Professional Documents
Culture Documents
Hedge Funds
Value, Growth, Blend Long-only, Long/Short, Shortonly Fundamental, Distressed, Macro, Event-Driven, Trading, Quant Investment Analysis Portfolio Management Trading
Private Equity
Growth Equity Large-Cap Fund Middle Market Control Equity Secondaries Co-Investing
Venture Capital
Control Equity Co-Investing
Front Office
Client Pitching Valuation / Modeling Deal Execution o M&A o Leveraged Finance o Equity & Debt Solutions
Middle Office
Portfolio Credit Analysis Pricing Counterparty Risk Ratings P&L Reporting Mark to Market Cash Operations Settlements
Cash Management Legal Entities Tax Structuring Investor Reporting Fund Valuation
Investment Banks serve as intermediaries between providers and users of capital Chinese Wall
Users of capital
Corporations Governments Municipalities
Investment Banking
Providers of Capital
Individuals Pension Funds Insurance Companies Asset Managers Corporate Treasuries Sovereign Wealth Funds
Private side
Public side
Advisory
Mergers & Acquisitions o Buyside o Sellside o Spin-offs / Splitoffs / Carveouts o Hostile defense o Hostile takeovers / proxy fights o Joint Ventures Restructuring Ratings
Execution
Financial Analysis Communication o Management, Board of Directors o Internal Committees Identify Potential Investors Negotiation / Structuring Transactions Due Diligence Documentation
Capital Markets
Equity Capital Markets Debt Capital Markets Tax-exempt Leveraged Finance Securitized Products
Industry Coverage
Consumer & Retail Healthcare Technology Media & Telecom Industrials Natural Resources Real Estate
Product
M&A Corporate Finance
Markets
Technical
Middle Market
Boutiqu e
Low
Capabilities
High
Two-year program with opportunity for a 3rd year 6-8 week training Mentorship programs Networking opportunities Summer internship program serves as primary feeder to full-time analyst positions
Be a member of a deal team, executing day-to-day activities surrounding live transactions Perform financial analysis and modeling Develop and prepare client presentation materials (pitches, roadshows, board materials, etc.) Coordinate roadshows, and M&A processes Research and due diligence
Challenges
Long and unpredictable hours Traveling Demanding senior bankers High stress/pressure environment
General Preparation
Network with peers and alumni Internships Research - Do I want to do Investment Banking? What type of firms? Make sure your resume is clear, concise and error free o Take advantage of resources available to you (alumni, Feld Career Center, etc.) o Everything is fair game Practice, practice, practice
The Interview
Be prepared: know as much about the bank and position as possible Know yourself: what motivates you, your strengths and weaknesses and be able to articulate those points Know EVERYTHING on your resume Be honest and demonstrate enthusiasm and motivation Read the Wall Street Journal EVERYDAY and use the Vault Guides Practice interviewing (mock interviews, preparing answers, etc.) Ask questions
Resources
Vault Career Guides Breaking Into Wall Street Wall Street Prep Wall Street Training DealMaven Wall Street Training
Corporate Banking
Wealth Management
Managing money for: High net worth Retail Corporate sponsored retirement plans including pensions, 401k plans, nonqualified plans, etc.
Sales: Calling investors to suggest trade ideas Trading: Buying and selling financial products with the goal of achieving a gain
Research
Stocks = Equity Research Bonds = Fixed Income Research Assigned to Various Sectors Energy, technology, media, telecom, consumer Financial Modeling Investment recommendations Earnings reviews Participate on investor calls Company visits Travel to industry conferences
Counterparty Credit Loan Pricing / Terms & Covenants Negotiation Industry Studies Sales Cross Selling Know the Client Know Your Bank Relationships Across Both Series 79 (depends on firm) Interview Selling Points: o Financial Statement Analysis o Credit Analysis o Law
Qualifications
Investment research and screening Analyze the research Investment recommendations Tactical allocation decisions and rebalancing Interact with individuals, executives, investment Series 7 & 66 & committees, fund Insurance managers License Chartered Financial Analyst (CFA) Chartered Retirement Plan Specialist (CRPS) Certified Investment Management Analyst (CIMA) Certified Financial Planner (CFP)
Client Need Bank Line / Working Capital Liquidity Facility / Commercial Paper Backstop Letters of Credit (LCs or LOCs) Project Financing Structured Vehicle Funding Capital Markets Hedging Programs
Corporate Banking Solutions Revolving Credit Facility (RCF): Revolver Revolving Credit Facility (RCF): Revolver Letter of Credit Facility Term Loans RCFs & LCs etc., Trading Lines
Revolvers from banks perspective: o Large, Long-Term (1-15 yrs) Commitments: Puts Balance Sheet of bank at Risk
Typically serve as liquidity / back-up facilities and are priced to incentivize the client NOT to draw Clients desire these facilities as well as their investors + rating agencies + other stakeholders - expensive, like a credit card Banks do not make a lot of money on undrawn revolver commitments: The bank gets paid to provide a
promise
Covenants
Banks do not lend unconditionally Long-term commitments are made under the condition that the borrower maintains a largely consistent risk profile o So, legal protections are built in: Covenants
Examples: Minimum Credit Rating of BBB Maximum Debt-to-Capital Ratio of 35%
o o
If client fails to meet these criteria, they are in breach A client in breach of a covenant will have no legal right to draw funds from the bank
Client Need Bank Line / Working Capital Liquidity Facility / Commercial Paper Backstop Letters of Credit Project Financing Structured Vehicle Funding Capital Markets Hedging Programs
Corporate Banking Solutions Revolving Credit Facility (RCF): Revolver Revolving Credit Facility (RCF): Revolver Letter of Credit Facility Term Loans RCFs & LCs etc., Trading Lines
