Internship

My experience as a Quantitative Investment Intern in Fortune Sg Fund Management

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My experience as a Quantitative Investment Intern in Fortune Sg Fund Management

Ziqian ZONG

In this article, Ziqian ZONG (ESSEC Business School, Global BBA exchange, 2024) shares her professional experience as a Quantitative Investment Intern in Fortune Sg Fund Management.

About the company

Fortune Sg Fund Management is a leading mutual fund management company with over 300 billion RMB in assets under management as of 2023. The company was founded in 2003 as a joint venture between Baosteel Group and Société Générale and has since grown to become a significant player in the Chinese market.

Fortune Sg leverages the capital markets to provide comprehensive asset management solutions for a wide range of domestic and international investors through professional operations. The company upholds the principle of prioritizing client interests, striving to be a responsible and trustworthy firm worthy of long-term commitment from all parties involved.

Logo of Fortune Sg
Logo of Fortune Sg
Source: Fortune Sg.

My internship

I joined the Quantitative Investment Department as an intern. This department primarily employs a multi-factor approach to select high-quality stocks in the Chinese stock market. The main products offered by this department are fundamental quantitative fund and quantitative hedging fund.

My missions

During my internship, I assisted the team with various programming and data analysis tasks. Furthermore, I undertook independent research project, including tracking the latest global trends in active quantitative funds and factor models, as well as developing a factor rotation-based index enhancement strategy.

Required skills and knowledge

The role requires advanced programming skills, primarily using Python and SQL. Proficiency in these languages is essential for improving work efficiency. Additionally, due to the rapid development of quantitative finance, it is necessary to read the literature to stay updated on the latest trends and investment methods. Sometimes, programming and searching for effective alpha (the excess return on an investment relative to the return of a benchmark index) can be tedious tasks that require persistent patience and confidence.

What I learned

During my internship, I gained extensive knowledge about factor investing and practical investment strategies. The integration of fundamental analysis with quantitative investment methods significantly enhanced the efficiency of traditional research. My research on factor timing allowed me to combine macroeconomic factors with market style shifts, using data to generate insights.

Financial concepts related my internship

Factor Investing

Factor investing is an investment strategy that utilizes certain quantifiable characteristics or attributes, known as “factors,” to explain and predict the risk and return performance of assets. These factors help investors better understand the behavior of the market and individual assets, leading to the construction of more effective investment portfolios.

The basic principle of factor investing is that certain factors have historically demonstrated a strong ability to explain and predict asset returns. By identifying and exploiting these factors, investors can achieve excess returns (known as “alpha”).

Common factors include:

  • Value Factor: Selecting stocks with low valuations, such as low price-to-earnings (P/E) or price-to-book (P/B) ratios.
  • Momentum Factor: Selecting stocks that have recently exhibited strong performance, under the assumption that this performance will continue.
  • Size Factor : Selecting small-cap stocks, which historically have outperformed large-cap stocks.
  • Quality Factor: Selecting stocks with strong financial health and high profitability.
  • Minimum Volatility Factor: Selecting stocks with lower volatility, which tend to perform better during periods of market uncertainty.
  • Growth Factor: Selecting stocks with high growth potential, such as companies with rapidly growing revenues and earnings.

Factor timing

Factor timing is an investment strategy that involves adjusting the exposure to different factors in a portfolio based on changing market conditions and macroeconomic cycles. The idea is to dynamically allocate capital to factors that are expected to perform well in the current or upcoming economic environment while reducing exposure to factors that are likely to underperform.

Here is how I do factor timing:

  • Economic and Market Analysis: Investors analyze macroeconomic indicators, market trends, and other relevant data to understand the current and projected state of the economy. This analysis helps in identifying which factors are likely to perform well in different economic conditions.
  • Factor Selection and Weighting: Based on the economic and market analysis, select which factors to emphasize in their portfolio. During Economic Expansion: Momentum and growth factors perform well because companies with strong recent performance and high growth potential are likely to continue thriving. During Economic Contraction: Quality and low volatility factors may be favored because companies with strong financial health and stable earnings are more resilient in downturns.
  • Dynamic Adjustment: Continually monitor economic indicators and market conditions to adjust the portfolio’s factor exposures.

Why should I be interested in this post?

With the advancement of computer technology and the increase in alternative data, quantitative finance is occupying an increasingly larger share in investments. Understanding related content can provide valuable advantages and aid in making informed decisions when purchasing quantitative-related products.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Youssef LOURAOUI Factor Investing

   ▶ Praduman AGRAWAL My Professional Experience as a Quantitative Analyst Intern at Findoc Financial Services

Jayati WALIA Programming Languages for Quants

Useful resources

Fortune SG fund management

The most classic factor model: Fama French factor model

About the author

The article was written in May 2024 by Ziqian ZONG (ESSEC Business School, Global BBA exchange, 2024).

My Professional Experience as a Quantitative Analyst Intern at Findoc Financial Services

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My Professional Experience as a Quantitative Analyst Intern at Findoc Financial Services

Praduman AGRAWAL

In this article, Praduman AGRAWAL (ESSEC Business School, Visiting Scholar, Summer 2024) shares his professional experience as a Quantitative Analyst Intern at Findoc Financial Services.

About the Company

Findoc Group offers both institutional and retail clients quality products and services that cover equity trading, derivative trading, commodity trading, currency trading, IPOs, and mutual fund investments. Findoc Group also offers depository services through NSDL to create a seamless transaction platform. Trades executed through the Findoc Group companies are settled through the Findoc Group Depository Participant. Findoc Group is also involved in business through Findoc Finvest Private Limited (NBFC) for activities such as loan against shares, loan against property, and loan against gold, among other loan services.

Findoc team focuses on providing long-term value addition to its clients while maintaining the highest standards of excellence and professionalism. With a vision to earn a name that represents trust, growth, and passion, Findoc Group practices transparent business operations and prioritizes client satisfaction. Their professional approach emphasizes long-term relationships with clients, constantly generating value-added features without passing the cost burden to the clients.

Logo of the company.
Logo of Findoc Financial Services
Source: Findoc Financial Services

About the Department

At Findoc Financial Services, I was part of the Quantitative Analysis department, specifically within the quantitative desk. Our team was dedicated to developing and implementing trading strategies focused on the Forex pair. My role involved designing a portfolio of trading strategies for USDINR aimed at reducing unsystematic risk through diversification. Using Easy Language on TradeStation, I coded these strategies incorporating a range of indicators such as Bollinger Bands, MACD, VWAP, and RSI, which I customized to fit our specific needs. In addition to the technical aspects, my work also delved into economic analysis and trading psychology, ensuring a comprehensive approach to strategy development. Utilizing 20 years of historical data, I meticulously conducted backtesting and forward testing, rigorously evaluating the effectiveness of our strategies and refining them for optimal performance.

My Internship

During my internship at Findoc Financial Services, I was entrusted with the development and implementation of trading strategies for the Forex market, specifically focusing on the USDINR currency pair. My primary responsibilities included coding trading strategies using Easy Language on TradeStation, backtesting these strategies using historical data, and performing forward testing to validate their effectiveness in real-time market conditions.

My Missions

My main mission was to develop a diversified portfolio of trading strategies aimed at reducing non-systematic risk. This involved extensive coding, data analysis, and testing to ensure the strategies were robust and effective. I also conducted economic analysis and considered trading psychology to enhance the strategies further.

Required Skills and Knowledge

During my internship, I honed a blend of soft and hard skills essential for success in quantitative analysis and trading strategy development. Effective communication was crucial for collaboration and presenting findings to stakeholders. Critical thinking and problem-solving skills were indispensable when encountering challenges in data analysis or strategy development. Adaptability was key as market conditions and requirements often changed, requiring flexibility in approach and strategy. Attention to detail was essential for ensuring accuracy in data analysis and coding of trading algorithms.

On the hard skills front, proficiency in programming languages such as Easy Language for TradeStation was fundamental for coding and testing trading strategies. A strong understanding of statistical methods and financial mathematics was necessary for designing robust strategies and interpreting results accurately. Expertise in data analysis tools and techniques facilitated thorough backtesting and forward testing of strategies. Additionally, a deep understanding of financial markets, including factors influencing currency movements, was essential for developing effective trading strategies.

What I Learned

Throughout my internship, I gained a deeper understanding of trading strategies and the technical and economic factors influencing currency markets. I learned the importance of rigorous testing and validation of strategies to ensure their effectiveness in real-time trading. Additionally, I developed valuable skills in programming, data analysis, and financial market analysis, which are crucial for a career in quantitative finance.

Financial Concepts Related to My Internship

Diversification

Diversification is the practice of spreading investments across different assets to reduce risk. In my role, I developed a portfolio of trading strategies for the USDINR currency pair. Each strategy had its unique approach and risk profile. By employing multiple strategies simultaneously, we aimed to diversify the risk associated with any single strategy. This concept directly links to my job as I focused on building a diversified portfolio of trading strategies to mitigate unsystematic risk.

Technical Indicators

Technical indicators are mathematical calculations based on historical price, volume, or open interest data. These indicators are used by traders to predict future price movements. In my role, I utilized various technical indicators such as Bollinger Bands, MACD, VWAP, and RSI to develop trading strategies for the USDINR pair. These indicators provided insights into market trends, momentum, volatility, and overbought/oversold conditions, which informed our trading decisions. Understanding and effectively using these indicators was crucial for building successful trading strategies.

Backtesting and Forward Testing

Backtesting involves testing a trading strategy using historical data to assess its performance. Forward testing, on the other hand, involves testing the strategy in real-time with live market data. In my role, I conducted both backtesting and forward testing of the trading strategies I developed. By analyzing past market data spanning 20 years, I assessed how well the strategies would have performed historically. Forward testing then allowed me to validate the strategies in real-time market conditions before implementation. The ability to conduct rigorous backtesting and forward testing was essential for evaluating the viability and effectiveness of our trading strategies.

Why Should I Be Interested in This Post?

If you love mathematics and finance, then a role as a Quantitative Analyst is a great fit for you. It broadens your horizon by offering different perspectives on financial markets. You will learn how small events can lead to significant changes in stock prices and how gap-up and gap-down movements can impact trading strategies. You will also gain skills in coding strategies (Algo-trading) that can be applied in various areas.

Related Posts on the SimTrade Blog

   ▶ Trading strategies based on market profiles and volume profiles

   ▶ Quantitative Analyst – Job descriptions

Useful Resources

Findoc Group

AlgoTrading with Kavin Davey

About the Author

The article was written in May 2024 by Praduman AGRAWAL (ESSEC Business School, Visiting Scholar, Summer 2024).

My experience as an Asset Management Sales Assistant for Amplegest

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My experience as an Asset Management Sales Assistant for Amplegest

Chloé ANIFRANI

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!

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Louis DETALLE A quick interview with an Asset Manager at Vontobel

   ▶ Akshit GUPTA Asset management firms

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

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My professional experience as a property manager assistant at Urban Premium

Lilian BALLOIS

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.
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.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Arthur EVERARD My experience as a Real Estate Analyst at Eaglestone

   ▶ Clément KEFALAS My experience of Account Manager in the office real estate market in Paris

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 experience as an EMEA Regional Treasurer intern at Sanofi

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My experience as an EMEA Regional Treasurer intern

Isaac ALLIALI

In this article, Isaac ALLIALI (ESSEC Business School, Bachelor in Business Administration (BBA), 2019-2023) shares his professional experience an EMEA Regional Treasurer intern at Sanofi.

Sanofi

During my internship at Sanofi, a leading global pharmaceutical company headquartered in Paris, I had the privilege of working in the Treasury Department. Sanofi is renowned for its extensive research, development, manufacturing, and marketing of pharmaceutical products across various therapeutic areas. With a steadfast commitment to improving global health, Sanofi’s portfolio includes treatments for diabetes, cardiovascular diseases, vaccines, and rare diseases. As a key player in the pharmaceutical industry, Sanofi holds a significant share of the prescription market.

