4
Mar

Written by Julia Emilia Sanchez, IMBA08 and member of IE Finance Club
On Monday, February 25th 2008, the IE Finance Club hosted an Education Day to provide students and alumni with an overview of career opportunities within the finance field. The panel consisted of five executives from reputable firms that operate within the Spanish marketplace: Deloitte, RBS, Merrill Lynch, Gala Capital and GBS Finanzas. Each speaker gave a transparent description of the responsibilities they face on a daily basis. IE Professor, Tomás Gutiérrez, presided over the panel offering reflective insights on the overall finance industry.
This first event was organized by Tomás Gutiérrez, along with Ildefonso Bertrand Figar and Felipe Rojas, both IMBA08, respectively President and Vice-President of the Club.

Speaker 1: Carlos Robles, CFA and Vice President for Investment Banking at Merrill Lynch.
Investment Banking Structure: Carlos provided a helpful overview of the traditional investment banking structure. He explained that Merrill Lynch, like many other investment banks, has 3 primary groups: 1) Private Client Group, catering to wealthy individuals that invest upwards of 5mm. 2) Investment Manager- Blackrock, compiles pools of money for investment from different sources, both private client and retail. 3) Global Markets and Investment Banking, consisting of 3 arms: Investment Banking, Debt and Equity. The Investment Banking arm employs 2000 bankers worldwide, 600 of which are focused in Europe. Bankers are allocated across three categories: 1) Country 2) Industry 3) Product. Often times, depending on the transaction, bankers collaborate across these categories.
Investment Banking practices: Investment bankers provide strategic and financial advisory for Mergers and Acquisitions (M&A) and Capital Structure Situations. Bankers work with the top management (Chairman, CEO, CFO) of large corporate and financial institutions. They advise companies on acquisitions by providing them with strategies on how to close deals and help to value companies. Inversely, they also work in hostile situations on behalf of a company that is being acquired in order to help management strategize on the prices they should demand. Day to day, investment bankers engage in both pitching and execution. Junior level executives tend to focus on valuation analysis whereas upper management consider potential transactions and devise pitches accordingly.
Investment Banking Career path: He eloquently defined an investment banking career as


