My professional experience as an Institutional Sales Assistant with Lazard Frères Gestion

May 11, 2024 by David-Alexandre BLUM

My professional experience as an Institutional Sales Assistant with Lazard Frères Gestion

In this article, David-Alexandre BLUM (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2019-2023) shares his professional experience as an Institutional Sales Assistant with Lazard Frères Gestion.

About the company

In 1848, Alexandre, Lazare and Simon Lazard, three French brothers from the Alsace region, founded Lazard Frères & Co in New Orleans as a dry goods merchant, having emigrated to the United States in the early 1840s.

Today, Lazard serves investors worldwide with a broad range of global investment solutions and asset management services. Lazard Asset Management operates in 19 countries across North America, Europe and Asia, as well as in Australia. The group focuses on strategies based on rigorous and detailed analysis and dynamic asset management.

Lazard Frères Gestion combines the power of a large global organization with the flexibility of a small entrepreneurial firm and focuses on asset management and advisory services for individual and institutional clients.

With offices in Paris, Lyon, Bordeaux, Nantes, Brussels and Luxembourg, Lazard Frères Gestion manages €30 billion of assets on behalf of institutional and retail clients.

Lazard Frères Gestion Logo
Logo of Lazard Frères Gestion
Source: Lazard Frères Gestion

The department I joined at Lazard Frères Gestion is the Distribution France sales department. The team handles customer relations and organizes meetings to sell and inform about the company’s funds. The department works closely with the management and marketing teams. Financial analysis and company knowledge are at the heart of Lazard Frères Gestion’s management processes. The model is characterized by an “analyst-manager” approach: the entire team is involved in investment decisions, and each analyst-manager can contribute his or her own valuation and market expertise. In addition, all institutional management is based on the same macroeconomic scenario. Lazard Frères Gestion’s investment philosophy is based on both business cycle analysis and company valuation.

My internship

As an institutional sales assistant, I worked as part of the Distribution France sales team and was in constant contact with customers. Therefore, I took part in all our management committees, videoconferences and events. I worked with management, client servicing, reporting, risk control, legal and middle office.

My missions

Follow the sales activity of the Distribution team (multi-managers, private banks, insurance networks and independent asset managers)
Participate in specific responses to client requests
Help prepare client meetings
Prepare quarterly (or more frequent) management reports on flagship funds for clients
Summarize videoconferences organized on flagship funds and equity, fixed income, convertible and diversified fund management committees
Follow the performance of flagship funds and defined peer groups
Send specific documents from our tools (performance attribution, inventories, allocations, specific performance comments and fund positioning).

Required skills and knowledge

Firstly, the position I held required a broad knowledge of all asset classes. Lazard Frères Gestion offers a wide range of investment solutions: equities, bonds, mutual funds, structured products… It is therefore essential to know all the relevant vocabulary and the specific features of all the asset classes. I needed to know the different financial indicators and ratios in order to understand the different financial analyses carried out by the analyst teams.

Thoroughness and efficiency were the qualities that my superiors expected most of me. There was no room for error, even in an emergency, and in a sales department the unexpected was commonplace. When writing memos on funds intended for clients, it was essential to transpose the managers’ analysis correctly. It was also my responsibility to respond to clients as quickly and accurately as possible.

During this internship, I required to master some essential skills in order to be successful such as rigor, adaptability or efficiency. Adaptability was key as my role was cross-functional. I was in contact with most of the departments at Lazard Frères Gestion. I worked on projects with marketing in conjunction with the management teams, or I had to provide answers thanks to the reporting departments, which sent me the data I needed to make my calculations in response to clients.

What I learned

This experience was a real springboard for learning about the finance profession. I had the opportunity to apply the theoretical aspects to real projects and to work on various subjects under the guidance of experienced professionals. I also had the opportunity to perfect my knowledge of the financial market environment through daily contact with the Management, Reporting, Risk, Legal and Marketing teams. In particular, I improved my knowledge of asset management, understanding of macroeconomics and financial analysis.

In particular, I was able to learn a lot about the different asset classes, thanks to the discussions I had with professionals and the various presentations I attended. Additionally, I was able to follow a number of fund sales and look after a variety of clients. I worked on various client presentations and financial documents such as reports and prospectuses.

Financial concepts related to my internship

Sale of financial products

I learnt a lot about commercial sales techniques. It is important to know what elements to emphasize when prospecting or selling financial products, especially when dealing with professional and highly technical clients.

I was able to familiarize myself with macro-economic and financial indicators that helped me understand certain economic scenarios and management decisions.

I therefore carefully analyzed the financial markets and improved my understanding of the different types of financial markets, such as the stock, bond, foreign exchange (Forex) and derivatives markets.

Through various client meetings, I was able to familiarize and educate myself on the different financial products. I dealt with a variety of financial products, such as equities, bonds, currencies, derivatives (options, futures, swaps) and mutual funds.

Fixed income management

Before this internship, I was much more comfortable with equities than bonds. However, the various committees, training sessions and discussions I’ve had have taught me a lot about bond management. In particular, I was able to follow how the management teams manipulated the funds’ modified duration to take advantage of unprecedented market conditions following the crises at the US regional banks and Crédit Suisse.

I was also able to follow the launch of a bond fund and understand the entire portfolio construction process by following the strategy implemented by the management teams.

Macro-economics

During my internship I was able to acquire knowledge in macroeconomics by studying economic indicators, monetary and fiscal policies, international trade, business cycles, exchange rates, the relationship between financial markets and the economy, and sovereign debt. These skills enable me to better understand the global economic environment, assess investment opportunities and risks, and contribute to investment decision-making. At Lazard, a team of macro-economists gives analyses and predicts a scenario for the coming months, which are taken into account by all the managers in different proportions in order to respect the management process and the objective of their funds. It is therefore essential for the distribution team to know and master this scenario in order to explain the performance and strategies implemented.

Why should I be interested in this post?

If you are looking for a formative experience in finance with responsibilities and challenges combining financial expertise and sales, this internship is for you. You will be working on a wide range of assets and investment universes. Lazard Frères Gestion will require you to be rigorous and hard-working, but you’ll learn a lot about asset management.

Useful resources

Lazard Frères Gestion

Lazard Frères Gestion Les métiers de la gestion d’actifs (webinaire)

Lazard Frères Gestion Qu’est-ce que la gestion d’actifs ?

Lazard Frères Gestion Quelle allocation d’actifs pour un portefeuille diversifié ?

Hull J. and P. Roger (2017) Options futures et autres actifs dérivés Pearson Education.

About the author

The article was written in May 2024 by David-Alexandre BLUM (ESSEC Business School, Global Bachelor in Business Administration, 2019-2023).

My Experience as an Investment Intern at Eurazeo

April 6, 2024 by Dante MARRAMIERO

My Experience as an Investment Intern at Eurazeo

In this article, Dante MARRAMIERO (ESSEC Business School, Master in Strategy and Management of International Business (SMIB), 2020-2023) presents its professional experience in Euazeo, a European leading Private Equity based in Paris.

About Eurazeo

Eurazeo stands as a prominent European firm within the world of alternative investments, boasting a diversified portfolio within various investment strategies, including private debt, real Estate, venture, growth, small-mid buyout, and mid-large buyouts. Eurazeo was initially the family office of the Lazard Freres family, but in 2018 decided to merge with Idinvest in order to start fundraising capital from third parties. Following 2018, Eurazeo’s strategy has always been to reduce the balance sheet investments and to increase the third-party capital investments.

Logo of the company.
Logo of Eurazeo
Source: the company.

Internship Overview

During my time as an Investment Intern at Eurazeo from January 2023 to June 2023, I had the privilege to immerse myself in the intricacies of private equity and alternative investments. My internship included a range of responsibilities aimed at supporting Eurazeo’s investment initiatives. My department was “Direct Transactions” and during my internship, I participated actively in three different activities:

Syndication of Co-Investment Opportunities

I actively participated in the syndication process of four co-investment opportunities across various investment strategies including private debt, growth, and mid-large buyout. This involved conducting comprehensive due diligence, financial analysis, and market research to assess the viability and potential returns of each opportunity. Together, these co-investment opportunities accounted for approximately €750 million in total investment value, underscoring Eurazeo’s commitment to strategic partnerships and collaborative investment initiatives. Co-investments, theoretically speaking can be cataloged under direct transactions as SPV (Special Purpose Vehicle) are created specifically for one single transaction and you are not making the investment for the limited partners but you are making it with the LPs (Limited Partners).

Strategic SPV Structures Analysis

I was tasked with examining strategic Special Purpose Vehicle (SPV) structures solutions for potential investment opportunities. This entailed analyzing, comparing, and developing alternative fundraising structures such as Collateral Fund Obligation and Rated Feeder Fund, focusing on optimizing capital deployment and mitigating risk. The main reason why we were evaluating new financial structures was to attract a category investor that, at the time, was not willing to invest in our funds: American insurance companies. 2023 has been generically speaking a rough year for fundraising capital and for this reason, we decided to implement this kind of solution. A collateral fund obligation is a structure composed by certified debt and equity; this structure will invest in different funds (all managed by Eurazeo) and will have the advantage of using the leverage raised as certified debt to enhance the return on the investment and the Cash on Cash. Therefore, by evaluating various SPV structures, we aimed to enhance our flexibility in structuring investments and optimizing returns for our investors, by using the right amount of leverage.

Evaluation of Secondary Transactions Advisors

I had the opportunity to participate in two competitive selection processes for secondary transaction advisors, tasked with choosing the financial advisor to support us in executing a single asset continuation vehicle. The evaluation process included analyzing and comparing proposed solutions, assessing current market conditions, and evaluating alignment with Eurazeo’s investment strategy and objectives.

Furthermore, this project included evaluation and due diligence, intending to identify strategic partners capable of delivering value-added solutions and maximizing returns for our investors. Single asset continuation vehicles are specialized structures tailored for investments held within the portfolio of a current fund of the firm. These investments require divestment as limited partners seek liquidity. However, recognizing the potential upside, the firm decides to establish these vehicles.

What did I learn during this experience?

My internship at Eurazeo provided invaluable opportunities for skills and knowledge development across various areas:

Financial Analysis: I honed my skills in financial modeling, valuation techniques, and investment analysis through hands-on experience with real-world investment opportunities.
Due Diligence: I gained practical insights into the due diligence process, including a thorough examination of financial statements, market trends, and competitive landscapes.
Strategic Thinking: I developed a strategic mindset by evaluating investment opportunities within the broader context of Eurazeo’s investment thesis and long-term objectives.
Communication and Collaboration: I enhanced my communication and collaboration skills through interaction with cross-functional teams and external stakeholders, fostering effective teamwork and decision-making.

This internship therefore offered a unique opportunity to gain firsthand experience in the dynamic and fast-paced world of private equity and alternative investments. As an aspiring finance professional, this experience has equipped me with the skills, knowledge, and insights necessary to thrive in the competitive landscape of the investment industry. Moreover, it has reaffirmed my passion for finance and deepened my understanding of the critical role played by alternative investment firms in driving economic growth and value creation.

As a newcomer to the finance industry, I had not anticipated the level of intricacy and competition inherent within the environment of Eurazeo. The depth of analysis, the meticulous attention to detail, and the relentless pursuit of excellence underscored the caliber of professionals operating within the firm. Despite the initial surprise, I found myself invigorated by the intellectual rigor and spirited competition that permeated every facet of Eurazeo’s operations.

Central to my experience at Eurazeo was the discovery of a challenging yet remarkably cohesive team—a team that demanded nothing short of excellence yet fostered an environment of camaraderie and mutual support. The intensity of our collaborative efforts forged bonds that transcended professional boundaries, culminating in a shared sense of purpose and accomplishment. Indeed, within the crucible of challenging assignments and tight deadlines, I discovered that the true measure of an internship lies not merely in the tasks accomplished but, in the relationships, forged and the personal growth attained.

Long But Fulfilling Working Hours

While the demands of the internship necessitated long hours and unwavering dedication, I found solace in the gratifying pursuit of knowledge and skill refinement. On average, my workday extended until around 10:30 in the evening, with occasional instances requiring weekend office visits. Despite the rigors of the schedule, the sense of fulfilment derived from contributing to meaningful projects and engaging with industry experts mitigated the challenges posed by extended working hours.

A game-changing internship

My internship at Eurazeo stands as a transformative chapter in my professional journey, characterized by unexpected challenges, profound growth, and enduring camaraderie. Through immersion in the fast-paced realm of private equity, I have gained invaluable insights, honed essential skills, and cultivated enduring relationships that will undoubtedly shape my future endeavours. As I reflect on my time at Eurazeo, I am reminded that true growth emerges from embracing adversity, fostering meaningful connections, and steadfastly pursuing excellence—lessons that will continue to guide me on the path toward personal and professional fulfillment.

Why should I be interested in this post?

I aspire that this experience might aid other students intrigued by Private Equity in gaining deeper insights into the internal dynamics and the range of exposure one can encounter within a private equity firm. Often, when students hear about private equity, their minds jump straight to financial analysis and modeling, overlooking the broader scope. My aim is for this article to spark curiosity among students about this sector, encouraging them to explore the private equity market further.

Useful resources

Eurazeo

Bain Bain private Equity Report 2023

About the author

The article was written in April 2024 by Dante MARRAMIERO (ESSEC Business School, Master in Strategy and Management of International Business (SMIB), 2020-2023)

My experience as Revenue Analyst at Olympique de Marseille

April 1, 2024 by Quentin CHUZET

My experience as Revenue Analyst at Olympique de Marseille

In this article, Quentin CHUZET (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2019-2023) shares his professional experience as Revenue Analyst at Olympique de Marseille.

About the company

Olympique de Marseille is a French football club founded in 1899. It is one of the most emblematic clubs in French and European football history, with an emblematic international reputation. Through decades of performance and media exposure, it has become an emblem of French sport, inscribing itself as a culture and tradition for millions of supporters around the world.

Logo of the Olympique de Marseille
Logo of Olympique de Marseille
Source: Olympique de Marseille.

Its takeover by the Mc Court Group in 2016 initiated a radical change in management and in the harmonization of processes, to continue to broaden its scope and enable grows bigger. Therefore, the club generates more than 200m € for the seasons 2021-2022 and 2022-2023 with 270m € of revenues expected for the season 2023-2024 It bases its growth on the sporting aspect but also on innovative sport business strategies. With a stadium capacity surpassing any of other Ligue 1 club (67.000 seats) and a meticulous ticketing strategy, the club is part of the Top 10 of the most attractive stadiums in Europe and continues to capitalize on its national and European reach.

OM Revenues vs other clubs.
OM Revenues vs others – Deloitte Report
Source: Deloitte Football Benchmark.

My apprenticeship

Joining Olympique de Marseille allowed me to discover and evolve within the soccer ecosystem, but also to take a practical approach to issues relating to football clubs revenues optimization and maximization.

The diversity of revenue sources at a club like Olympique de Marseille opens the door to a wide range of missions and tasks. As I was directly involved in all strategic aspects of revenue management : I was notably involved in defining the pricing of Ticketing & Hospitality (VIP) revenue streams, drawing up business plans for club projects, managing budgets and revenue targets set at the start of the season, analyzing financial opportunities represented by the entry of sponsors or investors, etc.

I therefore occupied a strategic role, acting as a pivot between the sales and finance teams, defining budgets alongside management control and that could be reachable for the commercial team, and while supporting the sales teams in achieving the latter by analyzing revenue opportunities and proposing strategic recommendations.

1/4 French Cup, season 2022-2023 : OM-Annecy. Historical record of attendance for a ¼ in the club’s and competition’s history.
Velodrome OM Annecy
Source: Olympique de Marseille.

My missions

Strategic recommendations and pricing

The main task assigned to a Revenue Analyst at Olympique de Marseille is to play an active role in defining pricing for the general public and VIPs at each match. To do this, I had to identify the exogenous variables of each match and quantify their impact in order to measure inbound demand as a function of a certain price level. Using historical data from similar matches and cross-referencing it with the maximization opportunities available at any given moment, I was responsible for drawing up the pricing and sales strategy (choosing best commercialization timing, best offer to address etc.) calculating forecast revenue trends and presenting my recommendations to management on several occasions. Thanks to our strategy the club reached the total of 1.550.000 attenders for a unique season and broke other records as the highest attendance ever known for one game (65.984 attendees vs PSG), the highest average attendance for one season (62.065 attendees), the highest number of sold-out games (23 over the season) and the highest attendance ever known for a French Cup game (63.929 attendees). Finally, the strategies leaded by the Revenue Management department leaded to a 4.8M € maximization of the total club revenues.

Participation in club project profitability studies

More generally, as a Revenue Analyst, I was involved in every aspect of the club’s revenue development.

Conducting pricing analysis and manage commercial strategy was part of the Ticketing & Hospitality revenue stream. However, my missions also involved providing my vision on certain high-stakes projects involving additional revenue generation. From the arrival of potential sponsors and investors to the launch of the new “Peuple Bleu&Blanc” loyalty program, I was responsible for measuring the profitability of these projects by calculating the potential income they could generate, while defining and steering a strategy for maximizing it.

Intermediary role between sales and finance teams

The role was multi-functional in terms of strategy, finance, and sales. We had to define ambitious, realistic budgets alongside management control, while supporting the sales teams in achieving them. To do this, we analyzed revenue opportunities and proposed appropriate strategic recommendations for the Ticketing, Hospitality, Retail, Membership and other revenue streams.

Development of steering tools and reporting dashboards

As the analysis are based almost entirely on the measurement of KPIs (Key Performance Indicators), the development of management tools represented a major challenge. So, it was up to me to play an active part, working with the IT (Information Technology) and back-office teams.

Required skills and knowledge

In my role at Olympique de Marseille, it is crucial to understand the financial and commercial issues facing the club and its teams. It’s also important to develop a strategic way of thinking in which everything can be optimized.

As a Revenue Analyst, every recommendation needs to be backed up by data, and every opportunity must be quantified to support each recommendations. That’s why you need to have an excellent mind for analyzing and interpreting data.

Furthermore, the numerous presentations and reports to management require solid written and oral communication skills (PowerPoint presentations, e-mail reports, etc.), as well as adaptability to the person you’re talking to, in order to make the right points and get your recommendations accepted.

In addition, mastery of Excel and the budgeting/revenue forecasting process is key to this position. As each decision has a significant impact on the season’s revenues, numerous budget forecasts are required, particularly around Best/Mid/Worst scenarios. It is also necessary to master the Power BI tool (Business Intelligence by Microsoft) to be able to develop and interpretate every KPI.

