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  1. 1. Welcome to the Finance Club Kickoff Meeting Ross School of Business University of Michigan September 2005
  2. 2. Agenda <ul><li>Overview : </li></ul><ul><li>Financial Services </li></ul><ul><li>Timeline </li></ul><ul><li>Finance Club Overview </li></ul><ul><li>Functional Areas : </li></ul><ul><li>Corp Finance </li></ul><ul><li>Investment Banking </li></ul><ul><li>Research/Asset Management </li></ul><ul><li>S&T </li></ul><ul><li>PWM </li></ul><ul><li>Wrap Up </li></ul><ul><li>To Do’s </li></ul><ul><li>Company Presentations </li></ul>
  3. 3. Financial Services Landscape <ul><li>Finance </li></ul><ul><li>Club </li></ul>EVC Club Investment Assoc. <ul><li>Corporate Finance </li></ul><ul><li>Investment Banking </li></ul><ul><li>Capital Markets – Syndicate </li></ul><ul><li>Research </li></ul><ul><li>Sales & Trading </li></ul><ul><li>Asset Management </li></ul><ul><li>Private Wealth Mgmt. </li></ul><ul><li>Venture Capital </li></ul><ul><li>Private Equity </li></ul><ul><li>Turnaround Mgmt. </li></ul><ul><li>Asset Management </li></ul><ul><li>Equity Research </li></ul><ul><li>Inst. Sales & Trading </li></ul><ul><li>Private Wealth Mgmt. </li></ul><ul><li>Personal Investing </li></ul>
  4. 4. Internship Search Timeline It’s Sooner Than You Think On-campus interviews! Jan. / Feb. October 14 Resume deadline for iMpact Oct. 24-26 Wall Street Forum Company presentations Sept. / Oct. Ross Corporate Finance Forum Informational interviews Nov. / Dec. Form study groups, review Course pack, and begin profiling potential employers Oct. 18-21 1 st Term Final Exams
  5. 5. Finance Club Overview <ul><li>“ 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.” </li></ul><ul><li>Members of the Finance Club have a strong commitment towards building Michigan’s brand in Finance. </li></ul><ul><li>Your Resources: </li></ul><ul><ul><li>OCD </li></ul></ul><ul><ul><li>Alumni </li></ul></ul><ul><ul><li>Faculty </li></ul></ul><ul><ul><li>Second Years </li></ul></ul><ul><ul><li>Each Other </li></ul></ul>
  6. 6. Quotes from Alumni & Recruiters <ul><li>“ The Finance Club at Michigan is the best of its kind in the nation because it has to be.” </li></ul>“ 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”
  7. 7. Corporate Finance <ul><li>CFO and management team </li></ul><ul><ul><li>Forecast revenues/expenses - budgeting </li></ul></ul><ul><ul><li>Invest in projects to maximize shareholder value </li></ul></ul><ul><li>Treasury </li></ul><ul><ul><li>Cash management, Invest excess cash </li></ul></ul><ul><li>Controller </li></ul><ul><ul><li>Internal auditing </li></ul></ul><ul><li>Risk Management </li></ul><ul><ul><li>Country risk </li></ul></ul><ul><ul><li>Market risk </li></ul></ul><ul><li>Strategy and Business Development </li></ul>
  8. 8. CF - Just the Facts Lifestyle, work-life balance, C-level exposure, overall view of organization, CFO/CEO track Pros North East, Mid-west, West Coast Where 8:00 am to 5:30 pm Hours Can get monotonous, some positions potentially heavy on accounting, steady pace Cons Corporate Finance Major corporations across industry, and banks Firms
  9. 9. Investment Banks <ul><li>Raise debt and equity capital for clients </li></ul><ul><ul><li>Maintain active securities markets enabling cost effective distribution </li></ul></ul><ul><li>Financial advisory services </li></ul><ul><ul><li>Mergers & acquisitions </li></ul></ul><ul><ul><li>Divestitures </li></ul></ul><ul><ul><li>Restructuring </li></ul></ul><ul><li>Merchant banking (private equity investment) </li></ul><ul><li>Syndicate: selling securities to “the street” </li></ul>
  10. 10. Investment Bankers <ul><li>Perform industry analysis </li></ul><ul><li>Create quantitative models to determine return on investment for all stakeholders </li></ul><ul><li>Perform sensitivity analyses based on different scenarios </li></ul><ul><li>Offer the client multiple financing options </li></ul><ul><li>Leverage the Capital Markets to execute these proposals </li></ul>
  11. 11. IBD - Just the Facts Challenging, fast-paced, top company interaction, strong compensation Pros Citigroup, CSFB, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, National City, Piper Jaffrey, UBS Key Firms Investment Banking Very demanding, less work-life balance, can be stressful, job security directly tied to the market Cons 9am to whenever: expect 80+ hr. weeks Hours Primarily New York, also Chicago, L.A., San Francisco, London & Hong Kong Where Top investment banks Firms
  12. 12. Research / Asset Management <ul><li>Research </li></ul><ul><li>Also known as a Sell-Side analyst </li></ul><ul><li>Generates investment ideas for investors </li></ul><ul><li>Conducts fundamental analysis of companies within an industry </li></ul><ul><li>Identifies factors and trends that drive a company’s or industry’s future growth and comments on valuation of securities </li></ul><ul><li>Examples: CSFB, Morgan Stanley Deutsche Bank </li></ul><ul><li>Asset Management </li></ul><ul><li>Known as the Buy-Side </li></ul><ul><li>Manage a portfolio of securities for other investors </li></ul><ul><li>Buy-Side includes </li></ul><ul><ul><li>Mutual funds, Pension funds, Insurance companies, Hedge funds </li></ul></ul><ul><li>Examples: Fidelity, Janus, Oppenheimer, Apollo </li></ul>
