Beta Series on Finance

The Journey Begins...

Why do you want a career in Finance

Why SHOULD you want a career

in Finance?

Because
It is a high-impact job
It is a high return, high risk occupation
It will challenge you on a constant basis
rarely is your work boring!!!
It is a profession which keeps you on the
cutting edge
- and obviously, there is money lots of
it!!!

Why SHOULD you NOT want a

career
in Finance?

Because
It is a high risk high return profession
It is a profession which gives you very few
second chances
You would prefer a relaxed lifestyle life
in financial services can be cruelly
intense!
You think there is better use to your
creative edge than using your ingenuity
to engineer cash flows

Clearing the air. a bit!

I am good with numbers. Is it not obvious that
a career in finance is ideal for me?
Maybe, but not necessarily!!!
Finance is not a profession which allows you to
express your creativity
Disagree
I enjoy marketing courses a lot. I dont think I
am cut out for finance
We think you are crazy!!!

Clearing the air. a bit!

Finance is another name for rocket science
FRA quizzes are no indication of your prospects in Finance
I have no relevant work experience, neither have I
appeared for CFA/NCFM/ABC/DEF/GHI and I am not from
a commerce/economics background. I do not think I can
compete for Finance roles
Just look at Team Beta!!!
I dont like marketing and I dont have the famous
spike in my resume required for consulting. Hence,
financehere I come!!!
Dudeyou are in big trouble!

How does an investment

bank work?
Clients Seeking CapitalIntermediary Directing / Facilitating the Flow of Capital Investors With Capital
INVESTMENT MANAGEMENT

PUBLIC
COMPANIES
E.g. Reliance

(Private Wealth / Asset Management)

INVESTMENT BANKING
Advisory

Financing

Groups

Group

Country
Teams
PRIVATE
COMPANIES
E.g. Unlisted
Companies

Industry
Teams

MERCHANT
BANKING
Traditional Private
Equity Fund

Debt Product Real Estate Private

Equity Fund
Groups
Equity
Product
Groups

MARKETS

INSTITUTIONAL
INVESTORS
E.g. ICICI Mutual Fund.

Sales
Trading
Strategy
Structuring

Infrastructure
Fund

RETAIL
INVESTORS
E.g. You and Me

Derivatives

GLOBAL INVESTMENT RESEARCH

GOVERNMENT &
AGENCIES
E.g. Delhi Metro

Operations, Technology
& Finance

Human Capital
Management

Legal/Management
Compliance Controls

*Including Services

Chinese Wall

GOVERNMENTS
& AGENCIES
E.g. LIC

Roles in Finance

Roles in Finance
Capital Markets
Investment Banking Division
Corporate Finance
Venture Capital & Private Equity
Private Wealth Management
Insurance
Finance in Social Businesses

Capital Markets

Sales
Structuring
Trading
Research
Sales-trading

Trading
Work
Marketmaking
Providing Liquidity to
clients
Managing risk
Earning spread

Proprietary Trading
Use Firm capital
Take views on the
market

Required Skill Set

Ability to handle stress
Thinking on your feet
Understanding market
events
Analytical and
quantitative skills
Product Knowledge
Networking

Sales
Work
Provide clients for
traders
Pitch trade ideas and
research
Build client relationships
Interact with clients to
identify their needs
Fulfill client requests for
market updates and
prices

Required Skill Set

Excellent
communication skills
Outgoing personality
Ability to think on your
feet
Basic product
knowledge

Sales Trading
Work
Dual role of sales and
trader

Required Skill Set

Good communication
skills

Trades smaller blocks

of securities
Initiates call to clients

Understanding of
market events
Understanding of
specific processes at
exchanges
Analytical skills
Product Knowledge

Structuring
Work

Required Skill Set

Create customized
investment products based
on

In depth product
knowledge - Sound
theoretical base

Client needs
Market conditions

Provide risk management

solutions to clients
Modeling and back-testing
of framework
Liaise with Sales to pitch to
clients

Good quantitative and

modeling skills
Ability to grasp client
needs and apply
theoretical knowledge to
produce customized
solutions

Research
Work
Analyze market events
Stay on top of market
events/ companies
Devise trading
strategies
buy/sell/hold
Convince salespeople /
buy-side clients
Brand building of firm

Required Skill Set

Analytical skills

Number crunching
ability
In-depth knowledge
of Sector/Product
Sales skills
Ability to read
through news&
events

Life in Markets
Good work hours: 12-13 hrs a day
Work is more of a sprint than a marathon
Weekends are generally off as work hours are related to
market hours
Compensation is directly linked to performance as bonus is
a bigger component of overall compensation
A good year in the markets can earn you enough for a
lifetime
Limited Exit Options
High risk of losing ones job in a bad year riches-torags story

