Six Key Things I have Learned in Investment Banker

After six months, I have learned the following things about Investment Banking: 

1. Have a good website www.performcap.com that lists your transactions.

We updated our website with the help of one of our clients, http://appiphanytech.com/, who happens to be a digital media and design guru. It has been attracting a lot of interest from companies and also good people looking for work. The latter is unfortunately a sign that the financial job markets are still poor. 

2. Which deals attract interest, like the capital markets, is part art and part science. One thing is for sure, good value and strong growth attracts interest. 

Right now high tech and IT are very hot in the markets, and those are the deals where we are seeing a lot of interest and traction. Especially in the venture capital / startup space. Commodities and mining are suffering in terms of deals and financings. Even the best "value" financings are having a hard time competing. 

3. Mergers and acquisitions are really fun to work on. 

Maybe I am turning into a deal junkie, but I really like mergers and acquisitions, and luckily it is Performance Capital's focus. They are easy to rationalize (Grow Revenue, Grow Earnings, Horizontal Markets, Vertical Integration) and there are a lot of good companies out there that are struggling because of lack of financing, so a bit of a buyers market.

4. Brokers don't have very long attention spans. 

We work with a lot of brokers to complete financings of our mergers. They get pulled in a lot of different directions because they are following the market, looking after their book / other people's money, and also hearing pitches from companies.  

5.  A main role of an Investment Banker is to write good paper. 

At the end of the day, an Investment Banker writes and creates Confidential Information Memorandums, Discussion Papers, Corporate Presentations, Pitch Books and a lot of models outlining financials and transactions. These "papers" outline the value of the deal, and getting good at creating good paper is one of the key values an Investment Banker brings to the transaction.

6. The most important qualification in Investment Banking is the sheer desire to get the transaction done. 

The most successful people I have met in the industry do not stop until the transaction is done. As an example, Gordon has been working on a deal for the past six months, and although it took a while, it is finally getting very good traction. I have also been talking to people from some of the big hedge funds, private equity funds, and they all have a strong work ethic. 

Speaking of sheer desire and motivation...  I finish my CFA Level II exam on June 2nd. I still have a lot of prep to do. In the next three weeks, I have one more book to get through, go back and review the other five volumes and take a dozen or so practice exams. 

So, it maybe a few more weeks until I seriously get back into writing again. 

General Update

It has been a while since I wrote a blog update, mostly because I have been overly busy doing a few things:

• Working Part Time at an Investment Bank (www.performcap.com) 
• Job Hunting and Interviewing
• Studying for the CFA Level 1,  test in December
• Starting a new internet venture
• Doing Outplacement Coaching with KnightsBridge 

So, first things first, I am working part-time at an Investment Bank!!! I got introduced through a friend in Vancouver who runs his own Investment Bank and advisory services firm in Vancouver. It is part-time work with him through the fall/winter. There are a lot of companies that are out there that need equity investment, and our job is to find them the money. He has an amazing track record and I am doing a lot of the execution while he does business development. 

So far, I have worked on two capital raises, one for a middle-market small wind manufacturer and the other a new smart-grid home automation. Additionally, I have been heavily involved in a merger of two high tech firms that we introduced to each other. They are just going through due diligence now, and once that is completed, we will be doing another equity raise for the NewCo. There will likely be some follow on management consulting to work through the change management of the merger. It is good experience for a longer term goal of Private Equity, or I may just stick with this. 

I pretty much gave up on job hunting in NYC in middle of October in the field of Private Equity and Investment Banking. I understand why people are Occupying Wall Street; the job market sucks. I did the best I could while in NYC... I networked like a ninja, I met some amazing people, who introduced me to more good people, I met with the big firms, I chitty chatted, I was inside every Starbucks in Lower and Middle Manhattan.

I did one mail merge (i.e. Spam) to hundreds of people that work in firms that I would like to work in. So far I have covered firms starting with Numbers, A & B, which was 500 contacts. Out of 500 contacts, I received 3 call backs and I still have C-Z to contact. One of those call-backs is a turn-around Private Equity firm. They are starting a new fund in January and will be looking to hire a few people in that time frame to start looking for new businesses/assets and then turning them around (drool/dream job).  It got me thinking, that my resume should really be marketing myself as a "turn around" specialist, given that I worked as a manager in 4 different roles, making the programs high performing. 