Finally, it is essential to be humble and questioning in order to identify areas for improvement in each strategy, and to meet management’s requirements on an ongoing basis and know how to identify the best practices of these recommendations.

OM revenues details for the 2022/2023 season.
OM Revenues - Deloitte Report
Source : Deloitte Report

Financial concepts related to my apprenticeship

Budget Management

Budget management is a key concept in this position, influencing the decisions of sales teams and having a major impact on every strategy implemented. Budget management represents a guideline for costs and revenues, and in particular the preparation of a forecast budget which serves as a basis for input management.

Revenue Management

Revenue Management is a key concept which consists of defining variables considered to have an impact on maximizing revenues in periods of growth and limiting losses in periods of decline. For a club such as Olympique de Marseille, this means capitalizing on positive trends (good sporting dynamics, special matches, etc.) and protecting revenues when the sportive situation is non-favorable : succession of bad games, bad weather on matchday, non-attractive game due to opponent.

Business Plans and Financial modeling

Studying the profitability of projects and simulating the impact of commercial strategies involves drawing up business plans and financial models in order to calculate forecast revenues. To do this, we need to establish different scenarios adapted to different contexts and KPIS and then take into account the action and development plans for these projects, as well as the business models used.

Why should I be interested in this post?

If you’re interested in the field of Finance and Strategy, particularly within a soccer club, then this article will give you a clearer picture of the tasks and skills required, as well as the importance of Revenue Management within a sporting institution. Through this empowering experience, I was able to develop both the hard skills that will serve me well in my future career in Finance, and the soft skills that will enable me to perform in a demanding, high-pressure environment.

If you have any questions about the position or the sector, please don’t hesitate to contact me on my personal Linkedin page, I’ll be delighted to answer them.

Useful resources

Official OM website

Deloitte reporting : Football Money League 2024 edition

Official French Football League website : All DNCG report until 2021-2022 season

Example of a Football club balance sheet : SC Bastia (French 1st division) during the 2015-2016 season

About the author

The article was written in March 2024 by Quentin CHUZET (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2019-2023).

My professional experience as a financial and accounting assistant at Professional Services

March 27, 2024 by Alessandro MARRAS

My professional experience as a financial and accounting assistant at Professional Services

In this article, Alessandro MARRAS (ESSEC Business School, Global Bachelor in Business Administration (GBBA), Exchange Semester, September 2023-December 2023) shares his professional experience as a financial and accounting assistant at Professional Services.

About the company

Professional Services was founded in 1986 by a team of professionals (lawyers, chartered accountants, and labor consultants), with the aim of providing services to businesses in the accounting, labor, administrative, tax, and corporate sectors. The mission is to offer entrepreneurs an integrated package of services capable of stimulating organizational transformations and facilitating the achievement of adequate levels of competitiveness. The target audience addressed by the Group primarily consists of Italian and foreign companies operating in the service sector and tertiary industries in general, as well as industrial, commercial, transportation, etc. With over thirty years of experience in the sector and an average annual group turnover of approximately €2,000,000, Professional Services can guarantee their clients the highest level of professionalism.

Logo of Professional Services.

Source: Professional Services.

As an assistant, I was part of the financial and accounting advisory department of Professional Services. In this department we were entrusted with critical responsibilities spanning the processing of accounting data and the provision of essential accounting and administrative services. The department served as the backbone of the organization, providing essential support across a spectrum of financial activities. We were responsible for maintaining accurate and up-to-date accounting records, ensuring the integrity of financial information. Moreover, we undertook the crucial task of preparing and analyzing financial statements, offering insights vital for informed decision-making. Additionally, the team managed various accounting and administrative services, including the maintenance of corporate books, providing corporate assistance, and overseeing the intricate landscape of taxation, encompassing value-added tax (VAT), personal income tax, corporate income tax, and regional tax on productive activities.

My internship

I had a 3-month internship at Professional Services as a financial and accounting assistant in 2023.

My missions

Over the course of these three months, my mission was to prepare and analyze the financial statements for our clients. I ensured that these statements were accurate and complied with relevant accounting standards, providing reliable insights for decision-making. This involved meticulously reviewing balance sheets, income statements, and cash flow statements for the given clients and reporting how these statements were in comparison to industry benchmarks. Moreover, I contributed to the maintenance of clients’ accounting records, assisting in the establishment of a comprehensive and organized financial record-keeping system. I did this through a software called Profis which helped by facilitating the compilation of balance sheets and declarations and performing tax simulations. Additionally, I handled various tasks related to invoicing, ensuring accurate processing and organization to facilitate smooth financial transactions for our clients. By fulfilling these responsibilities diligently, I aimed to support our clients in maintaining financial integrity, facilitating informed business decisions, and providing excellent service overall.

Required skills and knowledge

During this internship, I sharpened a combination of soft and hard skills that were indispensable for my position. Soft skills, such as effective communication, were essential. The ability to convey complex financial information clearly and succinctly to colleagues was crucial. Additionally, strong interpersonal skills facilitated collaboration within the team and ensured smooth workflow.

Attention to detail emerged as a critical soft skill, particularly when working with financial data and reports. The ability to meticulously analyze information and identify discrepancies was crucial for maintaining accuracy and reliability. Furthermore, time management skills were invaluable, as I often juggled various tasks and deadlines while prioritizing workload effectively.

On the hard skills front, proficiency in accounting principles and practices was fundamental. This included a thorough understanding of IFRS accounting regulations and principles, coupled with experience in financial statement preparation and analysis. Additionally, familiarity in applications such as a spreadsheet like Excel and an accounting software like Profis was essential. Mastery of Excel allowed me to manipulate and analyze financial data efficiently, while knowhow in Profis facilitated specific accounting operations and analyses required for the firm’s services.

Adaptability was also key, given the dynamic nature of the internship environment. The ability to quickly learn and adapt to new software and procedures ensured that I could contribute effectively to the team’s objectives. Overall, the combination of soft and hard skills enabled me to excel in my internship at Professional Services, providing me with invaluable experience and preparing me for future challenges in the field of finance and accounting.

What I learned

In terms of knowledge, I learned a multitude of valuable lessons that have significantly contributed to my professional growth and development. Firstly, I gained hands-on experience in financial statement preparation and analysis, improving my skills in interpreting financial data and drawing meaningful insights to support decision-making processes. Through my work. An integral part of this experience was learning to meticulously review and reconcile accounts to ensure accuracy in financial reporting. By identifying and correcting discrepancies between the general ledger and subsidiary accounts, I helped maintain the integrity of financial statements. Additionally, I deepened my understanding of IFRS (International Financial Reporting Standards) accounting principles and regulations, which are crucial for ensuring transparency, accountability, and comparability of financial statements. By familiarizing myself with these principles, I was able to assist in preparing financial statements that met regulatory requirements, enhancing the credibility and reliability of our clients’ financial information.

Moreover, working with software applications such as Excel and Profis expanded my technical proficiency, allowing me to efficiently manipulate and analyze financial data. This experience has enhanced my ability to leverage technology to streamline processes and improve productivity in the workplace.

On a broader level, my internship at Professional Services provided me with invaluable exposure to the dynamics of the finance and accounting industry, in the sense that I gained insight into the day-to-day operations of a consultancy firm, including client interactions, and the importance of maintaining accuracy and integrity in financial reporting.

Furthermore, collaborating with colleagues from diverse backgrounds, such as with different experiences, educational backgrounds and different areas of expertise, has improved my communication and teamwork skills, fostering an appreciation for the importance of effective collaboration in achieving organizational goals.

Overall, my internship experience at Professional Services has equipped me with a comprehensive skill set, valuable insights, and a deeper understanding of the finance and accounting profession, laying a strong foundation for my future career aspirations.

Financial concepts related my internship

Financial Statement Analysis

Financial statement analysis involves evaluating a company’s financial performance and position by examining its income statement, balance sheet, and cash flow statement. In my role, I actively participated in the preparation and analysis of financial statements for clients, ensuring accuracy and compliance with accounting standards.

Financial Reporting Standards

Financial reporting standards refer to a set of guidelines and rules established by regulatory bodies or standard-setting organizations to govern the preparation and presentation of financial statements. These standards aim to ensure consistency, transparency, and comparability in financial reporting across different organizations and industries. In my role, I applied financial reporting standards to prepare and review clients’ financial statements and records, ensuring accuracy and transparency in reporting.

Taxation

Taxation includes corporate income tax, applied to business profits, and value-added tax (VAT), imposed on goods and services at each stage of production. Corporate income tax understanding involves knowledge of tax laws, deductions, and applicable rates. Similarly, understanding VAT requires knowledge of registration, taxable transactions, and applicable rates. Even though I was not directly involved, the team was responsible in accounting for VAT and corporate income tax for clients, ensuring compliance with relevant regulations.

Why should I be interested in this post?

An ESSEC student aspiring to pursue a career in finance would find my experience at Professional Services particularly compelling. By sharing my experience as a financial and accounting assistant, I aim to offer fellow ESSEC students a glimpse into the practical application of finance concepts in a professional setting, inspiring and informing their own career aspirations in the field.

Useful resources

Professional Services

About the author

The article was written in March 2024 by Alessandro MARRAS (ESSEC Business School, Global Bachelor in Business Administration (GBBA), Exchange Semester, September 2023-December 2023).

My experience as a Data analyst in CEMEX

March 5, 2024March 5, 2024 by Jorge KARAM DIB

My experience as a Data analyst in CEMEX

In this article, Jorge KARAM DIB (ESSEC Business School, Master in Strategy and Management of International Business (SMIB), 2024-2025) shares his professional experience as a Data Analyst and Data Management in CEMEX.

About the company

CEMEX is one of the leaders in building materials in the world. Their main products are cement, concrete, and aggregates (building materials in general). Based in Mexico, CEMEX reported a $15bn USD revenue in 2022, representing a 12% increase from the previous year. The company’s sales distribution, with cement, leading at 42%, followed by concrete at 33%, aggregates at 14%, and urban development at 11%, illustrates a balanced yet strategic emphasis on its core products and services.

Geographically, CEMEX’s influence spans major regions, with a substantial presence in Mexico, the USA, Europe, Asia, the Middle East, South America, and the Caribbean. Its operational footprint includes 64 cement plants, 1348 ready-mix concrete facilities, 246 quarries, 269 distribution centers, and 68 marine terminals, showcasing its capacity to serve a global clientele effectively.

At their beginnings, the company started with a single plant in Hidalgo, Mexico, called “Planta Hidalgo” under the direction of Mr. Lorenzo Zambrano, founder and CEO. Ever since then, the company adopted a philosophy of growing by acquisition. Great financial ratios, high volume of sales related to a big percentage of market share in Mexico, allowed CEMEX to do key strategic acquisitions throughout the next years that catapulted CEMEX into the international markets. Even with the financial crisis in 2008, they have been resilient and survived a big economic turmoil thanks to their high-quality products, service and cutting-edge advancements in digitalization, supply chain and data management.

Logo of the company
Logo of CEMEX
Source: CEMEX.

At the beginning of my career in the company, I started inside a program called “Digital Professionals in Development” (DPiD) which aimed to train and prepare 100 recently graduates to help the company boost the digital transformation in a period where CEMEX was going through a major digital transition of the commercial customer experience. Inside the program, I started as a Data Scientist inside the Global Data Analytics department, which allowed me to understand the different schemes of work, the hierarchical processes, capabilities and scope of the company and the institutional tools.

After working for the Global Data Analytics, another area that I’ve had experience, and where I’ve spent most of my time with, is the Commercial Development Area. Here, the intention is to keep the company at the state of the art in the commercial practices and keeping up with the technological trends of the world. My main duties have been regarding Data Management, on the development and management of advanced data analytics projects and master data quality, everything under the commercial umbrella.

My expertise at Data Management

Advanced Analytics

The way Advanced Analytics topics are managed is in a scheme by projects and in a cross-functional mode with other areas of the company like data architecture, supply chain, and more. According to the needs, or trends that anyone in the company points out, we assess the feasibility and benefit of approaching a new idea.

Some of the topics that we’ve been approaching have to do with increasing sales, enhance customer experience, increase Net Promoter Score (NPS), and improve the digital experience. One of the main projects that we’ve been developing is aligned with the retention of customers by predicting with service variables, historic volume trends, and machine learning the probability of a customer leaving the company. This effort requires to align with sales people of the different regions to set thresholds for the service variables and come to an agreement, consume information from the correct architecture source, and do the development of the machine learning model. As a final product, we’ve got the model embedded in a dashboard that the sales people can consult at any time, joined by monthly alerts sent to their email and their Customer Relationship Management (CRM) account.

Data Quality

Within the area, we’re managing the quality of the commercial information by managing and implementing actions to improve their completeness and accuracy. We acknowledge the importance of a high-quality level of information. Understanding that high data quality is the base of a successful forecast, project improvements, and in general for a company to become data driven.

As expected with a company that has presence in many regions of the world, the amount of information and different types of it can be overwhelming, a prioritization and starting point had to be put in place in order to overcome the overwhelming amount of information. Naturally, the first step was to define the attributes, and fields to be measured. After doing so, we had a clear picture of pain points throughout the regions and we prioritize the remediation of them. Lastly, as we don’t want to be continuously doing the cleaning effort, we want to maintain as much as possible the incoming information clean, in order to do so, it is necessary to put entry point validations to only allow clean information to come into the systems.

Required skills and knowledge

It is necessary to have the “hard skills” to work with the institutional tools, in CEMEX’s case, it is needed to know SQL, Power Bi, and Python (and/or R). Apart from the “hard skills” just mentioned, it is also necessary for “soft skills” to be known and/or developed, which would be to coordinate different areas and teams to work together, frequent results report, presentations to stakeholders, agile methodology to follow the progress of the project, and more.

What I learned

My main takeaways that I’ve had working at these projects is the importance of coordination with other areas, the help and expertise that you can get from relying with people with more experience would be as a shortcut for a lot of problems that may arise. Always ask for help whenever you feel that you might be stuck with an issue and be open to receive new ideas.

Financial concepts related my internship

EBITDA/Debt ratio

As mentioned earlier, part of the company’s philosophy is to grow by acquisition, hence the EBITDA/Debt ratio is crucial in order to get debt with lower interest rates, as the ratio is part of the key financials that banks and rating entities take into account when analyzing a company.

Return on Assets (ROA)

This financial indicator measures a company’s efficiency in generating profits from its assets. It is calculated by dividing the company’s net income by its average total assets. In other words, ROA indicates how effectively a company is utilizing its assets to generate earnings.

Why should I be interested in this post?

This post is with the intention that any student or alumni can have a glimpse of the structure of my professional experience in a company that is based in a different continent and would probably help them compare and see the main differences and similitudes between what is being done in Europe against what is being done in Mexico.

Useful resources

CEMEX Official webpage in France (ICD)

About the author

The article was written in March 2024 by Jorge KARAM DIB (ESSEC Business School, Master in Strategy and Management of International Business (SMIB), 2024-2025).

My experience as an Asset Management Sales Assistant for Amplegest

June 4, 2024February 12, 2024 by Chloé ANIFRANI

My experience as an Asset Management Sales Assistant for Amplegest

In this article, Chloé ANIFRANI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2019-2024) shares her professional experience as Asset Management Development Assistant for Amplegest.

About the company

Amplegest was established in 2007 and operates across three main business segments: Private Wealth Management, Family Office, and Asset Management.

Private Wealth Management

Wealth Engineering: A team of wealth engineers provides personalized advice to clients, addressing evolving issues related to wealth, taxation, and family matters over time.

Discretionary Portfolio Management: The firm offers the market expertise of its fund managers, developed through extensive experience in banks or asset management firms. Amplegest actively seeks new investment opportunities across all asset classes and geographical regions, employing a short and collaborative decision-making process for responsiveness.

Profiled Portfolio Management: The firm offers specific profiled portfolios to retail investors, who manage their own clients’ portfolios.

Family Office

Amplegest serves high-net-worth individuals in France and internationally through a dedicated department, Canopée FO, offering fully customized services.

Asset Management

Amplegest’s Asset Management division offers three expertise:

Equity: with 5 funds, the firm covers many thematics (such as technological innovation, pricing power), capitalizations (large, mid and small caps) and regions (global, US and Eurozone),
Diversified portfolios: with its Latitude range, the firm offers diversified funds with precise return objectives and risk allocation, with an offer for each profile of investor,
Fixed Income: the firm distributes Octo AM’s funds, a company specialized in bonds funds, with a Value management style.

Key Facts and Figures

Assets under Management (AuM): 3bn€
A large product range of more than 13 funds
Diverse clientele: institutional, retail, funds selectors…
All activities of Amplegest are approved by the AMF (Autorité des Marchés Financiers).

Logo of the company.
Logo of Amplegest
Source: Amplegest.

My internship

My internship was in the sales department of Amplegest Asset Management. With a team of five sellers, I learned about the different distribution channels of funds in a B2B model (the team I was in did not work with final clients). The focus of the team is on institutional and retail clients. In 2023, we mainly worked on distributing Octo AM’s bonds funds, which have met a great success following the interest rates’ raises. The firm’s fixed income’s AuM went from €350m in 2022 to €800m in 2023.

My missions

Over the course of six months, I supported the team with customer relationship management and enhancing our understanding of the firm’s competitive landscape.

One of my primary responsibilities involved diligently preparing for client appointments. This entailed creating comprehensive briefs on Amplegest funds and conducting in-depth analyses of their competitive environments. Whether addressing global competition or specific funds selected by clients, my aim was to highlight the differentiating aspects of our offerings.

In addition to client-focused tasks, I took charge of producing documents containing technical information about the funds, ensuring compliance with our customers’ regulatory requirements such as “étude de transparisation”, KYC, and Due Diligence. Monthly, I managed the dispatching of these documents, tailoring the frequency to the individual needs of each client.

Collaborating closely with both the Asset Management and Marketing teams, I actively contributed to the planning and execution of numerous B2B events. This encompassed the coordination of trade fairs such as Patrimonia, organizing large-scale professional lunches and presentations, facilitating webinars, and orchestrating engaging professional afterwork events.

Furthermore, I dedicated efforts to augment the firm’s understanding of its funds’ positions in the market. Collaborating with dedicated tools designed to gather real-time information on competitors’ performance and track records, I systematically compared these metrics against our own. This included the creation of specific peer groups tailored to each fund, providing valuable insights into their relative standing within the market.

