Career in finance

In this article, Anna BARBERO (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2021) discusses various aspects of a financial career.

I had the opportunity to talk with Alexis Fontana (ESSEC Alumni and Board member of ESSEC Alumni-Club Finance) who has worked in many fields related to corporate finance (audit, private equity, and mergers and acquisitions, etc.) Alexis currently works at EY as a “Strategy and Transactions” manager.

Interview with Alexis Fontana

Question: First, your curriculum and your engagement at Club ESSEC Finance show a real passion for corporate finance. When did you decide you would take this orientation? And why?

Corporate Finance is indeed a field in which I really enjoy being involved and here are the reasons why:

• The analytical aspect of Corporate Finance, as a transaction due diligence professional on a day-to-day basis
• The investment side, I was once a private equity professional and continue to work with small and large Private Equity (PE) funds
• The theoretical approach, I have just finished my certified accountant thesis. The subject deals with the impacts of the working capital requirements on the value of industrial small medium enterprises (SMEs) in the context of a sell-side process.

When I joined ESSEC in 2012, I initially wanted to work for the Autorité des Marchés Financiers (the French financial regulator). The multiple professional experiences required to fulfil the ESSEC curriculum helped me in the design of my professional career I am still building today.
I think that one of the key encounters that made me discover my passion for corporate finance was Albert Aidan, a Senior Partner at Deloitte, who was once my professor of accounting at ESSEC Business School but also, back then, the treasurer of ESSEC Alumni.

Question: The financial sphere is often criticized for being profit oriented. What would you respond to those critics?

The financial sphere is mandated or has in its very statutory purpose the aim of making sustainable profit. One of the key aspects I learned over the recent years is that no company can be durable without being profitable.

During my curriculum at ESSEC Business School, I have been privileged to work in a pan-European French Private Equity fund, attending each week the investment committee with some of the sharpest investment minds I have had the opportunity to meet so far.

What I understood, is that these professionals work to safeguard the interests of the Limited Partners (LP) of the fund (institutions, family offices, individuals which decide to invest money in an investment fund managed by a General Partner (GP) and its team of investment professionals). To that extent the actions taken are aimed to achieve resilient returns through investments in high potential companies which are, by the way, embarked in value creation journeys which bring (i) new jobs, (ii) economic activity to region, (iii) growth and ambition on a national or international scale.

More recently in the context of the COVID-19 crisis, the financial sphere has been faced with a call for greater purpose that is still being translated in concrete actions: (i) extra-financial reporting measuring impact and Environmental, Social, and Governance (ESG) related metrics, (ii) tighter reporting and communication standards, (iii) stronger compliance. I really do believe that today is a good time to start a career in corporate finance. So many fields and uncharted territories are being addressed by the industry which is in high need of bright minds and pioneers!

Question: You have worked in several finance fields: audit, private equity and more recently even M&A. Which one did you like most? Do you feel that an experience in one field can help in another? For a young professional, which one do you advise to start with?

I am really passionate about my current responsibilities as a transaction due diligence professional, it offers me the opportunity to always be working on the most strategic corporate events (acquisition, divestiture, capital reorganization, refinancing and even restructuring). It gives me also the opportunity to work on daily basis with Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), Private Equity (PE) professionals, Merger and Acquisitions (M&A) bankers, lawyers (corporate, law, tax) on top of a broad ecosystem of experts.

My past experiences gave me the tools to advise my clients on very technical aspects of a deal with the aim of always giving them the more acute advice in a timely manner. What I really like is the negotiation phase of the deals – the final word is to convince the other party to get the deal done. Each deal is unique, and I would even say that cross-border deals are the most fascinating as you add the cultural aspects on top of the already complex deal challenges you must solve.

Should you consider a career in Corporate Finance, I recommend performing an introductory experience in Audit as it gives you all the keys to understand how financial information is sourced, processed and then communicated.

My advice to young professionals is to learn and gather soft skills, but to also bring a broader focus on a domain of expertise. Hard skills are keys in the current business environment we are navigating through and it will become more and more sought after. It can be law, accounting (please do write me directly if this field interest you) and other fields of interest but do be curious and keep learning things even after finalizing your curriculum at ESSEC Business School, you always to remain at the top of the game.

Key concepts

Audit

According to the Dictionary of Cambridge, financial audit is “the process of checking a company’s or organization’s financial statements to make certain they are correct and complete, and then providing this information in an official report”. Financial audits are conducted internally and externally by consulting firms. The major audit experts are called the “Big Four”: Deloitte, EY, KPMG & PwC.

Private Equity

“Private equity is an alternative investment class and consists of capital that is not listed on a public exchange” (Investopedia). There are two types of investors in private equity:

• Limited Partners (LP) that generally hold 99% of shares and have limited liability;
• General Partners (LP) who hold 1% of shares and have full liability.

Private equity allows companies & startups to gain liquidity without necessarily contracting expensive loans or listing on public markets. Yet, it is more difficult to find & negotiate private equity funds than making a match in the public market order book.

Merger and Acquisitions

According to the CFI (Corporate Finance Institute), “Mergers and acquisitions (M&A) refer to transactions between two companies combining in some form”:

• Mergers are the combinations of two companies of comparable size. The largest in history was the merger of American Online & Time Warner Inc. The $360 billion deal was closed in 2000 (Investopedia).
• Acquisitions occur when a bigger company acquires a smaller one. Vodafone acquired Mannesman AG for $180.95 billion. However promising, the deal was a failure (Investopedia).

Working in M&A can mean several things: leading the strategy to proceed M&A, advising on the target company, proceeding the financial transaction, examining the legal side, etc. M&A is treated internally in corporations and externally by consulting firms, banks, etc. Morgan Stanley and Goldman Sachs are two famous M&A firm.

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Useful resources

Corporate Finance Institution, Mergers & Acquisitions.

Shobit Seth reviewed by Eric Estevez, 2021. The 5 biggest Mergers in History, Investopedia.

Shobit Seth reviewed by David Kindness, 2021. The 5 biggest Acquisitions in History, Investopedia.

About the author

Article written by Anna BARBERO (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2021) .