Friday 22 February 2013

Bateman Interviews: "A day in IB begins with a BBM and ends with a BBM"

I recently had the opportunity to speak with Divya Aggarwal, an Investment Banking Analyst at Avendus Capital, one of the top investment banks in India. She was excited to learn about this blog and was happy to provide an inside peek into the world of IB. Over a course of 3 weeks, I was finally able to finish this interview (read on to find out why it took so long).

Divya Aggarwal is a qualified CS and CFA L2 candidate and has past experience in Consultancy at Mckinsey and M&A advisory services at KPMG. And below, she’ll give you answers to whether IB is like a relationship or a marriage, why analysts have a love-hate relationship with their Blackberry and why even investment bankers aspire to move to the buy side.

Bateman: CS and a bachelor in Finance and Investment Analysis - an unusual combination. So what were your initial interests and what led you to finance?

I have always been keen for finance and pursued bachelors in finance over B.Com. I opted for CS out of academic interests as wanted to understand the legal aspects of a company formation. It basically has provided me a wider perspective in understanding the financial solutions available to a firm from regulatory/compliance point of view also.

Bateman: Interesting. Few people look into the bigger picture in day to day work, let alone actually study for it.
You got into consultancy after your graduation. What exactly did you do there? How was the experience?

I was placed with Mckinsey & Company from college campus and as per my interest got selected for Corporate Finance team. The work experience at Mckinsey for a year and a half really helped me shape my personality in terms of request handling, communication skills and above all performing company valuation and capital market diagnostics.

Bateman: From consultancy you went into Big4 M&A transaction advisory. How was it different from what you did at Mckinsey?

To get a flavor of due diligence I went to KPMG from Mckinsey. At KPMG, I was working in the M&A team. The work was more of qualitative nature as compared to Mckinsey since here the main goal was to understand industry, identify potential targets, understand commercial aspects of a deal and perform financial due diligence under senior guidance.

Bateman: (Note: This is the best career path a prospective monkey could follow to get into IB. The jump is typically made from consultancy to IB or Big4 M&A to IB. Divya chose to do both out of interest.)
Next stop, Investment Banking. I’d give an arm and a leg to have a resume like that.
How did you make the jumps from consulting to Big4 M&A to IB? Did you reach out to headhunters, applied online or went through networking?

It was more of networking as one of my former colleagues referred my resume on an opening.

Bateman: Fair enough. But when did you first get interested in IB itself? You were actively looking for the change or did it just happen?

I was actively looking out for a change from Big4 and wanted to move into advisory role. Working with clients/promoters directly gave me an exposure which no other job gave me in the past. Honestly, would like to spend couple of years in IB and then move into PE/VC space, post which I would like to go for a PhD in Finance.

Bateman: CS, CFA, PhD and work-ex at top places. Make it two legs for that resume.
So what are the reasons for wanting to move to the buy side? How is it different from IB?

In IB, a bit of marketing aspect is involved whereas in buy side you look at an investment as your own baby and evaluate a proposition from all angles to ensure a safe return. In layman terms, I can think of IB as looking at a proposition from a relationship point of view whereas in buy side it’s more of a marriage point of view (since the risks and rewards are to be borne by you).
To actually have that perspective of being “personally” involved in the proposition would really help me understand the market better while working with a set of people who would encourage me to think from that perspective.

Note: What the interviewee is trying to say here is that in IB, you are trying to “sell” a deal to potential investors; which may sometimes involve sugarcoating some of the uglier aspects of the deal. However in PE, generally the funds’ own money is also involved. Hence, the deal is scrutinized all the more diligently.
Bateman: Awesome! I’m gonna use the relationship vs. marriage answer the next time somebody asks me what I do.
And now you’re in IB. Work, hours, culture, pressure... What are they like?

So work hours are hectic, culture is shrewd and pressure is there. Culture is open but seniority can’t be overlooked. Non-performers have no stay in the firm. But all this is overshadowed by the fact that working with a bright set of minds, you get to learn a lot. So again it boils down to personal aspirations of an individual. It’s a knowledge sharing forum where one can brainstorm on every aspect of a proposal. For some, IB work-ex pre-MBA gives a gateway for a great B-school application, for others it’s about bonuses and for some it’s actually about finance.

Bateman: I have a feeling the last category is the exception instead of the rule. Sigh.
So lastly, it would be a treasure if you could tell us what a typical day is like in the life of an IB analyst. That is to say, your routine in a typical day.

A typical day in IB begins with a BBM and ends with a BBM. You become attuned to keep checking mails and it eventually becomes a habit. Reaching office at 9:30 AM and being prepared that you haven’t missed any mails from your seniors. Balancing work and prioritizing on what is important is an art which needs to be followed every day. Especially for a junior level person, the variety of work can range from just taking print outs/scanning every day to working on full blown models. So one needs to keep ego aside and assist seniors in working on deals and client servicing.

Some days can be really hectic, involving sending out conference call invites for sudden updates, making sure the pitches and models are freezed with the client within the deadlines – which is exactly what happened at the time we were exchanging emails for this interview. A complicated model on a tight deadline – not a combination that leaves you with much spare time.

But on the other hand, some days are relaxed without work, waiting for discussions with the client and the aforementioned printing/scanning work. But the best part is you can actually see your work getting materialized and whether it is being used or not, you feel like seeing everything live.

The day ends only when you inbox is empty assuring that no further emails or urgent work has to be done. In IB, one needs to be on call 24/7.

IB is not a sustainable long term career. Rather, it’s a platform which can activate your grey cells and expose you to a lot of learning opportunities.

Bateman: Amazing. Thanks for the inside-peek into the world of IB!
Glad to help!

To reach Divya Aggarwal on her Linkedin profile, click HERE.

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