a very clear path in which “the rules are well defined“. At Merrill Lynch, the career advancement takes place in intervals of 3 years. First, an entry level candidate post-college enters as an analyst. Carlos described this role as “someone that works a lot.” In said capacity, the analyst would perform extensive financial analysis, conduct due diligence and engage in any other necessary tasks delegated by upper management. Three years later, an analyst ideally grows into a Vice President (VP) position in which he/she oversees analysis assigned for various projects and develops client presentations. The next step is a Director position that shares similar responsibilities as the VP role. Moreover, the Director also prepares to build his platform during these three years in order to rise to the Managing Director role. Once achieved, Managing Directors oversee one or two sectors within a particular country and focus on developing relationships with certain clients. In general, the other speakers reiterated similar career advancement structures within their firms.
Speaker 2: Ezequiel Szafir for Deloitte
Ezequiel described Deloitte as a “good place to start and stay”. He went on to say that Deloitte is a place where people can “smell and taste corporate finance”. Ezequiel runs the Transaction Support Services Group.
In essence when a company acquiring another company does not have a corporate finance department, they hire firms like Deloitte to help them with elaborating the deal from start to finish. Within this process, Ezequiel noted two key steps: pre-deal and post-deal. Pre-deal entails numerous types of due diligences: Financial, Tax, Legal, Operational & Commercial, Information Technology and Synergy Studies. All of these in depth reports comprise the homework required to assess whether or not to proceed with the deal. Ezequiel clearly pointed out that “transactions take a lot of work, a lot of discussion and a lot die along the way.” Deloitte has an arm of 800 consultants that the Transaction Support Services Group draws on for expertise in the areas noted above. Once a deal closes, most of the grunt work has passed and the company then shifts gears to track the progress/ensure execution.
Ezequiel highlighted four areas of knowledge that Deloitte values:
1) Accounting & Auditing
2) Treasury and Corporate Finance
3) Valuation
4) Business modeling and operations
Similar to the career timeline Carlos from Merrill Lynch described, Ezequiel pointed out that careers at Deloitte in the Transaction Support Services Group also follow a structured path. Initially, junior level employees engage in extensive analysis using excel, whereas senior level executives focus more on sales.
Speaker 3: Leopoldo Reaño for Gala Capital Partner Advisors SGECRSA
Leopoldo describes Gala Capital as a Spanish Independent Private Firm that targets the middle market transaction in the Iberian Peninsula. He proceeded to explain that 3 levers exist when trying to pursue deals in Private Equity: 1) Look for companies with a low multiple, although in Leopoldo’s opinion, this approach gained too much popularity and therefore does not work as effectively as it used to. 2) De-leverage, which means identifying large companies that can generate enough cash to support large amounts of debt. 3) The method Gala Capital employs: look at companies where there is an opportunity to double, triple them in size organically, geographically, or via acquisition.
Ideally, Gala Capital seeks to double their investment in 3 years and triple in 5 years. Leopoldo summed this practice up by saying, “D-Day is the day we sell the company, not the day we buy it.”
In order to provide a more tangible example of Private Equity practices, Leopoldo walked the audience through the four phases of an investment cycle: 1) Investment Sourcing, establishing relationships with banks, M&A houses, lawyers, consultants, owners and managers to seek out potential deals. 2) Deal Execution entails thorough due diligence/analysis, negotiations and financing of a deal. 3) Portfolio Management & Exit, means participating in Board of Directors & Executive Committees, add-on acquisitions if needed and management coaching. 4) Firm Management, producing quarterly investment reports and overseeing investor relations.
Leopoldo emphasized that his firm is very focused on meeting certain criteria when looking at investments. Last year, they looked at 150 deals, did work on 20 deals and only ended up investing a fraction of these.
In terms of recruitment practices, Leopoldo said that many associates come from backgrounds in investment banking, consulting and now they also consider candidates with line experience in relevant industries.
Speaker 4: Álvaro Camarero with RBS
Alvaro works in the Project Finance Sector and spoke enthusiastically about his experience in the field. Álvaro, a former engineer, explained that project finance can be a great way for engineers to penetrate the finance field. The entity that Álvaro works for, RBS is a lending organization that operates in both retail banking and the global banking/markets area. Project finance falls into the second category. Álvaro forms part of a team of 12 individuals that focus on the energy and construction sector. Álvaro´s role in project finance is two-fold, first he and his colleagues lend money to develop projects and secondly, they optimize risk allocation among different parties involved in the project. Like the other speakers, Alvaro reiterated the importance of conducting due diligence before entering into a project. RBS also turns to consultants such as Deloitte to help compile all the necessary data on these projects before making a decision.
Álvaro discussed the market for project finance and noted that substantial projects are developing everywhere, an encouraging point for individuals that wish to work in this field. Several Spanish companies such as Acciona, Iberdrola, etc are leaders in the world thereby generating job opportunities. Furthermore, Álvaro stressed that project finance does not succumb to volatility relative to other fields since demand for roads, infrastructure, etc. always exists.
On a closing note, Álvaro gave the audience a very comprehensive list of why he enjoys his job in project finance:
-Exposure to multi-disciplinary tasks.
-Ability to develop knowledge on legal aspects.
-Negotiation with clients.
-Originating deals.
-Modeling.
-Tangibility of projects (ability to see evolution and completion of projects the firm has financed).
Speaker 5: Juan Santodomingo from GBS:
Juan described his firm GBS as a Middle Market I-Banking institution. Alike larger institutions such as Merrill Lynch, they invest money in equity and debt instruments. The only main difference is that GBS does not hold a banking license. Juan clearly explained the 3 main divisions that fall under corporate finance category within his firm: 1) Mergers and Acquisitions (M&A) 2) Corporate Strategy 3) Debt Advisory.
Within GBS, the operations take place in 3 phases: 1) Deal origination 2) Execution that entails valuation, investment roadshows and conducting due diligence. 3) Closing: negotiation and contracts.
Aligned with the comments from the rest of the panel, he too affirmed that many hours are dedicated to research (origination) within his organization. Juan said that, “In 90% of the cases, you will get nothing…but when you do, it’s pretty good.”
In order to help the audience understand the demands of corporate finance, Juan ended his presentation with a few characteristics that he looks for in potential candidates. Foremost, previous experience in investment banking, corporate finance, private equity, corporate banking and strategic consultancy definitely gives candidates a competitive edge. In addition, GBS looks for financial modeling expertise, accounting & finance knowledge, and fluency in English.
Closing comments:
Overall, the presentation provided the audience with a great overview of different career paths within the finance industry. The speakers helped IE’s students and alumni by informing them of the resources they need to penetrate and advance within the industry. A few takeaways included: individual wishing to pursue careers in finance that do not possess backgrounds in the field should consider making an initial sacrifice and accepting an entry level analyst role in order to penetrate the business. The second key point, reinforced by Juan Santodomingo from GBS, stressed the importance of developing strong technical skills in order to work quickly and with ease on excel. Thanks to the helpful information provided by these speakers, attendees can make more informed choices regarding his/her career path.

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