Logo of Sanofi.
Logo of
Source: the company.

Financial accounts

Income statement of Sanofi.
Logo of
Source: the company.

Strategy

Strategy of Sanofi.
Logo of
Source: the company.

My internship

As a Europe Middle East and Africa (EMEA) Regional Treasurer intern at Sanofi, my internship involved two main aspects. Firstly, I was responsible for reporting on the performance of the company’s subsidiaries on a monthly basis, focusing on key financial metrics such as Days Sales Outstanding (DSO), Days Payable Outstanding (DPO), Days Inventory Outstanding (DIO), and cash flows. This required analyzing financial data, preparing comprehensive reports, and providing insights into the subsidiaries’ financial health. I developed a deep understanding of financial ratios and gained proficiency in financial analysis and reporting.

Additionally, on a day-to-day basis, I played a vital role in implementing alternative banking channels to ensure the sustainability of cash receipts from high-risk countries. This involved close collaboration with banks and local teams to establish robust procedures and systems. To ensure accurate cash receipts matching with product sales, I diligently contacted banks and the local teams on a daily basis. This rigorous process involved verifying and validating each transaction, ensuring the precise quantity of products sold aligned with the corresponding justifying claims. By maintaining meticulous attention to detail, I ensured that every transaction was accurately registered and properly accounted for.

This aspect of my internship demanded strong communication skills, attention to detail, and the ability to manage complex transactions efficiently. It provided firsthand exposure to the challenges and intricacies of international banking operations, risk management, and compliance in high-risk countries.

During my internship as an EMEA Regional Treasurer at Sanofi, I had the additional responsibility of consolidating the representative offices’ register, which included all the bank accounts and power of attorneys (legal documents allowing appointed employees to make decisions on behalf of Sanofi).

This task required me to meticulously reconcile and align the information from various regions before the audit control. To ensure accuracy and completeness, I actively communicated with every regional treasurer, collaborating closely to verify the documentation and address any discrepancies. This process of effective communication and coordination with the regional treasurers was crucial in achieving a thorough and successful consolidation. By ensuring that everything was in order, I contributed to the smooth audit control process and maintained the integrity of the company’s financial records.

My missions

My internship involved two main aspects. Firstly, I was responsible for reporting on the performance of the company’s subsidiaries on a monthly basis, focusing on key financial metrics such as Days Sales Outstanding (DSO), Days Payable Outstanding (DPO), Days Inventory Outstanding (DIO), and cash flows. This required analyzing financial data, preparing comprehensive reports, and providing insights into the subsidiaries’ financial health. I developed a deep understanding of financial ratios and gained proficiency in financial analysis and reporting.

Additionally, on a day-to-day basis, I played a vital role in implementing alternative banking channels to ensure the sustainability of cash receipts from high-risk countries. This involved close collaboration with banks and local teams to establish robust procedures and systems. To ensure accurate cash receipts matching with product sales, I diligently contacted banks and the local teams on a daily basis. This rigorous process involved verifying and validating each transaction, ensuring the precise quantity of products sold aligned with the corresponding justifying claims. By maintaining meticulous attention to detail, I ensured that every transaction was accurately registered and properly accounted for.

This aspect of my internship demanded strong communication skills, attention to detail, and the ability to manage complex transactions efficiently. It provided firsthand exposure to the challenges and intricacies of international banking operations, risk management, and compliance in high-risk countries.

During my internship,I had the additional responsibility of consolidating the representative offices’ register, which included all the bank accounts and power of attorneys (legal documents allowing appointed employees to make decisions on behalf of Sanofi).

This task required me to meticulously reconcile and align the information from various regions before the audit control. To ensure accuracy and completeness, I actively communicated with every regional treasurer, collaborating closely to verify the documentation and address any discrepancies. This process of effective communication and coordination with the regional treasurers was crucial in achieving a thorough and successful consolidation. By ensuring that everything was in order, I contributed to the smooth audit control process and maintained the integrity of the company’s financial records.

Required skills and knowledge

The EMEA Regional Treasurer role at Sanofi requires a combination of knowledge and skills. Here are key areas of expertise and proficiencies relevant to the position:

Financial Analysis: A strong foundation in financial analysis is essential for evaluating subsidiary performance, assessing financial health, and providing meaningful insights. Proficiency in financial ratios, financial modeling, and data analysis enables you to make informed decisions and recommendations.

Treasury Operations: Familiarity with treasury operations, including cash flow management, liquidity management, risk management, and financial reporting, is crucial. Understanding financial instruments, banking relationships, and compliance procedures ensures effective treasury operations and supports decision-making.

Communication and Collaboration: Effective communication skills are vital to engage and collaborate with internal stakeholders, such as regional financial management and local teams. Clear and concise communication fosters productive relationships and ensures the smooth execution of financial processes.

Attention to Detail and Compliance: Meticulous attention to detail is necessary when reporting on subsidiary performances and implementing alternative banking channels. Compliance with internal control procedures, risk mitigation protocols, and financial regulations ensures accuracy, transparency, and integrity in financial operations.

Analytical Thinking: Strong analytical skills are critical for analyzing financial data, identifying trends, and making data-driven decisions. The ability to evaluate risks, identify opportunities, and propose solutions contributes to effective financial management.

Adaptability and Problem-Solving: The dynamic nature of the role requires adaptability, as well as the ability to think critically and solve problems in a fast-paced environment. Resilience, flexibility, and a proactive approach enable you to navigate challenges and drive continuous improvement.

Financial concepts related my internship

Days Sales Outstanding (DSO)

DSO is a financial metric that measures the average number of days it takes for a company to collect payment after a sale is made. Monitoring DSO is crucial for assessing a company’s liquidity position and efficiency in collecting accounts receivable. During my internship, I actively analyzed and reported on DSO, gaining a practical understanding of its significance in cash flow management.

Days Payable Outstanding (DPO)

DPO is a financial metric that measures the average number of days it takes for a company to pay its suppliers after receiving an invoice. Managing DPO effectively is essential for optimizing working capital and maintaining strong supplier relationships. In my reporting responsibilities, I monitored and analyzed DPO, contributing to a comprehensive assessment of the company’s financial performance.

Cash Receipts and Compliance

Ensuring the accurate and timely recording of cash receipts is vital for financial integrity. Implementing alternative banking channels and verifying transactions from high-risk countries required a keen eye for detail and compliance with internal control procedures. This experience emphasized the importance of maintaining rigorous standards to mitigate risk and ensure accurate financial reporting.

Why should I be interested in this post?

The role of EMEA Regional Treasurer at Sanofi offers a compelling opportunity for individuals interested in finance, treasury operations, or the pharmaceutical industry. Here are a few reasons why you should be interested in this post:

Industry Leadership: Sanofi is a global leader in the pharmaceutical industry, renowned for its innovative research and development. Joining the Treasury Department of such a prominent company provides exposure to the complexities of finance within a multinational pharmaceutical corporation, offering a unique and valuable experience.

Financial Responsibility: As an EMEA Regional Treasurer, you would have a significant role in managing the financial assets of Sanofi across the EMEA region. This level of responsibility allows you to make strategic financial decisions, analyze financial performance, and contribute to the company’s financial health.

International Exposure: Working within the EMEA region exposes you to diverse markets, cultures, and business practices. It presents an opportunity to develop a global mindset, adaptability, and cross-cultural communication skills, which are increasingly valuable in today’s interconnected business world.

Learning Opportunities: The Treasury Department at Sanofi offers a dynamic and challenging environment where you can continually enhance your financial knowledge and skills. You will gain exposure to various aspects of treasury operations, financial risk management, liquidity management, and financial reporting.

Impactful Contributions: By actively participating in the implementation of alternative banking channels, you will contribute to ensuring the sustainability of cash receipts from high-risk countries. This responsibility allows you to make a tangible impact on the company’s financial operations and play a vital role in managing financial risks.

Useful resources

Sanofi

Careers at Sanofi

About the author

The article was written in June 2023 by Isaac ALLIALI (ESSEC Business School, Bachelor in Business Administration (BBA), 2019-2023).

My professional experience as B2B Project assistant manager at Dance

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My professional experience as B2B Project assistant manager at Dance

Theo SCHWERTLE

In this article, Theo SCHWERTLE (Maastricht University, School of Business and Economics, Bachelor in International Business, 2023) shares his experience as a B2B Project assistant manager at Dance which is a start-up in urban mobility.

About the company

Dance is a progressive company that is reshaping urban mobility by providing an electric mobility subscription service. The company offers members the freedom to explore their city with an electric bike or moped, with maintenance and repairs included in the membership. Founded by the creators of SoundCloud and Jimdo, Dance is currently operating in Berlin, Hamburg, Munich, Vienna, and Paris, with a focus on making urban commuting more connected, convenient, and environmentally friendly.

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

My internship

As part of the Dance for Business department, I was privileged to contribute to various crucial aspects of the business, including the development and standardization of Business-to-Business (B2B) playbooks for client outreach, engagement, and account management. I also had the opportunity to manage the company pipeline using our Customer Relationship Management (CRM) tool, conduct competitive market research, and collaborate with cross-functional teams to execute lead generation strategies and client retention initiatives.

My missions

My mission at Dance was multifaceted, encompassing both client relationship management and sales strategy. I was responsible for creating and developing B2B pitch decks, preparing and supporting pitch meetings with new clients, and building long-term relationships with our clients to provide the best service possible. Serve as the first point of contact for all B2B clients, but also to find new strategies to acquire more customers. Furthermore, we were making Partnership deals with other service providers to spread the word about the mobility solution that Dance offers.

Required skills and knowledge

This role required strong interpersonal skills for building and maintaining client relationships, as well as proficiency in using CRM tools to manage the company pipeline. It also called for a solid understanding of sales strategies and market research methodologies. Since we were only a small team, communication and constant prioritization of tasks was paramount. Interpersonal skills have strongly increased during that time since I was constantly pitching to the management of firms like AboutYou or Inditex while also taking care of our current clients.

What I learned

Project Management: In preparing B2B pitch decks and supporting pitch meetings, you would have honed your project management and organization skills.

Communication: Being the first point of contact for all B2B clients and building long-term relationships with them would have strengthened your communication and interpersonal skills.

Strategic Thinking: Conducting competitive market research and collaborating on lead generation strategies likely helped develop your strategic thinking and market analysis abilities.

Problem Solving: Proposing solutions in line with business objectives and incorporating new initiatives shows your problem-solving capabilities.

Financial concepts related my internship

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) refers to the total expenses a company incurs to convince a potential customer to purchase its product or service. It includes costs related to marketing and sales efforts and is a key metric for determining the return on investment for acquisition strategies.

Contribution Margin

Contribution Margin is a financial metric that calculates the profitability for individual items sold by a company. It is determined by subtracting the variable costs (costs that change with the amount of goods or services produced) associated with a product from the revenue generated by that product.

Customer Lifetime Value

Customer Lifetime Value (LTV) is a projection of the total net profit a company expects to earn from a customer throughout the business relationship. It takes into account the revenue a customer would generate, the costs of acquiring and serving the customer, and the duration of the relationship with the customer.

Why should I be interested in this post?

If you’re looking to gain insights into the world of business operations or contemplating a career in a similar industry, this post should be of high interest to you. The financial concepts discussed here form the backbone of many successful businesses. Understanding these concepts can help you view business operations from a new perspective, providing you with a solid base for making informed decisions.

Furthermore, sharing my experience at Dance provides an insider’s perspective into how the start-up operates and how different roles contribute to its success.

