A Complete Guide to Landing and Succeeding in the Role
Landing a financial due diligence internship can jumpstart your career in transaction services and open doors to prestigious positions in investment banking, private equity, and consulting. This comprehensive guide walks you through everything you need to know about landing an internship and excelling in the role.
What is Financial Due Diligence (FDD)?
Financial due diligence (also called transaction services, transaction advisory, or FDD) involves thoroughly analyzing a target company’s financial information during an M&A transaction. FDD is a very important part of the M&A process to both validate the company’s earnings and help establish the purchase price. As an intern, you’ll work alongside experienced FDD professionals to analyze financial statements, identify key business risks, and assess the target company’s financial health and performance trends.
Why Choose a Financial Due Diligence Internship?
FDD internships offer unique advantages that can accelerate your career path.
- You’ll gain exposure to multiple industries and business models, as FDD professionals work across various sectors (even within a single industry). For example, if you work in healthcare FDD, you will see multiple different types of healthcare transactions/companies. This broad exposure helps you learn how to identify attractive businesses and develop business acumen early in your career.
- FDD internships typically provide more hands-on experience than other financial roles. You’ll work directly with target company management teams, data, financial models, and presentation materials rather than just observing or handling administrative tasks. You will develop great excel skills during the internship that will serve you will throughout your career.
- You will develop exceptional financial analysis skills. You will become an expert at reading financials and quickly identifying key drivers of a business’ profitability and growth.
- You will develop an in-depth understanding of the M&A lifecycle that can be helpful for many different careers. The M&A world is complex and confusing to many outsiders, but FDD professionals are a key part of the process and you will get exposure to the buyer (often your client), the seller (target company), investment bankers, lawyers, tax professionals, and more.
- You will get exposure to private equity clients. Many of the best FDD firms are clients of the best private equity firms. You will have an opportunity to sit in meetings with PE investors and learn what is important to them and why they are interested in buying the target company from a strategic perspective.
- Finally, these internships often lead to full-time offers, and FDD jobs can be very lucrative and/or lead to many other prestigious careers.
Key Requirements and Qualifications
Most firms look for candidates who demonstrate the following:
- Strong academic performance in finance, accounting, economics, or related fields
- Typically a minimum GPA of 3.5
- Excellent analytical and quantitative skills, with proficiency in Excel
- Attention to detail and ability to work under pressure
- Hard worker
- Clear communication skills, both written and verbal
- Previous internships or relevant coursework in accounting or finance
- Leadership experience through campus organizations or other activities
- Good cultural fit
How to Land a Financial Due Diligence Internship
- Target the Right Firms
- Big 4 accounting firms (Deloitte, PwC, EY, KPMG)
- Middle-market advisory firms (Grant Thornton, BDO, RSM, A&M)
- Boutique transaction advisory firms
- Investment banks with transaction advisory services
- Perfect Your Application Materials/Resume
- Include relevant coursework in accounting, finance, and economics
- Technical skills, especially Excel and financial modeling
- Leadership positions and involvement in finance-related clubs
- Previous internships or work experience
- Academic achievements and honors
- If they ask for a cover letter, you should demonstrate knowledge of financial due diligence and explain why you’re specifically interested in transaction advisory services.
- Network Effectively
- Build your professional network through LinkedIn connections with professionals in the field, University alumni, coffee meetings and lunches, professional associations, career fairs and firm networking events, and information sessions hosted by target firms
What to Expect During Your Internship
- Daily Responsibilities
- Download target company datarooms, read target company CIMs, and maintain an updated request list
- Export financial data from target company’s accounting system
- Clean and map financial data into financial statements
- Analyze historical financial statements and identify trends
- Develop questions for an in-depth management meeting
- Support buildout of the quality of earnings analysis
- Prepare working capital calculations
- Create and maintain financial models
- Assist in drafting client deliverables (FDD reports)
- Assist in writing detailed emails to update your partner and/or client on progress and key findings to date
- Participate in client meetings and internal discussions
- Research industry trends and market conditions
- Skills You’ll Develop
- Financial analysis and modeling capabilities
- Understanding of accounting principles and their practical applications
- Understanding of key business drivers
- Business acumen and industry knowledge
- Knowledge of the M&A process
- Professional communication skills
- Project management abilities
- Attention to detail
Tips for Success
- Master the Basics Early
- Have a fairly in-depth understanding of accounting, including the three financial statements
- Practice Excel shortcuts, formulas, and basic modeling
- Understand common financial metrics and KPIs
- Familiarize yourself with industry terminology
- Familiarize yourself with the M&A process
- Be Proactive
- Asking superiors thoughtful questions about projects
- Be resourceful and try to get to answers on your own
- Volunteer for additional responsibilities
- Seeking feedback regularly
- Build relationships with team members
- Maintain Professional Standards
- Arrive early and stay as long as needed
- Double-check your work before submission
- Meet deadlines consistently
- Dress appropriately for the office environment
- Maintain confidentiality about client information
- Career Progression
- A successful FDD internship often leads to full-time offers in transaction advisory services, opportunities in investment banking or private equity, strong foundation for management consulting roles, and/or a career in corporate finance
Conclusion
Financial due diligence internships are highly competitive, but the experience and knowledge gained make the effort worthwhile. Focus on building relevant skills, networking effectively, and maintaining high academic standards to increase your chances of landing these coveted positions.
Whether you’re interested in a career in transaction advisory services or looking to build a strong foundation in finance and accounting, an FDD internship provides invaluable experience and career opportunities that few other internships can match.
