Finance Functional Area Overview

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Finance Functional Area Overview

  1. 1. FINANCE CLUB • Overview of a financial transaction from start to finish • Discuss how companies interact with investment banks and investors • How do investment banks work interdepartmentally
  2. 2. The Players • Corporate Finance • Investment Banking • Capital Markets – Syndicate • Research • Sales & Trading • Asset Management • Private Wealth Management
  3. 3. Corporate Finance • CFO and management team – Forecast revenues/expenses - budgeting – Invest in projects to maximize shareholder value • Treasury group – Cash management – Invest excess cash • Controller – Internal auditing
  4. 4. Investment Banks • Raise capital for clients – Cost effective distribution • Financial advisory services – Mergers & acquisitions – Divestitures • Merchant banking
  5. 5. Private Relationship Coca-Cola Investment Bank
  6. 6. 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 different options • Present Capital Markets - Syndicate with proposal(s)
  7. 7. Capital Markets - Syndicate • “Know” their respective markets – Loan – Debt – Equity • Work with bankers to determine whether deals are viable to bring to market • Specialists in marketing deals to investors – Road shows • Experts in pricing new issues to the public
  8. 8. Relationship Capital Markets Syndicate Coca-Cola Investment Banking Team
  9. 9. Research Analyst • Also known as a Sell-Side analyst • Assists in marketing new issues with Syndicate desk(s) • Generates investment ideas for investors • Conducts fundamental analysis of companies within a sector • Identifies factors and trends that drive a company’s or industry’s future growth • Comments on valuation of securities
  10. 10. Road Show Research Analyst Capital Markets Syndicate Coca-Cola Investment Banking Team
  11. 11. Asset Management • Known as the Buy-Side • Represents the group of institutional portfolio managers who selectively invest cash on behalf of investors – Mutual funds – Pension funds – Insurance companies – Hedge funds
  12. 12. Road Show Research Asset Analyst Management Capital Markets Syndicate Coca-Cola Investment Banking Team
  13. 13. Sales & Trading • Represents the public or secondary market where investors can trade securities • Sales communicates directly with the buy- side community • Traders or market-makers ensure an orderly flow of securities by buying and selling from market participants
  14. 14. Sales • Manages the relationship with top clients • Markets the firm’s new issues with analysts • Communicates what the traders on the desk would like to buy and sell • Provides daily insight into: – Company earnings – New research reports – Important news and events
  15. 15. New issues and secondary trades Research Asset Analyst Management Capital Sales Markets Syndicate Coca-Cola Investment Banking Team
  16. 16. Traders • Risk manager for the firm • Provides liquidity to the firm’s top clients • Communicates to the sales force what he/she wants to buy/sell and at what price • Attempts to match orders to generate riskless income • Risks capital on a selective basis for directional bets
  17. 17. Secondary Trading Research Asset Analyst Management Capital Sales & Markets Trading Syndicate Coca-Cola Investment Banking Team
  18. 18. Private Wealth Management • Develop and manage relationships with wealthy investors • Markets the investment services of the firm • Advises clients on investment opportunities • Analyze client portfolios
  19. 19. Secondary Trading Research Asset Analyst Management Capital Sales & Markets Trading Syndicate Coca-Cola Investment Private Banking Wealth Team Management
  20. 20. CONFUSED? • Finance is a wide field offering many different and exciting opportunities • Learn more about the functional areas • Pursue your interests • Ask questions • Second-years are your best resources

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