Required skills and knowledge

In Asset Management firms, the role of Sales Assistants requires a multifaceted skill set that encompasses technical expertise and strong interpersonal skills. B2B clients expect sales professionals to possess an in-depth understanding of the market and its dynamics, coupled with the ability to articulate a fund’s management process, recent market movements, and current values with the same proficiency as a portfolio manager.

Upon assuming the role, I prioritized enhancing my knowledge of current events, particularly those related to the stock market and global financial trends. Each day commenced with a thorough review of newsletters, and I highly recommend daily publications by Bloomberg for comprehensive insights. This proactive approach allowed me to respond swiftly when clients sought information about the prevailing market conditions and how they correlated with Amplegest’s product offerings.

A good knowledge of the regulatory environment of Asset Management firms is also essential. The rules that govern this profession are numerous and constantly updated. This means that a great interest for current events (suits and convictions in other firms, general recommendations…) will be beneficial, as well as a good understanding of the guidelines provided by the Compliance department.

A proficiency in Excel is paramount, serving as a vital tool for data analysis, reporting, and decision-making within the asset management landscape. Additionally, financial analysis skills are crucial for interpreting complex financial data and providing comprehensive insights to clients.

In terms of soft skills, effective communication is fundamental—both verbal and written—enabling the clear and concise articulation of complex financial concepts. Strong client relationship management skills are essential for building and maintaining long-term partnerships, understanding client needs, and providing excellent customer service.

Adaptability is key in navigating evolving market conditions, client preferences, and organizational changes. Problem-solving skills come into play in identifying challenges and proposing effective solutions to address client inquiries and concerns.

Negotiation skills are valuable in securing mutually beneficial agreements with clients, while team collaboration is essential for working effectively with colleagues across different departments, fostering a cooperative and supportive work environment. Effective organization and multitasking are necessary for managing multiple tasks and projects simultaneously, while analytical thinking is crucial for making data-driven decisions and providing valuable insights to clients.

Furthermore, networking skills contribute to building a professional network within the industry, attending relevant events, and staying informed about industry trends. Finally, strong time management ensures efficient task prioritization, meeting deadlines, and delivering results in a fast-paced environment. Together, these skills collectively contribute to the effectiveness of an Asset Management Sales Assistant in navigating the complexities of the financial industry and delivering value to clients and the organization.

What I learned

In terms of knowledge, I learned a lot about the organization of an Asset Management firm, and its funds. In this internship, I gained practical knowledge of the regulatory landscape governing the financial sector. I also learned about fund organization and shares, exploring the nuances of fund structures, issuance of shares, and compliance with legal frameworks. Moreover, I developed a perspective on the distinctions between the back, middle, and front office specific functions within an asset management firm. This exposure allowed me to appreciate the integral roles each department plays in the overall operational efficiency and success of the organization.

In this role, I was also able to use skills developed in previous internships. Time management was one of them, which, as explained earlier, revealed itself to be a crucial component to a good experience in this field. Indeed, some requests from clients and coworkers needed to be tended to in a matter of minutes or may make the firm lose millions (a bit extreme, but sometimes realistic). Therefore, my other missions needed to be done as soon as possible, to allow time for the more pressing ones. I learned to organize my work to optimize my efficiency on this matter.

In terms of technical skills, I learned funds analysis, with the ability to evaluate their performance, risk profiles and underlying strategies thanks it their allocation and communications. This involved a systematic examination of the firm’s competitive market and its key players and trends.

Thanks to this in-depth benchmark, a sales team is able to prepare clients’ briefs, but also to offer new strategies and product offerings to their managers, identifying market opportunities and specific needs for the clients.

This experience has not only enhanced my analytical capabilities but also deepened my understanding of the intricate dynamics within the financial markets.

As a Sales Assistant, I also developed my VBA skills, and learned the power of this tool, especially used in finance firms. Excel VBA helped me to automate and streamline numerous tasks related to data analysis, reporting, and client communication, thereby significantly enhancing my efficiency and productivity. By developing proficiency in Excel VBA, I could create customized macros and scripts tailored to the specific needs of our team, automating repetitive processes and allowing me to focus more on strategic aspects of sales and client relationship management.

Overall, this experience not only broadened my knowledge and skills base but also equipped me with practical insights crucial for navigating the complex and highly regulated landscape of asset management.

Financial concepts related my internship

Fixed income

As explained earlier, 2023 was the year of fixed income. Because of this, understanding the inner workings of a bond funds was essential, as those funds are more complex than equity funds.

In order to give the clients the information they required and work adequately with the provided documents, this knowledge was a real necessity.

Diversified Asset Allocation

In preparing briefings for clients and partners, I often had to summarize the recent movements made on the firm’s diversified funds. Those funds invest in ETFs, bonds, monetary funds structured products in order achieve their expected annual return and respect their risk budget. Therefore, this type of product is, once again, more complex than equity funds, and require a deep understanding of active asset allocation and market movements.

Return on Investment

In order to have more insight on Amplegest’s clients’ satisfaction, I had to compute their total RoI, taking into account every movement they made over the course of their investment in the firm (subscription/redemption), in different funds at different times and with different net asset value of the shares they bought. This required a good understanding of Return on Investment.

Why should I be interested in this post?

As ESSEC students, we often think of working in Asset Management firms as working as a portfolio manager. However, there are many other functions in this field, and sales is one of them. If you are looking to expend your knowledge on the field and your potential future job inquiries, this post will teach you more about a very exciting position!

Useful resources

Asset management markets in Europe size & share analysis – growth trends & forecast

Amplegest

About the author

The article was written in February 2024 by Chloé ANIFRANI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2019-2024).

My professional experience as a property manager assistant at Urban Premium

February 10, 2024February 10, 2024 by Lilian BALLOIS

My professional experience as a property manager assistant at Urban Premium

In this article, Lilian BALLOIS (ESSEC Business School, Bachelor in Business Administration Program, 2019-2023) shares his professional experience as a property manager assistant at Urban Premium.

About the company

Founded in 2010, Urban Premium specializes in the structuring and management of real estate investment trusts (REITs). The company specializes in the management of residential and commercial SCPIs (Société Civile de Placement Immobilier). A SCPI is a collective investment undertaking in the form of a company that is not listed on the stock exchange. SCPIs collect money from many investors with the sole aim of acquiring and managing a property portfolio for rental. Urban Premium specializes in inner-city real estate investment, incorporating attractive tax incentives like “Pinel/Denormandie”, “Malraux” and “Déficit Foncier”.

The Pinel and Denormandie instruments offer tax reductions for the construction or renovation of real estate in specific areas of France, based on the duration of the lease.

The Malraux Law promotes investment in high-quality real estate, often in city centres and protected areas, offering an income tax reduction.

The Déficit Foncier allows for reducing tax pressure by generating a deficit through investments in properties requiring renovations, deductible from rental income.

Logo of Urban Premium.

Source: Urban Premium

As a property manager assistant, I was able to work alongside the front office managers. It was the central unit within the company, and it was responsible for implementing the investment strategy in line with tax incentives (Pinel/Denormandie, Malraux, and Déficit foncier). The front office was made up of one Managing Director, 5 managers and me.

In addition to these responsibilities, our department played a crucial role in managing funds and making strategic decisions. This involved overseeing the allocation of resources across various investment channels, ensuring optimal utilization of available funds while adhering to risk management protocols. Furthermore, our team engaged in market research and trend analysis to identify opportunities.

My internship

I had a 6-month internship at Urban Premium as an assistant property manager.

My missions

During my 6-month internship from September 2022 to February 2023, I engaged with multiple investment opportunities and projects. I took on the responsibility of analysing and crafting pitch-books for weekly meetings with managers when investment opportunity booklets were received. In addition to this, I had to monitor the accounting sheets of the real estate funds, analyzing, and providing insightful comments on their performance. While also overseeing fundraising to a lesser extent, my internship enabled me to understand the complexities of regulatory compliance concerning tax incentives for real estate finance and portfolio management within my company.

Required skills and knowledge

To be able to work in a real estate investment fund, it is necessary to have certain key skills:

Financial analysis to assess the profitability and viability of real estate investments.
A certain degree in accounting knowledge to understand and manage financial sheets. Particularly, you need a good knowledge of property valuation and lease accounting.
The ability to implement and analyse benchmarks to evaluate investment performance relative to the market.
Some background knowledge of the mechanisms of real estate markets and investment strategies.
Excellent communication skills to collaborate effectively with team members, partners, and investors.
Mastery of IT Tools, notably Excel.
Especially for the fund in which I was employed, knowing the principles of the different tax systems (Pinel, Malraux and Déficit Foncier).

What I learned

During my internship at Urban Premium, I learned new concepts and solidified the knowledge I already had. The hands-on experience provided through my internship gave me understanding of the management of real estate investment portfolios. Other important aspects of my internship were analyzing and contributing to the assessment of investment opportunities, navigating the complexities of project financing, and honing my skills in financial analysis.

Financial concepts related my internship

(Real estate) Financial analysis

Real estate financial analysis is the process of evaluating the financial aspects of property investments. It involves a comprehensive examination of various financial metrics and considerations to determine the profitability and feasibility of a real estate venture. This analysis encompasses factors such as property values, rental income, operating expenses, financing costs, and potential returns on investment.

Investment opportunity evaluation

Evaluation of an investment opportunity is the process of assessing the viability and potential returns of a specific investment. It involves an analysis of financial data, market trends, risks, and potential rewards. This evaluation aims to provide decision-makers with an understanding of the investment’s feasibility and align it with the overall goals and strategies of the investor or organization.

Portfolio Management

Portfolio management is the strategic and systematic process of overseeing and optimizing a collection of financial assets (real estate in this case), known as a portfolio, to achieve specific investment goals.

Why should I be interested in this post?

This post provides insights into the professional experience of working as a property manager assistant at a real estate investment trust (REITs) and managing residential and commercial SCPIs. It delves into real estate finance, including French tax incentives such as “Pinel/Denormandie”, “Malraux”, and “Déficit Foncier”. Additionally, the post outlines the responsibilities and skills required for working REITs, making it a must-read for anyone interested in pursuing a career in this field or seeking to enhance their knowledge.

Useful resources

Urban Premium

About the author

The article was written in February 2024 by Lilian BALLOIS (ESSEC Business School, Bachelor in Business Administration Program, 2019-2023).

My professional experience as a credit analyst at Targobank

December 4, 2024January 20, 2024 by Matthieu MENAGER

My professional experience as a credit analyst at Targobank

In this article, Matthieu MENAGER (ESSEC Business School, Bachelor in Business Administration (BBA), 2017-2021) shares his professional experience as credit analyst at Targobank (a subsidiary of the Crédit Mutuel group).

The Company

Targobank, a subsidiary of the Crédit Mutuel group, is a German bank operating mainly in the retail and corporate customer segments. Founded in 1926, it is one of the major players in Germany. With €2.6 billion in equity (8.6% of its total liabilities), Targobank AG generated €1.2 billion in income and interest in 2021.

Targobank has 7,000 employees in 2022.

The Crédit Mutuel Alliance Fédérale group is one of the largest and financially strongest banks in Europe (18 billion euros in interest and similar income in 2022), with a very good credit rating (S&P: A). It combines the advantages of a cooperative bank with strong local roots with those of an international bank, Crédit Industriel et Commercial.

Logo of the company.
Logo of Targobank
Source: Targobank.

What is really a credit analyst?

Credit analyst is an important position in the organization of a bank. It generally belongs to the back office (in my case I was in the front office). This department determines a company’s ability to repay one or more different types of loan (syndicated loan, current account overdraft, club deal, etc.) and the degree of risk for the bank. It carries out a financial, macroeconomic, microeconomic, CSR (Corporate Social Responsibility) and overall analysis of all the criteria that can have an impact on repayment capacity.

In addition to carrying out a complete analysis on established customers and prospects (potential new customers), the credit analyst must also ensure that the systems are properly maintained (internal rating commitments, updating the group’s status, etc.). This is a task that should not be neglected, as it allows all the other divisions to be informed about the situation of each agency.

What were my missions in the VIE ?

I arrived in June 2022 as a VIE (Volontariat International en Entreprise in French) for a period of 1 year and 6 months (I’ve extended by 4 months until April 2024). My objective at Targobank was initially, to look after the 42 existing customer files at our Frankfurt branch by carrying out each year either a simple annual review (simple review of our borrower’s group without any major decisions), a renewal (complete review and renewal of one or more lines that are due to expire at the time of the administrative deadline for the file), or a new application (complete review and new application(s) in addition to the review or renewal of other existing lines).

We offer companies every possible type of loan (traditional loans, facilities, leasing, factoring, SDM, or even guarantees). I also analyze certain prospects to determine whether they could become our customers. This analysis can have several objectives: either the customer is solid and profitable or belongs to a group with which we would like to have a future commercial relationship.

Finally, it is also my task to keep the various files on our internal systems up to date. I’m in constant contact with the Back Office to obtain the various documents needed to carry out internal tasks. These tasks may include filling in financial data, listing the various commitments, updating the company’s status, etc.

Required skills and knowledge

To be a credit analyst, you need several hard skills. You need to know how to use Excel and all the internal programs (we have a few days to familiarize ourselves with the systems), you need to be able to produce complete and concise analyses (financial, risk, data, etc.), you need to have a good grasp of accounting and be able to draw up financial forecasts. In my personal case (I work in Germany), I also need to be able to speak several languages (German, English and French).

Soft skills are just as important as hard skills. As a credit analyst, you have to turn in reports on time. You have to be meticulous about every detail so as not to mislead those who are going to validate the reports (commitments can amount to €20 million). Another skill is knowing how to collaborate and communicate with your team in order to provide the best file based on the various documents obtained. Finally, it is important to manage time and stress so as not to make mistakes when sending the report to the committee.

What I have learnt

During my almost two years in banking, I was able to broaden my knowledge of the world of finance. I worked in many different sectors and was able to get familiar with several other finance-related jobs (leasing, back office, etc.). My analysis of different financial situations has only improved and I’m now very comfortable with technical terms and their repercussions on a company. I can quickly form an initial impression of a group by carrying out a simple financial and market analysis. I’m also increasingly careful in my research to avoid being misled by a group’s appearance (some groups may claim to be doing well but are actually in decline).

My communication (email exchanges, Skype, Meeting Calls) has also improved. I try to give clear, concise answers so that I don’t get bogged down in a flood of emails and so that my interlocutor and I waste as little time as possible.

I’ve also acquired knowledge of the different markets (trends, clients, best manufacturers, etc.) in which I’ve worked (construction, pharmaceuticals, automotive, etc.). This is a quality that could be very useful to me in any field in which I might later wish to work.

Financial concepts related my internship

Group Annual Report

A group’s annual report is essential to its analysis. It must or may be published depending on a number of conditions and the surrounding standards (IFRS or HGB in Germany). The annual report provides a detailed picture of the group’s profitability (income statement), financial strength (balance sheet) and liquidity (cash flow statement). Annual reports also include a market analysis and financial forecasts (PLAN and FORECAST).

Environmental Social Governance (ESG)

Environmental Social Governance (ESG) is playing an increasingly important role in finance. For some time now, I have had to carry out an internal analysis of these 3 non-financial factors for each group and assign a rating, which can have an impact on the increase or decrease in financial interest on each commitment. The group must pay attention to its carbon footprint, diversity within the group, and the health and well-being of its employees.

Covenant

A covenant is a clause in a contract that allows the loan to be repaid if targets are not met. Covenants often relate to financial aspects and require the Group to send a Compliance Certificate, which verifies whether or not the objectives have been met and which is to be delivered on the date specified in the contract. Examples of covenants I have dealt with are: leverage >3.0x; Maintain equity >= 30%; or Gearing <100%.

Why should I be interested in this post?

If you’re interested in the world of finance, the position of credit analyst will undoubtedly be very popular. You’ll be exposed to several areas of finance, you’ll acquire a lot of knowledge and skills, and you’ll be responsible for monitoring several files. It’s a job that requires a lot of qualities and rigor, but also a lot of experience and knowledge. You’ll be doing financial analysis, macroeconomic analysis, microeconomic analysis, ratings, reports, simplified excel sheets and lots of other tasks.

I’d highly recommend the job and I’d advise starting out in a banking institution. It will be easier to get into the swing of things in a bank because you have less risk-averse credits. You could then consider joining an investment fund, where the decisions taken will have greater importance.

Useful resources

Targobank

Crédit Mutuel

About the author

The article was written in January 2024 by Matthieu MENAGER (ESSEC Business School, Bachelor in Business Administration (BBA), 2017-2021).

Mon expérience professionnelle en tant que contrôleuse de gestion chez Carfuel

December 17, 2023 by Medine ACAR

Mon expérience professionnelle en tant que contrôleuse de gestion chez Carfuel

Dans cet articleMedine ACAR (ESSEC Business School, Programme Bachelor in business administration (BBA) – 2020-2024) partage son experience professionnelle en tant que contrôleuse de gestion chez Carfuel.

Présentation de l’entreprise

Carfuel, une filiale du groupe Carrefour, est un acteur notable dans le secteur pétrolier français depuis sa création en 1976. Elle se positionne comme le 3ème opérateur pétrolier du pays. La société, avec un capital social de 17,5 millions d’euros, a généré un chiffre d’affaires impressionnant de 4,78 milliards d’euros en 2021.

Elle possède et opère plus de 1 300 stations-service à travers la France.

Le produit phare de Carfuel est la carte carburant Carrefour pour les professionnels, offrant des avantages tels que l’accès à des stations-service à prix compétitifs, une gestion simplifiée des dépenses en carburant, et des fonctionnalités pratiques pour le suivi des dépenses et la récupération de la TVA.

Logo de l’entreprise.
Logo de Carrefour
Source : l’entreprise.

Le département

Le département de contrôle de gestion de Carfuel se concentre sur l’analyse et la surveillance financière de l’entreprise. Il gère les budgets, contrôle les coûts, et évalue les performances financières.

Les responsabilités de ce département incluent la préparation des rapports financiers, la conduite d’analyses de variance, et la collaboration avec d’autres départements pour optimiser les dépenses et améliorer l’efficacité. Ce département joue un rôle clé dans le soutien des décisions stratégiques et opérationnelles de Carfuel, assurant ainsi une gestion financière efficace.