I started working on my CFA Level 1 in October. The test is in December, in two weeks. There are 4000 pages of material to cover. I have covered 3600 pages to date, and still have 400 to read. I have yet to do a practice exam. I am using Analyst Notes as my study aid package because the books don't have enough practice questions in them and can be, uhm... verbose. Starting to study in October was a huge huge mistake. The CFA suggests 600 hours, I likely have done 300 hours, and 600 hours is probably right.  I should have started simpler, with something like the Canadian Securities Course. A friend who I did my MBA with suggested that way back in June, and I really should have listened to him. 

Next week, I start outplacement coaching with Knightsbridge here in Vancouver which should be an amazing experience. I already did a Birkman personality assessment and the number one job family is: Consultative Intangible Sales such as Marketing and/or sales of intangible products or services; include stocks and bonds sales, medical services sales, bank marketing. Interesting. 

 

Now, I have to admit, that I am starting to miss the salary and stability I had working as a Senior IT manager in large companies. The money was good, the work was good, the people were fun and it certainly wasn't as cyclical as working in Investment Banking. My resume as an IT Manager is "out there" and I get called quite a bit, particularly from the NYC job boards for some pretty interesting roles. I am throwing my application in for choice jobs in the field I do see. It is tough to ignore 10 years+ of experience in that area, a degree in electrical engineer / control systems, the salary and benefits that go with it. Career Hedging vs Financial Hedging. Real Engineering vs  Financial Engineering. Hmmm...

All the best*

-Brian. 

* Free Tip... everyone involved in investment banking ends their e-mails with "All the Best" or "Best" 

Focused Job Search Plan

These days I am thinking that career searching as a part of life... I have only ever worked for two companies, and both of them I didn't really look all that hard for the job. Over the past year, I have noticed almost all of my friends have gone through some type of job change. Also, quite a few of them are currently unemployed, which works really well for a mid-week night out on the town! A lot of them are hitting it hard, and others not so much. It takes a lot of stamina and motivation to continually job search. 

Although I am no expert, but what keeps me motivated is I have set and written out a vision for my life 10 years from now. It is specific, in that it details how much money I want to make, and what type of job, friends and where/how I want to live based on things that I value. I also have a list of 5-10 values, much like a company has value statements, and these values help guide my choices in terms of where I want to put my energy in terms of commitments I make to myself and others. Based on the 10 years from now projection, I have written 5 year and 1 year projection. From there, I have created a commitments list that details what I want to do to achieve that 1 year projection. Knowing that my current commitments (i.e. actions) are getting me towards my end vision really keep me motivated. 

A couple of other things that keep me motivated are really believing that I will achieve the 10 year vision. When I really believe in something, my mind comes up with interesting ways to achieve that belief, and I create more commitments towards more goals. 

Below are my current commitments for the career search. Note, this is now a month into my job search, and some of my previous commitments included updating my linkedin, creating this blog, researching alumni connections, getting business cards, etc. 

Commitments: Career Search

-read PE Hub, WSJ and twitter feed daily (wifi) XXX

-review contacts tracker and complete follow-ups (wifi) XXX

-apply to jobs on e-financials and Queen’s weekly (wifi) XXX

-research other private equity firms in NY and apply for positions that specialize in energy, ITsec based on PEHub, DealBook and WSJ articles(wifi) XXX

-review Canadian pe and vc firms, create a list I want to target (laptop)

-create a list of private equity / venture capital meetings, training and conferences. Register for relevant and add speakers/organizes to contact tracker for outreach  (wifi)

-reach out to korn ferry, heidrisk & struggles, ludwig, vlaadco recruiters (wifi)

-write a blog post every other day and then post to twitter, linked-in, etc (wifi)

-reach out to professors and ask about resume advice and informational contacts (wifi)

-Summarize the Career Leader in Post MBA Journal ()

-update Edgar’s linked in profile (laptop + edgar), target (wifi)

-find other Canadians in NYC that work in industry (wifi)

Legend: 

XXX - Priority / do almost every day. 

(etc) - What type of resources I need to do the commitments

All the best, 

-BSM. 

