Careers in Finance

1. Careers in Finance Taxonomy of The Finance Industry & Resources for Undergraduates Interested in Banking and Finance November 14, 2008

2. Presentation Outline • Landscape • Financial Headlines • Implications on the Finance Industry • Taxonomy • Sales & Trading • Investment Banking • Portfolio & Asset Management • Research & Analysis • Career Preparation & Resources • Undergraduate & Graduate Coursework • Extracurricular Research • Professional Networking • Financial Management Association (FMA)

3. Presentation Goals • Generate interest in the modern world of finance • Define the organizational structure of the industry • Unveil the general operations of each sector • Provide resources to prepare for careers in finance • Introduce the Financial Management Association

4. Landscape • Financial Headlines • Crisis • Subprime mortgages • Credit freeze • Consolidation • Bear Sterns – acquired by JPMorgan • Lehman Brothers – filed for bankruptcy • Fannie Mae & Freddie Mac – placed under conservatorship • Merrill Lynch – acquired by Bank of America • Washington Mutual – seized by FDIC • Goldman Sachs & Morgan Stanley - became bank holding companies • Wachovia – Acquired by Wells Fargo (not Citigroup) • Response • Interest rates – Fed Funds rate dropped to 1% • Emergency Economic Stabilization Act of 2008 – “$700B bailout” • TARP – Troubled Asset Relief Program

5. Landscape • Financial Headlines (cont’d) • Economic Downturn • Stock market volatility – DJIA + 400pts • Oil prices – $60 per barrel • US Unemployment Rate – 6.1% • Consumer Confidence – Conference Board index at 38 pts • Implications on the Finance Industry • Optimism & Opportunity • Finding the bottom • “There’s always a bull market somewhere”

6. Taxonomy • Sales & Trading • The “sell-side” • Players • Sellers • Institutional Sales • Retail brokers • Private Client Services (PCS) • Traders • Salesperson & trader relationships • Symbiotic • Volatile • The morning of a Junior Trader at a Bulge Bracket Firm…

7. Taxonomy • Investment Banking • Business • Raising capital for companies • Advising companies on financing and merger alternatives • Players • “Bulge Bracket” • Centered in New York City • I-Banking vs. Sales & Trading • Both raise capital for clients through investments • Investments differ in nature and timing • I-Banking vs. Commercial Banking • “One-stop shopping” for banking services

8. Taxonomy • Investment Banking (cont’d) • Components

9. Taxonomy • Portfolio & Asset Management • The “buy-side” • Traditional Investment Managers • Mutual Funds • Alternative Investment Managers • Hedge Funds • Private Equity • Venture Capital • Tools of the Trade • Modern Portfolio Theory • Sector Trends • Stability • Non-investment business interests

10. Taxonomy • Research & Analysis • Sell-side & Buy-side Analysis • Research equity or fixed-income markets • Analyze company and industry fundamentals • Predict earnings and cash flows • Determine appropriate valuations • The Start of a Career in Finance • Sell-side • Associate  Junior/Association-Analyst  Analyst  • Buy-side • Assistant  Analyst  Portfolio Analyst  Portfolio Manager

11. Career Preparation & Resources • Coursework • UCSC Undergraduate – Finance Courses • (S)Econ 80H: Wall Street and the Money Game • (W)Econ 130: Money and Banking • (S)Econ 131: International Financial Markets • (F/W)Econ 133: Security Markets and Financial Institutions • (W/S)Econ 135: Corporate Finance • (W)Econ 141: International Finance • (F)Econ 150: Public Finance • UCSC Undergraduate – Mathematics & AMS (Grad prep) • (F/W/S)Math 21: Linear Algebra • (S)Math 24: Ordinary Differential Equations • (W/S)Math 105A: Real Analysis • (S)AMS 131: Introduction to Probability Theory • (S)Econ 114: Advanced Quantitative Methods

12. Career Preparation & Resources • Coursework (cont’d) • Graduate • Masters in Finance • UCSC Pathways Program • Masters in Business Administration (MBA) • Keely Rogers-Free from Mills Graduate School of Business – Presentation on MBA degrees – UEA, January 29th, 2009 • Adjunct UCSC Professor Sharath Sury – MBA in Finance and Statistics, University of Chicago

13. Career Preparation & Resources • Extracurricular Research • Print Sources • The Wall Street Journal • Barron’s • Warren Buffett & Peter Lynch • Web Resources • Yahoo! Finance • http://finance.yahoo.com/ • Vault • http://www.vault.com/ • UpDown • http://www.updown.com

14. Career Preparation • Professional Networking • Finance professors • UCSC Adjunct Professor of Economics Sharath Sury • UCSC Economics Lecturer Kai Pommerenke • UEA functions • Career panels • Internship panels • Sponsored interview/etiquette/resume/cover letter prep events • Career Center • Job Fairs • SlugQuest • CAN – Career Advice Network • Networks of friends and family

15. Career Preparation & Resources • Financial Management Association (FMA) • Purpose • Serve as an academically oriented student group • Act as a forum for discussion of finance-related topics and their economic and political implications • Foster a growing student interest in the modern world of finance • Features • Conduct weekly analyses of current financial headlines • Manage investment club-style fund simulation • Sponsor presentations by finance professionals and academicians • Allow students to present on topics of interest to their peers • Whatever you want!

16. Conclusion Questions?

17. Conclusion • My Contact Information • Zachary Wallerich • UEA –Director of Graduate Studies • FMA –UCSC Chapter Representative • zwalleri@ucsc.edu • (408) 368-0018 Thank you for listening!

18. Sources • Kim, Gabriel, and Sarah Rodbard. Vault Career Guide to Sales and Trading. New York, NY: Vault.com, 2008. • Lott, Tom, Derek Loosvelt, and William Jarvis. Vault Career Guide to Investment Banking. New York, NY: Vault.com, 2008. • Schlossberg, Andrew R. Vault Career Guide to Investment Management, 2nd Edition. New York, NY: Vault.com, 2008.