Mon stage

Dans mon rôle d’Apprentie en Contrôle de Gestion au sein du Département de Contrôle de Gestion, j’ai activement contribué à la récupération efficace des créances, atteignant un montant significatif de plus de 1 million d’euros. Cette tâche nécessitait une gestion méticuleuse des litiges et des impayés, tout en assurant un reporting analytique précis et informatif pour nos équipes. De plus, j’ai habilement dirigé une équipe de sous-traitants, établissant des relations de travail solides et directes avec la direction.

En outre, j’étais responsable de la préparation de rapports et de tableaux de bord, ce qui impliquait une analyse détaillée des coûts et la validation des données financières. J’étais impliquée dans la communication des performances actuelles par rapport aux résultats précédents, fournissant ainsi des informations clés aux équipes pour soutenir la prise de décision et la planification stratégique.

Compétences et connaissances requises

Dans mon rôle chez Carfuel, la compétence en recouvrement de créances était primordiale pour assurer la santé financière de l’entreprise, en récupérant les fonds dus de manière efficace et en minimisant les pertes.

La maîtrise d’Excel était essentielle pour analyser avec précision les données financières et d’élaborer des rapports détaillés, permettant ainsi une meilleure prise de décision. De plus, le leadership et la gestion d’équipe étaient cruciaux pour coordonner et motiver une équipe de sous-traitants, garantissant l’efficacité et le respect des délais. Enfin, une bonne compréhension du secteur pétrolier et la capacité à établir des relations avec différentes directions étaient nécessaires pour contextualiser mon travail et optimiser les processus financiers.

Quelles ont été les bénéfices de cette expérience

Pendant mon apprenstissage chez Carfuel, j’ai eu l’opportunité d’enrichir mes compétences en gestion financière, me concentrant spécialement sur la gestion du crédit et la récupération des dettes. C’était une expérience immersive où j’ai pu développer mes talents d’analyse, notamment en exploitant intensément Excel pour analyser les données et élaborer des rapports pertinents.

Diriger et gérer une équipe de sous-traitants a été un véritable challenge, mais aussi une occasion incroyable de croissance personnelle dans les domaines du leadership et de la gestion d’équipe.

De plus, j’ai acquis une compréhension plus approfondie du secteur pétrolier et développé ma capacité à communiquer et à collaborer efficacement avec divers départements, améliorant ma vision globale des affaires et mon expertise financière.

Les concepts financiers en lien avec mon expérience

Recouvrement de créances

Mon rôle dans la récupération des créances est directement lié à ce concept. Un recouvrement de créances efficace est crucial pour maintenir la trésorerie de l’entreprise et sa stabilité financière.

Rapport financier et analyse

L’utilisation d’Excel pour une analyse financière détaillée et la création de rapports était une partie clé de mon travail, s’alignant sur ce concept. Un rapport précis aide à la prise de décision stratégique et à l’évaluation de la performance financière.

Gestion des coûts

Diriger une équipe de sous-traitants et optimiser les processus financiers touche à la gestion des coûts. Cela implique de contrôler et de réduire les dépenses pour améliorer la rentabilité de l’entreprise.

Un intérêt pour vous ?

Si vous êtes intéressé par une carrière dans la finance, cet article donne un aperçu concret et précieux de ce que signifie travailler dans la gestion financière au sein d’une grande entreprise. En partageant mon expérience de stage chez Carfuel, je vous donne un avant-goût de la réalité de la finance d’entreprise, en mettant l’accent sur des aspects pratiques tels que la gestion du crédit, le recouvrement de dettes, et l’analyse financière.

Vous découvrirez comment les compétences théoriques apprises se traduisent dans un environnement professionnel dynamique. Mon expérience illustre également l’importance des soft skills essentiels pour toute carrière dans la finance ?

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Ressources

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A propos de l’auteure

L’article a été rédigé en décembre 2023 par Medine ACAR (ESSEC Business School, Programme Bachelor in business administration (BBA) – 2020-2024).

My experience as Digital Business Developer for Capture Europe

December 17, 2023 by Michel VERHASSELT

My experience as Digital Business Developer for Capture Europe

In this article, Michel Henry VERHASSELT (ESSEC Business School, Master in Finance, 2023-2025) shares his professional experience as Digital Business Developper at Capture Europe.

About the company

Capture Europe provides software solutions and IT services to businesses on an international scale, with a focus on European businesses. Partners of Broadcom and ServiceNow, their areas of expertise are mainly in Project Portfolio Management and Automation. Past clients include major banks, telecommunication companies, etc.

Logo of the company.
Logo of Capture Europe
Source: the company.

My role at Capture Europe

My missions

In my role as a Digital Business Developer at Capture Europe, my primary mission was to coordinate our sales and marketing teams. This multifaceted role demanded a diverse skill set and included various responsibilities. On the sales front, I screened prospects, transforming them into valuable sales-qualified leads. This process involved market and industry research, cold-calling, and reaching out to other potential clients, such as webinar attendees and conference participants.

Once the leads met our predefined criteria and expressed a genuine interest in partnering with Capture Europe, I connected them with the relevant business divisions within our company. This transition from prospect to sales-ready lead was pivotal in driving sales, and it was perhaps what I enjoyed most about the job. I had to learn to be comfortable talking to people in different positions of the corporate hierarchy, to change my style accordingly and make sure they were interested in what I had to say. I also had to learn to deal with rejection and sometimes rudeness. In the end, you get used to it, and you focus on achieving your goals.
On the marketing front, I played a role in bolstering our company’s online presence. This involved curating content for our social media platforms and leading marketing campaigns in collaboration with the rest of the team. I was responsible for developing compelling marketing materials, creating engaging presentations and webinars, and maintaining our extensive CRM database, which housed information on 2,000-3,000 customers.

As part of my administrative duties, I maintained regular communication with our executives, providing them with insightful updates on the performance of both the sales and marketing teams in relation to key performance indicators and our organization’s overarching goals. This holistic experience provided me with insights into the inner workings of our business and, I believe, helped my professional growth in general.

Throughout my tenure at Capture Europe, I consistently exceeded KPI sales targets, driving over €600,000 in revenue through strategic software sales. This experience not only enhanced my sales and marketing skills but also equipped me with a comprehensive understanding of how an enterprise operates.

Required skills and knowledge

A diverse skill set is needed to succeed as Digital Business Developer. Approximately half of my responsibilities revolved around leveraging analytical skills, while the other half emphasized interpersonal and communication abilities.

On the analytical side, a substantial portion of my time was dedicated to database analysis and market research. These tasks demanded a thorough understanding of research tools and data analysis techniques, allowing me to derive meaningful insights from large datasets. Familiarity with Customer Relationship Management (CRM) software was also indispensable, enabling the efficient management of customer data and facilitating data-driven decision-making.

Once I had identified promising prospects, my role transitioned to a more people-centric focus. Building and nurturing business relationships became pivotal. Effective interpersonal skills, coupled with the ability to initiate conversations and guide them towards a successful conclusion, played a vital role in securing sales. These skills were also essential for facilitating smooth collaboration and alignment between the marketing and sales teams, despite differing goals and expectations. It was not uncommon for conflicts to arise, with the teams’ managers occasionally holding conflicting opinions. In such scenarios, I often found myself in a diplomatic role, navigating the fine line between my role as an employee of the Head of Marketing and the imperative to ensure effective cooperation. My background in languages and translation proved invaluable in these situations, as it equipped me with the ability to employ nuanced language to reconcile differences and lead the teams to collectively achieve overarching project success.

What I learned

My tenure as a Digital Business Developer at Capture Europe provided me with insights into the workings of a business, from its microscale operations to the macroscopic strategic planning. Throughout my role, I gained a comprehensive understanding of various facets, including how different branches within the corporate structure collaborate and communicate to achieve common objectives.

On a microscale, I learned the intricacies of identifying potential sales opportunities and managing short-term projects efficiently. These experiences equipped me with practical insights into the day-to-day operations of a business, highlighting the importance of timely execution and attention to detail.

On a macroscale, I had the privilege of observing how executives manage and coordinate teams to achieve long-term organizational goals. This perspective allowed me to comprehend the complexities of aligning individual efforts with the overarching mission of the company.

In terms of interpersonal skills, my role exposed me to the nuances of effective communication, diplomacy, and conflict resolution within a professional setting. I encountered challenging scenarios, learned how to navigate workplace conflicts, and honed my ability to maintain productive relationships, even when dealing with difficult customers. This aspect of my experience underscored the importance of empathy, patience, and adaptability when addressing customer concerns and achieving favourable outcomes.

Lastly, I acquired a range of hard skills, most notably advanced proficiency in Excel. The practical utilization of Excel tools and functions in data analysis and reporting became a crucial component of my daily responsibilities. This experience enhanced my analytical capabilities and has proven to be an asset in various professional contexts.

In essence, my time at Capture Europe provided me with a holistic view of business operations, from the smallest details of day-to-day tasks to the grand strategies of executives. It also honed my people skills and hard skills. These experiences have collectively contributed to my personal and professional growth.

Financial concepts related my internship

Return on Investment

As a Digital Business Developer, understanding ROI is essential. Your role involves identifying sales opportunities, conducting market research, and implementing marketing campaigns. These efforts all incur costs, and it’s crucial to measure the return on these investments. We would continually be measuring our efforts against the overall marketing budget, and gauging how cost-effective our campaigns were. For example, some menial tasks involve a lot of man-hours, like screening thousands of prospects’ backgrounds – would it be smarter for the organization to automate this work ? It is not at all obvious without thorough analysis of the specific costs of both options. It was my suggestion to management, but it was ultimately rejected as too costly.

You need to analyze the effectiveness of marketing campaigns, sales efforts, and the overall impact on the company’s bottom line. Knowledge of ROI enables you to assess whether your strategies are generating profitable outcomes or if adjustments are required.

Customer Lifetime Value

This concept, akin to ROI but with a more personalized focus, comes into play when dealing with numerous potential clients daily. In such a dynamic environment, you must make choices and prioritize certain relationships over others. It’s important to recognize that the most promising business relationships might not yield immediate success. Patience is key, as nurturing long-term client relations can be more valuable. While a single, small to medium-sized contract may not suffice to meet your KPIs or drive significant company growth, establishing trust with a long-term partner can be more advantageous. These enduring partnerships offer the potential for recurring contracts and cross-selling opportunities once clients appreciate the value you bring to their business, making them exceptionally valuable.

Cash-flow analysis

Cash-flow analysis serves as the linchpin that connects both ROI and CLV. To ascertain ROI, you must meticulously track the flow of financial resources. It involves assessing the inflow and outflow of cash within the business, to ensure liquidity and overall financial stability. Similarly, when considering CLV, understanding the organization’s cash flow is vital. It enables you to determine the feasibility of nurturing long-term client relationships, as you can evaluate the available funds to support these efforts over an extended period.

Why should I be interested in this job?

Imagine your finance studies as the “what” of the financial world – understanding numbers, investments, and markets. But a successful finance professional needs the “how” and “why” too. That’s where my experience as a Digital Business Developer comes into play.

You’ll need to grasp how different parts of a company connect and impact each other. My role helped me understand this interconnected web of business operations. You’ll appreciate this holistic perspective when you’re making financial decisions that affect the entire organization.

Moreover, I often needed to take the role of a team leader. Leadership and teamwork are more than buzzwords. Your finance journey won’t be a solo ride; you’ll work in teams with different goals. My time as a coordinator taught me how to lead, resolve conflicts, and unite people towards a common objective. This is the reality of working within a larger structure: managing projects, working with diverse teams, and making things happen together.

Externally, building relationships and securing deals were crucial in my role. These soft skills are a finance must-have too. Whether you’re advising clients in private banking or large institutions and businesses in corporate and commercial banking, it’s all about understanding others’ needs and offering tailored solutions. Your people skills will play a significant role in your future success.

Finally, in terms of hard skills, Digital Business Developers need to wield a variety of tools to garner meaningful business insight and drive sales. In finance, you’ll likewise need to use models and analysis tools for similar goals: to assess the feasibility of your projects, study potential risks, and compare them to the rewards.

In a nutshell, my journey as a Digital Business Developer gives you a sneak peek into the “real world” of a business. It’s like having a backstage pass to understand how businesses run, the art of teamwork, and the tools to navigate the corporate maze. So, when you blend this with your finance studies at ESSEC, you’re not just learning about finance – you’re becoming the kind of finance professional who can thrive in any role in the industry.

Useful resources

Capture Europe

What is Digital Business Development

Marketing Strategies for Financial Services

About the author

The article was written in December 2023 by Michel Henry VERHASSELT (ESSEC Business School – Master in Finance, 2023-2025).

Discovering the Secrets of a Bank Trading Room

December 11, 2023 by David GONZALEZ

Discovering the Secrets of a Bank Trading Room

In this article, David GONZALEZ (ESSEC Business School, Global BBA, 2023-2024) delves into the amazing yet often concealed aspects that frequently transpire within different bank trading rooms. This investigation is rooted in his experiences at Banco Industrial y de Comercio Exterior (BICE).

BICE Bank

BICE Bank was founded in 1979 in Santiago, Chile, under the name Banco Industrial y de Comercio Exterior by a significant group of Chilean investors associated with some of the country’s leading export companies. Currently, BICE Bank has focused on providing services to high-income individuals in Chile. Currently, it is the seventh-highest commercial bank in Chile.

Logo of the company.
Logo of Banco BICE
Source: the company.

My Internship at BICE

Ever since I was young, I have been drawn to the financial markets. This was the primary reason that led me to select a nine-month internship in the Market Risk and Liquidity division, a component of the trading room at BICE Bank. My primary responsibility was to provide daily reports on various risk indicators to the trading room, with a particular emphasis on highlighting the changes resulting from different trades conducted during the day. In the following paragraphs, I will provide a brief overview of some of the main indicators I was tasked with explaining, after that, I am going to talk about some interesting things that every aspiring trader should know about this business.

The risk indicators that I was in charge of

Value at Risk (VaR)

This indicator aims to quantify the worst-case scenario of losses in the bank’s portfolio, taking into account historical market data. In other words, it provides an estimate of the likely amount of money the portfolio could lose in a day of financial crisis (a stress scenario).

Present Value of 1 Basis Point (PV01)

This indicator seeks to quantify the potential loss in the portfolio resulting from a one-basis-point increase in interest rates. It is important to note that this indicator is applicable only to fixed-income assets, as it attempts to predict the change in the value of a bullet bond that is dependent on interest rate fluctuations.

Liquidity Coverage Ratio (LCR)

Have you ever heard of interbank loans? This indicator is of paramount importance to bankers as it assesses whether the bank possesses sufficient liquidity as required by regulatory standards or even for normal day-to-day operations. If the LCR falls below a certain threshold, the bank may need to enter into arrangements with a counterparty to borrow funds and restore this indicator to compliance.

Credit Value Adjustment (CVA)

Have you ever heard of the over-the-counter (OTC) market? Unlike centralized exchanges that guarantee the money or assets being traded, the OTC market lacks such centralized assurance. Banks frequently engage in OTC transactions, and the primary means by which they protect themselves against counterparty risk is through CVA. This is computed based on the credit rating of the counterparty. The CVA indicator reveals the bank’s exposure in relation to the counterparties with whom it conducts transactions.

Required skills and knowledge

In general, large trading rooms not only trade on the stock exchange, which is widely known, but they also engage in transactions in the over-the-counter (OTC) market. It was crucial for me to understand how this market operates, including what a swap is, what a forward contract entails, and how interest rates and inflation expectations influence the financial market. This knowledge was essential because I needed to stay informed about how macroeconomic factors or new transactions affected the bank’s portfolio. Every move in each risk indicator had to make economic or financial sense before being reported to the traders.

As for soft skills, effective communication when required was clearly important. Maintaining composure and seeking solutions rather than assigning blame when issues arose at work were vital skills as well. Furthermore, the ability to proactively seek solutions independently before seeking assistance from someone who might be occupied with their own tasks was crucial.

What just few people know (knowing the business)

Understanding Different Types of Trading Rooms: A Crucial Insight for Aspiring Traders

When I started working at BICE Bank, my boss told me that the bank had two trading rooms: one of them was the main trading room of the bank, and the other was the trading room of the stockbrokerage (which is a subsidiary of the bank). Obviously, this didn’t make sense to me, and I wondered, what is the reason for having two different trading rooms on two different floors of the building? When I expressed this concern to my boss, he explained, “It’s because they are oriented towards different sides. The main trading room focuses on the buy side, which means that traders manage, invest, and build portfolios while seeking returns within the risk level stipulated by the risk department. Usually, hedge funds, banks, insurance companies, and pension funds have this emphasis.” He continued, “The other trading room is part of the stockbrokerage, which is a subsidiary of this bank. They focus on the sell side. In this case, traders are responsible for executing transactions for clients who use our brokerage service. In other words, these traders don’t make decisions; they simply follow clients’ orders. Examples of this side include investment banks, brokerage firms, and market makers.”

Future traders must be clear on which side of the market they want to be on, so they can choose the right path for their careers. If the goal is to build their own portfolio and invest based on their own analyses and expectations, while assuming a higher level of risk, the trader should opt for the buy side. Conversely, if the aim is to avoid the risk of losses associated with maintaining a personal portfolio and only focus on achieving the best prices in the market, the sell side is the preferable choice. In this scenario, all the risk would be borne by the clients, as the trader would merely act as an intermediary between them and the market.

Financial concepts related my internship

The trader who triumphed over the 2008 crisis (Risks)

During my tenure at the bank, I had the privilege of meeting several senior traders, most of whom had over 20 years of experience in the market. One of them shared a fascinating story about how he navigated through the 2008 crisis.

Banks typically maintain a rather conservative investment policy, meaning they are risk averse. Consequently, one of the most common strategies is securities arbitrage (buying securities in a market where they are undervalued and selling them in other more expensive market). This strategy carries zero exposure, and profits are guaranteed when operating with substantial sums of money. This particular trader happened to be engaged in arbitrage on the day the 2008 financial crisis erupted. Upon realizing the unfolding catastrophe, he promptly closed his long positions remaining the shorts, that resulting in astronomical profits at a time when the global economy was collapsing.

Future traders looking to be on the buy side need to consider which financial institution is the best for advancing their career. Hedge funds, commercial banks, insurance companies, and pension fund managers tend to differ in terms of risk tolerance, either due to their own institutional policies or regulatory guidelines. For instance, in Chile, the regulatory commission does not allow commercial banks to invest in stocks.