 Practice puzzles, a good source - Heard on the Street

Courses to follow - Financial Markets, FRA, MC,

Macroeconomics
Books to follow Brealey Myers, Hull
Beta/Placecomm repository

Quantitati
ve
Aptitude

Domain
Knowledg
e

Market

Reading Financial Press

Knowledg
Follow key market indicators like SENSEX, LIBOR, Fed Rates,
e
S&P 500
Analyze effect of market events and data

Preparation

Investment Banking
Division

Mergers &
Acquisition
s

Equity
Capital
Markets

Debt
Capital
Markets

For all sectors Telecom, Real

Estate, Auto

Investment Banking
Division
Work

Required Skill Set

Attention to details
Knowledge of Corporate
Finance
Good presentation skills

Capital Raising

IPO/FPO, Debt

M&A Advisory

Investment advisory

Pitching potential
opportunities to PE firms

Financial Advisory

Pitching potential deals to

corporations

Restructuring/ Distressed
Sale

Proficiency in Excel
Work well under stress
Ability to network
internally and externally

Life as an I-Banker
Experience of working in a range of sectors
Possibility of working with the CFOs/Promoters
Attractive Remuneration
Several exit options.
Hedge Funds, PE Firms, Corporations
Hectic work hours: 15-20 hrs a day
Work is like a marathon with sudden spikes
On bad days, there is nothing called a weekend!!!

 Knowledge of different valuation techniques and their usage

High comfort level in understanding accounting (FRA)
Source: BETA REMs, PLACECOM Repository
Books: Brealey Myers, Damodaran

Knowledge about key M&A deals and IPO offerings

Understanding about valuation and funding structure about such deals
Reading Financial Press
Source: VCcircle, Dealcurry, newspaper

In depth information about 2-3 sectors

Key parameters like growth drivers, revenue drivers and cost drivers
Update about happenings in the last few months

Technical
Knowledg
e

Deal
Knowledg
e

Sector
Knowledg
e

Preparation

Corporate Finance
Work

Required Skill Set

Performance
management and
control
Business initiatives
and projects
Treasury and fund
management
Capital raising
Statutory compliance

Comprehensive
understanding of
concepts of corporate
finance
Clear grasp of business
insights
Working knowledge of
Compliance matters
Relationship
management and
networking skills

Life in Corporate Finance

Lifestyle
Standard work hours
Monthly/ Quarterly / Annual pressures
Meeting with Investment Bankers/Key
Investors

Career Path
CFO, Head of Corp. Fin.
Head of a region / business function
Head of M&A / Strategy
Lateral movements

Preparation

Venture Capital and

Private Equity
Private equityis money invested in
companies that are notpublicly traded

Venture Capital and

Private Equity
Work
Find investment
opportunities
Pick companies to
invest in
Negotiate deals
Monitor and advice
invested companies

Required Skill Set

Analytical skills
Networking
Team player
Good Communication
skills
Knowledge in all
business areas and not
just finance

Preparation

Life in PE
Immense learning opportunity

Exposure to various sectors

Diverse aspects of business

(Market diligence, Financial modelling, Management of operations,

Strategic initiatives)

High paying job with compensation linked to individual

performance & Companys overall performance
Weekends depends on the amount of live deals
Intensive work hours (80-100 hrs a week)

Private Wealth
Management Sales
Role
Work

Required Skill Set

Frequent interaction
with clients

Good communication
skills

Liaising with the

investments team to
push new products to
the clients

Ability to strike deals

Monitoring the
portfolio of your
clients

Need to be very
proactive to maintain
your client list
Knowledge of various
asset classes and
investment products

Private Wealth
Management
Investments Role
Work

Required Skill Set

Designing
customized products
for the clients such as
Structured Notes

Sound knowledge of all

the investment products

Includes client
interaction
Launching new
products

Ability to negotiate with

various vendors such as
fund managers
Good knowledge about
the yields on different
asset classes in
domestic market

Life in Private Wealth

Management
Reasonable work hours (50-60 hrs a week)
No work on weekends
Opportunity to acquire good knowledge about the
domestic markets
Large part of compensation linked to your
performance and the teams performance

Preparation
Knowledge of Different Asset Classes
Pros and cons of investing in different asset
classes
Portfolio Theory
Sound knowledge of derivative products
Knowledge of Current Market Trends
Current yields of various investment products
Basic idea of regulations around various
products
New products coming into the markets

Insurance - Investments
division
Work
Investments constrained
to Equity and Government
debt instruments
Creating investment
strategies
Analysis of market data

Required Skill Set

Analytical and
Quantitative skills
Excel skills
Basic understanding of
markets

Analysis of specific sectors

Preparation : Similar to that of capital markets.

Finance in Social
Businesses
Intermediaries in Microfinance
Providing Liquidity and access to debt capital markets to
Micro Finance Institutions

Work
Securitization of MicroLoans
Modeling , Risk analysis and
Pricing of the securities
Credit Structuring
Research, Product Design
and Development

Required Skill Set

Basic product
knowledge
Excel skills
Analytical skills