Download Origination Execution

Goal of This Presentation
 What is an Investment Bank?
 What are the opportunities?
 Learning more about the business
What Does an Investment Bank Do?
 Raise capital for clients
 Advise corporations, states, or other entities
on capital structure, strategy, business
combinations
 Create and sell securities to institutional and
retail clients
 Manage money for institutional and retail
clients
 Trade on a proprietary basis
An Investment Bank’s Objectives
 To be the leading investment bank as
measured by share of client activity,
market rank and profitability
 Manage a diversified portfolio of
business and asset classes, making
prudent use of Firm capital
 Out-perform through market cycles
 Be the most relevant advisor to its
target client base
Investment Bank Organization
GLOBAL BANK
Global Securities
Research
& Economics
Investment Banking
and
Capital Markets
Commodities
Global Equity
Markets
Global Debt
Markets
Global Private Client
Global
Investment
Banking
Global
Private Equity
Investment Management
GMI Business Construct
Global Markets
Sales and
Trading
Principal
Investing
Investment Banking
Private
Equity
Capital
Leveraged
Markets &
Finance
Financing
 GMI – Global Markets and
Investment Banking
Strategic
Advisory
GLOBAL MARKETS
It’s not just sales and trading

Global Markets encompasses sales, trading, structuring and
origination activities in a variety of product areas. Global Markets
professionals provide institutional clients worldwide with a
comprehensive range of end-to-end products, services and solutions.
Global Markets Product Areas
 Equity Trading (Cash, Equity-Linked,
Equity Financing & Services, and
Strategic Risk)
 Rates and Foreign Exchange
 Credit, Real Estate and Structured
Products
 Hedge Fund Development &
Management
 Investor Client (Debt & Equity Sales)
 Commodities
 Relationship Management
Investment Banking
 Investment Banking professionals originate and execute transactions
– Client focus – identify and meet client needs
– Product focus – opportunistically position expertise with clients
 Investment Banking draws on the diverse resources of the firm to deliver
the best advisory solutions
– Mergers & Acquisitions Advisory
– Restructuring Situations
– Equity and Debt Issuance
– Financial Sponsors and Leverage Finance
– Corporate Finance
– Investment Management and Private Client
How Does Investment Banking Fit In?
 Advisory: Investment Banking the primary driver
– Primarily M&A
– Expertise of other groups drawn upon
 Capital Raising:
– Equity: Heavy involvement from equity capital markets
– Debt: Heavy involvement from debt capital markets
– Lending increasingly important: Some companies favor their lenders when choosing an
investment bank
 Other
– Derivatives becoming increasingly important (opaque pricing)
– Private Equity creates opportunities
– Cross selling becoming increasingly important
– Today almost no interaction with research
A Wide Range of Opportunities
Coverage Groups
Product Groups
Equity
Capital
Markets
Financial
Institutions
Telecom &
Media
Financial
Sponsors
Mergers &
Acquisitions
Real Estate
Retail
Regional
Offices
Corporate
Finance
Equity Linked
Capital Markets
Healthcare
Consumer
Energy &
Power
Leveraged
Finance
Debt
Capital
Markets
Technology
Gaming,
Leisure &
Transportation
Multi
Industries
Private
Equity
Investment Banking Organization
Position
Background
Managing Director:
Most senior industry professional with a minimum of 10+ years of investment banking experience
Director:
Intermediate officer position with a minimum of 6-9 years of experience
Vice President:
First officer position in most firms with a minimum of 3-6 years of experience
Associate:
MBAs, first permanent position in investment banking
Analyst:
Undergraduate, two to three year program
What Do Investment Bankers Do?
Origination

Idea Generation
– Strategic Alternatives
Execution

Due Diligence

Documentation
– Capital Raising
– SEC Merger and Offering Documents
– Risk Management
– Purchase and Sale Agreements, Other Agreements

Problem Solving

Financial Analysis (Valuation, Accounting Impact)

Pitch Book Production – Quantitative & Qualitative Analysis


Client Contact
Develop Presentation Materials for Board of Directors
Meetings
– Financial Analysis
– Strategic Rationale
– Market Receptivity/reaction

Prepare Materials for Internal Committees
(Merrill Lynch)

Identify Potential Investors and Develop Investor Marketing
Materials

Negotiation/structuring

Client Management
What Does an Associate Do?
Financial Analysis:
Industry Research:
Presentation Preparation:
Transaction
Execution:
Client Support:

Financial Forecasts and Projections

Valuation Approach, Rationale and Modeling

Capital Structure and Financing Impacts

Merger Consequences

Client and Industry Competitive Analyses

Briefing Materials

Idea/Solution Generation

Outline and Organization

Drafting and Editing

Client “Point Person” for Execution

Drafting Documents

Due Diligence

Marketing Material Preparation

Acquisition Project Support

Strategic Studies

Special Projects
What Makes a Successful Banker
KEY QUALITIES
Quantitative Ability
Research Skills
Intellectual Curiosity
Entrepreneurial
Communication Skills
Presentation Skills
High Energy Level
Long-Term Commitment
What Makes a Successful Banker
 Summer Associate
– Be a great first year associate
 First Year Associate
– Be a great associate
 Second Year Associate
– Start showing signs of being a great VP
 Third Year Associate
– Be a great VP
Learning About the Business:
Do Your Homework

Read Business Newspapers: Business Section (Credit Markets),
Economic Commentary, Equity Markets section and Equity
Volatility commentary
– Need to be current on major events in business world and current
market levels
– Other good resources:
• Barron’s
• Economist
• Institutional Investor, Investment Dealers’ Digest, Derivatives Week

Know what is going on in the markets (stocks, bonds, RBI)

Learn as much as you can about the business and the different
functions

Understand the job: WHY you want to do it, WHAT you want to do