Why a Chilean bank is concerned about federal reserve FED (Interest rates)

I had the fortune of gaining my experience at this bank during a period when the Fed and most central banks worldwide were raising their interest rates as a measure to control inflation stemming from the expansive policies implemented during the COVID-19 pandemic. I noticed that the traders were always closely monitoring the Fed’s announcements and whether they aligned with market expectations.

Intrigued by the heightened anticipation surrounding the market, I decided to seek insight from one of the traders. He offered the following explanation: “There are several factors contributing to this heightened attention. Primarily, monetary policy decisions in an inflationary environment tend to shape our trading strategies. On one hand, rate hikes affect all fixed-income assets, potentially causing our portfolio to depreciate in value and elevating risk indicators like VaR. Additionally, when the Federal Reserve tends to raise interest rates, it becomes more profitable for institutional investors to purchase bonds due to the relatively low levels of risk premium and liquidity premium demanded. Lastly, we also consider short positions in emerging market currencies since the dollar typically appreciates in the midst of Fed rate hikes.”

Federal Reserve announcements typically tend to influence financial markets. This is mainly because they shed light on the current state of the economy, enabling institutional investors to assess whether it is more profitable to invest in fixed income or equities. This assessment considers the risk premium and liquidity premium demanded from assets.

Liquidity the most important but the most avoided for banks (Banks Liquidity)

Every Monday afternoon, we held our weekly meeting where the latest developments were reported to the company’s top executives, including the CEO. During one such meeting, the bank’s CEO noticed that the bank’s liquidity indicators were quite comfortable, indicating an ample reserve of funds in the bank’s coffers.

Normally, customer deposits do not remain dormant in their accounts; instead, this money is put to use for investments or lent to other customers. Hence, the surplus liquidity captured the CEO’s attention. In the end, money entails a trade-off, and maintaining it in reserve can prove rather costly. The CEO raised a query regarding this with the head of the trading room, who clarified that the excess liquidity was a result of the impending release of the decision on whether to change the Chilean constitution or not, anticipated for that week. In anticipation of an adverse outcome, the trading room needed to uphold substantial liquidity to accommodate depositors wishing to withdraw their funds. The head of the trading room confirmed that, indeed, maintaining such high liquidity levels cost millions each day since interest rates were exceedingly high and the funds could have been invested. Nevertheless, this course of action was deemed necessary in light of the country’s political crisis.

Why should I be interested in this post?

Are you interested in pursuing a career in a trading room? Do you aspire to become a trader one day? If the answer is yes, you must read this post. By doing so, you will gain insights into how trading rooms operate and the various types of trading rooms available in the marketplace. Additionally, you will learn about some important concepts in finance, accompanied by an interesting story to introduce them.

Useful resources

Hull J.C. (2021) Options, Futures, and Other Derivatives Pearson, 11^th Edition.

Banco BICE (2022) Memoria Anual.

About the author

The article was written in December 2023 by David Gonzalez (ESSEC Business School, Grande Ecole Program – Global BBA, 2023-2024).

My experience as a Strategic Consultant at SGS

December 10, 2023 by Arthur EVERARD

My experience as a Strategic Consultant at SGS

In this article, Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024) shares his professional experience as a strategic consultant at SGS Spain, the largest certification and verification company in the world.

About the company

SGS is a leading inspection, verification, testing and certification company headquartered in Geneva, Switzerland. Founded way back in 1878, SGS has grown over the past 140+ years into a global powerhouse in its industry. Today, SGS operates an expansive network of over 97,000 employees located across 2,600 offices and laboratories around the world. SGS provides critical services to clients across a diverse range of industries such as agriculture, food, pharmaceuticals, energy, mining, and consumer goods. The key services SGS offers include quality control, safety audits, supply chain security, verification testing, and certification services aimed at minimizing risk, improving operational efficiency, and ensuring regulatory compliance for its clients. In 2021, SGS reported impressive annual revenues of CHF 6.1 billion, showcasing the scale and market-leading position the company has established. SGS trades its stock publicly on the SIX Swiss Exchange and has maintained a very strong market capitalization around CHF 20 billion as of 2022, highlighting the company’s value and the confidence investors have in its ongoing growth and performance.

My internship

My missions

During my intensive five-month internship within the strategic consulting division at SGS, I gained first-hand experience driving key projects to identify new market opportunities for SGS clients across priority industry verticals. Working closely in a team of five interns, we successfully pinpointed high-potential new market entries in the rapidly growing areas of e-commerce, renewable energy, and smart city solutions. For each of these technology-driven verticals, I made key contributions in researching the competitive landscapes, analyzing growth drivers and trends, and formulating data-driven go-to-market strategies tailored to the client’s specific capabilities and needs. In addition to the core project deliverables, I worked adaptively to address over 15 distinct requests from clients, customizing our recommendations and insights to align with their feedback and objectives. Moreover, I continually demonstrated my ability to operate effectively under tight deadlines and high-pressure situations, consistently delivering high-caliber final deliverables across the 5 core project milestones.

Required skills and knowledge

The comprehensive overview provided across SGS’s operations, my contributions, and the key metrics studied highlight the diverse mix of strategic, analytical, communicative, and execution skills that are foundational for succeeding in high-impact consulting roles. The ability to formulate data-driven market strategies, address shifting client needs, operate under tight timelines, and quantify engagement outcomes using metrics like churn rate, cost synergies and market share growth will all serve me well for future consulting positions.

What I learned

By actively participating in full consulting engagements, I expanded both hard and soft skills critical for delivering impactful solutions. On the hard skills side, I honed my PowerPoint and data visualization capabilities, along with sharpening my structured approach to framing issues and developing strategies. Regarding soft skills, I improved my communication and relationship-building abilities in order to understand clients’ needs and maintain alignment. I also boosted time management, project coordination, and adaptability competencies by driving progress across fluctuating priorities and deadlines. Most importantly, I gained invaluable understanding of how the consulting world operates, from how engagement scoping and staffing works to techniques for guiding clients toward data-backed decisions. This 360-degree exposure undoubtedly provides me with a strong experiential foundation for launching my career as a strategic consultant.

Business concepts related my internship

Three key metrics we evaluated for the consulting project were churn rate, cost synergies, and market share growth. Churn rate measures customer losses – a low churn indicates customer retention and satisfaction. Cost synergies track cost savings from mergers or process improvements. Market share growth shows expanded business in existing or new markets. These metrics demonstrate the success of growth strategies for clients like SGS.

Churn Rate

Churn rate measures the percentage of customers that stop using a company’s products or services over a given period of time. It is calculated by dividing customer losses by the total number of customers at the start of the measurement period. A low churn rate indicates customers are happy and sticking with the company’s offerings. High churn means customers are leaving and switching to competitors – a major warning sign. For consulting firms like SGS, monitoring churn allows them to evaluate client satisfaction post-engagement. Low churn means clients saw value in the insights and strategies provided by the consulting team. High churn could indicate ineffective solutions or poor client management.

Cost Synergies

Cost synergies refer to cost savings and efficiency improvements achieved by combining operations and streamlining processes after mergers, acquisitions or other business integrations. Quantifying cost synergies helps companies like SGS demonstrate the financial upside of inorganic growth through M&A. It shows tangible bottom-line impacts. Specifically for management consulting firms, cost synergies can be generated by consolidating back office functions, integrating IT systems, and leveraging shared services post-acquisition. High cost synergies boost profitability.

Market Share Growth

Market share growth reveals how successfully a company like SGS expands within its core markets or penetrates new high-potential segments. It is measured by comparing the percentage of total market sales or customers held by the company over time. Increases in share signal effective strategies. For consultancies, market share growth validates their ability to win new business and expand wallet share with existing clients through cross-selling and new service offerings. It highlights the competitive positioning and growth trajectory of the consulting firm within its addressable industry advisory market.

Why should I be interested in this post?

For those interested in consulting, this experience offers very relevant preparation and perspective into core aspects of the job.

Useful resources

SGS

About the author

The article was written in December 2023 by Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024).

My experience as a Business Analyst at HelloFresh

March 31, 2024December 10, 2023 by Arthur EVERARD

My experience as a Business Analyst at HelloFresh

In this article, Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024) shares his professional experience as a business analyst at Hellofresh Benelux, the largest meal kit provider in the world.

About the company

HelloFresh is a meal-kit delivery company founded in Berlin, Germany in 2011 by Dominik Richter and Thomas Griesel. The company ships preportioned ingredients and recipes to customers to prepare home-cooked meals. HelloFresh went public in November 2017, completing its IPO on the Frankfurt Stock Exchange. The company’s stock price rose significantly during the COVID-19 pandemic in 2020 and 2021 as demand for meal kits surged due to lockdowns and reluctance to grocery shop in-person. However, in 2022 the stock declined from its pandemic highs as consumers returned to pre-pandemic habits and inflation/recession concerns weighed on the stock price. Despite this drop, HelloFresh remains one of the largest meal kit providers globally. HelloFresh reported record revenue of €5.99 billion in 2021, a 62.5% increase over 2020, with adjusted EBITDA of €827 million. The company provides over 30 different recipes each week, shipping pre-portioned fresh ingredients and step-by-step instructions for dishes such as seared steak with mustard sauce, chicken enchiladas, and zucchini noodle Bolognese. HelloFresh carries over €1 billion in total debt but remains profitable, positioning itself as the largest meal-kit provider globally based on market share.

Logo of HelloFresh.

Source: the company.

My internship

During my six-month internship at HelloFresh, I worked within the product development department on the HelloFresh Market. The product development department at HelloFresh is responsible for optimizing the HelloFresh Market, which is the section of the HelloFresh website that allows customers to add individual items to supplement their regular meal kits. The product development team analyzes sales data and customer feedback to determine the optimal mix of products to offer on the Market that will maximize sales and customer satisfaction.

My missions

I extracted data using SQL code and created pivot tables to analyze product and category performance. Using this data, I generated charts and visualizations that provided insights into growth opportunities. I also managed the database of over 4,000 products, monitoring demand and availability. Additionally, I led ten research projects focused on competitive analysis and predicting demand fluctuations in the Benelux (Belgium, Netherlands and Luxemburg) region.

Required skills and knowledge

Throughout my internship at HelloFresh, I developed a valuable mix of hard and soft skills. In terms of hard skills, I improved my Excel abilities considerably, including advanced use of pivot tables, lookups, and complex formulas. I also honed my PowerPoint skills to deliver impactful presentations. Regarding soft skills, I learned the importance of teamwork, time management, and public speaking. Collaborating with team members, prioritizing tasks, and presenting findings to stakeholders were critical.

What I learned

Additionally, I gained important knowledge specific to my role. I learned how to write and optimize SQL code to extract and analyze large datasets efficiently. My Excel modeling skills became sharper through regular use of data analysis, lookups, and visualizations. I gained useful insight into the food industry by managing HelloFresh’s extensive product database. The internship gave me valuable exposure to e-commerce operations and using data to inform business decisions. I also developed a deeper understanding of key performance metrics like AOV, ticket size, and repeat rate that guide strategy for online retailers. Overall, this internship provided me with marketable hard and soft skills and enriched my familiarity with the data-driven decision making crucial in food e-commerce.

Key concepts related my internship

I present below three key concepts that I used throughout my internship: Average Order Value, Ticket Size, and Repeat Customer Rate.

Average Order Value (AOV)

This metric calculates the average amount spent per order across all customers. It is important for e-commerce because it indicates whether customers are spending more or less per transaction over time. A high AOV signals customers are purchasing more items per order or higher-value items. Tracking AOV helps e-commerce optimize pricing, discounts, product selection, and cross-selling tactics to encourage larger basket sizes. In the department we used to check the evolution of the AOV of the week compared to the previous week.

Ticket Size

Ticket size measures the average number of items purchased per order by customers. Monitoring this shows if customers are adding more products to their carts from an order to another, which boosts revenue. A low or declining ticket size could indicate issues with product selection, bundles/recommendations, or that customers are running out of reasons to buy more per order.

Repeat Customer Rate

The repeat customer rate shows the percentage of customers that make more than one purchase with the company over two consecutive periods (say six months or one year). A high repeat rate is crucial for e-commerce profitability because acquiring new customers is more expensive than retaining existing ones. Repeat customers tend to spend more over their lifetime too. This metric indicates whether marketing efforts and customer experience lead to loyal, valuable long-term customers.

Why should I be interested in this post?

The overview of HelloFresh and description of the product development department would be useful reading for anyone interested in working in the food or e-commerce industries as an analyst or in a finance role. The details provided give insight into how data analysis and financial metrics are utilized at a meal-kit company to optimize product selection and drive growth. Understanding how databases are leveraged, performance is monitored, and strategic decisions are informed by data analysis is applicable for those pursuing analyst positions that require SQL, Excel, and visualization skills. Additionally, the explanation of key business concepts like average order value , ticket size, and repeat customer rate provides a look into e-commerce economics that would benefit those interested in finance roles focused on online retail and subscription businesses. In summary, the text illustrates responsibilities and skills sought after in analytical and financial positions at food and e-commerce companies.

Useful resources

HelloFresh

About the author

The article was written in December 2023 by Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024).

My experience as a Real Estate Analyst at Eaglestone

December 10, 2023 by Arthur EVERARD

My experience as a Real Estate Analyst at Eaglestone

In this article, Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024) shares his professional experience as a Real Estate Analyst at Eaglestone, a Belgian real estate developer operating in Europe.

About the company

Eaglestone is a real estate developer based in Brussels, Belgium and focused on commercial and residential projects across Europe. Founded in 2014, Eaglestone has already developed over €1 billion in real estate assets including office buildings, hotels, apartments and more. The company currently has around 15 ongoing projects spread across major cities like Brussels, Amsterdam, London and Lisbon. Eaglestone’s business model involves identifying promising development opportunities, securing financing, overseeing construction, and managing/leasing the completed properties.

Logo of Eaglestone.

Source: the company.

My internship and missions

During my two-month internship at Eaglestone, I worked on several key projects. I compiled and presented detailed analyses on new London, Lisbon and Brussels investment opportunities (development for offices and residential buildings) to the CEO, including market overviews and financial projections. I visited three ongoing construction sites in Brussels to assist with leasing and sales strategies. Additionally, I reviewed financial models for major projects and provided input on funding options like special purpose vehicles (SPVs) and bullet loans (similar to zero-coupon bonds) to support Eaglestone’s equity and debt needs.

Required skills and knowledge

During my internship, I improved vital hard and soft skills. For hard skills, I honed my Excel modeling for feasibility analysis, project financing and timelines. I also gained PowerPoint presentation experience. Regarding soft skills, I improved at working independently, time management, public speaking and presenting to executives. Additionally, I learned enormously about real estate development operations and strategies. I became comfortable presenting analysis and recommendations to senior leadership. The experience provided me with tangible skills and invaluable exposure to the world of real estate finance.

What I learned

The overview of Eaglestone and my internship experience highlights skills and knowledge applicable to real estate finance and development roles. Understanding how to assess new opportunities, project costs and returns, and different funding sources provides useful perspective for those interested in real estate or project finance analyst positions. The work I completed, and metrics analyzed are directly relevant to finance departments at real estate companies.

Financial concepts related my internship

Three important financial metrics for real estate are return on investment (ROI), cash-on-cash return, and gross rent multiplier. ROI measures the profitability of an investment as a percentage of the total cost. Cash-on-cash return indicates the annual income generated by a property as a percentage of the total cash invested. Gross rent multiplier shows the relationship between purchase price and potential rental income. Tracking these metrics allows developers like Eaglestone to evaluate opportunities, fund projects strategically, and maximize ongoing returns. They provide vital insights into real estate investment performance.

Return on Investment

ROI measures the profitability of an investment as a percentage of the total investment (assets on the balance sheet). It is calculated by dividing net profit by total cost. ROI is useful for comparing different real estate opportunities, as it shows the potential profit per dollar invested. A higher ROI indicates a more profitable investment. Tracking ROI helps developers like Eaglestone allocate capital by comparing projects.

Cash on Cash Return

Cash-on-cash return shows the annual pre-tax income generated by a property as a percentage of the total cash invested. It provides a clear picture of the annual return. Cash-on-cash return demonstrates the ability to recoup the initial investment through ongoing rental or sale income. Real estate investors use this metric to evaluate the short-term returns on a project.

Gross Rent Multiplier

Gross rent multiplier compares the purchase price of a property to the potential annual rental income. It is calculated by dividing the purchase price by the annual rent. A lower gross rent multiplier means the property is more affordable based on the expected rents. This metric helps assess if the acquisition price for a development is appropriate given the usual market rents (used as a benchmark). It is an important consideration in the initial viability of a project.

Example

Please find below an Excel file to illustrate the three concepts above: return on investment (ROI), cash-on-cash return, and gross rent multiplier.

Why should I be interested in this post?

Useful resources

Creating tomorrow’s city together – Eaglestone

About the author

The article was written in December 2023 by Arthur EVERARD (ESSEC Business School, Master in Finance Program – Master in Finance, 2023-2024).

My Experience as a Communication Officer at La Française des Jeux (FDJ)

December 28, 2023December 9, 2023 by Lou PERRONE

My Experience as a Communication Officer at La Française des Jeux (FDJ)

In this article, Lou PERRONE (ESSEC Business School, Global Bachelor of Business Administration (GBBA), 2019-2023) shares her professional experience as a Communication Officer at La Française des Jeux (FDJ).

About the company

La Française des Jeux, more widely recognized by its acronym FDJ, stands as an iconic pillar in the French lottery and gambling arena. Established in 1976, FDJ is not just a corporate entity but an embodiment of French heritage and communal festivities. Over the decades, it has ingrained itself into the very fabric of French culture and tradition, offering a diverse portfolio that encompasses lottery games, instant scratch tickets, and an array of sports betting services.
Functioning as a public entity, FDJ’s significance goes beyond entertainment. It plays a pivotal role in the nation’s economic framework, channeling a substantial portion of its revenues into the state’s coffers. This financial contribution has been instrumental in bolstering various sectors, including social welfare programs, sports development, and numerous cultural endeavors that enrich the French way of life.

Recognizing the winds of change and the digital transformation of the entertainment industry, FDJ has not remained complacent. In recent years, it has undertaken a digital metamorphosis. By harnessing the latest technological advancements, FDJ has unveiled a suite of online gaming experiences and user-friendly mobile applications. This digital leap is a testament to FDJ’s commitment to evolving with the times and catering to the preferences of a wide-ranging user base, from traditionalists who have been with the company since its inception to the tech-savvy younger generations seeking on-the-go entertainment solutions.

