't flub the handshake. Waiting for the interviewer to sit down before you do is a great way to show the respect which is appreciated by the interviewer.
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