Welcome to the Finance ClubKickoff Meeting

Ross School of Business

University of Michigan

September 2005

2

Agenda

Overview:

Financial Services

Timeline

Finance Club Overview

Functional Areas:

Corp Finance

Investment Banking

Research/Asset Management

S&T

PWM

Wrap Up

To Do’s

Company Presentations

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Financial Services Landscape

Finance Club

EVC Club

InvestmentAssoc.

–Corporate Finance

–Investment Banking

–Capital Markets – Syndicate

–Research

–Sales & Trading

–Asset Management

–Private Wealth Mgmt.

–Venture Capital

–Private Equity

–Turnaround Mgmt.

–Asset Management

–Equity Research

–Inst. Sales & Trading

–Private Wealth Mgmt.

–Personal Investing

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Internship Search Timeline

It’s Sooner Than You ThinkIt’s Sooner Than You Think

On-campus interviews!Jan. / Feb.

October 14 Resume deadline for iMpact

Oct. 24-26 Wall Street Forum

Company presentationsSept. / Oct.

Ross Corporate Finance ForumInformational interviewsNov. / Dec.

Form study groups, review Course pack, and begin profiling potential employers

Oct. 18-21 1st Term Final Exams

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Finance Club Overview

“The Finance Club is a student-run organization that provides members interested in finance careers (or finance-related) the resources, tools, and guidance needed to successfully reach their professional goals.”

Members of the Finance Club have a strong commitment towards building Michigan’s brand in Finance.

Your Resources: OCD Alumni Faculty Second Years Each Other

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Quotes from Alumni & Recruiters

“The Finance Club at Michigan is the best of its kind in the nation because it has to be.”

“If you have to, miss a class. NEVER miss a Finance Club meeting.”

“The most successful students are those that treat the Finance Club and the recruitment process as a fifth class.”

“Sometimes we like to ask individuals what they did in Finance Club over the past week just to see if they have been preparing themselves”

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Corporate Finance

CFO and management team Forecast revenues/expenses - budgeting Invest in projects to maximize shareholder value

Treasury Cash management, Invest excess cash

Controller Internal auditing

Risk Management Country risk Market risk

Strategy and Business Development

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CF - Just the Facts

Corporate Finance

FirmsMajor corporations across industry, and banks

WhereNorth East, Mid-west, West Coast

Hours8:00 am to 5:30 pm

Pros Lifestyle, work-life balance, C-level exposure, overall view of organization, CFO/CEO track

Cons Can get monotonous, some positions potentially heavy on accounting, steady pace

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Investment Banks

Raise debt and equity capital for clients Maintain active securities markets enabling cost

effective distribution Financial advisory services

Mergers & acquisitions Divestitures Restructuring

Merchant banking (private equity investment) Syndicate: selling securities to “the street”

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Investment Bankers

Perform industry analysis

Create quantitative models to determine return on investment for all stakeholders

Perform sensitivity analyses based on different scenarios

Offer the client multiple financing options

Leverage the Capital Markets to execute these proposals

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IBD - Just the Facts

Investment Banking

Firms Top investment banks

WherePrimarily New York, also Chicago, L.A., San Francisco, London & Hong Kong

Hours 9am to whenever: expect 80+ hr. weeks

Key Firms

Citigroup, CSFB, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, National City, Piper Jaffrey, UBS

ProsChallenging, fast-paced, top company interaction, strong compensation

ConsVery demanding, less work-life balance, can be stressful, job security directly tied to the market

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Research / Asset Management

Research Also known as a Sell-Side analyst Generates investment ideas for investors Conducts fundamental analysis of companies within an industry Identifies factors and trends that drive a company’s or industry’s future

growth and comments on valuation of securities Examples: CSFB, Morgan Stanley Deutsche Bank

Asset Management Known as the Buy-Side Manage a portfolio of securities for other investors Buy-Side includes

Mutual funds, Pension funds, Insurance companies, Hedge funds Examples: Fidelity, Janus, Oppenheimer, Apollo

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Research - Just the Facts

Sell-side Buy-side

Firms Typically I-Banks Fidelity, Janus

Where Primarily New York Everywhere

Hours 7am to 7 pm, plus weekends 7am to 5:30pm, no weekends

ProsPay, entrepreneurial, access to top executives

Pay, excitement, work/life balance, clear reward system

ConsLong hours, hard to differentiate research

Difficult to find jobs, tough market cycles

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Sales & Trading

Represents the public or secondary market where investors can trade securities

Traders “make markets” in securities, providing liquidity to the market

Salespeople build relationships with the buy-side to draw trading business to its bank

Trading and sales desks must work together to be successful; many internship programs include rotations in both

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S&T - Just the Facts

Sales Trading

Firms Top investment banks

Where Primarily New York

Hours7am to 5:30pm + some evenings

7am to 5:30pm, no weekends

ProsPay, expense account lifestyle, entrepreneurial

Pay, excitement, camaraderie, hours, clear reward system

ConsIntensity/stress, insecurity, cyclical

Intensity/stress, insecurity, narrow focus

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Private Wealth Management

Develops and manages relationships with wealthy investors

Markets the investment services of the firm

Advises clients on investment opportunities

Analyzes client portfolios

Additionally, provides advice regarding banking, lending and wealth transfer needs

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PWM - Just the Facts

Private Wealth Management

Firms Top investment banks

Where Primarily New York, but smaller offices in most major cities

Hours 7:30 - 6:30 at a minimum - no weekends

Key Firms

UBS, Citigroup, Goldman Sachs, JPMorgan, Lehman Brothers, Northern Trust, Bessemer Trust, Morgan Stanley

ProsIntellectual challenge, fast-paced, strong compensation, entrepreneurial, personal relationships with clients

ConsVery demanding, solely responsible for P&L - need to have a strong grasp of a wide range of products and areas, not just investments

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CONFUSED?

Conduct Self-assessment- interests, skills, sacrifices

Schedule OCD counseling appointments

Realize that finance is a wide field offering many different and exciting opportunities

Learn more about the functional areas

Ask questions- DUMB ONES TO US, smart ones to recruiters

Second-years are your best resources for information and first-years are your partners

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To Do’s

Company presentations begin tomorrow

Resume book deadline of October 14

Start forming study groups

Sign up for FinClub06

Go to the Finance Club Website

Sign up for Finance Club

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Company Presentations

On a daily basis, go to OCD Events and look up which companies are coming when – look for “Office Hours” too

Attire is business casual for every event unless stated

Research a company’s web page before they arrive (vault, wet feet, etc… are also great resources)

Ask great questions that show your knowledge about the company, industry, and market – stay away from personal/specific questions!

Be a good, courteous listener: Do not walk around/leave

Do not talk

Do not disregard proper event attire

Do not eat food

Do not ask poorly thought out questions

DO NOT HAVE YOUR LAPTOPS UP

DO NOT HAVE YOUR CELL PHONES TURNED ON

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Company Presentations

Be able to “talk the talk”

Read Wall Street Journal everyday

Review company/bank websites

Company overview section / investment bank

Investor relations / press releases

Investext for analyst reports, Vault.com, WetFeet

Be able to articulate early on:

Why do you want to do IB?

Why XYZ bank?

Tell me about yourself

Most important: listen, learn, and don’t eliminate yourself

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Company Presentations

Good Questions:

Questions about their internship program How the bank is organized Questions about the bank’s strategy Deals bankers have worked on Trends in the investment banking industry

Bad Questions:

Too detailed – “Why did your bank’s credit card net income decline by XX% in the third quarter?”

Too vague / easily researched – “How big is your investment bank?”