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UCLA Anderson Investment Banking ACT Group Session 1

10/1/2011

IB Recruiting Timeline

November 4th - December 13th: Company Presentations

October 18th: Resume due for Parker Resume Book October 19th and 20th: Training the Street Valuation Workshop

Companies will be on campus with presentations followed by networking events

October 21st: Investment Banking Career Night

Overview of valuation methodologies Recruiting process kicks off

November 14th and 15th: SF DOJ

Date TBD: NYC DOJ

Visit banks in their San Francisco, Palo Alto, and Menlo Park offices Visit banks in their NYC offices Study interview questions

Winter Break:

January 2-3:

January 3:

Career Preparation Week

January 6th 10th:

Training the Street Interview Prep Mock Interviews First round interviews begin

January 13th:

IB Resources
Investment Banking Overview

Research and Valuation


WSJ Dealbook
http://dealbook.nytimes.com/

http://www.mergersandinquisitions.com/ Parker CMC website Parker CMC website

Mergers and Inquisitions Vault Career Guides Wetfeet Career Guides

The Deal Pipeline Capital IQ

Rosenfeld Library Database Rosenfeld Library Database

Investment Banking Valuation, Leveraged Buyouts, and Mergers & Acquisitions by Joshua Rosenbaum and Joshua Pearl ACT Dropbox

Investext (Thomson Reuters)


Rosenfeld Library Database

PE Hub Wire

Free daily e-mail http://www.pehub.com/pewire-signup/

Please inform your ACT coaches if you do not have access

Investment Banking

What is Investment Banking


What is investment banking
Investment banking, or I-banking, as it is often called, is the term used to describe the business of raising capital for companies and advising them on financing and merger alternatives. Capital essentially means money. Companies need cash in order to grow and expand their businesses; investment banks sell securities (debt and equity) to investors in order to raise this cash. These securities can come in the form of stocks, bonds, or loans. Once issued, these securities trade in the global financial markets.

Investment Bank Structure


Corporate Finance (equity) Corporate Finance (debt) Mergers & Acquisitions (M&A) Equity Capital Markets Debt Capital Markets Equity Sales Fixed Income Sales Syndicate (equity) Syndicate (debt) Equity Trading Fixed Income Trading Equity Research Fixed Income Research

Source: Vault Career Guide

Investment Bank Structure


Traditional Investment Banking Capital Raising Debt Equity S&T Distribution and execution arm of I bank Sells and trades stocks and bonds Manages the firms risks and makes markets for the securities underwritten by the I bank. Research Analysis and recommendations of stocks and bonds Includes company Coverage and Sector Coverage

Strategic Advisory M&A Takeover Defense Restructuring

Banking Functions
M&A
On the mergers and acquisitions (M&A) advising side of corporate finance, bankers assist in negotiating and structuring mergers between companies. If, for example, a company wants to buy another firm, then an investment bank will help finalize the purchase price, structure the deal, and generally ensure a smooth transaction. In the last few years, the M&A market has been white-hot, as companies have large cash balances with which they can complete strategic transactions.

Underwriting
The underwriting function within corporate finance involves the process of raising capital for a company. In the investment banking world, capital can be raised by selling either equity (stocks) or debt (bonds or loans) (as well as some more exotic securities) to investors. Underwriting is unique, in that it involves the investment bank assuming a large amount of risk. Essentially, in the case of a bond offering, you can think of the process of underwriting as an investment bank writing a check to a company, then raising the funds in the markets from investors. This means that the investment bank assumes the risk of the transaction not selling in the market. Think of this as buying pizza for friends and relying on them to pay you back. If youve ever done this, youve underwritten a transaction.

Source: Vault Career Guide

Product vs. Coverage Groups


Product Group
Product groups always work on a specific deal type, such as M&A or debt, across all different industries examples include: Mergers & Acquisitions Equity Capital Markets Debt Capital Markets Leveraged Finance Restructuring So if youre in the M&A group, youll always work on acquisitions of other companies across all industries Product groups get to know specific transactional models merger models or LBO models really well, but wont do much outside that and wont learn an industry in as much depth.

Industry Groups

With industry groups, by contrast, you work within one industry but on many different types of deals equity, debt, M&A, and so on. Examples include: Healthcare Natural Resources (Oil & Gas and Mining) Technology, Media & Telecommunications (TMT) Financial Institutions Group (FIG) Industrials Industry groups focus more on knowledge of the industry, what different companies are doing, and building operating models (3-statement models) for companies.

Source: Mergers and Inquisitions

Product and Coverage Landscape


TMT Consumer/Ret. Financial Sponsors Industrial Healthcare Financial Inst. Group Energy/Power Gaming Leisure

M&A

Leveraged Finance

Restructuring

Equity Capital Markets

Debt Capital Markets

Major Players that Recruit on Campus


Bulge Goldman Sachs Morgan Stanley Bank of America Merrill Lynch JP Morgan Deutsche Bank Credit Suisse Barclays Capital Citi UBS Middle Market RBC Wells Fargo Houilhan Lokey Jeffries Piper Jaffrey Boutique Lazard Moelis Demeter Group

Deal of the Week


Deal of the Week 3-5 minute overview of a recent deal
Buyer / Seller Revenue, EBITDA, Market Cap Deal Size Payment Method / Deal Structure Advising Banks Deal Rationale Market Reaction

Deal can be M&A, debt or equity offering, or other transaction Please send your ACT coaches your deal research the night before your assigned meeting

For Next Week


Continue working on 30-second pitch Continue refining your resume for IB Begin reading WSJ everyday Sign up for WSJ Deal Alerts Begin reading Vault Guide Read following fit questions from 400 IBD Questions and begin working through your answers. We will go through these next week

Sign up for Deal of the Week before you leave

Why Banking? Background / Personal Walk me through your resume Career switcher questions