Jobs in the Investments Industry

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Jobs in the Investments Industry

• Bryan Sudweeks
• Fall 2005

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Jobs in the Investments Industry

• I. Investment Banking
• Investment banking, Asset Management, Sales and
  Trading, Research
  
• II. Financial Planning
• Investment advising, Insurance, and Estate
  planning
  
• III. Corporate Finance
• Pension Fund Administration and Management
• IV. Financial Consulting
• Pension Fund Consulting

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I. Investment Banking

• Objectives
• 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

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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 Capital
  Structure
  
• Offers Equity and Fixed Income Underwriting
  (e.g.. IPOs, High Yield Offerings)
  
• Provides asset management advice to high net
  worth individuals and institutions
  
• Provides Sales and Trading of Equity (Stocks),
  Fixed Income Securities (Bonds), Derivatives
  (Options).
  
• Offers research and advice on publicly listed
  stocks and bonds to institutional and individual
  investors

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Structure of Investment Banks

• Major investment banking divisions include
• Investment Banking
• Intermediary between the capital markets
• Advice and analysis on MA 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
  (Options).
  
• Research
• Provide research on public stocks and bonds

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Structure of Investment Banks (continued)
Investment Bank
I-Banking Division (IBD)
Research
Sales Trading
Asset Management
Industry Groups Corporate Finance Product Gro
ups MA High Yield Debt Capital Market
s
Equity Capital Markets
Buy and Sell Financial Securities and Deriva
tives
Private Client Services Work with High Net Wo
rth Individuals
Analyze all Public information in order to give
advice to investors and sales and trading
group
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Structure of Investment Banks (continued)
Investment Bank
I-Banking Division
Research
Sales Trading
Asset Management
Product Group
Industry Group (Corp Finance)
Manage funds for institutions and individuals
Private Client Services
Economic
Derivatives
Fixed Income
Equity
Fixed Income
Equity
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 Care Retail
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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 no
  semblance of conflict of interest?
  
• A Chinese wall was proposed and instituted
• Certain divisions are inside and others
  outside the wall
  

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Interaction Between Divisions (continued)

• Inside the Wall Outside
• the Wall

Corporate Finance
IBD
Sales Trading, Research, and Asset Management
Corporate Finance
Corporate Finance
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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.

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Jobs in Investment Banking (continued)
I-Banking Division
Asset Management Division
Research Analyst Analyst Senior Analyst Portfol
io Manager
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 Seni
or Analyst
Assistant Analyst Research Analyst Analyst Seni
or Analyst
Research Analyst Analyst Senior Analyst
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Jobs in Investment Banking (continued)

• What are the different types of analyst
  positions?
  
• Analysts position vary depending on who they are
  doing research for, i.e., sell-side versus
  buy-side research
  
• What are sell-side analysts?
• Analysts whose work is used for selling
  securities to investors, i.e. Research, Sales and
  Trading, etc. Analysts prepare the research for
  potential investors in the hope that investors
  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 the research and then act on
  that research to buy companies.

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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 learning from senior partners
  
• After you have built experience in the field, it
  offers wonderful opportunities at top business
  schools and companies
  

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The Analyst Position (continued)

• 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

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The Analyst Position (continued)

• 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

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The Analyst Position (continued)

• 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, and
  reporting and attribution
  
• Investment policy statement
• Portfolio construction and management
• Portfolio reporting and attribution
• Whatever is needed to attain company goals and
  objectives

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The Analyst Position (continued)

• 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)

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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 lifestylevery 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

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A Career in Investment Banking

• Dont get discouraged
• Understand yourself and your goals
• Work hard and be patientFaith precedes the
  miracle
  
• Keep your priorities in order
• Obedience is the first law of Heaven--do what you
  should
  
• He will help take care of the rest
• Follow the Spirit
• Stay worthy of the Spirit
• He is your competitive advantage--stay worthy of
  His help
  
• Remember the Lords hand in your blessings
• Always be appreciative of his blessings
• Remember to share them with others