My experience at Dance was nothing short of enriching. With the right blend of motivation, attention to detail, and focus on business objectives, I was able to contribute effectively to the company’s success. I hope my insights will inspire and guide those looking to embark on a similar professional journey.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Jayna MELWANI My professional experience as a Global Development and Learning Intern at Danone

Useful resources

Dance

About the author

The article was written in May 2023 by Theo SCHWERTLE (Maastricht University, School of Business and Economics, Bachelor in International Business, 2018-2023).

My experience as a leisure tourism management assistant in the French Tourism Development Agency

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My experience as a leisure tourism management assistant in the French Tourism Development Agency

William LONGIN

In this article, William LONGIN (EDHEC Business School, Global BBA, 2020-2024) shares his experience as a leisure tourism management assistant at Atout France USA, which is the French Tourism Development Agency in the United States of America.

Atout France

Atout France is the official French National Tourism Development Agency. It is a government agency responsible for promoting France as a tourism destination to visitors and tourism professionals (tour operators and travel agents) from around the world.

Logo of the Atout France.
Logo of Atout France
Source: Atout France.

Atout France was created in 2009 through the merger of three existing organizations that focused on tourism promotion: Maison de la France, ODIT France, and France Tourism Development Agency. The name Atout France comes from “Atout” meaning asset and “France” the nation that it services. The agency’s main mission is to develop and implement strategies for promoting France as a tourism destination by working with French companies and tourism professionals from around the world. We will explore the strategies used by Atout France in more depth in this article.

Atout France objectives are set by the French government and reflect the needs of French businesses in the tourism sector. To attain the objectives set by the government, Atout France organizes and attends multiple business-to-business (B2B) events to create visibility and encourages French networking. Another key objective set by the French government is promoting the new offers for sustainable tourism called eco-tourism, still overlooked by many international travelers. For example, Atout France in the United States launched an e-learning platform covering eco-tourism in France.

I interned in the branch of Atout France located in New York, as a “leisure tourism manager assistant”. As a foreign worker in the United States, I was granted a diplomatic A2 Visa for my internship. Kind of cool! My experience in New York was really valuable in addition to the experience I had in the company as I was able to make many friends and discover the city through a new lens (a worker and not a tourist). Indeed New York is home to many international institutions such as the United Nations, many consulates, and schools such as New York University (NYU) and Columbia University. New York, also called the Melting Pot, has a developed French community and culture particularly in the areas of art, cuisine, and fashion. The numerous French restaurant venues in the city allows Atout France to showcase French cuisine when organizing events. We could almost call French restaurants the culinary consulates of France in New York!

My personal experience at Atout France

My experience at Atout France USA was very valuable as I learned about company culture, the tourism industry and about the various software used by the company.

My experience of the company culture and workplace at Atout France USA is very positive. As an intern I have been well received and helped in the beginning of my internship. However, I realized very early on that in order to be useful it was important to be proactive. I cannot emphasize enough on the word ‘proactive’ because it is central to understanding how to be a useful coworker in the trade and events department of the company. I learned that it is important to ask questions about tasks, especially that you could be unfamiliar with as an intern. For example, when building the slide show for an internal proposition I made, I went in a freestyle but learned afterwards that there was a corporate template that was essential to respect in order to keep things more organized.

The tourism industry was a completely new industry for me as I have never interned or leaned towards a career in this sector before. What attracted me the most for this internship was to learn more about the industry, have the opportunity to work in New York and serve the nation of France. Throughout my internship I learned about jobs and vocabulary that I was unfamiliar with before such as what travel writers do, what is MICE (which is an acronym for business tourism), or what is eco-tourism. My time in the industry allowed me also to learn about the importance of networking events for professionals and their ways of communicating. Overall, my experience at Atout France encouraged me to learn more about the different forms of tourism and how professionals operate.

The large number of valuable contacts (from the United States and from France) that Atout France possesses is a key asset that adds value for the local and French companies interested in developing businesses. In order to organize its contacts, Atout France uses a Customer Relation Management tool (CRM) called HubSpot. HubSpot is a cloud-based software platform that provides marketing, sales, and customer service tools for businesses. In the case of Atout France, the main purpose is to store data about its contacts. Data about area, domain of expertise and level of engagement with the company are useful for selectively picking the most adequate contacts when organizing events. For example, amongst the tour operator companies of the network, only a segment of them is already selling French packaged trips. This segment of tour operators is interesting for French companies because they already have an interest in the country and are more likely to create more deals or tailor new offers. Throughout my internship I was taught to get accustomed with the use of the software for searching information, creating spreadsheets for business analytics and creating invite lists for events.

Core missions and duties

Event planning

Part of my responsibilities as an intern at Atout France USA were to contribute to organizing events by finding venues, inviting business representatives and communicating with our clients to best build the event according to their needs. Atout France USA organizes events for its local partners and French institutions to increase their visibility on the American market and meet travel professionals that could be interested in doing business with them. Generally, the size of events ranges from dinners with 10 guests to larger events going over 100 guests. As an intern it was my duty to look for appropriate venues matching the style, theme, and logistical capability of the venue according to the needs of the client.

Market research

As part of my duties as an intern I was asked to perform market research for various missions notably to contribute to the updating of the market presentation of the United States created and regularly updated by Atout France. Atout France puts an emphasis on design and credibility of sources when gathering data. Performing such research is very enriching as it allows you to have a better understanding of the industry and analyze the industry better.

Must do tasks – Mindset

When preparing an event, there were many manual tasks that needed to be done. For example, it was imperative to set up the event space with a well-thought decor, and other necessary equipment. When preparing for the event it also involved managing vendors by making sure they delivered food, beverages, audio-visual equipment, or other services. During events interns were often asked to handle registration and troubleshooting during the event by handling any issues that arise, such as technical difficulties or unexpected changes to the schedule.

Required skills and knowledge

To perform well as an intern at Atout France in New York, there are several prerequisites that you should consider such as strong communication skills. Interns are asked to communicate with different stakeholders, including industry professionals, tourists, and colleagues. Therefore, having the ability to clearly communicate and proactively ask questions is a must. Knowledge of the French language is an excellent plus for talking to partners. It can ease communication and make it easier for both French and American partners. Familiarity with the events and tourism industry is largely valued by Atout France as it is a good indicator for adaptability. Atout France has a dynamic workplace, and as an intern, you may have to manage multiple tasks simultaneously so having good time management and a sense of organization can come in very handy.

Learned skills and knowledge

During my internship I have improved and worked on my hard skills and soft skills. Hard skills such as my knowledge of the industry, learned how to use HubSpot, perform market research in the tourism industry. Soft skills such as flexibility during events, bilingual communication and team empathy skills.

Key concepts

Cultural awareness

Cultural awareness is the ability to recognize and appreciate different cultures, values, and beliefs. It involves understanding and respecting differences between cultures and being able to navigate and communicate effectively with people from different backgrounds. Cultural awareness also involves recognizing one’s own biases and assumptions and being open to learning from and about different cultures. Cultural awareness involves developing attitudes of respect, openness, and curiosity toward other cultures, which can help to build stronger relationships and promote mutual understanding. When performing missions it is important to take into account the image that Americans have of France.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) tool is a tool that organizations use to manage and analyze their interactions with customers and improve customer relationships. CRM involves collecting and analyzing customer data from various sources, including sales, marketing, and customer service, to gain insights into customer behavior, preferences, and needs. The CRM was a very useful tool for analyzing email opening rates, network contracting and marketing data.

Ecotourism

Ecotourism is a type of tourism that focuses on responsible travel to natural areas that conserve the environment and improve the welfare of local communities. Ecotourism examples are visiting and experiencing natural areas, such as national parks, wildlife reserves, and cultural sites, while minimizing the negative impact on the environment and supporting local communities. Ecotourism is also characterized by responsible travel practices, such as reducing waste, etc.

Ecotourism is of growing interest to France in its pioneering mission of the eco touristic industry and carbon neutral objectives for 2030. At the same time ecotourism can provide economic benefits to the local community by promoting conservation efforts by providing financial incentives for protecting natural resources and wildlife.

MICE

MICE is an acronym that stands for Meetings, Incentives, Conferences, and Exhibitions. It refers to a type of tourism that involves the organization and hosting of business events, such as conferences, seminars, trade shows, exhibitions, and meetings. MICE tourism is a growing industry that often involves large groups of people traveling to a specific destination for a specific purpose, such as attending a conference or meeting.

MICE tourism is of interest to Atout France as it provides significant economic benefits such as revenue for French hotels, restaurants, transportation providers, and other businesses.

Travel Agent VS Tour Operator

A travel agent is an intermediary that personally helps clients plan and book their travel arrangements. On the other hand, a tour operator specializes in organizing and selling complete travel packages, which may include transportation, accommodations, meals, and activities. Both professions are both of interest to Atout France as a majority of Americans use their services to plan their travel to Europe.

B2B and B2C

B2B and B2C are abbreviations for “Business to Business” and “Business to Consumer” respectively. Indeed, different companies rely on different business models. Relations and commerce with different customers change the way companies do business. At Atout France, the company’s services are for companies, so it operates on a B2B model when organizing events. However, Atout France also interacts with the public through marketing campaigns. Whether that interaction is a B2C is arguable because the “product” sold by Atout France is the whole nation of France and the operation is made in the nation’s interest rather than in the businesses’ interest as the income gained from such an operation is not directly earned from the consumer.

Why should you be interested in this post?

My article about my experience as an intern for Atout France in New York should be of great interest to people who are interested in the travel and tourism industry, as well as those who are considering pursuing an internship or career in this field. The article provides valuable insights into what it’s like to work for a destination marketing organization and gives a behind-the-scenes look at the operations of Atout France in New York. Readers can learn about the different departments and functions within a tourism development agency, as well as the challenges and opportunities that come with working in this field. Readers can also learn about the vocabulary, skills and qualities that are important to excel in this industry.

Word of conclusion

In conclusion, my experience as an intern at Atout France in New York was an incredibly valuable opportunity for me. I had the chance to work with a talented and dedicated team, passionate about promoting France as a premier travel destination.

During my internship, I gained valuable insights into the operations of the government in the tourism area abroad and learned about the different strategies and tactics used to promote tourism. I had the chance to work on a variety of projects, from developing marketing materials to conducting research and analysis on industry trends.
Throughout my internship, I was impressed by the level of professionalism and expertise demonstrated by the Atout France team. I also had the chance to network with industry professionals and attend industry events, which provided me with valuable connections and insights into the travel industry.

Overall, my internship at Atout France in New York was an incredible learning experience and a valuable steppingstone in my career. It has provided me with a strong foundation in destination marketing and tourism. I would highly recommend an internship with Atout France to anyone who is passionate about travel and tourism and looking to gain valuable insights and experiences in this industry.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Nithisha CHALLA My experience as a Risk Advisory Analyst in Deloitte

   ▶ Alexandre VERLET My experience as an investment banking analyst intern at G2 Capital Advisors

Useful resources

Atout France Organization website

Atout France USA LinkedIn group

HubSpot Firm website

About the author

Article written in March 2023 by William LONGIN (EDHEC Business School, Global BBA, 2020-2024).

My experience as an investment banking analyst intern at G2 Capital Advisors

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My experience as an investment banking analyst intern at G2 Capital Advisors

Aastha DAS

In this article, Aastha DAS (ESSEC Business School, Bachelor’s in Business Administration, Exchange Student from Northeastern University) shares her experience during a summer internship as an investment banking analyst at G2 Capital Advisors.

About the company

G2 Capital Advisors is a boutique, low-middle market investment bank which is sector-focused with an integrated and multi-product approach, creating an uncommon full-service product line. G2 provides unique solutions in the investment banking realm including specializing in buy-side and sell-side advisory, capital markets, and restructuring, with different teams allocated to each part of those practices. Most analysts specialize in one of the products while associates and vice presidents tend to cover more product lines while specializing a certain industry in the business practice, further supporting the C-Level executive heading their respective industry specialty group.

