Sudeep Paul Jyoti Joshi October 24, 2007

Agenda
Working on Wall Street Areas of an Investment Bank The Buy Side  The Wall Street Hiring Process Skills/Tips

Our Background
Sudeep Paul
Double Degree in Business (Finance) and Economics Senior Advisor of UFA Email: sudeepp@andrew.cmu.edu Cell: 516-582-7759

Jyoti Joshi
Major in Business (Finance) President of UFA Email: jjoshi@andrew.cmu.edu Cell: 908-868-4504

Why do people want to work on Wall Street?
Intelligence is Highly Valued

Positives of working on Wall Street
Money Prestige Power Challenging work environment Work with smart people Chance to meet the top people at interesting

companies Large amount of learning You are paid based on your personal performance Rapid advancement opportunities Great business credential to have for future jobs and graduate educational opportunities

Negatives of working on Wall Street
Long Hours = Falling Asleep all the Time

Negatives of working on Wall Street
Long hours Sometimes tedious work – lower levels “Up or out environment” High Pressure Work/Life Balance – limited social/family

life Belittlement at the lower levels Opportunities tied to overall economy (strong swings in hiring based on macroenvironment) Can be cut-throat depending on the situation

Words You May Have Heard Before
Sell Side Investment Banking Commercial Banking Capital Markets Sales & Trading Traders Analysts MD (Managing Buy Side Asset Management Mutual/Hedge/Pension

Director)

Funds Stock Broker Equity Debt/Fixed Income Institutional Retail

Who are the Big Players?
The Old Guard
Merrill Lynch Goldman Sachs Morgan Stanley Lehman Brothers JP Morgan Citi UBS

The New Players
Barclays Capital Bear Stearns Deutsche Bank CSFB (Credit

Suisse) Wachovia HSBC

The Structure of an IBank
Investment Bank- 3 main functions An investment bank vs. investment banking
 CM: Help customers raise money in markets  IB: Advise companies on mergers and acquisitions  AM: Management of securities and assets (buy side)

Capital Markets
Sales/Trading/Research Structure & Origination

Investment Banking
Mergers & Acquisitions Corporate Finance

Asset Management
Institutional Investors Private Investors (Retail)

Capital Markets
Capital Markets
Equities (Stocks)
Sales Trading

Fixed Income (Bonds)
Bonds Rates Derivatives

Research

Credit Mortgages Real Estate Foreign Exchange (FX)

Capital Markets
Sales and Trading Both equity and debt- interact with both markets Trade and sell securities, derivative products Equity Division deals only with stock markets Fixed Income Division deals only with the debt, currency, and commodity markets Research Equity Research Fixed Income Research

Capital Markets
Structuring & Origination Supports Sales & Trading in Capital Markets (for both debt and equity) Create new products to fit needs of corporate or individual clients Create products to customize risk exposure Can create products that have both equity and debt components (called hybrid products) Structure IPO’s and secondary offers (for banking)

Trading Floor

Investment Banking
Investment Banking
Raise Money
M&A

Corporate Finance

Initial Public Offering (IPO) Secondary offering

Mergers Acquisitions

Corporate Decisions Increase Return

Investment Banking
Unlike a commercial bank, has no pile of cash A company comes to an I-bank for advice, for capital

(cash), and other special financing needs

Mergers and Acquisitions  Help companies merge/acquire others Corporate Finance  Goal: enhance corporate return while decreasing the firm’s risk  Divided into short-term and long-term decisions IPOs/Secondary offerings  Goal: to help companies raise money  IPO: Initial Public Offering  Secondary offering in the “after market” – debt or

Asset Management
A part of the buy side, but many firms have

both sell and buy side components

Institutional Investors Mutual, Hedge, or Pension Funds Insurance companies Corporations Private clients Individuals who have a lot of money (high net worth) Often just want to manage investments vs. grow

Difference between banks and brokerage
Commercial Banking
bank, make a deposit Players
 JP Morgan Chase  Bank of America  Citi

Retail Brokerage
asset management  Invest money for individuals  Players
 Merrill Lynch  Morgan Stanley  Goldman Sachs

Typical “bank” - go to the aka: a form of individual

Make money by

“borrowing” and lending

 Make money on trading

commissions

The Buy Side
They buy securities offered by the sell-side All over the US (buy side) vs. just in NYC (sell side) Many firms have both buy and sell side components- the

buy side of an investment bank is the Asset Management part

Buy Side Components Buy Side Firms Pension funds Fidelity Investments Mutual Funds Federated Hedge Funds Mellon Financial Institutional clients Vanguard Insurance companies AIG Global Investment Individual clients Washington Mutual

What is Life Like?
Common Things Long Hours Lots of Stress High pay Investment Banking Really long hours (8090) Slower paced Lots and lots of money Capital Markets Shorter hours (60-70) Very fast paced High pressure/stress Buy Side Short hours (40-50) Slower paced Low stress

Where Do You Fit in an I-Bank
Analyst Associate Analyst (no MBA): 1-3 Years Out of College
$80k-120k in salary + bonus

Associates : 4-7 Years Out or Post MBA
$120k-300k in salary + bonus

VP MD

Vice President: 7 – 10 Years Out
$300k-1M in salary + bonus

Managing Director: 10 + Years Out
$500k-10M in salary + bonus

The Hiring Process
Internships
Freshman Sophomores Juniors

Full-Time positions Seniors Transferring from a

different job
Graduates

The Hiring Process
Places to apply Investment Banks Hedge Funds Private Equity Firms Fortune 1000 companies (Finance department) Local companies where you will get good experience Interview
First round- usually behavioral Second round- more technical

How to Get In
Qualitative Skills  Be intelligent/intelligent looking  Make yourself marketable  Know how to interview  Good interpersonal skills  Strong work ethic Image is everything What you should have  Strong quantitative competency  The way you carry yourself  The things you say  Good grades  The people you associate  Strong leadership in with extracurriculars  Appear

How to Get In
What you should do
Make yourself marketable Know how to interview Network, network, network Be aggressive Use Alumni Use any contacts you may have Use job search sites to locate opportunities In the end, you don’t need a degree in finance, just an

interest

Skills/helpful tips
Learn Excel Read the Vault guide Investopedia.com, wikipedia.com Read the Wall Street Journal Ask people for help;

upperclassmen, career center, people in the industry Have a solid resume Do LOTS of practice interviews Books: Liar’s Poker, Monkey Business Movies: Wall Street

Future Events
Interview Training - January  Wall Street interview are very different  Tips on how to do well in interviews  Show you what to do/what not to do  We’ll go through some mock questions/short interviews (best way to learn) Fidelity Presentations  Technical Analysis- Oct. 30, 4:30pm, Simon  Investing Basics- Nov. 5, 4:30pm, Simon Finance Jobs- Wednesday Night Insight- Nov.

7th

 In conjunction with Tepper/Career Center  Focus on non-Wall Street finance jobs

Words You Now Understand
Sell Side Investment Banking Commercial Banking Capital Markets Sales & Trading Traders Analysts MD (Managing Buy Side Asset Management Mutual/Hedge/Pension

Director)

Funds Stock Broker Equity Debt/Fixed Income Institutional Retail

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