Logo of FDJ
Source: the company.

My apprenticeship

Embarking on my journey with FDJ as a Communication Officer wasn’t just the beginning of a new job; it signified my induction into a vibrant ecosystem, pulsating with innovation, challenges, and endless learning opportunities. FDJ, with its rich history and significant national footprint, presented a unique landscape where tradition intertwined with modernity. This duality was reflected in every facet of my work, whether communicating the time-honored joy of a lottery win or promoting the cutting-edge digital interfaces of our latest gaming apps.

In the heart of this dynamic environment, my role was multifaceted. While the title ‘Communication Officer’ might evoke images of drafting press releases or handling social media, the reality was a tapestry of responsibilities that spanned across strategic planning, content creation, media relationship management, and more. The position was a constant balancing act: upholding the legacy and values of FDJ while simultaneously pushing the envelope, striving for innovation, and setting new benchmarks in the realm of corporate communication.

Each day presented its unique set of challenges. From navigating the intricate nuances of communicating gaming responsibly to orchestrating large-scale promotional events during national festivals, my role was as much about creativity as it was about strategy and meticulous planning.

One of the most enriching aspects of my apprenticeship was the diversity of people I interacted with. From seasoned professionals who had witnessed FDJ’s transformation over decades to young innovators brimming with fresh ideas, every interaction was a lesson in itself. These encounters not only honed my communication skills but also broadened my perspective, enabling me to view challenges as opportunities and to approach problems with a multifaceted lens.

My missions

Strategy Formulation

Every campaign began with in-depth brainstorming sessions. Collaborating with various internal teams, I led ideation stages, where we’d evaluate current market trends, assess FDJ’s positioning, and devise innovative communication strategies. For each campaign, we identified our target demographics, created tailored messages, and chose the most effective communication channels – from traditional billboards to emerging social media platforms.

Content Creation

This wasn’t simply about drafting text; it involved creating a narrative. Each press release or promotional material told a story, resonating with our audience’s aspirations and emotions. I also collaborated closely with our in-house graphic design team, ensuring visual elements impeccably echoed our narratives. For digital campaigns, A/B testing became a routine, helping us fine-tune our content for maximum engagement.

Event Coordination

FDJ’s presence at exhibitions and conferences wasn’t just about setting up a booth. Each event was an opportunity to entrench our brand deeper into the public consciousness. I meticulously planned every detail, from the booth’s design to the merchandise distributed. Training the staff for these events became pivotal; ensuring they not only knew about FDJ’s offerings but also imbibed the company’s ethos in every interaction.

Media Relations

Building and nurturing relationships with journalists, bloggers, and influencers was crucial. Regular media briefings were organized, where we’d discuss FDJ’s latest ventures, answer queries, and sometimes even handle challenging questions regarding industry controversies. Managing media relations was not just about promoting our brand but also about ensuring FDJ’s voice was accurately represented in the public domain.

Required skills and knowledge

In my dynamic role as a Communication Officer at FDJ, I quickly realized the vast spectrum of responsibilities and the ever-evolving landscape of skills required. Central to my role was the art of communication, both written and oral. Crafting press releases, coordinating with media personnel, or pitching fresh ideas, I always aimed for clarity and resonance with the audience. It was equally important to adapt my tone and style to match the specific audience and occasion.

But communication wasn’t just about creating the message; it was also about measuring its impact. Here, the world of data analytics became an invaluable ally. Metrics like engagement rates and conversion rates offered a window into the effectiveness of our campaigns and highlighted areas ripe for improvement. As the digital world expanded, I delved deeper into tools like Search Engine Optimization (SEO) and Search Engine Marketing (SEM) to ensure FDJ’s prominence in the vast online landscape.

One of the most critical facets of my role was crisis management. While not every day brought a storm, being prepared for them was essential. Specialized workshops in crisis communication provided the knowledge and tactics to manage challenges and ensure FDJ’s reputation remained impeccable.

Understanding FDJ’s brand essence allowed for the creation of cohesive narratives across all communication platforms, fostering consistency and a deeper connection with the audience. The world of communications is vast, and every project came with its timelines and nuances. Efficiently organizing, prioritizing, and monitoring became second nature to me, aided by tools and platforms that ensured timely delivery and informed stakeholders.

Visual storytelling, an integral part of modern communication, often saw me collaborating closely with graphic designers. A foundational understanding of design tools ensured that our visual campaigns harmoniously merged with our narratives. Beyond internal collaborations, my role also demanded external networking. Building genuine relationships with media representatives, influencers, and other industry stakeholders was pivotal. Regular participation in industry events kept me connected and informed about the latest trends.

The digital realm further expanded with platforms like WordPress and Joomla playing a pivotal role. Even a basic grasp of these Content Management Systems smoothed interactions with the IT team, ensuring our online content was always up to date. Given FDJ’s diverse audience, cultural awareness was of paramount importance. Recognizing and respecting cultural nuances ensured our communications were not just well-received but also deeply resonated with our varied demographic.

This journey was more than just a job; it was a continuous learning experience, ensuring I stayed abreast with the best practices and evolving trends in the world of corporate communication.

What I learned

Adaptability

Thriving in a dynamic environment like FDJ was an exercise in adaptability. The rapidly shifting terrain of the gaming and gambling industry, influenced by evolving market trends, customer behavior, and technological breakthroughs, taught me that flexibility wasn’t just an asset—it was a necessity. Whether it was adjusting campaign strategies in response to unexpected market shifts or incorporating feedback from real-time analytics, I learned the importance of being agile, proactive, and receptive to change. It wasn’t just about adjusting to change but leveraging it to foster innovation and drive growth.

Collaboration

My role at FDJ was not siloed; it was deeply intertwined with various departments, from marketing and digital to events and customer service. This cross-functional collaboration was a masterclass in teamwork. I realized that the success of a campaign or project was often the culmination of diverse inputs, insights, and expertise. Engaging with colleagues from different backgrounds and specializations enriched my perspective, helping me appreciate the value of collective brainstorming and problem-solving. It emphasized the importance of open communication, mutual respect, and the synergies created when individuals come together with a shared purpose.

Strategic Thinking

Beyond the day-to-day tasks and immediate goals lay the broader vision of FDJ. My tenure taught me the significance of strategic foresight. It wasn’t enough to create impactful campaigns; these campaigns needed to be aligned with FDJ’s long-term objectives and brand ethos. I learned to view projects not as standalone endeavors but as interconnected pieces of a larger puzzle. By keeping an eye on the bigger picture and anticipating future trends, I could make decisions that not only addressed immediate challenges but also positioned FDJ for sustained success in the years to come.

Financial concepts related my internship

Return on Investment (ROI )

In the intricate realm of communication, the concept of Return on Investment (ROI) transcends its traditional financial boundaries. For every campaign I led or contributed to at FDJ, the metrics weren’t limited to immediate financial returns. We delved deep into intangible metrics like brand recall, media impressions, and customer sentiment analysis. Parameters such as engagement rates, share of voice in media, and other key performance indicators (KPIs) served as compasses, guiding our strategic adjustments. These metrics, while not directly financial, held significant implications for FDJ’s long-term revenue potential. An impactful campaign with high brand recall, for instance, could drive customer loyalty, leading to repeat purchases and sustained revenue streams.

Budget Management

Managing a campaign’s budget wasn’t just about allocation; it was a strategic endeavor in its own right. With every campaign at FDJ, we had to ensure that the funds were deployed where they’d yield the most impact. This involved making tough decisions, prioritizing certain channels over others, and sometimes innovating cost-effective solutions without compromising the campaign’s efficacy. Regular tracking of expenses, juxtaposed against campaign milestones and KPIs, ensured that we remained within the stipulated budgetary confines. Through continuous monitoring and adaptive allocation strategies, I learned the delicate art of optimizing returns while maintaining fiscal discipline.

Risk Management

Operating in the gambling and lottery sector came with its unique set of challenges, the most paramount being the responsibility towards our customers and stakeholders. While the overarching goal was to promote FDJ’s offerings, it was crucial to strike a balance with responsible gaming narratives. Every promotional message was meticulously crafted to ensure it didn’t inadvertently promote irresponsible gambling behavior. This not only mitigated potential reputational risks but also preempted regulatory backlash. Beyond communications, risk management also extended to assessing financial vulnerabilities in our campaigns, such as over-reliance on a single promotional channel or unforeseen market fluctuations that could impact campaign outcomes.

In conclusion, my apprenticeship at FDJ was a deeply immersive journey, one that sharpened my skills in corporate communication while concurrently highlighting its symbiotic relationship with core business and financial principles. Every campaign, every message, and every budgetary decision was a lesson in strategic foresight, underscoring the intricate balance between effective communication and fiscal responsibility.

Why should I be interested in this post?

If the world of finance and a company’s profitability pique your interest, this article is tailored for you. Through my experience at FDJ, I unveil the communication strategies of a major company and the financial impact of every decision made. From ROI to risk management, and budgetary control, this deep dive provides you with a tangible insight into how communication is shaped by financial imperatives.

Useful resources

La Française des Jeux (FDJ)

About the author

The article was written in December 2023 by Lou PERRONE (ESSEC Business School, Global Bachelor of Business Administration (GBBA), 2019-2023).

My experience as a Self-employed Business Owner

December 2, 2023 by Magnus NIELSEN

My experience as a Self-employed Business Owner

In this article, Magnus NIELSEN (ESSEC Business School, European Management Track, 2023-2024) shares his professional experience as an entrepreneur and Business Owner.

About the company

Pilot Education ApS is a Danish aviation consultancy company that I founded in 2019.
The company originated as a vision to establish a flight school. Specializing in pilot training and revalidation services, my company initially focused on ensuring the continued proficiency of pilots through regular license revalidation processes, as well as the training of new student pilots.

As I delved deeper into the aviation industry and advanced in my studies at Copenhagen Business School, the company’s scope evolved. Expanding beyond traditional pilot training, the company began to establish connections with various stakeholders in the aviation sector. This growing network allowed me to provide valuable non-pilot services, transforming the company into a small dynamic aviation consultancy.

Presently, Pilot Education ApS is still a new player in the aviation consulting landscape, offering a range of services to small and medium-sized companies within the industry, and mostly to Danish firms. The company’s core areas of expertise include cost optimization, addressing strategic concerns, streamlining operational processes, and focusing on services that enhance overall value for its clients. As one might hear, this comprises typical and commonly encountered elements within the consulting sector. Nothing different about it, just in a much smaller scale compared to the large consulting firms, such as McKinsey and Bain and Company.

Pilot Education ApS has carved a niche for itself by combining practical aviation knowledge with business acumen. This unique approach has positioned the company as a trusted advisor in the Danish aviation sector, providing tailored solutions to meet the diverse needs of its clients.

I attempted to gradually foster the growth of the company; however, this endeavor was swiftly hindered by the impact of COVID-19 (which hit the aviation sector extremely hard) and time constraints arising from my academic commitments. Consequently, I faced a dilemma between maintaining academic performance and pursuing the expansion of the small consulting firm specializing in aviation. I choose the first option.

Working with the company has provided me with diverse experience across a variety of segments within the sector. This includes involvement with entities engaged in air travel (airlines), aviation mechanics, ground handling, and even organizations contributing to the education of air traffic controllers.

Similarly, through the company and its connections with clients and customers, I have had the opportunity to travel not only within Denmark but also to various parts of Scandinavia and Northern Europe. This has all been very valuable for me personally, and a unique way to work besides my university studies, allowing me to integrate practical experiences with theoretical knowledge and giving a holistic approach to my professional development.

Evolution and Expertise

“Be the master of one’s own destiny.”

As the company grew, I encountered the need for a deeper understanding of Danish tax law, and corporate law particularly during the transition from “sole proprietorship to a limited liability company”. This strategic shift was prompted by the company’s growth, underscoring the importance of adapting to evolving business needs and legal considerations. As Denmark is the best country for business in (Forbes 2021), it is easy to get advice from the government and municipalities. In the beginning I did all accounting myself, but quickly found it difficult to cope with all the tax rules and tax deduction/credit. Thus, I found the need to employ an accountant and a bookkeeper. I could then focus on core business tasks, while getting advice on financials by the accountant. Likewise, the annual report is also prepared and filled by the accountant.

Operating a consultancy firm demands a versatile skill set, as one must navigate various aspects of the aviation sector, handle client interactions directly, and manage the complexities of Danish business regulations. This multifaceted role involves not only consulting services but also to understand and comply with legal frameworks governing business structures and taxation.

Entrepreneurial Responsibilities

In contrast to traditional student assistant roles, where tasks may be more narrowly defined, the responsibility of running a small consultancy falls squarely on the entrepreneur. Direct client engagement is a key aspect, requiring a proactive approach to meet client expectations, secure projects, and ensure the successful delivery of services.

The entrepreneurial journey involves not just technical expertise but also resilience, adaptability, and a relentless commitment to client satisfaction. In the competitive field of aviation consultancy, success is contingent upon the ability to proactively pursue opportunities, work diligently, and deliver tangible results. It’s a journey where the dedication to achieving professional goals goes hand in hand with the responsibility of running a business. One must be the

My missions

Client Engagement

Directly responsible for client interactions
Proactively pursue opportunities to secure projects
Ensure client satisfaction through attentive and responsive interactions

Evolution and connections

Expanded the company’s scope beyond traditional pilot training
Establish connections with various stakeholders in the aviation sector

Entrepreneurial Responsibilities

Manage diverse aspects of the aviation sector
Navigate legal frameworks and comply with business regulations

Adaptability and Resilience

Demonstrate adaptability in response to challenges, such as the impact of COVID-19
Balancing academic commitments while fostering company growth

Required skills and knowledge

Operating a small company requires skills and knowledge that extend beyond conventional boundaries. One must not merely adhere to established norms but instead think innovatively, always ready to step out of the box and explore uncharted territories. The ability to think creatively is paramount, to uncover solutions and pathways that may not have been immediately apparent. In my experience I’ve learned that the capacity to think beyond traditional approaches is a key driver of success. Initially I didn’t expect to end up in the consulting world. But, when I saw the opportunity, I went for it.

Whether navigating legal transitions, devising strategies for cost optimization, or engaging with clients in the aviation sector, thinking outside the box has proven essential. It involves not just following a set path but actively seeking unexplored avenues, fostering adaptability, and finding solutions to challenges that may not have been initially apparent. If you do not like to do so, the lifestyle may not be for you.

It is crucial to bear in mind that in a small company, you represent the face of the business. You are intricately connected to every facet of the company’s operations and must actively participate in all activities that the company undertakes.

What I learned

Tax advantages in a limited liability company

Investment tax credit
Income split. One can choose to pay salary to the owner but may instead focus on the benefits to distribute profit as “dividends”
Tax deferral delay paying taxes on income until a later date, provides additional cash flow, that can be used in projects or in passive investments such as treasury bills

Financial Management and Planning:

Owning a company has provided insights into effective financial management, including budgeting, forecasting, and strategic allocation of resources to ensure sustained growth.

Regulatory Compliance and Legal Understanding:

Managing a business involves navigating legal frameworks and ensuring compliance with regulations. Learning about legal structures, and industry-specific regulations has become integral to the day-to-day operations. While it requires time to grasp, once mastered, it can become a valuable asset for the owner’s advantage.

Financial concepts related my internship

Game Theory Analysis

Game Theory, a branch of mathematics that analyzes strategic interactions between rational decision-makers, provides an advanced framework to model and understand the complex dynamics of airline alliances in the aviation sector. Despite the high level of competitiveness in the industry, and despite the impact of inflation leading to overall price increases, the cost of plane tickets has remained relatively stable, comparable to the prices observed three years ago.

The application of Game Theory to airline alliances involves the study of strategic interactions among airlines. Each client (airline) pursues its own interest in a very competitive environment.

Modeling the Strategic Interaction

The Nash Equilibrium, a central concept in Game Theory, represents a state in which no player has an incentive to unilaterally deviate from their chosen strategy. In the context of alliances, the Nash Equilibrium can be determined by analyzing the reaction functions of each airline to the other’s strategy.

The strategic considerations go beyond quantity decisions. Airlines must also strategically determine pricing, route allocation, and capacity sharing. These decisions can be incorporated into the game model to provide a more comprehensive analysis of the strategic landscape. Sometimes I try to quantify the Nash equilibrium, other times you should just keep it in your mind, and then look into strategy in a broader sense (not quantified). For instance, Ryanair is extremely good at providing low-cost air fares. While a customer choosing Air France, might expect more quality or at least a larger selection of flights to his/her destination.

Capital Structure optimization

Within the industry, a growing trend among airlines is the preference for leasing over direct purchases. This shift in approach calls for a thorough reassessment of fundamental business operations. The utilization of foundational financial modeling techniques, such as Discounted Cash Flow (DCF) analysis, becomes essential in making well-informed decisions when weighing the options between leasing and purchasing.

While calculating the Net Present Value (NPV) might be straightforward, accurately estimating the relevant parameters and acknowledging their uncertainties poses a more intricate challenge. To address this, I designate each parameter as a stochastic variable and conduct multiple simulations to compare NPVs across various leasing and acquisition scenarios.

By integrating statistical methodologies into corporate finance, a more nuanced and informed decision-making process emerges. This approach enhances the accuracy of predictions, allowing for a more robust evaluation of leasing versus acquiring propositions in the dynamic landscape of the aviation industry. Navigating the details of debt financing terms and adhering to covenants is also paramount in the process. The objective is not only to secure operational flexibility for aviation-related activities but also to ensure alignment with financial agreements and covenants.

In the end, it is the management of the respective company that makes decisions based on their strategic intuition, complemented by data and suggestions compiled by my company.

Why should I be interested in this post?

Entrepreneurial Exposure: The entrepreneurial journey of a business owner, and how you should shed light on the challenges and triumphs of managing your own firm. This firsthand experience is invaluable for anyone interested in finance, as it provides insights into the financial intricacies of running your own business.

Financial Management: The aspects of running a company, including budgeting, forecasting, and strategic resource allocation. These financial management skills are directly applicable to finance roles, where expertise in budgeting and strategic financial planning is highly sought after.

Application of Financial Concepts: If one is interested in applying financial concepts learned at ESSEC or another top Business School, directly into business related challenges, while being the sole responsible to the results. Then you need to consider starting you own minor company.