G2 Capital Advisors logo
Women in Finance
Source: G2 Capital Advisors.

G2 follows a unique business model in which their managing directors and leads of industry practices are from a background of sector success, and not necessarily banking careers, like Industrials & Manufacturing, Technology & Business Services, Consumer & Retail, and Transportation & Logistics. The culture and core values at G2 Capital Advisors revolve around dedication to their clients, to be able to provide the best possible, creative yet lucrative solutions for their issues. Their main business practice remains Restructuring and Investment Banking.

Through remaining tenacious in all their business processes, they are able to create a full-servicing bank which can provide accountability in an honest and respectful manner, further differentiating themselves.

My Internship

My Missions

I worked as an intern in the summer of 2022 for the Investment Banking practice at G2 Capital Advisors. I was mainly responsible for supporting the analysts and sometimes supported the associates in the buy-side and sell-side business practices. As the size of this boutique lower-middle market investment bank is a lot smaller than a lot of other banks, my experience was more unique than most investment banking summer analyst positions.

I got holistic views on the whole firm as I got experience in intensive levels in three of four of their business practices: Technology & Business Services, Consumer & Retail, and Transportation & Logistics, on both the buy-side and sell-side investment banking advisory. On the buy-side, I created extensive market maps for clients to source their clients and potential new acquisitions for them. Here I was also able to perform also as a research analyst for M&A and equity research on active advisory and restructuring deals throughout the summer by using Excel to curate and develop market maps, historical financial analysis, and prepare for engagement with clients. I was the forefront of the intern class through ensuring that all the submissions from the group were of top quality for all curated presentation materials including tailored pitch books, Confidential Information Memorandums, deal sheets, and teasers. This helped prepare me, the other interns, as well as the analysts and associates for client presentations, oftentimes doing more research than necessary, to stay ahead of competitors. I also aided in the company’s outreach initiatives through drafting many press releases and research presentations for transaction announcements and quarterly industry reports specifically for the Consumer & Retail and Transportation & Logistics business practices.

In my final weeks as an intern, I was able to generate my own comparables and financial models to aid associates for many ongoing deals. All the interns were also responsible for a research presentation of any of the business practices and I delivered a presentation on Consumer & Retail. In this presentation, I sourced new portfolio companies, hedge funds, and private equity firms for G2 to create connections with and evaluated the intrinsic value of creating relations with each of these different sub-sectors and companies and how it better aligns with G2’s goals to provide industry specialized support for clients. I have since gotten feedback from several of the managing directors and leads in the Consumer & Retail team that many of the suggested partnerships have rendered successful and are in process of deal-making with due diligence underway.

Required Skills and Knowledge

The Investment Banking sector at G2 Capital Advisors is arguably the most profitable business practice and there was a high learning curve to going into this internship. I had to quickly learn the sell-side and buy-side business practices to best support the analysts and associates so that we were able to deliver the best market maps and materials to the clients and our managing directors/deal managers. Along with the steep learning curve of investment banking concepts, I also had to adapt to the G2 form of financial modeling as I had learned it already from a club at my university called Bull & Bear Equity Research club. It is also necessary to develop and come prepared with many soft skills like humility, generosity to always give a helping hand, self-discipline, time management, conflict resolution, and high analytical/critical thinking. As an aspiring intern in the investment banking and advisory space, it is wise to stay up to date with financial news, so it is recommended to read/listen to news through podcasts like the NYTimes Daily, New York Times, Wall Street Journal, The Economist. Most higher-level executives are well versed with financial news and do not need to think twice about it and this is a good tactic to incorporate in beginner’s careers to ensure the interns are knowledgeable on all that is going on in the market, in light of any swift changes.

What I Learned

My internship at G2 Capital Advisors gave me a good understanding of the composition of the entire financial institution and the operation of the financial market as well as investment banking through allowing me to master my Excel capabilities, relationship building skills with clients and other employees, while learning technical skills as well like financial terms and everything that is necessary in the different advisory processes. The knowledge I had previously from taking microeconomics, macroeconomics, macroeconomic theory, financial management, Wall Street Prep, and financial accounting aided me in the internship to create a solidified foundation to grow in the industry. I also learned how lucrative a career in investment banking is because of how heavily technical it can get with developing models, but also how personable it can make you through creating special relationships with many different market leaders, clients, and investors, creating a well-rounded employee in the financial services space.

Key Financial Concepts

Here are three useful financial concepts I learned in the Investment Banking department at G2 Capital Advisors.

Buy-side vs sell-side

Buy-Side – is the side of the financial market that buys and invests large portions of securities for the purpose of money or fund management.

Buy-Side – is the other side of the financial market, which deals with the creation, promotion, and selling of traded securities to the public.

M&A Sell-Side Advisory Process Explained

One of the most in-depth processes I learned was the Sell-side process for investment banking: Detailing my insight below

Process and Timeline

  • 1. Winning the Mandate
    • a. Pitch
    • b. Engagement Review Memo
    • c. Engagement Letter Signing
  • 2. Preparing for sale
    • a. Definite strategy (who, how much, what process)
    • b. Draft Teaser, Executive Summary, CIM
    • c. Kick-off Meeting
    • d. Organize Financials
    • e. Create Projections
    • f. Prepare non-disclosure agreement
  • 3. Marketing
    • a. Launch process
      • i. Contact Buyers
      • ii. Receive preliminary bids
      • iii. Manage deal processes
      • iv. Send teaser and NDA
      • v. Investor meetings/emails
      • vi. Draft Letter of Interest bid
      • vii. Draft Management Presentation
      • viii. Set up data room and due diligence
    • b. Letter of Interest Bid Deadline
      • i. Receive final LOIs
      • ii. Board meetings
      • iii. Management presentation
      • iv. Negotiate with lead bidders
      • v. Execute LOI
  • 4. Confirmatory Due Diligence
    • a. Enter into exclusivity agreement with one bidder post negotiation
    • b. Kick-off diligence meeting
    • c. Facilitate due diligence
  • 5. Closing
    • a. Proceeds waterfall deliverables
    • b. Present finalized deal terms and fairness opinion
    • c. Get board approval
    • d. Signing and closing
    • e. Invoice deliverable sent
    • f. Transaction review memo

What is Restructuring?

Restructuring is a unique concept in investment banking which entails growth and special situations in and out of the court with both a debtor and creditor side, based on what is best fit for the firm. It helps provide clients with clear solutions to ensure sustainable long-term stability. This is usually a practice which is enacted, and advisors are called in when a company wants to change its structure completely or significantly in both financial and operational aspects, during times of financial pressures where clear restructuring of the business is necessary. It often involves revising debt options, operations, and forms of limiting financial detriment while still improving the firm.

A company will often use restructuring advisory when there is debt difficulty, especially regarding consolidating to pay their bondholders. It is also possible to incorporate operation restructure to help cut costs in payroll and/or in the size of assets through significant sales.

Internal restructuring often entails operations, processes, departments, supply chains, executive board, and even ownership change, further enabling the firm to grow profitable while growing. This is when investment banks come in to help with the negotiation of restructuring plans to input financial and legal advisors and potentially even gain aid from investors and appointing new CEOs to implement the new changes and propel the firm forward.

Merger & Acquisition Activism

Activism a particularly new space in the investment banking world but one worth keeping tabs on because of how much it changes and how volatile it can make certain deals. In activist investing, there is usually a sign of change occurring through a catalyst which prompts activist investors to reveal themselves. This is an investment strategy where an investor comes into and/or attempts to pursue poorly-run companies with share prices that have gone down recently, usually an investor which much potential. The activist investor usually takes in a large stake in the company which reveals their interest and pushes for changes because of their vast equity, in efforts to turnaround the company for the better. This hopefully results in price increases for the security.

It is necessary to stay weary of activist investors because they may not always have the company’s best interests at hand. For this reason, shareholder trust is a large factor for activist investors. Most of the most successful activist investors are public figures and not necessarily hedge funds. They often use aggressive and confrontational tactics to pressure the management teams of public companies. It is necessary to grow public and shareholder trust along with public attention to grow their platform to endorse the suggested recommendations.

Why should I be interested in this article?

It is worth reading this article because of the topic it discusses in the popular investment banking space. It is necessary to note how well-rounded investment banking can make an individual but also the uniqueness of this post entails how the experience was at a boutique low-middle market investment bank with full servicing to reveal how one smaller firm can do so much in efforts to create the most impactful and creative solutions to business issues and M&A deals.

Related posts on the SimTrade blog

▶ All posts about Professional experiences

▶ Anne BARBERO Career in finance

▶ Suyue MA Expeditionary experience in a Chinese investment banking boutique

Useful resources

G2 Capital Advisors

Financier Worldwide Magazine (June 2019) The rising influence of shareholder activism in M&A transactions: recent trends in the UK

About the author

The article was written in December 2022 by Aastha DAS (ESSEC Business School, Exchange Student from Northeastern University – Bachelor’s in Business Administration).

My experience as an intern of the Wealth Management Department in Hwabao Securities

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My experience as an intern of the Wealth Management Department in Hwabao Securities

Wenxuan HU

In this article, Wenxuan HU (ESSEC Business School, Global BBA, 2021-2023) shares her internship experience as an intern in the Wealth Management Department in Hwabao Securities in China.

The Company

Hwabao Securities is a securities company of China Baowu Steel Group, one of the world’s top 500 companies. With the strong support of shareholders, Hwabao Securities adheres to the business purpose of “creating value for customers, opportunities for employees, returns for shareholders and benefits for society” and continues to provide professional, high-quality and personalized comprehensive financial services for investors.

Logo of Hwabao Securities
Logo Hwabao Securities
Source: Hwabao Securities.

Wealth Management is an important business unit of Hwabao Securities. From 2019 to 2021, approximately 80% of Hwabao Securities’ revenue is derived from wealth management business and securities proprietary business.

Headquarters of Hwabao Securities
Headquarters Hwabao Securities
Source: Hwabao Securities.

My Internship

My missions

I worked as an intern in the Wealth Management Department of Hwabao Securities. I was mainly responsible for supporting the department staff in business analysis and compliance management.

I coordinated and analyzed the company’s 2021 interim brokerage business operation. In practice, I used the Vlookup function and pivot table, etc. to count the market share of the sales department, business revenue, commission breakdown, etc., and created data visualization charts to report to the company president and other managers in the interim meeting. In addition, I calculated the performance of the marketing staff. Based on their performance I adjusted their rank.

Moreover, I was responsible for investor eligibility management (a review system that requires institutions to Know Your Customer( KYC) and identify the customer’s risk tolerance) and branch compliance training and participated in developing compliance test questions for branch heads. In addition, I created a PowerPoint presentation for the training of new regulations of positive repo risk control and compliance management work report to assist the compliance officer in personnel training. I also assisted the compliance officer in completing the company’s risk compliance management work, preparing and integrating multi-departmental internal control compliance checklists, and formulating branch compliance cross-check work plans. I wrote an article about typical case of compliance to improve the construction work of the company’s compliance system. The article was appreciated by the department manager and the staff of the Shanghai Stock Exchange (SSE).

Required skills and knowledge

The Wealth Management Department is an important department of a financial institution, directly managing all branches and sales staff, and an important line of defense to ensure business compliance. Working in the Wealth Management Department requires less computer skills and mathematical abilities but requires financial knowledge and legal background. Interns are required to keep an eye on changes in market regulations to assess the risk of financial transactions between the company and its clients. Interns also need to have strong communication skills and be willing to give advice to colleagues in different departments. In addition, departmental staff should also have a high level of ethics and self-discipline and adhere to the legal bottom line.