Summer Associate Programs -- The Last Minute Recruit

Happy Post-Independence Day and Happy Post-Canada Day, and for all the other Countries in the Northern Hemisphere, I believe an amazing summer is ahead. I took the weekend off of job hunting, which I have now done for the past three weeks, and basically disconnected from the world, on a beach on Long Island. It was a nice mix of friends, parties and relaxing. 

Before the long weekend,  my goal was to try to land a summer associate program at one of the major banks. Every summer, the large banks take fresh MBA graduates and put them through a couple of months of training about the bank, and then they go through rotations around the firm for several years until the perfect fit is found. I spent several days of last week contacting all the campus recruiting directors at the big investment banks in NYC.

The recruiting for these associate programs usually happens in the fall. I was working full-time and going to school full time for my MBA while the recruiting was happening. Like most people in my class, I wasn't really paying attention; school and work was enough. Recruiting for the Associate Programs is pretty much solely targeted towards full-time MBAs. I think this is a failing of the Administrators of part-time MBA programs and banks are also missing out on attracting good talent. 

Despite missing out on the recruiting season, a friend of mine suggested that I contact some of the IBs and see if there were any last minute cancellations or openings into the program. The vast majority of them start the first week in July. So, I started with a linkedin search of all the campus recruiting directors at the large firms (Goldman, Barclays, UBS, Nomura, JP Morgan, Deutche, Credit Suisse, CITI,  Bank of America / Merrill Lynch,  RBC). At most of the firms I was able to speak to someone in HR and they all pretty much said that at an analyst level, perhaps they wold look at a last minute recruit, but not at the associate / post-MBA level. My couple of days of effort was not wasted. I made several great connections with HR recruiters that advised there were looking for experienced managers for associate roles. So, I have closed out the task to try for a summer associate program, and will be actively pursuing those opportunities this week (I am developing a networking approach for some of the more interesting roles and I will see how it goes). 

As a coincidence, I met with a fellow university alumni this morning for coffee in midtown, and there was a sign in the Barclay's lobby that said "Welcome 2011 Graduates to the Associate Program" There was obviously a certain feeling of satisfaction in knowing that I had tried to get in, instead of wondering what could have been! 

As a side note, there is a great coffee shop called the Financier Patisserie, with quiet outdoor seating and amazing coffee on 6th Ave and 48th st. Check it out if you need a little respite just north of Times Square. 

Location of Financier Patisserie

-BSM. 

My Initial Contact E-Mail

I learned a huge lesson over the past few weeks on the importance of the format of the initial contact e-mail. Short and sweet is way better than trying to personalize or give an explanation. I learned this hard way, wasting valuable time and giving up the opportunity to meet amazing new people! 


Several weeks ago, I sent out two waves of e-mails to alumni. The first wave my e-mail was tailored to the individual and had an explanation of what I was looking for, either a role in Private Equity, or if they were in Investment Banking, financial sponsorship / project sponsorship. Crafting these e-mails took a lot of effort because I looked up the person on LinkedIn, and based my e-mail on their profile. This was also the exact advice that a career coach gave me, and my e-mails were based on a sample in a leading career search book. After about 20 of them over 4-5 hours, and realizing that I had about 20 left to go, I went with a much shorter e-mail that wasn't really tailored. My response rate to the shorter e-mail has been amazing (like 15/20 of the people responded), as opposed to the longer e-mail where only 2/20 ever responded. 


So... huge lesson learned on two fronts (my time and response rate). Keeping it short is way faster to get out the door and also yields more results. If the job trail goes cold, I will have to go back to those initial contacts and try the shorter e-mail for my second touch. But, on that note, it is unlikely, I now have made some good connections and have some meetings with some big folks in big firms over the next couple of days!!! 


- BSM 


-------------------------
SHORT E-MAIL EXAMPLE (SUCCESSFUL) 

Subject: Introduction / Chat 

Hi XXX, 

I am reaching out to alumni after completing my MBA; looking for finance and investment banking opportunities, and want to make some new connections. It is also nice to meet other alumni and Canadians in NYC. Are you free for a chat or coffee this week or next? 

Cheers - BSM  

Brian Spencer Martin, PE, MBA
www.linkedin.com/in/brianspencermartin
strategygrowth.blogspot.com
www.motiv808.com
www.strategygrowth.com

----------


LONGER E-MAIL SAMPLE (FAILURE)

Subject: Introduction / Chat

Hi XXX, 

 

I recently completed my MBA through Queen's and came across your name on the alumni directory. I am currently looking to move forward with my career in the IT or energy sectors of private equity / venture capital. I was an engineer and manager directly in the industry prior to doing my MBA. 

