1 Careers in Investments I - IB 31Jan08(2)

8/7/2019 1 Careers in Investments I - IB 31Jan08(2)

http://slidepdf.com/reader/full/1-careers-in-investments-i-ib-31jan082 1/19

11

Jobs in the

Investments Industry I:

Investment Banking

Bryan SudweeksBryan Sudweeks

FallFall 20082008



22

Jobs in the Investments Industry

I. Investment Banking

Investment banking, Sales and Trading, Research

II. Investment Management

Asset Management

III. Financial Planning

Investment advising, Insurance, and Estate planning

IV. Corporate Finance

Pension Fund Administration and Management

V. Financial Consulting

Pension Fund Consulting



33

I. Investment Banking

O bjectives

A. Understand the purpose of Investment Banking

B. Understand the structure of an Investment Bank

C. Understand the interaction between divisions of Investment Banking groups (and the recent

problems)

D. Know where the potential jobs are in Investment

Banking E. Know how to prepare for a career in Investment

Banking



44

A. Purpose of Investment Banking

An intermediary between the capital markets

(investors) and corporations (borrowers)

Offers strategic advice and financial analysis on

Mergers & Acquisitions, Divestitures, and CapitalStructure

Offers Equity and Fixed Income Underwriting (e.g..

IPO¶s, High Yield Offerings)

Provides asset management advice to high net worthindividuals and institutions

Provides Sales and Trading of Equity (Stocks), Fixed

Income Securities (Bonds), Derivatives (O ptions).

Offers research and advice on publicly listed stocks

and bonds to institutional and individual investors



55

B. Structure of Investment Banks

Major investment banking divisions include:

Investment Banking

Intermediary between the capital markets

Advice and analysis on M&A and Capital Structure

Equity and Fixed Income Underwriting

Asset Management

Provide asset management services to investors and

institutions

Sales and Trading Sales and Trading of Equity (Stocks), Fixed Income

Securities (Bonds), Derivatives (O ptions).

Research

Provide research on public stocks and bonds



77

Structure of Investment Banks (continued)

Investment Bank

I-Banking

Division

ResearchSales &

Trading

Asset

Management

Product

Group

Industry

Group

(Corp Finance)

Manage funds

for institutions

and individuals

EconomicDerivativesFixed

IncomeEquity

Fixed

IncomeEquity

Equity

Capital

Markets

Debt

Capital

Markets

High

Yield

Debt

M & A

Consumer Products

Technology

Telecommunications

Real Estate

Utilities

Health Care

Retail

Consumer Products

Technology

Telecommunications

Real Estate

Utilities

Health CareRetail

Private Client

Services



88

C. What is the Interaction between

Investment Banking Divisions?

Investment banking meets the needs of

different clientele

Companies wanting to list equity/debt

Individuals/institutions wanting unbiased research

for investing

Strategic and asset management advice for

companies/individuals

How should it be structured to maintain nosemblance of ³conflict of interest´?

A ³Chinese wall´ was proposed and instituted

Certain divisions are ³inside´ and others ³outside´

the wall



99

Interaction Between Divisions (continued)

³Inside the Wall´ ³Outside

the Wall´

IBD

Corporate Finance

Sales & Trading, Research,

and Asset Management

Corporate Finance

Corporate Finance



1010

D. Potential Jobs in Investment Banking

Where are the jobs in Investment Banking?

Most investment banking jobs are in analysis

Equity market analyst

Debt market analyst

High Yield analyst

Mergers and Acquisitions

Industry Analyst Consumer products, telecommunications,

real estate, finance, etc.



1111

Jobs in Investment Banking (continued)

I-Banking

Division

Product

Group

Industry

Group

(Corp Finance)

Equity

Capital

Markets

Debt

Capital

Markets

High

Yield

Debt

Mergers &

Acquisitions

Consumer Products

Technology

Telecommunications

Real Estate

Utilities

Health Care

Retail

Assistant Analyst

Research Analyst

Analyst

Senior Analyst

Asset Management

Division

Research Analyst

Analyst

Senior Analyst

Portfolio Manager

Assistant Analyst

Research Analyst

AnalystSenior Analyst

Research Analyst

Analyst

Senior Analyst



1212

Jobs in Investment Banking (continued)

What are the different types of analyst positions?

Analysts position vary depending on who they are doingresearch for, i.e., sell-side versus buy-side research

What are sell-side analysts?

Analysts whose work is used for selling securities toinvestors, i.e. Research, Sales and Trading, etc. Analysts

prepare the research for potential investors in the hope thatinvestors will buy and sell companies through the I-bank

What are buy-side analysts? Analysts whose work is used in the process of buying

securities for specific portfolios, i.e. Asset Management,Private Wealth Management, etc. Analysts prepare theresearch and then act on that research to buy companies.



1313

The Analyst Position (continued)

Why are Investment Banking analyst positions so hard

to get?

They provide instant exposure to senior management teams

of the largest companies in the world

They have the highest exposure, learning potential, and

salary of any job in the Financial Services Industry (out of

college)

They give opportunity to work in small teams, with learningfrom senior partners

After you have built experience in the field, it offers

wonderful opportunities at top business schools and

companies



1414


What are the skills gained as an analyst?

Financial modeling and strong quantitative work

Solid Understanding of Corporate Capital Structure &

Capital Markets

Solid understanding of companies and industry composition

and structure

Professional presentation analysis



1515


What are the responsibilities of an analyst?

Financial Analysis and Modeling

Discounted cash flow and Free cash flow

analysis,

Comparable company

Precedent transactions, and

Leveraged buyout

Client Exhibits and Presentations Market research and competitive analysis

Client interaction

Roadshow execution management



1616


What type of work do Analysts do?

Company Analysis (both buy and sell side)

Financial forecasting

Strategic analysis Industry Analysis (both buy and sell side)

Strategic analysis

Portfolio implementation, construction, andreporting and attribution

Investment policy statement

Portfolio construction and management

Portfolio reporting and attribution

Whatever is needed to attain company goals and

objectives



1717


What are the criteria used to select analysts?

There is a record of achievement

A strong academic record

A balanced individual with extracurricular activities

A good employment history

Strong communication skills

Evidence of being a team player

A tireless work ethic

Attention to detail

A strong analytical capability (with examples)



1818

E. How to Prepare for a Career in

Investment Banking

Understand the industry, the positions, and the lifestyle

This is a wonderful but crazy industry

Are you suited for the lifestyle²very long hours

Start building your contacts

Meet with as many of the visiting speakers as possible

Do well in your classes

A strong GPA is important

Have a good financial analysis project to leave with potential employers as an example of your best work

Look to beginning your CFA program

It is looked on highly in the industry



1919

A Career in Investment Banking

Don¶t get discouraged Understand yourself and your goals

Work hard and be patient²Faith precedes the miracle

Keep your priorities in order

O bedience is the first law of Heaven--do what youshould

He will help take care of the rest

Follow the Spirit

Stay worthy of the Spirit

He is your competitive advantage--stay worthy of Hishelp

Remember the Lord¶s hand in your blessings

Always be appreciative of his blessings

Remember to share them with others

1 Careers in Investments I - IB 31Jan08(2)

Documents

Transcript of 1 Careers in Investments I - IB 31Jan08(2)