What I have learnt

My internship at Hwabao Securities gave me a good understanding of the composition of the entire financial institution and the operation of the financial market. This experience allowed me to master many financial terms and trading processes and raised my awareness of compliance and the different types of risks related to investments. The knowledge I learned in class was also applied during the internship, such as money and credit, macroeconomics, credit management, bank management, risk management, compliance management, and law.

While writing the article about the revision of SSE’s investor eligibility management regulations, I also found areas where compliance management could be improved. My article was called “Dispute over account opening for the visually impaired – enhancing investor satisfaction with personalized services”. In the article, the investor’s application for online account opening at the company was rejected due to the investor’s visual impairment and the company’s lack of corresponding hardware facilities. In order to effectively protect the rights and interests of vulnerable groups, the company developed a personalized off-site account opening business process applicable to the visually impaired investor. The company took several measures to take care of the physical conditions of special groups while achieving compliance. For example, the company let the investor open the account offline with professional staff, rather than online. To ensure compliance, the company informed the investor of the investment risks in detail and made a recording.

The article was adopted and commended by SSE as China’s management methods for special group investors are not yet perfect. For special groups, under the condition of meeting the requirements of regulatory laws and regulations, providing better and more humane services in a targeted manner can better protect the interests of investors. Actively fulfilling social responsibility can reflect the social responsibility of enterprises.

Three key financial concepts

Here are three useful financial concepts I learned in Wealth Management Department.

Anti-money-laundering

Money laundering is the process by which monetary gains are cleansed from their illegal origins. The money laundering process has three stages and often incorporates an important international dimension: placement, layering, and integration. Financial institutions are often used, wittingly or unwittingly, by criminals in this cleansing process.

For securities firms, there are usually a variety of measures in place to fight money laundering:

  • Establish various anti-money laundering systems.
  • Establish internal working mechanism, staff with professional personnel and improve operation process.
  • Improve business systems to meet the needs of AML work and ensure accurate and efficient information collection.
  • Identify customers and reasonably classify and adjust customer risk levels. Strengthen identification and supervision for high-risk customers or accounts.
  • Manage customer information, including identity information and transaction records.
  • Establish abnormal transaction detection indicators and models to identify large or suspicious transactions.
  • Conduct anti-money laundering assessments to provide system-wide risk prevention capabilities.
  • Organize anti-money laundering training and strengthen training for personnel in key positions to effectively communicate the latest regulatory requirements.

The Eligibility Management of Investors

The Eligibility Management of Investors is an obligation that sell-side institutions should fulfill for investors. (A sell-side institution is a party that sells its own products or services. Unlike the physical industry, sell-side institution in the financial industry sell virtual products, such as industry research reports, liquidity services, financing services, etc.) The investor eligibility management system was established by the China Securities Regulatory Commission (CSRC) and the China Financial Futures Exchange (CFFEX), taking into account the characteristics of the stock index futures market. The system requires financial institutions to understand their customers, objectively and comprehensively measure their risk appetite and risk-taking ability, and adhere to the principle of “providing the right products to the right investors”. The eligibility obligation was first introduced in the U.S. to regulate misconduct by securities firms. In recent years, the content of the appropriateness obligation has been gradually enriched and improved, and has played an increasingly important role in the trials of Chinese courts at all levels.

The eligibility management of investors has become a direct legal basis for investors to seek remedies in financial disputes. The purpose of investor suitability management is to ensure that customers can make investment decisions and bear the resulting benefits and risks on the basis of a full understanding of the risks of the relevant financial products. In essence, the investor eligibility management system is the investor protection system.

Repurchase Agreement and Reverse Repurchase Agreement

In my internship, I was responsible for compliance training for staff. I produced PowerPoints on the new regulations for Repurchase Agreement risk control.
Repurchase Agreement (Repo) is a transaction in which a party pledges a certain size of bond to raise funds and promises to repurchase the pledged bond at a later date. It is also one of the open market instruments frequently used by The People’s Bank Of China (PBC), which can achieve the effect of repatriating funds from the market by using positive repo operations. Compared with PBC bills, Repurchase Agreement will reduce operating costs, while locking in funds more effectively and reducing liquidity.

Reverse Repurchase Agreement is a transaction in which the PBC purchases marketable securities from a primary dealer and agrees to sell the marketable securities to the primary dealer on a specific date in the future. Reverse Repurchase Agreement is an operation in which the PBC puts liquidity into the market, and the expiration of Reverse Repurchase Agreement is an operation in which the PBC takes back liquidity from the market, called Repurchase Agreement. Simply put, a Reverse Repurchase Agreement is a transaction in which the investor actively lends funds and obtains a bond pledge is called a Reverse Repurchase Agreement transaction, at which time the investor is the financier who accepts the bond pledge and lends the funds.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Wenxuan HU My internship experience as industry research assistant in Industrial Securities

   ▶ Alexandre VERLET Classic brain teasers from real-life interviews

Useful resources

Hwabao Securities

Shanghai Stock Exchange

The People’s Bank Of China (PBC)

China Securities Regulatory Commission (CSRC)

China Financial Futures Exchange (CFFEX)

About the author

The article was written in October 2022 by Wenxuan HU (ESSEC Business School, Global BBA, 2021-2023).

My internship experience as an industry research assistant in Industrial Securities

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My internship experience as an industry research assistant in Industrial Securities

Wenxuan HU

In this article, Wenxuan HU (ESSEC Business School, Global BBA, 2021-2023) shares her internship experience as an industry research assistant in Industrial Securities which is a securities company in China.

The Company

Industrial Securities is a integrated, innovative, conglomerate and international Chinese securities company approved by the China Securities Regulatory Commission. In May 2022, Industrial Securities was listed in the Forbes 2022 Global 2000 list of companies. As of the end of June 2022, the Group had total assets of 238.2 billion RMB and over 10,000 employees at home and abroad. The company has developed into a securities and financial holding group covering securities, funds, futures, asset management, equity investment, alternative investment, industrial finance, offshore business, regional equity market and other professional fields. The company’s core businesses rank among the top in the industry.

Logo of Industrial Securities
Logo Industrial Securities
Source: Industrial Securities.

Industrial Securities adheres to the “industry-oriented” driving force, creates a unique financial ecological alliance, forming a complete ecological chain that runs through the life cycle of enterprises and industries.

Headquarters of Industrial Securities
Headquarters Industrial Securities
Source: Industrial Securities.

My Internship

My missions

During my internship, I work in the Home Appliance Group, which belongs to Industrial Securities. Home Appliance Group is composed of research analyst firm focusing in the home appliance industry.

I was mainly responsible for writing company reports and medium-term strategy reports about firms in the home appliance industry. I was also exposed to how to value companies with Excel and various databases.

I used Wind, Euromonitor and other databases, combined with expert interviews, to analyze the development dynamics of companies like Bear which produces small appliances like blenders, kettles, air fryer, etc. I wrote reports that compared the company with its peers from the perspective of products, channels and marketing, and I found out the competitive advantages of the company. I created over 20 charts in the report to demonstrate its high cost-performance ratio, multiple segmentation categories, and mature online channels. I also tracked the interim reports of leading companies in mature foreign markets, such as Electrolux, in terms of revenue and profit by region, to compare and analyze with major domestic home appliance brands.

I also studied the characteristics of the long-tail small home appliance market where it is located. Long-tail small home appliances refer to home appliances with small demand and sales scale (contrary to large home appliances like dish washers and laundry machines).

In addition, I independently collected information to analyze the market size, financial indicators, and the company’s product channels of XGIMI, a leading company in the Chinese projector industry. I assisted the analyst to create a 55-page roadshow PowerPoint.

In the process of writing the report, I not only honed my analytical and presentation skills and learned to be graphic in the report, but also learned about the market situation of China’s home appliance industry. For example, I found that the two waves of the Covid pandemic in 2020 and 2022 showed different dynamics in terms of impact on the growth of demand for home appliances in China. The first wave of the pandemic increased the home cooking scenario; young consumers purchased basic, just-needed small appliances. The first wave of the pandemic led to an outbreak of live e-commerce, with online sales becoming the main channel for home appliance consumption, which drove rapid growth in demand for small appliances (like blenders and nutri-pots). The second wave of the pandemic has hampered logistics in some areas, and after 2020, the category of basic small home appliances was gradually saturated, and the demand was not fully released. The pandemic pushed consumers to form healthy living concepts and home cooking habits, demand shifted from basic appliances to advanced appliances. This pushed the industry product structure. So, I really felt the impact of the pandemic (a Black Swan) on the market in practice. For investors and companies, any major event means both challenges and opportunities.

Required skills and knowledge

When starting out, interns usually need to learn to write meeting minutes quickly and use Excel to do some simple calculations and data summaries. This is more of a test of the student’s information gathering skills and basic computer skills.

As we become familiar with the work, we need to apply our financial knowledge, understand industry dynamics, develop market insight and learn to express our opinions clearly. This includes being able to read company financial reports, fully analyze company operations, and make predictions about the future.

What I have learnt

During my internship I worked with valuation models. Valuation modeling has always been an important section in company research or industry research reports. For investors, financial projections provide a visual representation of the underlying company’s operations and future state of development. Also, students looking for jobs in investment banks, equity research analyst firms and even consulting firms, need solid modeling skills.
The steps of valuation modeling financial projections are as follows:

  • Forecast operating income and split revenue (different products and business, domestic vs foreign, etc.). Then forecast costs and expenses to complete the income statement forecast.
  • Forecast the balance sheet and complete the forecast for all accounts except for the reserved matching items (money funds and financing gap).
  • Prepare the cash flow statement, and calculate the monetary funds and financing gap on this basis.
  • Fill in the vacant monetary funds and financing gap in the balance sheet, and match the balance sheet.

In fact, the complete financial modeling requires a lot of financial accounting knowledge and requires to be careful and conscientious, otherwise, the data can easily be wrong. On specific financial items, analysts need to mobilize financial knowledge to fill in the numbers. For example, depreciation and amortization are calculated with the fixed assets and intangible assets in the balance sheet forecast. Then we can go back to the income statement to fill in the two vacant cells. In the internship, I found that financial modeling is closely related to the financial management and financial statement courses we studied in university, so we still need to firmly grasp the basics of finance before seeking employment.

Key financial concepts

The discounted cash flow (DCF) model is a standard valuation method, which aims to calculate the value of a company based on the projected future cash flows of the company discounted to the present at the discount rate (weighted-average cost of capital or WACC).

Basic Formulas

Entreprise value formula

Where EV means the enterprise value, FCF free cash flows, WACC the weighted-average cost of capital, and TV the terminal value.

Free Cash Flow

Free cash flow

We can predict future turnover, expenses, tax rates, etc. by extrapolating the past or imagining the future of the company). Although this part of the formula is relatively complex, usually in practice the analysts will use the Excel formula or Visual Basic for Applications (VBA) to collate the various subjects, greatly simplifying the steps of financial modeling.

WACC

wacc formula

Where D represents the market value of the company’s debt, E the market value of equity capital, and t the income tax rate.
The Cost of equity can be calculated by CAPM model:

cost equity formula

Where:

Risk free rate is the rate of return that can be obtained by investing money in an investment object without any risk.
β, also known as the beta coefficient, is a risk index that measures the price volatility of an individual stock or stock fund relative to the overall stock market.
Market risk premium, also known as equity risk premium or market risk return, refers to the difference between the return on a market portfolio and the risk-free rate of return. It measures the rate at which investors are paid for taking risk.
The Risk free rate can be the yield of the country’s national debt and β can be queried through the Wind database, such as the last three years of β.
Market risk premium is sometimes a forecast value in practice.
Cost of debt is the after-tax cost of debt. It is necessary to multiply the pre-tax cost by (1-t).

