Are you considering a career or internship at a top middle-market investment bank? I hope you will find the following information on Houlihan Lokey careers and interview tips helpful.
Houlihan Lokey (a.k.a. Houlihan Lokey Howard & Zukin, or HLHZ) is founded by Houlihan and Lokey in 1972. Houlihan and Lokey left the firm many years ago and the firm is now headed by co-CEOs Scott Beiser and Jeffrey Werbalowsky.
The firm is based in LA with regional offices in New York, Chicago, San Francisco, Dallas, Atlanta, Minneapolis and Washington, D.C. There are also branches in Europe (London, Paris, Frankfurt) and Asia (Tokyo, Hong Kong, Beijing).
Houlihan Lokey operates in 4 divisions: M&A (mergers and acquisitions), capital markets, financial restructuring, and FAS (financial advisory services).
Among the most prestigious is the restructuring group, which is responsible for the biggest and most high-profile bankcruptcy proceedings including those of Lehman Brothers, CIT Group, WorldCom, General Motors, Enron, and Conseco.
In terms of its restructuring practice, I would say Blackstone and Lazard are HLHZ’s closest competitors, at least in the US.
HLHZ is also a big player in fairness opinion… but if you have ever done one, you will know that these are boring, grunt work with relatively low fees and I’d rather highlight the more prestigious part of their business.
Our firm’s culture is very collegial, supportive, and fun. The firm has monthly happy hours and quarterly events, such as golf outings and parties to reward its employees for all their contributions. The firm also heavily promotes an environment of no ‘social borders’ between its junior staff and senior officers, to ensure every level of staff has exposure to senior officers in the firm. Additionally, the culture is one where you never feel like another number; all the senior officers in my group know me by name, which is very different than my previous employer.” ~ Vault Report.
If you look at the Vault report, all the “verified reviews” (i.e. those written by existing HLHZ employees) give out raving reviews.
Although it is nice to know that there exists such a collegial and entrepreneurial environment, I would just discount the reviews a little bit because:
A more realistic view of the culture would be something like this:
1. Collegial. Your bosses and colleagues do care, which is typical in a smaller bank.
2. More Responsibility. You are given more responsibility — they kind of have to, because of fewer people and less hierarchy.
1. More Work. Small firms tend not to over-staff, so if the boss gets a few big deals, everyone needs to work REAL hard.
2. Very Stressed. Due to the unpredictable workload and big responsibility.
3. Too Cozy? Some may not like the idea of spending time with your colleagues during weekdays, weeknights AND weekends…
If you get the HLHZ restructuring group offer and you like the nature of the work, go for it.
For other industry groups in corporate finance, they are considered ok-ish… If you like the people there and don’t mind an occasional lack of deal flows, no problem; but if you get an offer at a bulge bracket, you should seriously consider your alternatives.
Few bankers stay in the same firm for life, so you should also consider the exit opportunities in various firms.
Again, if you are in the restructuring group, you shouldn’t have problem switching to other restructuring shops (although I’ll have a hard time understanding why…)
For other groups, your realistic exit would be smaller mid-market private equity firms.
OK. Before we get too excited about multiple offers and exit opportunities, let’s see whether we can land the job first. Here are the tips:
1. Why Middle Market?
HLHZ is a strong player in middle market investment banking. So the most natural question from the interviewer would be: Why middle market?
Here are 6 reasons why middle market / boutique investment banks can be more attractive than the bulge bracket. Feel free to craft your answer based on this… with a personal touch.
2. Why Houlihan Lokey
Every interviewee should have known that HLHZ is big in its niche, so you’ve got to have a more concrete answer to nail the offer.
Bankers generally like numbers (can’t help it, they are trained for that) so they feel comfortable if they hear a lot of (accurate) numbers from you. Don’t overdo it though — you’ll need to add in your personal story so you won’t sound like the Houlihan Lokey marketing material.
If you ask me, I would think the safest answer should be something around their renowned restructuring practice. HLHZ arguably has the best restructuring group out there and they are proud of it. Do some research and see what you can find. Their website lists out the many awards they won over the years.
3. Do You Know What Restructuring Is?
They may throw you this question out cold. Unless you know this business inside-out (most likely don’t), be honest and tell them that’s what you learn in textbook but understand things are more complicated in real life.
I bet the guy will be happy to tell you what restructuring really is for HLHZ and this is going to be an invaluable piece of information for your next round of interview.
4. VERY Technical Questions
The firm is known to ask very technical questions, which reflect the firm’s technical, no-nonsense culture. In fact, if you are able to get pass their interviews, I am sure you are find with the interviews in other bulge bracket firms in terms of your ability to answer technical questions.
Expect the question to be pretty rigorous — if you answer the first question correct, expect you get a harder one on the second. And the third. And so on.
5. A Written Test?
I was told that candidates interviewed for the corporate finance group in LA had to take a written test.
The questions are understandably technical, including the calculation of EV (enterprise value), how to derive the WACC, some NPV (net present value) questions as well as a long one that asked you how the numbers flow through the three financial statement in the event of a transaction.
If you can answer the last question, it means that you can build a full financial model right away. In other words, be well prepared!
Houlihan Lokey is prestigious for a reason — it does seem to be an excellent place to launch your banking career IF you are a banking material. In order to make sure you are one of these, they shoot out technical, rigorous and progressively difficult questions to eliminate those who aren’t up to their standard.
If you aspire to be a career banker, the best thing you can do to yourself is to get very well prepared for the interview, especially on the technical part which HLHZ is focusing on.