Based on your profile, you seem like you have had some success working in private equity. I was wondering if we could have a brief telephone chat or coffee this week or next, so I could brainstorm with you some other local companies that are great employers and might have interesting opportunities. It is also nice to connect with fellow alumni and Canadians in NYC. 

 

Let me know either way, and I understand if you can't connect because this is a busy time. My contact information is below and the linkedin profile gives a bit of my background. 

Yours truly, 

Brian Spencer Martin, PE, MBA
www.linkedin.com/in/brianspencermartin
strategygrowth.blogspot.com
www.motiv808.com
www.strategygrowth.com

Debrief on the first weeks of info interviews...

For the past couple of weeks, I did informational interviews with friends and classmates that work in the finance industry. Unfortunately, none of them work directly in private equity and my main goals were to have some reviews of my resume from people that work in finance, get some perspective on the current job outlook in the industry, and discuss how to best transition into private equity leveraging my experience in the energy and IT sector.

I spoke with a half a dozen folks and several of them thought that I could go directly into a private equity or venture capital firm, particularly those that specialize in the energy or IT Security sector (which are both red hot, see below). Many of the companies will value the experience that I have in the industry when evaluating opportunities and also my industry knowledge will generate leads for new deals/investments. 

Others thought that it would be beneficial for me to spend some time as an analyst for a large investment banking firms, so I could get some deep knowledge of the industry players. For now, I am going to focus on the private equity and venture capital firms directly, not for any particular reason, other than I think targeting both types of opportunities would stretch me a little thin. I would rather do great focused networking, and then look for opportunities in the private equity and venture capital firms.

The people that have helped me so far have been amazingly gracious with their time and support, and access to their networks. Thank you all!!! 

-------
Amazing Recent Energy and IT Security Deals... 

http://www.pehub.com/109317/icontrol-networks-inks-50m-series-d/

http://www.pehub.com/108990/vcs-bulk-up-in-computer-security/

http://www.pehub.com/109467/contour-energy-systems-inks-series-c/

http://www.pehub.com/109362/solarbridge-raises-19m-from-existing-new-investors/

http://www.pehub.com/108771/google-solarcity-announce-280m-fund-for-solar-projects/

Amazing Book - The Magic of Thinking Big, David J Schwartz

I stumbled upon this book after reading the Four Hour Work Week because the Author, Tim Ferris, stated that it was a foundation for his life at an early age, and with a bold statement like that, I managed to track down a copy. For some reason, I was never big into reading "self help" books and taking my MBA changed that. Many books throughout the MBA are like "chicken soup for the executive soul" teaching you how to negotiate better, how to talk with your eyes, how to influence people, etc. etc. The MBA chicken soup tasted delicious and I have a pile of business books (self help) books loaded onto my iPad.

I simply loved The Magic of Thinking Big by Dr. David Schwartz. I must have been reading the original 60s version because it was written in a 60s style men's working world and there are a lot of references to advertising men and general motors. I think this classic style added to the "get up and go" mantra that the book preaches. It was written by a Professor and Psychologist, which gives it some credibility and there are the occasional reference to clinical studies. Having said that, the majority of the book is just good anecdotal modern-day fables about how people become successful by having the right attitude. To summarize the book in a couple of passages:

"Believe, really believe, you can move a mountain, and you can. Believe not wish. Belief, strong belief, triggers the mind to figure ways and means and how-to. And believing you can succeed makes others place confidence in you.... Currently, there is some talk of building a tunnel under the English Channel to connect England with the Continent. Whether this tunnel is ever built depends on whether responsible people believe it can be built."

They built that tunnel and I am hooked on the Magic of Thinking Big. The book is the power of positive thinking, multiplied by a thousand. It goes through very simple techniques like morning pep talks, getting rid of negative thoughts and people, setting a clear goal about what you want to do, and then allowing your mind to work its way to the answer. Lots of other great tips in there also.

Here is a picture of the book. It seems to be available online. There is no kindle version unfortunately, but hard copies seem abundant and are well worth toting around for a while!