Terminal Value Calculation

To calculate the terminal value, we can use the Gordon Growth method to estimate the value based on its growth rate into perpetuity.

The Gordon Model, also known as the constant-growth model, is a special case of the dividend discount model, which reveals the relationship between the stock price, the expected base period dividend, the discount rate and the fixed growth rate of the dividend. The model has three assumptions:

1. The dividend payment is permanent in time;
2. The dividend growth rate is a constant;
3. The discount rate in the model is greater than the dividend growth rate.

The terminal value is extrapolated from the Gordon model:

cost equity formula

Where g is perpetual growth rate which means that the company has perpetual growth rate and return on invested capital. The perpetual growth model assumes stable and sustainable growth in the long term. In practice, g is usually a conservative figure.

Related posts on the SimTrade blog

   ▶ All posts about professional experiences

   ▶ Wenxuan HU My experience as an intern of the Wealth Management Department in Hwabao Securities

   ▶ Alexandre VERLET Classic brain teasers from real-life interviews

Useful resources

Industrial Securities

Wind Database

China Securities Regulatory Commission

About the author

The article was written in October 2022 by Wenxuan HU (ESSEC Business School, Global BBA, 2021-2023).

My internship experience at Little Friends for Peace

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My internship experience at Little Friends for Peace

Talia HAMMOUD

In this article, Talia HAMMOUD (The George Washington University, BBA, 2019-2023) shares her experience as an intern at a non-governmental organization Little Friends for Peace.

Little Friends for Peace

Little Friends for Peace (LFFP) is a small-medium-sized non-profit organization, based in Washington, D.C., that welcomes youth and adults to experience, learn and practice peace through various peace education programs. Started by MJ and Jerry Park in 1981, LFFP believes that all people can create homes, classrooms, teams, and workplaces where everyone gives, everyone gains, and everyone wins. Named for the “little” part we can all play in spreading peace, LFFP seeks to eradicate violence by teaching skills for peace. Some ways they can do this are by hosting ‘peace circles’, summer camps for children, and weekly visits to the McKenna Center, an organization that helps incarcerated men get back on their feet. Furthermore, they have international programming to certain parts of the world such as China, the Middle East, and Latin America.

Logo of Little Friends for Peace
Little Friends for Peace
Source: Little Friends for Peace

My Internship Experience

Since my internship experience took place during the unprecedented pandemic, it was not quite the same as other people’s internship experiences. Firstly, we met weekly on zoom as a team for updates, to-dos, and any exciting news about the NGO. Then we had the option to choose what tasks we wanted to be a part of or lead. For example, I chose to lead the Halloween fundraising event as well as lead in-person peace circles for children between the ages of 6-10 every Monday.

Knowledge and skills needed

Some of the skills required for the internship include organization, fundraising skills, and communication via e-mails, meetings, and social media. I had to organize a fundraising event and create an itinerary for the night. I also had to create advertising and marketing materials to spread awareness and attract attention to the event. This proved difficult as it required the use of a lot of social media outlets to stimulate interest.

What I learned

Operating a non-profit organization is very difficult in terms of financing it. Since a lot of the services they provide are pro bono (meaning for free), the non-profit must find other sources of income to keep the program running. Thus, LFFP must make use of donations, host fundraising events, request grants, and other methods of public funding. Despite this, Little Friends for Peace can maintain operating the business successfully.

Financial Concepts

Interdependence: Non-profits are very dependent on governments and donors which requires them to well connect all parts of operations such as planning, programs, evaluations, etc., to ensure that they receive the right amount of funding and to please potential donors.

Another thing to note is that non-profits must have a substantial amount of cash in operating reserves in case of any downturn or opportunities. For example, due to the pandemic, the government had significant delays in handing out grants and donations to NGOs, thus many organizations had to turn to their reserves to keep business operating.

Why should I be interested in this post?

I think it is very important for all students studying business to experience or learn about all different types of businesses, especially non-profit organizations. I feel that the business behind NGOs and the difficulties of running one is not discussed enough. Therefore, I encourage all business students to consider learning more about the behind-the-scenes of a non-profit organization.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

Useful resources

Little Friends for Peace

Non-Profit Finance: 12 Golden Rules

About the author

The article was written in August 2022 by Talia Hammoud (The George Washington University, BBA, 2019-2023).

My professional experience as an intern at Caisse des Dépôts

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My professional experience as an intern at Caisse des Dépôts

Louise Pizon

In this article, Louise PIZON (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2022) presents her internship experience at Bank of Territories from La Caisse des Dépôts in the Social and Solidarity Economy.

About the company

Caisse des Dépôts et Consignations (CDC), sometimes referred as Caisse des Dépôts, is a French public financial institution created in 1816. Under the direct control of a supervisory commission reporting to Parliament, it carries out general interest activities on behalf of the State and local authorities as well as competitive activities. It employs both civil servants and private-sector personnel under collective agreements.

Launched in 2018, Bank of Territories is a department of CDC. It supports local players in the service of regional development. It offers tailored advisory and financing solutions in loans and investments to meet the needs of local authorities, social housing organizations, local public companies and the legal professions. Bank of Territories also forges strategic partnerships with companies and financial players to carry out projects with a strong territorial impact. It is aimed at all territories, from rural areas to metropolitan areas, with the ambition of fighting against social inequalities and territorial fractures.

It mobilizes 20 billion by year to finance projects for local authorities and social housing actors. It has 35 local offices to ensure greater proximity to its clients. In September 2020, the Bank of Territories and BPI France launched a €40 billion “climate plan” over five years to support French companies in their ecological transition. Priority is given to building renovations and the development of renewable energies, with more than €14 billion budget for each. The rest of the budget should be devoted to innovation (5.6 billion euros), mobility (3.5 billion euros) and industry (1.5 billion euros).

To give an example, in 2013, the Caisse des Dépôts with the help of the State launched the waste recycling and insertion project in Haute Marne. The SCIC (Société Coopérative d’Intérêt Collectif) is called DIB 52 and consists of transforming common industrial waste (CIW), via the creation of platforms allowing the sorting and transformation of CIW into solid recovered fuel (SRF). This project has made it possible to respond to environmental issues thanks to an innovative industrial solution and, in addition, to create jobs.

Logo of La Banque des Territoires
Logo banque des territoires
Source: CDC

What is SSE?

The concept of Social and Solidarity Economy (SSE) designates a set of organizations in the form of cooperatives, mutual insurance, associations or foundations, whose internal functioning and activities are based on a principle of solidarity and social utility.

These enterprises adopt democratic and participatory management methods. The profits made are reinvested. Their financial resources are generally partly public.

Thus, SSE enterprises are concerned with their social or ecological impact. They aim at putting the human being and solidarity at the heart of the economy and respond to the major challenges of society (ageing well, transition to a local, sustainable food system, the circular economy).

My role and personal missions

I was intern in the Social and Solidarity Economy department of Bank of Territories.

I selected innovative start-ups respecting the environment or social utility company and I created their identity card to classify them. Indeed, to be eligible for different type of funding we need to segment them by type of activities. Then some of them will be chose to be financed and we help them for the process of development as an incubator.

The Social and Solidarity Economy department offered them a two-stage support solution for the creation stage and then the development stage. Our mission was to offer them a support as early as possible to be successful during the maturation of the project.

During the creation stage

We help for several tasks :

  • Create spaces for experimentation in each territory: specific advisors “young people” in an employment support contract, “hosting”/sponsoring of the bearers within a SSE enterprise of the sector (financed).
  • Help for the rebound in case of failure: assessments of the skills acquired during the creation.
  • Ensure a flexible and reactive support, adapted to the functioning of these initiatives, based on a mutual relationship between the mentor(s) and the entrepreneur(s)
  • Offer both technical support (legal, financial, administrative) and support on the substance of the projects’ approach (values, collective management, knowledge of the SSE …).
  • Immersions in other SSE companies, training on SSE and its values.
  • To insert the young people as soon as possible in a network as broad and varied as possible (collectives of support to projects). Mutualize the tools and devices of the SSE and the classic economy by the creation of common platforms.

During the development stage

We help them to set up supports for the perpetuation: lines of financing intended for the social innovation of young people (indicators and criteria adapted to the realities of the projects), improve the links between funders to simplify access to funding, make available specific territorial “funds of assistance” for funds for SSE activities of people under 35 years of age.

Raising awareness among local support network’ agents about the characteristics of young SSE projects. Provision of “drawing rights” on all the dimensions that cover support for young people over several years. Offer permanent and informal exchange spaces between holders to simplify the mode of creation of a SCIC. To make a place for young entrepreneurs in the SSE support systems.

Commitment of the Bank of Territories to the development of the SSE and social innovation

The State Secretariat for the SSE and Bank of Territories signed on November 3rd, 2020, an agreement to take an action on the strengthening of the support of SSE companies, the development of their financing and the support to social innovation.

With this objective in mind, Bank of Territories is mobilizing €300 million for the social and solidarity economy (SSE) between 2020 and 2022, as part of a pact to boost the SSE and social innovation.

This pact is based on two main goals:

  • Strengthening the support of SSE companies: Several actions must be carried out to improve the meeting between SSE companies and private financiers, particularly in the booming field of impact investment.
  • Financing SSE companies and social innovation

Thus, in addition to its support actions, Bank of Territories is committed to the State to deploy its investment actions over the next three years by:

  • Massively increasing the use of impact contracts*: These contracts make it possible to finance social innovation based on results and impact measurement. Within this framework, the State will launch calls for expressions of interest to identify projects in which the Bank of Territories will be able to invest in pre-financing.
  • Reinforcing its direct investments in the sectors of solidarity and medico-social services, food transition, local economic development, education and professional training, and digital inclusion.
  • Facilitate access to financing.

In addition, indirect investments (impact funds and sharing funds) will allow the Bank of Territories to multiply its support actions to SSE actors, in a complementary way to its direct investments.

General concepts

Impact contract

The impact contract is a partnership between the public and private sectors designed to encourage the emergence of innovative social and environmental projects. These contracts allow for the scaling up of solutions that have been identified in the field and are effective. The private and/or public investor pre-finances the project and takes the risk of failure in exchange for a pre-determined remuneration in case of success. The State only reimburses according to the results obtained and objectively observed by an independent evaluator.

How it works ?

The impact contract renews the financing of innovative projects carried out by actors in the social and solidarity economy. Under this system, social and environmental projects are financed by private and/or public investors, who are reimbursed by the State if the projects achieve the objectives previously set.

Impact contracts are not intended to replace traditional financing of social or environmental activities. They provide a complementary method of financing to facilitate the development of new activities or an innovative program for existing activities.

In concrete terms, the public authorities will launch calls for projects to meet social or environmental needs that are not, or are poorly, covered by the State: the selected structures will then be financed by a third-party investor. Depending on the results observed, based on indicators determined by the stakeholders, the State will remunerate the project leader, who will then be able to reimburse the investor.

Circular economy

The circular economy refers to an economic model whose objective is to produce goods and services in a sustainable manner, by limiting the consumption and waste of resources (raw materials, water, energy) as well as the production of waste. It is about breaking with the linear economy model (extract, manufacture, consume, throw away) for a “circular” economic model.

Intended to generate potential for the creation of activities and jobs, and to respond to the challenges of resource scarcity, circular economy approaches are based on the dynamics of multi-actor cooperation on a territorial scale.

Transition to a local, sustainable food system

The transition to food system refers to the process by which a society profoundly modifies its way of producing and consuming food. The term is used in the context of energy transition, the ecological transition or the demographic transition.

In the 2010s, the term transition to food system is increasingly used in the public debate to designate the expectations or efforts undertaken by the different actors in the chain (producers, processors, distributors, consumers, public authorities) to better respect the environment, improve the nutritional status of food, develop organic and fresh products, and produce under conditions that are more respectful of animal welfare and with greater equity between the actors in the chain.

