Tag Archives: Careers

Careers Paths, Tough Decisions And Saving Sex Until Your Old Age

Finance just isn’t flowing through my proverbial veins this week, so I thought a slightly more personal and far less theoretical blog was in order.

Hopefully, this blog will serve the purpose of getting my regular readers (I know you’re out there) somewhat more acquainted with me and it may serve as a useful collection of thoughts for those in a similar situation to myself. That is, graduates with either a couple of years work experience ranging to very little experience who are considering their next steps.

If that fails, hopefully the odd header image will do the job. If you are new to my blog, you may prefer one of my more regular posts such as Options Trading Strategies, Technical and Fundamental Analysis, or Short Selling Strategies.

Having moved on from the job which has occupied my last two and a half years at a Sydney web design and development agency, and having recently graduated from Law at Sydney University, I have spent the last month collecting my many thoughts and considering the path forward.

It is certainly not an unenviable situation to find myself in but like many others in my position, I am somewhat overwhelmed by the number of choices and the desire to make my next move somewhere close to the correct decision moving forward.

The most apparent decisions open to me at the moment include training as an analyst or a lawyer at a reputable firm, starting my own business, working in a combined sales / marketing role at a small to medium sized company or going travelling.

The really tough decisions seem to arise where you exclude future options or careers as a result of choosing a certain path. The obvious example is putting a small barrier in front of a career as a lawyer or an investment banker by not getting in to one of the big firms as a graduate.

It is for this reason that choosing to not work out at least two years as an analyst at an investment bank or my two years as a lawyer in training at a law firm is somewhat of a tough choice.

Warren Buffett equates making choices purely based on the fashioning of your resume rather than pursuing what you are interested in to “saving sex until your old age” and I am somewhat inclined to agree.

However, I believe it would be hard not to benefit from the situations I would find myself in and the people I would work with at a leading Investment bank or law firm and thus the decision is somewhat blurred as I am always interested in exposing myself to situations that I can learn from.

In my opinion, the main difference between working in the ‘big firm’ situation above versus a smaller company or even in my own business would likely be the difficulty of the work and the repetitiveness of the tasks that I was assigned to in addition to their hierarchy in the greater scheme of the company.

I’m sure this is a decision many out there are faced with and if anyone wants to comment below with any thoughts, I would encourage it.

At this point, Whilst Descartes may recommend travelling as the ideal option, I am going to think about my steps begin helping out where I can at an investment analysis and advice company known as Intelligent Investor in a mixed role of analysis + legal assistace + sales and marketing (if they’ll have me).

I believe this combined role will give me a good introduction to working in Finance. As a bonus, I will be working close to great people that I can learn from; a very important factor for me.

Finally, I have decided to try and get some leading Australian executives to participate in interviews on career paths, different postgraduate degrees, key skills in finance and generally in a series of interviews that I plan to set up.

Mergers and Acquisitions Career; What is involved and is it for you?

Mergers and Acquisitions

To many in the finance industry and the general population, mergers and acquisitions work can seem very glamorous and high profile. The mergers and acquisitions group (known as M&A) provides advice to companies that are buying another company or are themselves being acquired.

At the same time, the work leading up to the headline-grabbing multibillion-dollar acquisition can involve a great effort to crunch all the numbers, perform the necessary due diligence, and work out the complicated structure of the deal. The guide noted that one insider said, “You have to really like spending time in front of your computer with Excel.”

Often, the mergers and acquisitions team will also work with a Corporate Finance industry group to arrange the appropriate financing for the transaction (usually done through a debt or equity offering).

In many cases, all this may happen on a very tight timeline and under extreme secrecy and pressure. Mergers and acquisitions is often a subgroup within corporate finance; but in some firms, it is a stand-alone department. Mergers and acquisitions can be one of the most demanding groups to work for.

What do Mergers and Acquisitions Groups do?

  • Advise firms on merger and acquisition strategies
  • Determine target company valuations using a number of different valuation techniques
  • Help the target of a hostile acquisition arrange a defensive strategy where appropriate
  • Conduct due diligence on a target or acquiring company (this includes examining the financial results and other business factors that will affect the value of an acquisition)
  • Negotiate price, terms, and conditions of an acquisition or merger
  • Work with the other company’s advisory team and the lawyers to structure the deal

A Career in Mergers and Acquisitions; Who Does Well?

Like corporate finance, mergers and acquisitions requires detail-oriented thinking, a knack for using numbers to understand business patterns, problem-solving skills, an ability to think critically about the numbers you’re working with. Add to this, excellent communication and people skills and you have a potential mergers and acquisitions candidate.

Also like corporate finance, lawyers, MBAs, and experience candidates with specific industry knowledge make good mergers and acquisitions candidates. Many entry-level candidates try to get an internship to increase their chances of eventually getting full-time offers and the guide discusses methods of attaining these internships. Selection is competitive to say the least.

Investment Banking Interview Questions and Tips can be found in my article on Investment Banking Interview Questions and Tips.

Mergers and Acquisitions Job Tips

The M&A department usually recruits under the Corporate Finance or investment banking umbrella, although within the group you may find further specialization along industry lines. The work here tends to be intense and very deal-focused, and the hours are unpredictable.

“You might be staffed on five transactions and not much is happening. Then one turns live, and you have to cancel your weekend plans,” says an insider. “Or you could be very busy, and the next day something happens and work gets pushed back a week and suddenly your weekend is free.”

The job provides an excellent introduction to the high-stakes, power centric movement of the corporate world. It is common for insiders to report that personal ambition is a big success factor in mergers and acquisitions.

“You can learn the technical skills like accounting and modeling,” says one first-year associate. “It’s not so easy to learn how to be driven and to take responsibility, to own the deal.”

If you are the type of person to be depressed by the thought of spending 3 or more weeks of your life crunching numbers for a deal that may never happen, the guide suggested that there may be better alternatives in Corporate Finance.

Example of a Mergers and Acquisitons Deal

IBM Corporation decides it has an opportunity to strengthen its hardware business by acquiring an innovative developer of communications software. It approaches an investment bank to get advice on the potential deal. The bankers help IBM secretly value the target company’s assets and the potential value of its products to IBM (which may be higher than their current value because of the opportunities to link with IBM hardware and because of Big Blue’s marketing muscle).

The mergers and acquisitions group then develops IBM’s acquisition strategy and makes contact with the target company. Once the offer is made, the target company will consult its own investment bankers. They help the target evaluate IBM’s proposal, determine various strategies for defending against or negotiating with IBM, and work out a deal that will be in the best interest of the company’s shareholders. After some back and forth, the sides agree on a price (usually a combination of equity and debt), sign the documents, and merge.

I have sourced the majority of the information above from the Wetfeet Insider Guide to Careers in Investment Banking; click here to read about what is involved in a career in investment banking.