Revolvers from banks perspective: o Large, Long-Term (1-15 yrs) Commitments: Puts Balance Sheet of bank at Risk
o
Typically serve as liquidity / back-up facilities and are priced to incentivize the client NOT to draw Clients desire these facilities as well as their investors + rating agencies + other stakeholders - expensive, like a credit card Banks do not make a lot of money on undrawn revolver commitment: The bank gets paid to simply provide a
In periods of stress, these facilities go from having relatively relaxed surveillance profiles to receiving intense attention
They are LARGE commitments and represent money out the door when the client draws American International Group (AIG) promise
So, banks usually commit the largest amounts with the most favorable terms (pricing + covenants), to their best clients o Clients in turn recognize this strategic partnership and open their doors to more business:
Sales & Trading, Debt Capital Markets, Equity Capital Markets, Foreign Exchange & Cash Management, M&A Advisory etc.,
Discuss Client Needs (Size and purpose of RCF) Discuss Market Appetite for lending: Bank Group + Allocations Determine Target Terms: Pricing, Covenants, Tenor (length)
Launch Deal
Banks Group HSBC JP Morgan Citigroup BAML UBS + others Post DD Negotiations: Due Diligence (DD) Meeting / Call
Lead Arranger
What to Expect
The Job
Long Hours (less hours than Investment Banking) Life will revolve around deals Good salary + bonus package (less than Investment Banking) A lot of phone time / meetings with clients, other banks, lawyers, & internal colleagues Credit analysis o Financial Statement Analysis / Modeling o Industry Studies Must know your clients better than the competition o Investor Calls / Presentations o Company press releases as well as reports in the media o 10-Ks, transcripts, sell-side research etc., Broad product experience / limited understanding of each product Competitive / High Pressure Environment o Can be said about any position at a bank. Especially front office but also middle and back.
Provide similar but expanded services to corporate and institutional clients: o Capital raising in the form of syndicated loans, public and private issues of debt and equity o Specialized services such as M&A and ratings advisory, industry and competitive analyses and market-making in complex instruments o Sales, trading and research of publicly traded issues and currencies Product groups specialize in a certain service or instrument, such as M&A, bonds, equity Industry groups cover all client firms which operate in a certain field (i.e. healthcare, gaming, energy, media)
Focus on supporting middle market clients by providing corp. loans for acquisitions, recaps, refinances & other corp. needs Business largely driven by private equity activity Firms focused underwriting fees and greater interest rate spreads Many MM firms also have advisory & capital market services, but not broader corporate banking services
Responsibilities include: o Issuing loans (vs. bonds, high yield) o Taxes strategy o Treasury management o FX management o Cash management o Project financing Traditional Corporate Banking offered by large banks with diverse product offerings Focus on relationship with company as cross-selling of products There is often an overlap between corporate banking and IB capital markets when capital markets expertise is utilized to issue equity or debt
Career Considerations
Analyst Role / Responsibilities
Financial analysis and financial modeling Company valuation Comparable analysis Preparation internal credit / approval memos Industry and company research Developing client presentations Marketing material (i.e. Teaser, Confidential Information Memorandum) Updating all internal databases and systems Administrative tasks (set up calls, fax, FedEx, etc.)
Representative Companies
Large Commercial Banks
Citibank Bank of America Wells Fargo / Wachovia
Super-Regional Banks
Comerica Union Bank of California Bank of New York Mellon Key Bank SunTrust Fifth Third PNC
Foreign Banks
CIBC Toronto Dominion Royal Bank of Canada Bank of Montreal / Harris Societe Generale HSBC National Australia Bank ANZ Banking Group Royal Bank of Scotland Macquarie Group Sumitomo
Next Steps
Take advantage of ALL Feld Career Center services, job postings and info sessions
NETWORK: Utilize the BU Alumni network and all family & friend contacts
Practice your interviewing skills and have all book knowledge down cold
Have a story about who you are, where you have been and where you are going
Utilize all resources including the Vault Guide, publications (WSJ, etc.), websites (LinkedIn, eFinancialCareers, etc.)
Search yourself: Make sure this is the field for you BEFORE going through the process
Commit: Once you decide to go for any finance job, give it your all or it will show otherwise
Questions
Appendix
PROOF READ your emails. If there is a typo or a grammar error, it can kill your momentum Be sensitive to the interviewers time constraints. Do not insists on times / topics / sending your resume Remember: Alums are BUSY and they are doing you a big FAVOR by talking
Make sure you have a story about who you are and why you want the position / company / industry you are applying for Specialize your resume o Todays job market is extremely tough: Employers are looking for the perfect candidate o It is a numbers game but make sure you target positions for which you are a good fit o Make sure your resume is FLAWLESS; bad formatting, a strange layout or something that is hard to read can easily give someone a bad impression and/or cause them to overlook your talents If you dont have a 4.0 GPA or all of the relevant course work, guess what? - It is OK! o Will cost you initially but can be recovered from
Get the best job you can Work hard and be the best STAY in TOUCH with people Always be aware of and open to new opportunities