Useful resources

Banque des territoires

Ellen MacArthur Foundation L’économie circulaire : du consommateur à l’utilisateur Video (in French).

About the author

The article was written in August 2022 by Louise PIZON (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2022).

My professional experience as a business developer at AJISO

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My professional experience as a business developer at AJISO

Louise Pizon

In this article, Louise PIZON (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2022) presents her personal internship experience as a business developer at AJISO in the sector of micro funding.

Presentation of the organization

AJISO is a legal aid provision organization that was established in 1998 with the aim of promoting women and children rights and access to justice in society. It empowers women and children through access to justice, organizing public awareness raising meetings about human rights, legal education and Gender-based Violence (GBV). It also trains paralegals, the ward protection committees and child rights clubs to eliminate all forms of violence in society.

After realizing that poverty is a leading cause of GBV, AJISO embarked on empowering women economically by mobilizing them into Village Community Banks (VICOBA) groups where they receive entrepreneurship trainings and other demand driven skills which in turn allows them to engage in economic activities and improve their livelihood hence reducing the risk of being subjected to GBV.

Every year AJISO together with the paralegals serve more than 500 clients and reaches out to more than 93,659 people (43,808 male and 49,851 female) in Kilimanjaro and neighboring regions with legal and GBV education.

Organization structure of AJISO
Ajiso association in Tanzania
Source: Ajiso

Organization structure of AJISO
Organization structure
Source: Ajiso

My role

My role within the organization was to help underprivileged women and disadvantaged minorities in Tanzania to get out of poverty and empower them. I was also in charge of finding new solutions to resolve problems and limits they are facing in their daily life and VICOBA groups.

My personal missions

The main mission was to promote human rights, access to justice and socio-economic empowerment of women and children in Tanzania :

My first mission was to work on VICOBA which is the main solution use by AJISO to help low-income and poor people to get out of the poverty by using micro funding. The solution of VICOBA groups to help people to build their own business. This solution is great and successful but has limits, so I found solution to these limits.

My second mission was to help communities, especially women that wish to join these groups but are unable to afford shares due to their extreme poverty situations. You need 10.000 Shilling to enter in these groups which represent around 3 euros.

My third mission was to work on the problem of wood in households. Indeed, most of the households have a traditional oven which uses a lot of wood. Women spend a lot of time in the wood to find firewood and during this time they are losing customers and money. Because of this they are enabled to buy shares in VICOBA group.

In addition to my missions, I have been working on the preparation of a training guide on VICOBA groups for a better understanding of the system for members and interested people.

Required skills needed

To work for AJISO you need minimum a bachelor’s in economics. The skills and knowledge needed are basics in finance, background in law, social work, gender issues, media or other relevant fields.

The language requirement is English C1.

You need to be flexible and have a strong adaptability to other culture as you will face “different” ways of work, “different” times of work, “different” ways of communication, and different planning and organization. You need also to be altruist to live together. It means a “different” way of managing projects and “different” expectations about the results of the projects. You should be capable to cope with these differences.

You need to send a contribution of 450€ to participate to the program.

Concepts

Village Community Bank (VICOBA)

VICOBA (Village Community Bank) is a savings and loan fund for members who have joined together and formed a group for economic improved purposes. The system started in Tanzania twenty years ago and has shown great success for its members to be able to lend to each other, help each other in various problems as well set up joint economic projects.

The micro funding provided by VICOBA involves banking transactions and group deposits using a share system. Shares are funds that are invested by a group member in the group for the purpose of making profit and becoming the owner of the group. A group member can buy one or more shares. The value of one share will be based on the agreement of the members of the group and it is recommended that the rate take into account the economic potential of its members. So, this feature requires group members to buy shares for each one by loudly stating the number of shares they are buying and the amount of social fund they are investing.

The VICOBA system is like any other financial system that requires a lot of attention in managing its records and assets. The VICOBA system encourages records to be stored in categories (shares and loans) and this is to simplify and be sure when one of the records is read differently or when it causes controversy. In the VICOBA system, records are recorded in the member’s book, group ledger.

With the help of the Economic Empowerment program of AJISO, at least 900 (756 female and 144 male) people including people living with disabilities 34 (18 male and 16 Female) were empowered with knowledge of VICOBA and entrepreneurship which in turn has enabled them to start and expand their businesses to improve their livelihood.

Economic benefits from VICOBA Bank

VICOBA has a lot of economic benefits compare to a normal bank. VICOBA members can benefit from borrowing’ procedures without collateral. The low interest rates are decided by the group members and it is charge between 5 to 10%. At the end of each cycle, shareholders received a return on investment. So, you can win money by simply injecting money into the fund (buying shares).

The poor and low-income household have access to a wide range of financial services such as deposit, loans, payment services, money transfers and insurance products.
All these benefits permit to low-income household to be able to invest in their small businesses and increase their income. VICOBA bank is simple with transparent transactions, It is a safe economic and a good way to secure group members’ market.

Weekly meeting of a VICOBA group
Meeting Vicoba
Source: Vicoba

My takeaway

Working for AJISO was a great experience both on a professional and personal level.

During this internship I understood that the success of an organization is based on the projects that propose long-term solutions to the problems of development and poverty. It was very beneficial to me and made me understand the importance of our involvement in a responsible cooperation generating a human development which will allow the village population that wish develop their business to set up autonomous actions to reach precise objectives. I believe that we can reduce poverty with the implementation of community development, social justice and various forms of emergency interventions.

For the personal aspect, I have acquired a greater sensitivity and knowledge of global inequalities. I understand the importance of helping each other to make things evolve. I learned to be humble because we are so lucky to live in such conditions in France and I am thankful.

Why should I be interested in this post?

If you are interesting to work for a NGO or helping low income people to going out of the poverty through micro funding this post is for you. In this post, I explain my experience as a business developer withing the association AJISO headquarter in Tanzania. And how an almost entirely female association has succeeded in lifted a large part of the population out of poverty.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Louise PIZON Vicoba

Useful resources

AJISO

About the author

The article was written in August 2022 by Louise PIZON (ESSEC Business School, Master in Strategy & Management of International Business (SMIB), 2020-2022).

My experience as an M&A Analyst Intern at Oaklins Atlas Capital

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My experience as an M&A Analyst Intern at Oaklins Atlas Capital

Basma ISSADIK

In this article, Basma ISSADIK (ESSEC Business School, Global Bachelor of Business Administration, 2019-2023) shares her experience as an M&A Analyst intern at Oaklins Atlas Capital.

In May-June 2021, I was able to intern at Oaklins Atlas Capital, which is the Moroccan branch of Oaklins, a leader of M&A advising in mid-market operations. Oaklins group has advisory teams in 45 countries around the world. The Oaklins team provides mergers and acquisitions, growth equity and equity capital markets, debt advisory and corporate finance advisory services.

Oaklins Atlas Capital

Founded in 1999, Atlas Capital is an independent investment bank in Morocco covering all businesses: investment banking, asset management, stock market intermediation and private management. Offering a range of financial services with high added value, it targets a diversified clientele, whether companies and public offices, financial institutions, private companies or individual investors. It then was included in the Oaklins group and network which has presence across the globe through its 45 teams from Stockholm to Shanghai, from New York to São Paulo. The bank benefits from cross-border collaboration which helps the teams find the best suitable deals for its clients with a track record of more than 1900 deals being closed in the past five years.

Logo Oaklins Atlas Capital
Oaklins Atlas Capital
Source: Oaklins Atlas Capital.

My internship at Oaklins Atlas Capital

During May-June 2021, I worked as an M&A Analyst intern at Oaklins Atlas Capital. During my time at the bank, my main responsibilities were writing fact sheets about new clients (through communication with the Oaklins Network) and target companies / projects in Morocco. I was also responsible for drafting presentations (teaser, pitch, kick off meetings), for valuations (DCF, transactions) of the target companies once our clients confirmed their interest with it, and for assisting senior management in day-to-day tasks in relation to the transactions.

This experience was my very first in investment banking and it helped me understand the M&A process and how important negotiation and customer relationships were to this field. This internship introduced me to the very basics of Mergers and Acquisitions through a high-level of personal attention and monitoring as I was in a team of five in total including two partners and three interns. I had the opportunity to learn directly from professionals who have been in the field for 20+ years. Moreover, through this internship, I have been exposed to many industries: textile, technology, agriculture, food processing industry, electrical equipment, infrastructure, renewable energy and to clients from all over the world.

Skills needed

  • Strong interpersonal skills
  • Financial analysis skills
  • Customer service (if you are to interact with clients)
  • To be familiar with finance and be able to analysis financial data
  • To be familiar with digital tools such as pptx and excel

What I have learnt from the internship

This internship has helped me learn so much about cross-border operations and how to approach potential acquirers with target companies and discuss the acquisition with them. It has also enabled me to have a solid understanding of many industries as I was in charge of sectoral research.

Key concepts related to my work

Mergers and acquisitions

Why do companies merge with and acquire other companies? Mergers and acquisitions are the act of consolidating companies or assets with an eye toward stimulating growth (it can expand a company’s market shares without it having to do significant heavy lifting), gaining competitive advantages (maybe eliminating competition and gaining market share), increasing market share, or influencing supply chains (eliminating a tier of costs).

A merger describes two companies uniting into a single company, where one of the two companies ceases to exist after being absorbed by the other company. The boards of directors of both companies must first secure approval from their respective shareholder bases. In 2006, Disney and Pixar completed a successful merger.

An acquisition occurs when one company (the acquirer) obtains a majority stake in the target firm, which incidentally retains its name and legal structure. For example, after Amazon acquired Whole Foods in 2017, the latter company maintained its name and continued executing its business model, as usual.

Tender Offer

A tender offer is a bid to purchase some or all of shareholders’ stock in a corporation. Tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time.

The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold. To tender is to invite bids for a project or accept a formal offer such as a takeover bid. An exchange offer is a specialized type of tender offer in which securities or other non-cash alternatives are offered in exchange for shares. For example, Elon Musk has recently announced making a tender offer to acquire Twitter.

Proxy fight

A proxy fight refers to the act of a group of shareholders joining forces and attempting to gather enough shareholder proxy votes to win a corporate vote. Sometimes referred to as a “proxy battle,” this action is mainly used in corporate takeovers. For example, Microsoft Corporation made an unsolicited offer to buy Yahoo for $31 per share. The board of directors at Yahoo believed the offer by Microsoft under-valued the company, and, consequently, the board stalled any negotiations between Microsoft and Yahoo executives.

Why should I be interested in this post

This post is interesting for everyone who would like to work in investment banking and who would like to kick start their career by doing a summer internship.

Useful resources

Oaklins Atlas Capital

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Basma ISSADIK My experience as an M&A/TS intern at Deloitte

   ▶ Anna BARBERO Career in finance

   ▶ Alexandre VERLET Classic brain teasers from real-life interviews

About the author

The article was written in August 2022 by Basma ISSADIK (ESSEC Business School, Global Bachelor of Business Administration, 2019-2023).

My experience as an M&A/TS intern at Deloitte

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My experience as an M&A/TS intern at Deloitte

Basma ISSADIK

In this article, Basma ISSADIK (ESSEC Business School, Global Bachelor of Business Administration, 2019-2023) shares her experience as an M&A/TS (Mergers and Acquisitions / Transaction Services) Intern at Deloitte.

Summer 2021, I was able to intern at Deloitte Casablanca for a couple of months. I was in the Transaction Services team which was in charge of advisory in deal and IPO readiness, target screening, sell-side and buy-side due diligence, transaction accounting and reporting, and business integration or separation. Transaction services typically refers to the services provided when a business transaction takes place. An example of a business transaction would be a merger or acquisition of a company.

