Finance Careers Defined
For the MBA, doors are continuing to open to career possibilities not previously available coupled with a need to bolster traditional skills with a greater emphasis on knowledge of global markets, new investment strategies and models, and advanced quantitative and management skills. Through our APEx programming, Toigo helps MBA students assess the right focus for career complemented by critical mentoring and career guidance to help realize those goals
One of the fastest growing areas of interest for Toigo Fellows is in the area of alternative investments. A “catch all” area, this includes private equity, venture capital, hedge funds and real estate. Referred to as the “alternative” sector, this includes the investments that institutional investors might view as different or alternative to traditional public equity markets.
As a business development professional, you’ll be responsible for identifying, researching, analyzing and bringing to market new businesses and new products. You’ll focus on implementing your company’s (or team’s) strategic business plan through equity financing, acquisition/divestiture of technologies, products, and corporate acquisitions. You’ll help establish strategic partnerships and, in some cases, manage those relationships.
As a consultant, you will provide professional advice to clients (typically large pension funds, plan sponsors and public institutions), based on your understanding of the marketplace, the qualifications/expertise of investment professionals and your client’s needs. You will also serve as intermediary between your clients and investment professionals-helping clients identify the right group of professionals to help meet the stated investment objectives. Consultants are typically self-employed or employed by consultancy firms. Consulting within the financial advisory arena differs from management consulting, a field in which you would provide strategic business advice to Fortune 500 corporations.
Corporate Finance (internal)
Corporate finance is also a function within companies in all industries, from consumer products and health care to high technology and finance organizations. As part of the finance team, you’ll manage the overall policy and strategy for the company’s capital structure, budgeting, acquisition and investment, dividends and taxation. Professionals who work in-house as part of the corporate finance team tend to have more manageable schedules than their colleagues in the corporate finance department of a Wall Street investment firm.
The corporate treasury department works closely with the CFO, Treasurer and other members of senior management to manage a company’s funding, liquidity, capital and relationships with creditors, rating agencies and regulators. Corporate Treasury plays a key role in the finance firm’s strategic and analytical projects, and provides unique insight into risk/reward management.
Fintech (Financial Technology)
A career in financial management where financial needs of both business and consumer are at the forefront. This is a growing industry looking for bright graduates to join in a number of different roles. Though every position is different, there are normally a few common traits sought after, such as, analytical, entrepreneurial, a passion for technology, and professional maturity.
Hedge Funds are alternative investment firms that utilize high-risk investment strategies and techniques, such as borrowing money and selling short, in an effort to realize extraordinary capital gains for its investors. As part of a hedge fund team, your responsibilities will be to identify and orchestrate highly leveraged investments.
As an institutional marketing/sales professional (“institutional” means that you have access to large investors, such as pension funds, with substantial amounts to invest), your career will focus on marketing a range of financial products and services to institutional clients, including organizations like private hospitals, schools, churches, and libraries whose objectives differ from those of traditional businesses.
Within a firm, the International Finance branch examines foreign investment, foreign capital budgeting, and exchange rates (including their impact on international trade), in order to capitalize on opportunities in the international arena that will benefit the company. The team often helps the company navigate complex international accounting standards, tax and reporting regulations.
As an investment banking Associate, your role will be to help private and public companies, governments and institutions raise and manage capital. The typical areas within a major investment bank include Research, Corporate Finance, Private Banking, Fixed Income, Sales & Trading, and more. Investment banks also assist public and private corporations in raising funds in the capital markets (including both equity and debt offerings), as well as in providing strategic advisory services for mergers, acquisitions and other types of financial transactions.
- Corporate Finance– As a corporate finance professional within the field of investment banking, you’ll work as part of a firm’s team serving a range of clients (including companies, institutions and governments) and managing a wide range of financial opportunities. You’ll represent clients in financial dealings ranging from raising capital (including IPOs) and negotiating financings to orchestrating M&As and reconstructions, issuing bonds (debt) and shares (equity). Your scope may also include lending money, supporting privatizations for government, and managing initial public offerings (IPOs).
- Mergers and Acquisitions (M&A)– M&A professionals thrive on the deal, working as part of a team charged with identifying, analyzing and orchestrating the purchase of a company, or the merger of their company (or client) with another business. The goal is to provide all stakeholders with increased shareholder value (i.e., through economies of scale/operations, expanded market or manufacturing strength, etc.) due to the combination. Acquisitions involve one company absorbing another, while mergers involve an agreement between two companies to become a single (new) company.