  13. 13. Research - Just the Facts Fidelity, Janus Typically I-Banks Firms Everywhere Primarily New York Where Pay, excitement, work/life balance, clear reward system Pay, entrepreneurial, access to top executives Pros Buy-side Sell-side Difficult to find jobs, tough market cycles Long hours, hard to differentiate research Cons 7am to 5:30pm, no weekends 7am to 7 pm, plus weekends Hours
  14. 14. Sales & Trading <ul><li>Represents the public or secondary market where investors can trade securities </li></ul><ul><li>Traders “make markets” in securities, providing liquidity to the market </li></ul><ul><li>Salespeople build relationships with the buy-side to draw trading business to its bank </li></ul><ul><li>Trading and sales desks must work together to be successful; many internship programs include rotations in both </li></ul>
  15. 15. S&T - Just the Facts Pay, excitement, camaraderie, hours, clear reward system Pay, expense account lifestyle, entrepreneurial Pros Trading Sales Intensity/stress, insecurity, narrow focus Intensity/stress, insecurity, cyclical Cons 7am to 5:30pm, no weekends 7am to 5:30pm + some evenings Hours Primarily New York Where Top investment banks Firms
  16. 16. Private Wealth Management <ul><li>Develops and manages relationships with wealthy investors </li></ul><ul><li>Markets the investment services of the firm </li></ul><ul><li>Advises clients on investment opportunities </li></ul><ul><li>Analyzes client portfolios </li></ul><ul><li>Additionally, provides advice regarding banking, lending and wealth transfer needs </li></ul>
  17. 17. PWM - Just the Facts Intellectual challenge, fast-paced, strong compensation, entrepreneurial, personal relationships with clients Pros UBS, Citigroup, Goldman Sachs, JPMorgan, Lehman Brothers, Northern Trust, Bessemer Trust, Morgan Stanley Key Firms Private Wealth Management Very demanding, solely responsible for P&L - need to have a strong grasp of a wide range of products and areas, not just investments Cons 7:30 - 6:30 at a minimum - no weekends Hours Primarily New York, but smaller offices in most major cities Where Top investment banks Firms
  18. 18. CONFUSED? <ul><li>Conduct Self-assessment- interests, skills, sacrifices </li></ul><ul><li>Schedule OCD counseling appointments </li></ul><ul><li>Realize that finance is a wide field offering many different and exciting opportunities </li></ul><ul><li>Learn more about the functional areas </li></ul><ul><li>Ask questions- DUMB ONES TO US, smart ones to recruiters </li></ul><ul><li>Second-years are your best resources for information and first-years are your partners </li></ul>
  19. 19. To Do’s <ul><li>Company presentations begin tomorrow </li></ul><ul><li>Resume book deadline of October 14 </li></ul><ul><li>Start forming study groups </li></ul><ul><li>Sign up for FinClub06 </li></ul><ul><li>Go to the Finance Club Website </li></ul><ul><li>Sign up for Finance Club </li></ul>
  20. 20. Company Presentations <ul><li>On a daily basis, go to OCD Events and look up which companies are coming when – look for “Office Hours” too </li></ul><ul><li>Attire is business casual for every event unless stated </li></ul><ul><li>Research a company’s web page before they arrive (vault, wet feet, etc… are also great resources) </li></ul><ul><li>Ask great questions that show your knowledge about the company, industry, and market – stay away from personal/specific questions! </li></ul><ul><li>Be a good, courteous listener : </li></ul><ul><ul><li>Do not walk around/leave </li></ul></ul><ul><ul><li>Do not talk </li></ul></ul><ul><ul><li>Do not disregard proper event attire </li></ul></ul><ul><ul><li>Do not eat food </li></ul></ul><ul><ul><li>Do not ask poorly thought out questions </li></ul></ul><ul><ul><li>DO NOT HAVE YOUR LAPTOPS UP </li></ul></ul><ul><ul><li>DO NOT HAVE YOUR CELL PHONES TURNED ON </li></ul></ul>
  21. 21. Company Presentations <ul><li>Be able to “talk the talk” </li></ul><ul><li>Read Wall Street Journal everyday </li></ul><ul><li>Review company/bank websites </li></ul><ul><ul><li>Company overview section / investment bank </li></ul></ul><ul><ul><li>Investor relations / press releases </li></ul></ul><ul><ul><li>Investext for analyst reports,, WetFeet </li></ul></ul><ul><li>Be able to articulate early on: </li></ul><ul><ul><li>Why do you want to do IB? </li></ul></ul><ul><ul><li>Why XYZ bank? </li></ul></ul><ul><ul><li>Tell me about yourself </li></ul></ul><ul><li>Most important: listen, learn, and don’t eliminate yourself </li></ul>
  22. 22. Company Presentations <ul><li>Good Questions: </li></ul><ul><ul><li>Questions about their internship program </li></ul></ul><ul><ul><li>How the bank is organized </li></ul></ul><ul><ul><li>Questions about the bank’s strategy </li></ul></ul><ul><ul><li>Deals bankers have worked on </li></ul></ul><ul><ul><li>Trends in the investment banking industry </li></ul></ul><ul><li>Bad Questions: </li></ul><ul><ul><li>Too detailed – “Why did your bank’s credit card net income decline by XX% in the third quarter?” </li></ul></ul><ul><ul><li>Too vague / easily researched – “How big is your investment bank?” </li></ul></ul>