Versatile Skill Development: Operating a consultancy necessitates a diverse skill set, including financial management, client engagement, and legal understanding. The development and application of such skills is crucial to survive against competitors.
Remember that when being a business owner, you cannot hide behind an excel sheet. You are the sole responsible for the survival and growth of your company and your wealth.

Useful resources

Denmark Tops List Of Best Countries For Business

Business demography statistics

About the author

The article was written in December 2023 by Magnus NIELSEN (ESSEC Business School, European Management Track, 2023-2024).

My experience as a student assistant at KMD

April 4, 2024December 2, 2023 by Magnus NIELSEN

My experience as a student assistant at KMD

In this article, Magnus NIELSEN (ESSEC Business School, European Management Track, 2023-2024) shares his professional experience as a student assistant at KMD. A company located in Denmark, mainly focusing on software solutions for the public sector in Denmark.

About the company

KMD A/S, is a Danish IT company, within development and delivery of software and service solutions tailored for municipalities, government entities, and businesses in Denmark, alongside selected segments in Scandinavia. The company, with branches in all major cities in Denmark, operates as a subsidiary of the NEC Corporation (Japanese multinational corporation). The KMD group works primarily in Denmark, but has recently expanded to Norway, Sweden, Finland, and Poland, boasting an annual turnover of approximately DKK 4.8 billion and a workforce exceeding 3,000 employees.

A significant player in the Danish IT landscape, KMD traces its roots back to 1972 when it was established as “Kommunedata” (translated to; “municipality data”), a merger of all Danish municipal IT centers. Until March 2009, the company was owned by Kommune Holding A/S, giving it close relations to the government. After 2009 it was privatized in a large selloff by the municipalities.

KMD’s systems play a crucial role in administering various Danish income transfers, including welfare, child benefits, maternity benefits, unemployment benefits, disability pensions, and old-age pensions. With a clientele exceeding 1,500 from both the public and private sectors, KMD serves around 800 Danish and international companies. Main competition comes from NNIT, Netcompany, TDC Group and SimCorp. Representing the forefront of the Danish IT industry.

In the evolution of its ownership structure, KMD transitioned from municipal ownership to becoming part of “EQT Partners and Arbejdsmarkedets Tillægspension” (a special pension fund system in Denmark) in 2009. Subsequently, in 2012, EQT Partners sold its stake to the private equity firm Advent International. Notably, KMD expanded its portfolio in 2015 through the acquisition of Banqsoft, a Nordic software company specializing in financial services.

The year 2019 marked a significant milestone for KMD as Japanese company NEC acquired the company for 8 billion DKK, solidifying KMD’s position in the ever-evolving landscape of IT solutions.

Logo of the company.
Logo of
Source: the company.

My internship and the department

Being a part of KMD in the role of a student employee within the Finance department is an enriching and dynamic experience. The company’s role in developing and managing over 400 IT systems that support the welfare of Denmark adds a sense of purpose to the work environment.

The focus of my position is primarily on maintaining and enhancing financial reporting for the business. The responsibilities extend to supporting the monthly closing process in collaboration with experienced controllers. This hands-on experience allows for a deep dive into the intricacies of financial operations, providing valuable insights into the core of KMD’s activities.

The role involves working with a substantial amount of data, requiring proficiency in tools such as Excel, PowerPoint, SAP, and Power BI. This emphasis on data analysis and modeling adds a layer of complexity to the tasks, making it an intellectually experience.

The position was for 15-hour per workweek which is normal in Denmark to do besides studies. Instead of internships, students often work in between 15-25 hours a week whil also keeping track of their academic

My missions

Strengthening Financial Reporting: Playing a key role in maintaining and enhancing financial reporting for the business.

Monthly Closing Support: Collaborating with senior controllers to facilitate the monthly closing process, involving the analysis of statistics from the previous month. This includes identifying areas where company performance may have fallen short and investigating the underlying reasons. Additionally, overseeing the tracking of consultants’ work hours and assessing their productivity.

Data Analysis and Modeling: Participating in data-related tasks, encompassing analysis and model development. Leveraging tools such as Excel, PowerPoint, SAP, and Power BI for efficient data management. SAP serves as the primary system for obtaining accountable data, subsequently analyzed using Excel and Power BI.

Required skills and knowledge

My position in KMD’s Finance department demanded a blend of both soft and hard skills essential for the dynamic responsibilities associated with financial reporting and analysis. On the soft skills front, effective communication was paramount, as conveying complex financial insights to diverse stakeholders required clarity and precision. Including the elaboration and communication of complex financials to non-financial employees.

Additionally, a high degree of analytical thinking was indispensable for interpreting data and contributing meaningfully to the monthly closing process. Being detail-oriented was crucial, ensuring accuracy in financial reporting and tracking of consultants’ work hours.

On the hard skills side, proficiency in tools like Excel, PowerPoint, SAP, and Power BI was fundamental. The ability to navigate and extract actionable insights from SAP, the primary system for accountable data, was essential for comprehensive financial analysis. Moreover, a solid foundation in data analysis and modeling techniques facilitated the creation of meaningful reports that contributed to the strategic decision-making processes within the department. The use of PivotTables thus exemplifies how technical skills, in this case, mastery of Excel functionalities, played a crucial role in the success of tasks within the dynamic environment of financial analysis at KMD.

What I learned

Financial Analysis and Communication

Analyzed corporate information and financial statements
Prepared pitch-books and presentations for effective communication with stakeholders
Utilized evidence-based conclusions and strategic thinking to propose innovative initiatives aligned with industry innovations and key success factors
Enhanced collaboration skills through engaging with diverse stakeholders.

Global Industry Understanding

Understanding value creation within the IT industry, drawing parallels with academic studies in competitor theory
Explored potential channels for international expansion, broadening perspectives on global finance dynamics
Applied financial modeling and analysis skills in a real-world context.

Financial concepts related my internship

DuPont Analysis

A powerful and simple financial tool, holds particular relevance in the financial reporting function at KMD. Rooted in financial ratio analysis, DuPont Analysis breaks down Return on Equity (ROE) into three key components, providing an understanding of the drivers behind financial performance.

The theoretical foundation of DuPont Analysis lies in the decomposition of ROE using the formula:

Return on Equity (ROE)

Net Profit Margin (NPM): The first component assesses profitability, reflecting the proportion of each revenue dollar that translates into net income. The formula for Net Profit Margin is:

Net Profit Margin (NPM)

Asset Turnover (ATO): The second component, Asset Turnover, evaluates the efficiency of asset utilization in generating sales. The formula is:

Asset Turnover (ATO)

Equity Multiplier (EM): The third component, Equity Multiplier, gauges the financial leverage used to magnify returns. It is calculated as the ratio of total assets to shareholders’ equity:

Equity Multiplier (EM)

By breaking down ROE into these components, DuPont Analysis enables a more structured assessment of financial performance. The application of DuPont Analysis enhances the finance department’s ability to interpret and communicate the multifaceted nature of financial performance within the context of KMD’s operations. Likewise, it provided an opportunity to pinpoint areas where improvement actions could be initiated.

Real options valuation

The application of real options valuation (ROV) methods in the context of KMD’s IT projects involves adapting and selecting appropriate models to capture the dynamic and uncertain nature of these projects. Considering that KMD’s projects may span various stages and encounter multiple uncertainties, the valuation method addresses American-styled exercises and incorporate flexibility throughout the project lifecycle.

When large uncertainties surround costs and revenues of a complex IT project, where development costs already is initiated before the actual contract is won, the traditional Black-Scholes approach can be used to estimate the value. When multiple uncertainties exist Monte Carlo simulation can also be a way to estimate the value of a project.

One must understand the concepts of IT projects, as these are put out to tender. And development cost almost always arise before the company even know if they have won the tender offer. Thus, there is a chance that the option will never get exercised, and the value is lost.
In the context of an IT project, the real option is often more analogous to a call option than a put option.

Call Option Characteristics:

A call option provides the holder with the right, but not the obligation, to buy an asset at a predetermined price (strike price) within a specified period (expiration date).

Similarly, in an IT project, the company holds the real option to proceed with the project but is not obligated to do so. The company has the flexibility to exercise the option if the conditions (such as winning a tender) are favorable.

With a call option, the holder’s downside is limited to the premium paid for the option.
In the case of an IT project, the development costs incurred before knowing the tender outcome represent a limited downside. If the tender is not won, the company may choose not to exercise the option, limiting the financial exposure.

This is a simple case. And the real option of KMD’s IT projects are often much more complex.

Monte Carlo simulation can be a powerful tool instead of the Black and Scholes formula.

In the context of an IT project’s real options valuation, Monte Carlo simulation involves modeling the project’s uncertainties using stochastic variables and running numerous simulations to estimate the project’s value. Here’s how it can be applied:

1. Identify Stochastic Variables

Project Success Probability: The likelihood of winning the tender or securing the project
Development cost: The cost associated with developing the IT project
Exogenous factors: External factors impacting the project, such as changes in technology, regulatory environment, or market demand.

2. Define Probability Distributions

Assign probability distributions to the identified stochastic variables. For example:

Probability of success: Following a beta distribution representing high degree of uncertainty/
Cost of development: Triangular distribution based on optimistic, most likely, and pessimistic estimates
Market conditions: Following a gaussian distribution

Denote that one can assign any distribution to the stochastic variables, depending on what is assumed to fit best.

3. Run the Monte Carlo Simulation

Generate random values for the stochastic variables based on their probability distributions. For each set of randomly generated values, calculate the project’s Net Present Value (NPV) or other relevant financial metrics. Repeat the process for thousands of iterations to create a distribution of possible outcomes.

Finally one may analyze the result, and present the obtained results for a managing director, who will take the final decision together with the executives. Depending on NPV of the project and the degree of uncertainty, the executives may agree to bid for the tender offer, or not to engage.

Why should I be interested in this post?

For an ESSEC student aspiring to build a career in finance, this post offers an opportunity to explore the intersection of finance and information technology. The practical application of financial concepts, such as DuPont Analysis and Real Options Valuation, within the IT industry at KMD provides a valuable insight in the daily life of a Danish software firm.

The position requires a holistic understanding of financial operations within the company. Working with technologies like SAP and Power BI enhances your skill set, making you more versatile and competitive, particularly in a digitalized financial landscape.

The exposure to real-world scenarios involving strategic decision-making under uncertainty, as emphasized by Real Options Valuation, equips you with a strategic mindset—vital in finance roles where decision-making is critical.

Understanding the inner workings of a major IT company operating in Denmark and other Nordic countries, like KMD, provides insights into the challenges and opportunities in the competitive IT market. If you ever aspire to work in Denmark, this post offers international experience, giving you a taste of the Danish business environment and company culture.

Useful resources

About KMD

Goran Avlijaš (2019) Examining the Value of Monte Carlo Simulation for Project Time Management Management Journal of Sustainable Business and Management Solutions in Emerging Economies

Black F. and M. Scholes (1973) The Pricing of Options and Corporate Liabilities The Journal of Political Economy, 81(3) : 637-654.

About the author

The article was written in December 2023 by Magnus NIELSEN (ESSEC Business School, European Management Track, 2023-2024).

My experience as Actuarial Apprentice at La Mutuelle Générale

October 9, 2023 by Shengyu ZHENG

My experience as Actuarial Apprentice at La Mutuelle Générale

In this article, Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2024) shares his professional experience as Actuarial Apprentice at La Mutuelle Générale .

About the company

La Mutuelle Générale is a major French mutual insurance company that has established itself as a trusted provider of health and social protection solutions. With a history dating back to its foundation in 1945 as the mutual health insurance provider for La Poste et France Télécom, La Mutuelle Générale has grown to become a key player in the mutual health insurance sector in France.

Unlike private insurance companies, mutual insurance companies are based on the concept of solidarity and not for lucrative purposes. As a mutual insurance company, La Mutuelle Générale has no shareholders but only member clients who also contribute to the decision making of the company.

Specializing in health insurance and complementary health coverage, La Mutuelle Générale offers a comprehensive range of insurance products and services designed to meet the diverse needs of both individual and collective clients. On top of the coverage offered by the French social security system, la Mutuelle Générale’s health insurance offerings encompass a wide array of guarantees, including medication reimbursement, hospitalization coverage, dental care, optical care, and so forth. The company strives to provide flexible and tailored solutions to suit the specific requirements of the member clients.

The core business of the mutual insurance company is composed of health insurance and social protection (short-term incapacity, long-term invalidity, dependency and death). For the purpose of providing a more comprehensive healthcare service, in 2020, the company launched its Flex service platform, which enables partner companies to access services such as home care or personal assistance.

Overall, La Mutuelle Générale stands as a reliable and reputable insurance company, driven by the mission to provide quality healthcare coverage and social protection to individuals and businesses across France. They combine their extensive expertise, expansive coverage, and a dedicated workforce to promote well-being, financial security in face of healthcare needs, and peace of mind for their members.

Logo of La Mutuelle Générale

Source: website of La Mutuelle Générale

My position

Since September 2022, I have been engaged in a one-year apprenticeship contract for the position of Actuarial Analyst in the Technical Department that englobes all the actuarial missions. Specifically, I was in the team of Studies and Products Collective Health Insurance and Social Protection. This team takes charge of the actuarial studies of social protections and collective health insurance contracts.

My missions

Within the team, I had the chance to assist my colleagues to conduct actuarial studies in various subjects:

Monitor the profitability and risk of different insurance portfolios

We continually evaluate the financial performance and risk exposure associated with individual and group Health Insurance and Life Insurance policies. We assess factors such as claims experience, investment returns, and expenses to gauge the profitability and financial health of the portfolios. By closely monitoring these aspects, the management can make informed decisions to ensure the sustainability and growth of the company.

Calculate and provide rates for group Health Insurance and Life Insurance products

We are responsible for developing the pricing structure and tools for group Health Insurance and Life Insurance products. According to the size of the clients, we deploy different pricing strategies.

We model factors such as the demographics and health profiles of the insured individuals, expected claims frequency and severity, and desired profit margins. Through mathematical models and statistical analysis, we determine appropriate premia for corresponding products.

Here I introduce brief the key idea of insurance pricing. The mechanism of insurance is that the insured person pays for a premium beforehand to get guarantee against a certain risk for a period in the future. Insurance works on the basis of mutualisation, explained by the Law of Large Numbers. For example, for automobile insurance against the risk of theft. The risk does not befall everyone (the probability of occurrence is relatively low). Whereas, when it happens, the owner has to endure a loss amount that is relatively high and it is in this case that insurance companies accompany the car owner to cover part or all of the loss if the owner is insured.

Let’s denote X_i as the loss amount for insured person i (X_i equals 0 if the risk does not take place). If an insurance company has n insured persons, and we assume all X_i are independent and identically distributed. According to the Law of Large Numbers, we have:

1/n ∑ ⁿ_{i =1} X_i → 𝔼[ X_i]

If n is large enough, the total claim amount will converge to 𝔼[ X₁]. Therefore, if every insured person pays individually a premium of 𝔼[ X₁], the insurance company as a whole would be able to pay off all the possible claims.

Ensure the implementation of the underwriting policy:

The Underwriting Department relies on a tool to assess and price group insurance contracts. Actuaries play a crucial role in guaranteeing the consistency and accuracy of the pricing scales used within this tool. We review and validate the formulas and algorithms used to calculate premia, to make sure that they are aligned with the company’s underwriting guidelines and principles and with our calculations.

We work closely with the underwriting team to enforce the company’s underwriting policy. This involves establishing guidelines and criteria for accepting or rejecting insurance applications, determining coverage limits, and setting appropriate pricing. We provide insights and recommendations based on their analyses to ensure the underwriting policy is effectively implemented, balancing risk management and business objectives.

Conduct studies related to the current political and economic conditions

Given the dynamic nature of the insurance sector, we conduct studies to assess the impact of external factors, such as economic conditions, on insurance products. For example, we analyze the effects of the 100% Santé reform on insurance premia and claim payouts. We also conduct theoretical research of the impact of the 2023 retirement reform on our social protection portfolio.

By understanding these impacts, actuaries can adapt pricing strategies, adjust risk models, and make informed decisions to address emerging challenges and provide appropriate coverage to policyholders in conformity with the framework of regulations.

Required skills and knowledge

First and foremost, the position pivoted on actuarial studies requires solid understanding of actuarial and insurance concepts and theories. For example, it is indispensable to understand the contractual aspects of insurance policies, pricing theories and accounting rules of insurance products. Actuary is a profession that requires high-level specified expertise, and the title of Actuary is recognized by actuarial associations in respective countries after passing the credentialing process.

Besides, statistical and information techniques are highly needed. The professions of Actuary could be in a way considered as a combination of Statistician, Informatician and Marketer. Making use of statistical and information techniques, actuaries delve deep into data to uncover useful information that would aid the pricing of insurance policies and the decision-making process.

Last but not least, since the insurance sector is highly regulated and insurance offerings are mostly homogeneous, a solid and comprehensive knowledge of the local regulatory environment and business landscape is a must to make sure efficient development and management of the product portfolio. In my case, a thorough understanding of the French social security system and product specificities is crucial.

What I have learned

This apprenticeship experience takes place in parallel with my double curriculum in Actuarial Science at Institut de Statistique de Sorbonne Université (ISUP). I had the opportunities to apply the theoretical aspects in actual projects and work on various subjects with the guidance of experienced professionals. I had the chance to deepen my understanding in insurance pricing, health insurance & social protection and risk management for insurers.

Financial concepts related my internship

Insurance pricing

Health insurance pricing involves the application of theoretical concepts and statistical analysis to assess risk, project future claims, and determine suitable premiums. Insurers utilize statistical models to evaluate factors such as age, gender, pre-existing conditions, and healthcare utilization patterns to estimate the likelihood and cost of potential claims. By considering risk pooling, loss ratios, and health economic studies, insurers strive to set premiums that balance financial sustainability while providing adequate coverage to policyholders. Regulatory guidelines and statistical modeling further contribute to the development of pricing strategies in health insurance.

Solvency II

Solvency II is a regulatory framework for insurance companies in the European Union (EU) that aims to ensure financial stability and solvency. It establishes risk-based capital requirements, governance standards, and disclosure obligations for insurers. Under Solvency II, insurers are required to assess and manage their risks, maintain sufficient capital to withstand potential losses, and regularly report their financial and risk positions to regulatory authorities. The framework promotes a comprehensive approach to risk management, aligning capital requirements with the underlying risks of insurance activities and enhancing transparency and accountability in the insurance sector.