- Public Finance (municipalities)– Professionals in public finance arena often deliver the same banking services to clients as the corporate finance team, but rather than private clients, you work with public entities such as city and state governments and agencies, bridge and airport authorities, housing authorities, hospitals, and other public agencies. In addition to delivering key banking services, you need to also consider public policy, regulatory, taxation and political issues that may be tied to major financing initiatives. As a result, deal structure, analysis and products utilized will be unique.
- Private Client Services / Private Wealth Management– As a private client services professional, you will provide comprehensive wealth management solutions and responsive day-to-day service to clients with anywhere from $5 to $50 million in net worth. Private Client Services helps customers protect and grow their wealth by addressing key investment decisions, philanthropic endeavors, tax issues, and more.
- Research– The role of research is to provide information to the market by analyzing stocks, fixed income and to offer investment advice through the issuance of “buy” or “sell” ratings. The focus for most teams is on both fixed-income research and equity research. Both involve heavy quantitative research (corporate financing strategies, specific product development, and pricing models), economic analysis and forecasts (US/global), interest rate and currency fluctuations. On the equities side, meeting with company management and analyzing financial statements and operations, and providing written and oral updates on market trends and company performance to your firm’s sales force are key parts of the job.
- Sales & Trading– Sales & Trading professionals focus on buying and selling within the secondary market, i.e. purchasing existing financial products and securities from investors rather than issuing companies. Professionals in this field are often the first to arrive at work and the first to leave (their day ends shortly after markets close for the day). The tempo on the trading floor is fast-paced-and oftentimes chaotic.
As an investment management professional, you will work with a team and be responsible for investing capital from pension funds, institutions and high net worth individuals. Whether your client is an institution or an individual, your focus is on providing guidance about how and where to invest the client’s funds. As part of the process, you will consider the long and short-term goals, the client’s risk profile, and economic and industry trends. The ultimate goal is to provide an investment strategy that delivers high, consistent returns to your clients. At many finance firms, investment management professionals might be in teams known as asset management, fund management, wealth management, portfolio management or money management. Professionals in this field are typically analytical, decisive, focused, driven, attuned to the market, and organized.
Pension Fund Investment
Pension funds invest on behalf of employees of government entities (such as states, cities, or other municipalities), unions and other associations. Their focus is to invest the retirement funds of the group’s members. As an investment professional working for a pension fund, your responsibilities will include investing the fund’s capital (or common asset pool), all with the goal of generating stable growth over the long term.
Private equity professionals manage funds on behalf of limited partners (LPs), investing in companies with the goal of realizing a high rate of return (typically 3x-7x). Private equity is capital that has been made available to companies separate from the public markets, such as the stock market. The funds raised through private equity are often used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company’s balance sheet. Oftentimes, the private equity partner actively advises the management team on key business strategy issues, and holds a seat on the company’s board of directors. Once a liquidity event occurs-the company is sold, acquired or goes public-the private equity firm realizes a return that is shared by the partnership and the firm’s limited partners.
Interested in a career in private equity? Check out the Toigo Private Equity MBA Graduate Fellowship. It’s a one-year rotation that provides entrée to the industry and exposure to a top PE firm, plan sponsor and company.
Real Estate Acquisitions
As a real estate acquisition professional, you will be involved in prospecting, structuring, underwriting, negotiating, and closing real estate deals. You will conduct due diligence for acquisitions, as well as analyze financing, cash flow models, leases and other associated documents, real estate portfolios, and market trends. Professionals working in Real Estate enjoy independence and flexibility, as well as the opportunity to specialize in areas like urban planning, commercial brokerage, land development, appraisal, or property management. Common traits of professionals in this field include strong communication skills, experience and interest in research, and the ability to conduct detailed and accurate analyses.
Real Estate Development
As a real estate development professional, you will be involved in designing and executing concepts, monitoring multiple development projects, analyzing and maintaining financial spreadsheets that monitor returns, conducting market and project research, and negotiating leases. Development professionals are generally risk-takers, goal-oriented, charismatic, and budget time well. In this business, income is often based on success, and many developers are paid in straight commission. Positions within this department include analyst, associate/project manager, vice president/managing director, and developer.
Social / Micro-Finance
Social finance is a growing area within many investment and commercial banks that focuses on providing capital access to underserved markets, including communities and/or individuals in the third-world. Microfinance enables these individuals to access small loans (larger loans become available based on repayment history) with quick disbursement turn-around. The goal of microfinance is to reduce poverty, improve quality of living, and increase self-sufficiency.
As a venture capitalist, your focus is on investing in emerging and middle market companies on behalf of your firm’s limited partners. You’ll work with your portfolio company teams to set strategy and grow the business-all with the goal of realizing liquidity (and profit) via an initial public offering (IPO) or acquisition. Select members of the venture fund team (typically the more senior partners) lead the firm’s fundraising efforts and interactions with institutional investors.