Welcome to the Finance Club Kickoff Meeting Ross

Welcome to the Finance Club Kickoff Meeting Ross School of Business University of Michigan September 2005

Agenda Overview: q Financial Services q Timeline q Finance Club Overview Functional Areas: q Corp Finance q Investment Banking q Research/Asset Management q S&T q PWM Wrap Up q To Do’s q Company Presentations 2

Financial Services Landscape EVC Club –Venture Capital –Private Equity –Turnaround Mgmt. Finance Club –Corporate Finance –Investment Banking –Capital Markets – Syndicate –Research –Sales & Trading –Asset Management –Private Wealth Mgmt. 3 Investment Assoc. –Asset Management –Equity Research –Inst. Sales & Trading –Private Wealth Mgmt. –Personal Investing

Internship Search Timeline It’s Sooner Than You Think Sept. / Oct. Company presentations Form study groups, review Course pack, and begin profiling potential employers October 14 Resume deadline for i. Mpact Oct. 18 -21 1 st Term Final Exams Oct. 24 -26 Wall Street Forum Nov. / Dec. Ross Corporate Finance Forum Informational interviews Jan. / Feb. On-campus interviews! 4

Finance Club Overview “The Finance Club is a student-run organization that provides members interested in finance careers (or finance-related) the resources, tools, and guidance needed to successfully reach their professional goals. ” q Members of the Finance Club have a strong commitment towards building Michigan’s brand in Finance. q Your Resources: § § § OCD Alumni Faculty Second Years Each Other 5

Quotes from Alumni & Recruiters “The Finance Club at Michigan is the best of its kind in the nation because it has to be. ” “If you have to, miss a class. NEVER miss a Finance Club meeting. ” “The most successful students are those that treat the Finance Club and the recruitment process as a fifth class. ” “Sometimes we like to ask individuals what they did in Finance Club over the past week just to see if they have been preparing themselves” 6

Corporate Finance q CFO and management team § Forecast revenues/expenses - budgeting § Invest in projects to maximize shareholder value q Treasury § Cash management, Invest excess cash q Controller § Internal auditing q Risk Management § Country risk § Market risk q Strategy and Business Development 7

CF - Just the Facts Corporate Finance Firms Where Hours Major corporations across industry, and banks North East, Mid-west, West Coast 8: 00 am to 5: 30 pm Pros Lifestyle, work-life balance, C-level exposure, overall view of organization, CFO/CEO track Cons Can get monotonous, some positions potentially heavy on accounting, steady pace 8

Investment Banks q Raise debt and equity capital for clients § Maintain active securities markets enabling cost effective distribution q Financial advisory services § Mergers & acquisitions § Divestitures § Restructuring q Merchant banking (private equity investment) q Syndicate: selling securities to “the street” 9

Investment Bankers q Perform industry analysis q Create quantitative models to determine return on investment for all stakeholders q Perform sensitivity analyses based on different scenarios q Offer the client multiple financing options q Leverage the Capital Markets to execute these proposals 10

IBD - Just the Facts Investment Banking Firms Top investment banks Where Primarily New York, also Chicago, L. A. , San Francisco, London & Hong Kong Hours 9 am to whenever: expect 80+ hr. weeks Key Firms Citigroup, CSFB, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, National City, Piper Jaffrey, UBS Pros Challenging, fast-paced, top company interaction, strong compensation Cons Very demanding, less work-life balance, can be stressful, job security directly tied to the market 11

Research / Asset Management Research q q Also known as a Sell-Side analyst Generates investment ideas for investors Conducts fundamental analysis of companies within an industry Identifies factors and trends that drive a company’s or industry’s future growth and comments on valuation of securities q Examples: CSFB, Morgan Stanley Deutsche Bank Asset Management q Known as the Buy-Side q Manage a portfolio of securities for other investors q Buy-Side includes § Mutual funds, Pension funds, Insurance companies, Hedge funds q Examples: Fidelity, Janus, Oppenheimer, Apollo 12

Research - Just the Facts Sell-side Buy-side Firms Typically I-Banks Fidelity, Janus Where Primarily New York Everywhere Hours 7 am to 7 pm, plus weekends 7 am to 5: 30 pm, no weekends Pros Pay, entrepreneurial, access to top executives Pay, excitement, work/life balance, clear reward system Cons Long hours, hard to differentiate research Difficult to find jobs, tough market cycles 13

Sales & Trading q Represents the public or secondary market where investors can trade securities q Traders “make markets” in securities, providing liquidity to the market q Salespeople build relationships with the buy-side to draw trading business to its bank q Trading and sales desks must work together to be successful; many internship programs include rotations in both 14

S&T - Just the Facts Sales Trading Firms Top investment banks Where Primarily New York Hours 7 am to 5: 30 pm + some evenings 7 am to 5: 30 pm, no weekends Pros Pay, expense account lifestyle, entrepreneurial Pay, excitement, camaraderie, hours, clear reward system Cons Intensity/stress, insecurity, cyclical Intensity/stress, insecurity, narrow focus 15

Private Wealth Management q Develops and manages relationships with wealthy investors q Markets the investment services of the firm q Advises clients on investment opportunities q Analyzes client portfolios q Additionally, provides advice regarding banking, lending and wealth transfer needs 16

PWM - Just the Facts Private Wealth Management Firms Top investment banks Where Primarily New York, but smaller offices in most major cities Hours 7: 30 - 6: 30 at a minimum - no weekends Key Firms UBS, Citigroup, Goldman Sachs, JPMorgan, Lehman Brothers, Northern Trust, Bessemer Trust, Morgan Stanley Pros Intellectual challenge, fast-paced, strong compensation, entrepreneurial, personal relationships with clients Cons Very demanding, solely responsible for P&L - need to have a strong grasp of a wide range of products and areas, not just investments 17

CONFUSED? q Conduct Self-assessment- interests, skills, sacrifices q Schedule OCD counseling appointments q Realize that finance is a wide field offering many different and exciting opportunities q Learn more about the functional areas q Ask questions- DUMB ONES TO US, smart ones to recruiters q Second-years are your best resources for information and first-years are your partners 18

To Do’s q Company presentations begin tomorrow q Resume book deadline of October 14 q Start forming study groups q Sign up for Fin. Club 06 q Go to the Finance Club Website q Sign up for Finance Club 19

Company Presentations q On a daily basis, go to OCD Events and look up which companies are coming when – look for “Office Hours” too q Attire is business casual for every event unless stated q Research a company’s web page before they arrive (vault, wet feet, etc… are also great resources) q Ask great questions that show your knowledge about the company, industry, and market – stay away from personal/specific questions! q Be a good, courteous listener: § Do not walk around/leave § Do not talk § Do not disregard proper event attire § Do not eat food § Do not ask poorly thought out questions § DO NOT HAVE YOUR LAPTOPS UP § DO NOT HAVE YOUR CELL PHONES TURNED ON 20

Company Presentations q Be able to “talk the talk” q Read Wall Street Journal everyday q Review company/bank websites § Company overview section / investment bank § Investor relations / press releases § Investext for analyst reports, Vault. com, Wet. Feet q Be able to articulate early on: § Why do you want to do IB? § Why XYZ bank? § Tell me about yourself q Most important: listen, learn, and don’t eliminate yourself 21

Company Presentations q Good Questions: § § § Questions about their internship program How the bank is organized Questions about the bank’s strategy Deals bankers have worked on Trends in the investment banking industry q Bad Questions: § Too detailed – “Why did your bank’s credit card net income decline by XX% in the third quarter? ” § Too vague / easily researched – “How big is your investment bank? ” 22