Careers in Finance TAXONOMY OF THE FINANCE INDUSTRY & RESOURCES FOR UNDERGRADUATES INTERESTED IN BANKING AND FINANCE November 14, 2008 Presentation Outline  Landscape Financial Headlines  Implications on the Finance Industry   Taxonomy Sales & Trading  Investment Banking  Portfolio & Asset Management  Research & Analysis   Career Preparation & Resources Undergraduate & Graduate Coursework  Extracurricular Research  Professional Networking  Financial Management Association (FMA)  Presentation Goals 1. 2. 3. 4. 5. Generate interest in the modern world of finance Define the organizational structure of the industry Unveil the general operations of each sector Provide resources to prepare for careers in finance Introduce the Financial Management Association Landscape  Financial Headlines  Crisis    Consolidation         Subprime mortgages Credit freeze Bear Sterns – acquired by JPMorgan Lehman Brothers – filed for bankruptcy Fannie Mae & Freddie Mac – placed under conservatorship Merrill Lynch – acquired by Bank of America Washington Mutual – seized by FDIC Goldman Sachs & Morgan Stanley - became bank holding companies Wachovia – Acquired by Wells Fargo (not Citigroup) Response    Interest rates – Fed Funds rate dropped to 1% Emergency Economic Stabilization Act of 2008 – “$700B bailout” TARP – Troubled Asset Relief Program Landscape  Financial Headlines (cont’d)  Economic Downturn Stock market volatility – DJIA + 400pts  Oil prices – $60 per barrel  US Unemployment Rate – 6.1%  Consumer Confidence – Conference Board index at 38 pts   Implications on the Finance Industry  Optimism & Opportunity Finding the bottom  “There’s always a bull market somewhere”  Taxonomy  Sales & Trading   The “sell-side” Players Sellers  Institutional Sales  Retail brokers  Private Client Services (PCS)  Traders   Salesperson & trader relationships Symbiotic  Volatile   The morning of a Junior Trader at a Bulge Bracket Firm… Taxonomy  Investment Banking  Business Raising capital for companies  Advising companies on financing and merger alternatives   Players “Bulge Bracket”  Centered in New York City   I-Banking vs. Sales & Trading Both raise capital for clients through investments  Investments differ in nature and timing   I-Banking vs. Commercial Banking  “One-stop shopping” for banking services Taxonomy  Investment Banking (cont’d)  Components Taxonomy  Portfolio & Asset Management   Traditional Investment Managers   The “buy-side” Mutual Funds Alternative Investment Managers Hedge Funds  Private Equity  Venture Capital   Tools of the Trade   Modern Portfolio Theory Sector Trends Stability  Non-investment business interests  Taxonomy  Research & Analysis  Sell-side & Buy-side Analysis Research equity or fixed-income markets  Analyze company and industry fundamentals  Predict earnings and cash flows  Determine appropriate valuations   The Start of a Career in Finance Sell-side  Associate  Junior/Association-Analyst  Analyst   Buy-side  Assistant  Analyst  Portfolio Analyst  Portfolio Manager  Career Preparation & Resources  Coursework  UCSC Undergraduate – Finance Courses (S)Econ 80H: Wall Street and the Money Game  (W)Econ 130: Money and Banking  (S)Econ 131: International Financial Markets  (F/W)Econ 133: Security Markets and Financial Institutions  (W/S)Econ 135: Corporate Finance  (W)Econ 141: International Finance  (F)Econ 150: Public Finance   UCSC Undergraduate – Mathematics & AMS (Grad prep) (F/W/S)Math 21: Linear Algebra  (S)Math 24: Ordinary Differential Equations  (W/S)Math 105A: Real Analysis  (S)AMS 131: Introduction to Probability Theory  (S)Econ 114: Advanced Quantitative Methods  Career Preparation & Resources  Coursework (cont’d)  Graduate Masters in Finance  UCSC Pathways Program  Masters in Business Administration (MBA)  Keely Rogers-Free from Mills Graduate School of Business – Presentation on MBA degrees – UEA, January 29th, 2009  Adjunct UCSC Professor Sharath Sury – MBA in Finance and Statistics, University of Chicago  Career Preparation & Resources  Extracurricular Research  Print Sources The Wall Street Journal  Barron’s  Warren Buffett & Peter Lynch   Web Resources Yahoo! Finance  http://finance.yahoo.com/  Vault  http://www.vault.com/  UpDown  http://www.updown.com  Career Preparation  Professional Networking  Finance professors UCSC Adjunct Professor of Economics Sharath Sury  UCSC Economics Lecturer Kai Pommerenke   UEA functions Career panels  Internship panels  Sponsored interview/etiquette/resume/cover letter prep events   Career Center Job Fairs  SlugQuest  CAN – Career Advice Network   Networks of friends and family Career Preparation & Resources  Financial Management Association (FMA)  Purpose Serve as an academically oriented student group  Act as a forum for discussion of finance-related topics and their economic and political implications  Foster a growing student interest in the modern world of finance   Features Conduct weekly analyses of current financial headlines  Manage investment club-style fund simulation  Sponsor presentations by finance professionals and academicians  Allow students to present on topics of interest to their peers  Whatever you want!  Conclusion Questions? Conclusion  My Contact Information Zachary Wallerich  UEA –Director of Graduate Studies  FMA –UCSC Chapter Representative  [email protected]  (408) 368-0018  Thank you for listening! Sources  Kim, Gabriel, and Sarah Rodbard. Vault Career Guide to Sales and Trading. New York, NY: Vault.com, 2008.  Lott, Tom, Derek Loosvelt, and William Jarvis. Vault Career Guide to Investment Banking. New York, NY: Vault.com, 2008.  Schlossberg, Andrew R. Vault Career Guide to Investment Management, 2nd Edition. New York, NY: Vault.com, 2008.