Useful resources

La Mutuelle Générale

Institut des Actuaires

Pricing Insurance #1: Pure Premium Method

About the author

The article was written in October 2023 by Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2024).

My Experience as an External Junior Consultant with Eurogroup Consulting

August 2, 2023 by Snehasish CHINARA

My Experience as an External Junior Consultant with Eurogroup Consulting

In this article, Snehasish CHINARA (ESSEC Business School, Grande Ecole Program – Master in Management, 2022-2024) shares his experience as an External Junior Consultant with Eurogroup Consulting, which is a consulting company specialized in organization and operations (supply chain).

About Eurogroup Consulting

Eurogroup Consulting, founded in 1982, is a French consulting firm with a European approach to management, strategy and organization. With a focus on freedom to take risks, requirements of the clients and the projects, and solidarity to the success of their entrepreneurial partners, Eurogroup consulting has been able to expand its network to 16 countries and clientele to all sectors of activity. They have grown significantly in the areas of banking and finance, business, insurance and welfare, logistics and transportation, retail, energy and the environment, and public sector, including healthcare. Today, Eurogroup Consulting stands out as a highly reputable and able partner for companies seeking all-encompassing solutions and knowledgeable advisory in the areas of Digital, Operational Excellence, and Transitions.

Eurogroup Consulting Logo

Source: Eurogroup Consulting.

Junior Consultant Experience

As a part of my Master in Management program at ESSEC Business School, I and a few other students a ESSEC (my team) collaborated as an External Junior Consultant with Eurogroup Consulting for a consulting project in the aviation sector based in Singapore. With my team, I closely worked with the managing partner of Eurogroup Consulting in Singapore to offer strategic recommendations to one of the firm’s clients in the aviation sector dealing with logistics (for the maintenance, repair and overhaul (MRO) of airplanes). Our focus was on addressing the real-world challenges faced by the aviation industry in the post-Covid era in the Asia-Pacific region.

My project with Eurogroup Consulting dealt with logistics and supply chain within the aviation sector. Efficient logistics and supply chain management are vital for businesses to remain competitive in today’s globalized marketplace as they ensure the efficient flow of goods, services and information from the point of origin to the point of consumption.

Our focus was on Contract Logistics in the aviation sector, which is a type of third-party logistics (3PL) service where a company delegates certain aspects of its supply chain operations to a specialized provider. This provider, known as the contract logistics provider, oversees a portion or all the company’s supply chain, which includes transportation, distribution, and related activities, as per the contractual agreement. The primary objective of contract logistics is to enhance the efficiency of the customer’s supply chain, reduce expenses, and optimize overall performance. By leveraging expertise, resources, and technology, contract logistics providers enable clients to concentrate on core business activities while entrusting the management of their logistics operations to the specialized service. Contract logistics providers provide services such as warehouse management, inventory management, order fulfillment, distribution and transportation management. In the aviation sector, contract logistics play an important role in offering services like space part logistics. Airlines face challenges with “Inoperable parts” (INOPs), which necessitate costly replacements or risk grounding the aircraft indefinitely. Major companies provide essential services to address this spare parts availability issue, such as Order Tracking & Tracing, spare parts storage management, advanced stock organization, and repair logistics management.

My missions

The objective my project was to achieve the following:

Identify the post-Covid supply chain strategies of major multinational corporations (MNCs) in the aviation sector, including the evolution of their supply chain footprints and their expectations from contract logistics providers (an intermediary between the different manufacturers and an airline company).
Evaluate the current positioning and services offered by prominent contract logistics providers and anticipate how their positioning and offerings might evolve in the future.
Recommend new potential offerings and analyze their suitability and key factors for success.

Required skills and knowledge

As a part of a cross-functional team of ESSEC students to achieve the shared project objectives through efficient cooperation, and decision-making, I gained an understanding of the aerospace Third Party Logistic (3PL) and Maintenance, Repair and Overhaul (MRO) industry in the Asia-Pacific region as we conducted comprehensive market research. We gathered and analysed large sets of data related to the aviation contract-logistics market, customers, competitors, and industry trends to identify growth opportunities. Following the analysis, we had weekly meetings with the managing partner of Eurogroup consulting, a professor-mentor of the team at ESSEC and the client to discuss our approach to the problem statement, challenges faced by the team to gather access to information, since aviation industry is well-known for its confidentiality norms, and the assessments produced after detailed analysis of the data. Attending the weekly team-mentor meetings was vital to our learning, providing us with first-hand exposure to the real-life operations within a consulting firm. In these meeting we decided upon the objective targets for the coming weeks and how to address the challenges faced this week.

As a junior consultant, I engaged with subject matter experts in the region in order to gain a holistic understanding of the impact of Covid-19 on the aviation contract-logistics industry. I conducted detailed financial statement analysis to understand how the larger players and competition were leveraging their cash flows, and debt to counter the crisis caused on the industry by the pandemic. In order to measure the risk of the competitors of the client, we conducted a fundamental calculation of Altman’s Z-Score and developed a credit rating model based on key financial indicators, both quantitative and qualitative, in Excel. This allowed us to scrutinize the key players in the current market and identify competitors to be focused on. Based on our discussions with experts, and analysis conducted, we identified the gap in the service offerings which allowed us to provide strategic recommendations for the client company. This 3-month long learning-by-doing experience gave me immense exposure to the operations of a consulting firm and the way they respect the needs of the stakeholders of the project.

What I learned

Key Learning Outcomes of this project :

To utilise evidence-based conclusions and strategic thinking to propose new strategic initiatives that aligned with industry innovations and key success factors.
To analyse corporate information and financial statements, preparing pitch-books and presentations while collaborating with stakeholders.
To define the value chain of aviation contract-logistics industry in Asia-Pacific region and observe potential channels to expand.
To develop custom credit rating tool based on key performance indicators.

Concepts related my internship

Third-Party Logistics in Aviation Sector

Third-Party Logistics (3PL) is a crucial aspect of Logistics and Supply Chain Management, that has transformed how businesses handle the transportation and storage of products and services. Through strategic outsourcing, companies delegate specific logistics tasks to external service providers, known as 3PL providers. These service providers streamline supply chain processes, resulting in increased efficiency, cost reduction, and improved overall performance. Within the aviation sector, 3PL is crucial for aiding airlines, aircraft manufacturers, and associated enterprises with intricate global logistics. Due to the complexity and time-sensitivity of aviation operations, 3PL providers offer customized solutions to address the unique demands and challenges of the industry. 3PL companies in the aviation industry offer a range of essential services to streamline operations. These include arranging the transportation of aviation-related cargo and goods, managing efficient warehousing and inventory systems for quick access to items, handling customs clearance for international shipments, ensuring prompt last-mile delivery to designated destinations, managing the distribution of critical spare parts for airlines’ maintenance facilities worldwide, and facilitating smooth transportation of large components and sub-assemblies for aircraft manufacturers. These services contribute significantly to the industry’s efficiency and help reduce aircraft downtime, making them indispensable partners for aviation businesses.

Aviation 3PL Services:

Freight Transportation: 3PL companies arrange timely transport of aviation cargo to airports, maintenance facilities, and aircraft assembly lines.
Efficient Warehousing: These providers manage aviation-related inventory in well-organized warehouses, reducing lead times.
Customs Compliance: 3PLs handle international shipments’ customs documentation, ensuring smooth clearance.
Last-Mile Delivery: They ensure prompt delivery of aviation components to their destinations.
Spare Parts Distribution: Airlines rely on 3PLs for critical spare parts distribution, minimizing aircraft downtime.
Aircraft Manufacturing Support: Specialized 3PLs facilitate smooth production by transporting large components for aircraft manufacturers.

Aviation companies benefit from the expertise of 3PL providers in handling complex logistics. Outsourcing these services saves on capital investments and allows them greater flexibility in scaling services based on demand. 3PL providers’ extensive network aids in smoother international operations for the customers.

Credit risk

The evaluation of credit risk holds significant importance in financial risk management, especially concerning lending and investment activities. It pertains to the potential financial loss that a lender or investor might encounter in the event of non-payment or failure of a borrower or counterparty to fulfil their financial commitments. Credit risk occurs when people, companies, or governmental entities take loans or offer credit with the possibility that they might be unable to repay the borrowed amount according to the agreed terms.

Several key concepts allow us to gauge the risk involved with an investment and make better decisions. The Probability of Default (PD) is a measure that evaluates the probability of a borrower being unable to fulfil their contractual obligations and defaulting. Although defaulting doesn’t always result in immediate losses, it can raise the risk of bankruptcy and eventual losses. PD is expressed as a percentage, with higher percentages indicating a higher risk of default. Loss Given Default (LGD) is a commonly used expression to describe the ‘loss severity’ of an investment. It calculates the proportion of an exposure (such as a bond or loan equivalent) that is expected to remain unrecovered if a default occurs. It is a percentage of the outstanding debt or investment that is not recoverable after a default occurs.

Credit agencies are responsible for assigning credit ratings to both corporations and governments based on their ability to fulfil financial obligations. These credit ratings serve as indicators for lenders regarding the entity’s capacity to repay loans. Each credit agency employs slightly varied approaches in determining credit ratings. On the other hand, credit scores pertain to individuals and reflect their creditworthiness, considering their credit history and financial conduct. Credit risk models play a vital role in the financial industry as they employ mathematical techniques to foresee the probability of default, evaluate potential losses, and handle credit risk. These sophisticated tools aid both financial institutions and investors in making well-informed choices concerning lending and investment matters. As the global economy continues to evolve, understanding and managing credit risk will remain paramount for safeguarding financial stability and ensuring sustainable growth in lending and investment sectors. By employing comprehensive credit risk analysis, stakeholders can navigate potential challenges, capitalize on opportunities, and foster a resilient financial landscape for the future.

The evaluation of credit risk had a vital role in the extensive market research conducted for the top players in the aviation contract logistics segment. Although credit risk analysis mainly concentrates on appraising the creditworthiness of potential collaborators or customers, it offered valuable insights that prove beneficial for competitive intelligence and market research objectives. Conducting credit risk analysis on companies within the industry allowed for the identification of major players and their market position. Assessing financial stability, including liquidity, profitability, and debt levels, helped evaluate potential investment opportunities and market disruptions. Additionally, studying competitors’ credit risk provided insights into their market share, customer base, and potential risks of default or bankruptcy. Understanding their financial strength aided in formulating effective strategies for competitive positioning in the aviation contract logistics niche.

Corporate Risk Management

In order to mitigate various types of financial risks, such as credit risk, market risk, liquidity risk, and operational risk, investors and management can use risk analysis to identify, measure, and mitigate these risks effectively. Instabilities and losses in financial markets generally caused by fluctuations in stock prices, currencies, interest rates and more lead to rise in financial risks. Market risk reflects the fluctuations of interest rates, currencies, and prices of raw materials. Probability of failing to pay creditors such as banks or lenders leads to credit risk. Liquidity risk is the inability of a company to meet its short-term financial obligations (to pay the salaries of its employees, to settle the invoices to its suppliers, to pay back the capital and interests to the bank, to pay the taxes to the State, etc.) and is generally signs of cashflow inefficiencies. Flawed policies, processes, events or systems disrupt business operations and are known to cause operational risks. Financial risks are measured by calculating specific ratios that indicate the overall health of a company, which are then compared against the industry benchmark.

The following table provides some of the important financial ratios used to estimate the risk of a company. High financial risk is implied by high or low measure according to the ratio.

Table 1. Financial ratios

Source: The author.

Ratios are most useful when compared between companies in similar sectors and over time. Multiple measurements may be necessary for each given firm to fully comprehend the financial risk.

Why should I be interested in this post?

Working closely with subject matter experts and engaging in financial statement analysis to assess the impact of Covid-19 on the various industries equipped us with valuable skills and knowledge in financial analysis and risk assessment. Additionally, learning to calculate Altman’s Z-Score and developing a credit score model allowed us to evaluate the financial health of companies, a crucial skill in the finance industry. The exposure to strategic decision-making, data analysis, and client interactions during this consulting project helped me develop problem-solving capabilities and communication skills, which are highly sought-after attributes in the finance job market. Overall, this hands-on experience provided me with practical experience for finance roles, especially in consulting firms.

Useful resources

Eurogroup Consulting

Financial Risk – Allianz Trade

Financial Risk – Deloitte

About the author

The article was written in August 2023 by Snehasish CHINARA (ESSEC Business School, Grande Ecole Program – Master in Management, 2022-2024).

My experience as a trading floor intern at CIC Market Solutions

June 22, 2023 by Tanguy TONEL

My experience as a trading floor intern at CIC Market Solutions

In this article, Tanguy TONEL (ESSEC Business School, Global BBA, 2019-2023) shares his professional experience as an intern at the Bordeaux trading floor of CIC.

About CIC Market Solutions

Logo of the CIC Market Solutions.
Logo of CIC Market Solutions
Source: CIC Market Solutions

My internship

I joined the trading floor of CIC Sud-Ouest (the South-West branch of CIC) which is divided in two desks (FICC – Fixed Income, Currencies and Commodities, and asset management) to provide personalized advice to local corporate clients for their investments and risk management. There, I assisted sales and asset managers in their daily duties.

My missions

As an intern, my tasks were very diverse as I have been assisting both FICC and asset management desks. In a day, I would operate the trades reconciliation, monitor the limit orders execution for the sales traders, research and analyze data for the asset managers in preparation of client meetings and do reporting to track the performance of investments. Finally, I helped with management control and middle office tasks such as new clients’ registration.

Required skills and knowledge

While some technical skills such as Excel/VBA are welcomed, the most important skill to have is curiosity. Indeed, as financial markets are constantly evolving it is important to look for anything that can help explain any change, whether in the products’ performances, in the regulatory environment or in clients’ demand to react proactively.

What I learned

During the internship, I learned about the financial solutions provided by a trading floor. On the FICC desk, I was exposed to derivatives and other complex products. On the asset management desk, I discovered the world of EMTNs (Euro Medium Term Notes) which are structured products.

Overall, the internship allowed me to get a broader understanding of the financial markets as I could see the impacts of the markets and the broader economy on clients’ needs, and the impact of client’s needs on the type of products offered by the bank.

Financial concepts related my internship

EMTNs

Euro Medium Term Notes (EMTNs) are a type of debt security that is issued by large corporations, financial institutions, and sovereign governments to raise funds for financing purposes (so the bank can loan money). EMTNs are similar to traditional bonds in that they pay a fixed or floating rate of interest and have a maturity date. One of the key advantages of EMTNs is their flexibility. They can indeed be tailored to meet the specific needs of investors. In practice, the structurers can work on guaranteeing the capital, on the yield… They usually obey rules (such as “The EMTN pays 7% per year for 3 years, then the spread between a rate and another. When the EMTN has paid 22% or at the end of the seventh year, the product ends, and the investor gets his or her capital back.”).

Derivatives

Financial derivatives are financial instruments used to manage risk. They derive their value from an underlying asset or group of assets. Derivatives can be sold for a wide range of assets such as interest rates, currencies and commodities, which are traded by the FICC desk.

There are several types of financial derivatives. The best-known include futures contracts, options contracts, swaps, and forwards.

Futures contracts are agreements to buy or sell an asset at a predetermined price and date in the future.
Options contracts give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price and date in the future.
Swaps are agreements to exchange cash flows based on different financial instruments, such as interest rates or currencies.
Forwards are similar to futures contracts, but they are customized agreements between two parties rather than standardized contracts traded on an exchange.

Structured products

Structured products are financial instruments that are created by combining multiple financial assets, such as stocks, bonds, and derivatives, into a single investment product. These products are designed to meet specific investment objectives, such as providing income, capital protection, or exposure to a particular market or asset class.

Structured products are typically created by financial institutions, such as banks or investment firms, and are sold to investors. They can be customized to meet the specific needs of individual investors and can be structured to provide a range of risk and return profiles.

Some common types of structured products include:

Principal-protected notes: These products provide investors with a guaranteed return of their initial investment, while also offering exposure to the performance of an underlying asset or index.
Autocallable notes: These products provide investors with a fixed income stream, while also offering the potential for higher returns if an underlying asset or index meets certain performance criteria.
Reverse convertibles: These products provide investors with a fixed income stream, while also exposing them to the risk of a decline in the value of an underlying asset or index.

Why should I be interested in this post?

The trading floor is the link between the financial markets and the rest of the business world. Understanding the products offered allows one to get a better grasp on both sides of the economy.

Useful resources

Academic resources

Hull J.C. (2021) Options, Futures, and Other Derivatives Pearson, 11^th Edition.

Business resources

CIC Market Solutions

About the author

The article was written in June 2023 by Tanguy TONEL (ESSEC Business School, Global BBA, 2019-2023).

My professional experience as an Institutional Sales Assistant with Lazard Frères Gestion

About the company

My internship

My missions

Required skills and knowledge

What I learned

Financial concepts related to my internship

Sale of financial products

Fixed income management

Macro-economics

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My Experience as an Investment Intern at Eurazeo

About Eurazeo

Internship Overview

Syndication of Co-Investment Opportunities

Strategic SPV Structures Analysis

Evaluation of Secondary Transactions Advisors

What did I learn during this experience?

Long But Fulfilling Working Hours

A game-changing internship

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My experience as Revenue Analyst at Olympique de Marseille

About the company

My apprenticeship

My missions

Strategic recommendations and pricing

Participation in club project profitability studies

Intermediary role between sales and finance teams

Development of steering tools and reporting dashboards

As the analysis are based almost entirely on the measurement of KPIs (Key Performance Indicators), the development of management tools represented a major challenge. So, it was up to me to play an active part, working with the IT (Information Technology) and back-office teams.

Required skills and knowledge

Financial concepts related to my apprenticeship

Budget Management

Revenue Management

Business Plans and Financial modeling

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My professional experience as a financial and accounting assistant at Professional Services

About the company

My internship

My missions

Required skills and knowledge

What I learned

Financial concepts related my internship

Financial Statement Analysis

Financial Reporting Standards

Taxation

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My experience as a Data analyst in CEMEX

About the company

My expertise at Data Management

Advanced Analytics

Data Quality

Required skills and knowledge

What I learned

Financial concepts related my internship

EBITDA/Debt ratio

Return on Assets (ROA)

Why should I be interested in this post?

Related posts on the SimTrade blog

Useful resources

About the author

My experience as an Asset Management Sales Assistant for Amplegest

About the company

Private Wealth Management

Family Office

Asset Management

Key Facts and Figures

My internship