Hey all, Maybe I can get some help here. I have an interview for an ibanking associate role who specializes in PIPE markets. Problem? I have no private equity, ibanking experience and am trying to make the switch from an analytical/valuation role in the energy industry with which i have 3 yrs experience. Anyone like to lend some help on what I need to focus on, and where i can quickly learn the ins and outs of private equity deal flow, structure, etc??? Thanks.
I think there are more people here who would like to hear how you landed an IB associate interview in this market, that too with no prior experience in the sector!!
Definitely! Please share your tips. 
I have no IB experience myself, but I’m guessing you have to be able to demonstrate your understanding of how below processes work: - Underwriting - IPO’s - Sydicated Loans - M&A’s My above approximation is probably on the right track. Good luck.
pingo Wrote: ------------------------------------------------------- > I have no IB experience myself, but I’m guessing > you have to be able to demonstrate your > understanding of how below processes work: > > - Underwriting > - IPO’s > - Sydicated Loans > - M&A’s > > My above approximation is probably on the right > track. Good luck. + valuation methodologies, usually 4 main ones (DCF, Comps, Income Approach, etc etc) + demonstrate your lack and need of a social life (seriously) + while soft skill questions are not asked often, be sure to have an answer for what drives you I have had two IB interviews that came up empty. These are questions that came across in both of them.
As far as how I got the initial opportunity, I have a well documented resume, and I followed up with a vm to the MD expressing my passion and interest. Now, as far as what I need to know, thanks for the input pingo and ditchdigger. Is there something somewhere (ie books?) i can learn about this quicky, or simply doing the internet research. My knowledge in these areas is pretty much limited to my CFA knowledge (ie no hands on esperience) except for a few small M&A deals. “demonstrate your lack and need of a social life (seriously)” What do you mean by “lack and need”?? Anyone else care to share some knowledge, experiences??
http://www.wallstreetoasis.com/ http://www.ibankingfaq.com/category/about-investment-banking/ http://www.mergersandinquisitions.com/
How long is your interview? I have only had two 30 minutes (unsuccessful), and as I am reflecting now, whatever was in the CFA books would have been enough to make me sound pretty knowledgeable. If it’s going to be long (1hr+) I would look up a merger case. For e.x. try News Corporation buy up WSJ (pretty recent) or Google buying up Youtube, or the case Lehman where Barclay’s acquistion DIDN’T happen. Go through the process of raising capital: - How did they raise money? Ratio between corporate bonds and issuing of shares (seasonal issues as opposed to an IPO) -In the case bonds, will they be only one IB involved, or more than one in order to reduce exposure (syndicate) -What was the cost of capital and what were the market conditions at the time that made them arrive at this rate (Treasury rates, yield spreads, all those risks) -Any options or convertibles in the issues? (affecting the price of bonds or the cost of equity) Now, in the acquiring process: - how did the buyer value the one being acquired? Book value per share? -Any corporate governance issues with the shareholders of the firm being acquired? Regulatory approval: I’m from Australia so I’m unclear as to which American institution approves M&A’s (the SEC?) But anyway the market share of the new company must stay within the limits of what would constitute ‘competition’ in the industry’s market, and make sure that it is not in a position to take advantage of its market power. This is what I can gather so far from what I’ve researched. I haven’t found a comprehensive internet website that outlines what is exactly happening in IB, or what it is that they do. So I can only say this is my educate approximation. Any professional welcome to comment.
Dont underestimate the ‘fit’ part of the interview… go in with an informed opinion about economic environment local and global research the backgrounds of the interviewers - their interests and see if there might be a common theme Always be Selling. Good luck…
Thanks all for the feedback. Firstly, this is a “pre interview” with an MD so I think he’s going to feel my out as far as my knowledge of m&a given that I lack the hands on eexperience so thats what im focusing on. I do understand the basics, but what I don’t fully grasp is such things as how banks arrive at how a company acquires another. By how, I mean whether the use syndicated loans, raise equity, LBO, etc. given current economic environment. I know there is no single right answer, butI need to know how the bank values the options in terms of financing. Right now, credit markets are tight, raising NEW equity is tough and generally not favorable, and most balance sheets dont have tonnes of cash kicking around for these acquisitions. So what are companies who find a good target supposed to do? Anybody care to weigh in? I know restructuring and other services are offered too, but im curious on the M&A front more specifically, and in a broader sense, raising capital period. I want to be able to speak intelligently on how companies can be a little more creative in thsi environment to raise $$$. Thanks again, gotta go study…
if they specialize in PIPEs also, I’d definitely get familiar with that space. There has been an incredible amount of new regulation and litigation (deephaven, gryphon come to mind off of the top of my head) over the last few years with regard to hedge funds in the sector-the timing of the borrow/short, not collapsing shorts w/ the PIPE stock/convert, death spiral financing in general, etc. I would think this market right now would be pretty dead- it’s all but done in the HF sector anyways. I can’t speak that much about PE or I-banking with regard to it. but if that’s their specialty, i’d definitely read up- a ton has changed in the PIPEs industry in the last 1-4 years or so. and everything else above is solid as well. good luck.
“I know there is no single right answer, butI need to know how the bank values the options in terms of financing. Right now, credit markets are tight, raising NEW equity is tough and generally not favorable, and most balance sheets dont have tonnes of cash kicking around for these acquisitions. So what are companies who find a good target supposed to do? Anybody care to weigh in?” This answer lies in private equity and venture capital. IB are in frequent contact with these parties. This is why valuation methods are so important. PE/VC firms are excellent at finding value, so the IB must be credible and relevant in their valuation.