Deloitte

Founded in 1845, Deloitte is one of the biggest professional service providers in the world. Being one of the “Big Four” accounting firms, it provides services in audit and assurance, consulting, financial advisory, risk advisory, tax and legal advisory. Deloitte was founded by William Welch Deloitte in London in 1845 and expanded into the United States in 1890. It merged with Haskins & Sells to form Deloitte Haskins & Sells in 1972 and with Touche Ross in the US to form Deloitte & Touche in 1989. As of 2020, Deloitte is the third-largest privately-owned company in the United States, according to Forbes. The firm has sponsored a number of activities and events including the 2012 Summer Olympics.

Logo Deloitte.
Logo Deloitte
Source: Deloitte.

My internship at Deloitte

When I arrived at Deloitte in July 2021, the team was working on a specific project in cooperation with the Minister of the Industry. I was in charge of analyzing the eligibility of our clients to obtain financing from the Minister of the Industry. We already had set criteria for the companies that would later be presented to the Minister of the Industry. Our mission was to select the interesting project in accordance with the “banque de projet” which had already been established and advise the companies to meet the criteria as best as they can. These criteria were of different natures:

  • In financing for instance, there should be a portion of the project financed by the shareholders / founders.
  • The forecasted financial figures should be realistic.
  • The business plan should fit within the criteria and so on…

The junior analysts made sure I was closely supervised and assisted whenever I needed help with anything. I was communicating with them on a daily basis, and they all ensured I had a great experience at Deloitte which is what differentiates the firm from other competitive professional services companies. From the start I was given a lot of responsibilities which I was very happy about. I was able to participate in meetings and had the opportunity to lead one at the end of my internship. It was a really good experience in a way that enabled me to have direct contact with professionals and feel very useful to the team as well.

Skills needed

  • To have some experience in accounting
  • To be able to communicate and interact with the team
  • To possess analytical skills and problem-solving skills
  • To be familiar with financial reporting
  • To be familiar with digital tools such as pptx and excel
  • To have a strong learning ability
  • Be able to take responsibilities early on

What I have learnt from the internship

This internship has taught me a lot on the importance of meticulousness and how vital it is to be very rigorous with the data we are given and the analysis we do of it. I have also learned lots about the role of an auditing and consulting firm in advising clients to make the best decisions for their companies.

Key concepts related to my internship

Due diligence

Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering a proposed transaction with another party. Due diligence (DD) is an extensive process undertaken by an acquiring firm in order to thoroughly and completely assess the target company’s business, assets, capabilities, and financial performance. There may be as many as 20 or more angles of due diligence analysis.

The main types of due diligence inquiry are as follows:

  • Administrative DD: Is the aspect of due diligence that involves verifying admin-related items such as facilities, occupancy rate, number of workstations, etc.
  • Financial DD: Financial DD aims to provide a thorough understanding of all the company’s financials, including, but not restricted to, audited financial statements for the last three years, recent unaudited financial statements with comparable statements of the last year, the company’s projections and the basis of such projections, capital expenditure plan, schedule of inventory, debtors and creditors, etc.
  • Legal DD
  • Asset DD
  • Human Resources DD
  • Environmental DD
  • Taxes DD : Due diligence in regard to tax liability includes a review of all taxes the company is required to pay and ensuring their proper calculation with no intention of under-reporting of taxes.
  • Intellectual Property DD: Almost every company has intellectual property assets that they can use to monetize their business. These intangible assets are something that differentiates their products and services from their competitors.
  • Customer DD
  • Strategic Fit: Acquirers are generally also very careful about exercising due diligence in regard to evaluating how well the target company fits in with the overall strategic business plan of the buyer.

Why should I be interested in this post

You should be interested in this post if you are interested in working in finance in general because it might help you understand if you would like to work in the field or not, and maybe help you refine your professional project.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Basma ISSADIK My experience as an M&A Analyst Intern at Oaklins Atlas Capital

   ▶ Anna BARBERO Career in finance

   ▶ Alexandre VERLET Classic brain teasers from real-life interviews

Useful resources

Deloitte

About the author

The article was written in August 2022 by Basma ISSADIK (ESSEC Business School, Global Bachelor in Business Administration, 2019-2023).

My experience as a sell-side equity research analyst

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My experience as a sell-side equity research analyst

Tanmay DAGA

In this article, Tanmay DAGA (ESSEC Business School, Global Bachelor of Business Administration, 2017-2021) introduces equity research, shares his internship experience at a top sell-side equity research company named Kotak Securities and gives his opinions on what the future holds for the industry.

About Kotak Securities

Kotak Securities was founded in 1994 as a subsidiary of Kotak Mahindra Bank and is headquartered in Mumbai, India. It is headed by Mr. Jaideep Hansraj who is a leading figure and has over 20 years of experience in the equity research industry. The company has over 1.7 million customer accounts and handles over 800,000 trades every single day making it one of the biggest brokerage houses in the country. The company handles operations in over 394 cities in India and is well poised for further expansion helping it expand its customer base. Kotak Securities offers stock broker services, portfolio management services, depository services, research expertise, dynamic market data and international reach for clients looking for investment opportunities overseas.

Kotak Securities

What is equity research?

It is a mainstream finance position which entails fundamental analysis and subsequent recommendation of public securities. Fundamental analysis is a method of evaluating the intrinsic value of an asset (future cash flows discounted to the present) and analyzing the factors that could influence its price in the future. Hence, equity research is an investigation based upon the core business drivers of a particular business which are reflected in its financial statements. Hence, equity researchers use financial statements combined with other industry and macroeconomic reports to form their opinion about a certain company or a universe of companies (also called coverage list). Investors such as money/managers use this information to better investigate their potential or existing investment decisions. To conclude, the main purpose of equity research is to provide investors with detailed financial analysis and recommendations on whether to buy, hold, or sell a particular stock. The professionals working in brokerage firms which sell analysis reports to investors are called sell-side analysts. Professionals working for mutual funds or hedge funds and who make direct investment decisions are called buy-side analysts.

Read an interesting interview with an industry expert who shares his experience of working in the industry.

Me and Finance

I had gotten enrolled in ESSEC’s GBBA in 2017 owing to my curiosity in finance and the university’s premier status, especially in finance. At the end of the first year, I had the opportunity to apply my mind and practically learn a few things along with it. It had always been my mission to work in finance, particularly in valuation. My fascination with valuation is simple – you are allowed to deem the situation as you see fit provided you have a logical reasoning behind it. Nothing can narrow the scope of your thoughts as long as they are realistic and reasonable. It is a great way for individuals to look at things from a broader perspective and develop an analytical mindset to help comprehend several moving parts simultaneously. It does take time getting used to the idea of having to dig into minute details but it’s worth it! Valuation is not purely science per se. It is a blend between sound analytical reasoning that helps you come up with a story (forecast as experts call it) and simple objective mathematics to help validate your story’s credibility. The fact that valuation today in investment banking and other fields looks so complicated is partly to mask the simplicity involved in the process so big banks can continue to charge hefty fees for what they do. Moreover, it is not a skill that will ever go in vain. The mindset a sound valuer develops helps him/her analyze the pros and cons any situation better than a counterpart. It is a skill that I recommend everyone to acquire.

My internship in Kotak Securities

In 2018, at the end of my first year of my GBBA at ESSEC Business School, I did an internship at Kotak Securities equity research division in Mumbai, India. I was 18 years old and comparatively new to equity research. Resulting, I witnessed a steep learning curve requiring me to learn and apply several concepts in a short span of time. My main responsibility was to help the fundamental research team carry out due diligence (financial analysis to analyse the true or intrinsic value of an asset and all other factors affecting this value) for the companies under our coverage universe. This was done by performing rigorous research for the company’s business, its supply chain, its value drivers and all other factors that affect its value and ultimately its stock price. The conclusions were to be presented to the senior management and the sales team along with a thorough explanation behind the rationale of selecting a particular stock for client recommendation. Based on the findings, recommendations were to be published in a bi-monthly analysis report which also included other important topics like the economic analysis of the current situation and trends in the currencies traded in foreign exchange (FX) market. As the organization was agile and flexible with what responsibilities members could take, I had the opportunity of working with several other departments aside from fundamental research. Some of the other projects I worked on were developing a proprietary algorithm based on analysis of trading patterns for index companies alongside the technical analysis team (which is the motivation for me in selecting the SimTrade course) and a model project on sentiment analysis – how news and company perception (especially on Twitter) affect the stock price in the short run. I learnt several hard skills such as modelling in Excel, literacy in reading company’s financial statements and intermediate level of coding in Python. Overall, it was a great work experience for me.

Key takeaways from my internship

During my time at Kotak, I have come across some important financial concepts that I believe every individual, irrespective of their affiliation with the finance industry, must truly understand. They will help you better understand financial issues and make sound investment decisions.

Inflation

Inflation refers to the sustained increase in the price of goods and services in an economy. This increase in price is hard to pinpoint at any one factor but more often than not, it is a combination of various factors. This could range from increase in labor prices to jump in raw material costs. As prices rise due to inflation, you’ll be able to afford less and less over a given period of time. That’s why it is imperative to understand that long-term savings must be invested in a manner by which the returns surpass the inflation rate. That’s the only way one can continue to afford to buy more in a definite time period in the future. In many countries, the only reliable way to beat inflation is investing in stocks/equities. As Bonds or Bank savings do not offer any positive real interest realization.

Diversification

Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk. The rationale behind this technique is that a portfolio constructed of different kinds of assets will, on average, yield higher long-term returns and lower the risk of any individual holding or security. This is a widely approved method for protecting capital against unexpected events in the global markets. By using the primary study of correlation, investors can diversify certain risk away. However, data on correlation is historical and thus, backwards looking, and might not always hold true in the future. For instance, during the shutdown of the global economy in March 2020, multiple assets like stocks, commodities and bitcoin (which have not been positively correlated in the past) collapsed together. All have had a positive recovery together since (again implying positive correlation as opposed to results from previous studies).

Time Value of Money

The time value of money (TVM) is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that provided money can earn interest, any amount of money is worth more the sooner it is received. For instance, assume a sum of $10,000 is invested for one year at 10% interest. The future value (FV) of that money is: FV = $10,000 x (1 + 10%) = $11,000. The formula can also be rearranged (reversed) to find the value of the future sum in present day dollars. For example, the present value (PV) of $5,000 one year from today, compounded at 7% interest, is: PV = $5,000 / (1 + 7% ) = $4,673.

TVM is also sometimes referred to as present discounted value. This is a fundamental pillar on which company valuation is based. The true value of a company is the future free cash flows the company generates, discounted to the present time using an appropriate discount factor.

Future of equity research: my personal view

Equity research is an important role that has come into prominence since the bull market in the 1950s. Thousands of fund managers handling trillions of dollars in assets under management often use sell-side research to get an outsider’s opinion before making investment decisions. Certainly, the size of the industry has shrunk significantly since buy-side and IB analysts are being better compensated, causing a shift in the workforce. However, things are not bad. Companies are now letting analysts focus more on analysis than on sales. This is certainly going to attract new talents who want to focus purely on analysis.

Read this interesting counter-view on the future of the industry.

Relevance to SimTrade

This course helps in understanding the other side of the same coin – technical analysis (using price movements and other factors to predict the future of a security). Participants of this course can expect to gain practical knowledge about stock trading by using a real-world like simulator where multiple strategies can be applied and tested. Other benefits include gaining a broad understanding of the financial markets and concepts.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Louis DETALLE My experience as a Transaction Services intern at EY

   ▶ Aastha DAS My experience as an investment banking analyst at G2 Capital Advisors

   ▶ Basma ISSADIK My experience as an M&A/TS intern at Deloitte

Useful resources

Kotak Securities

Corporate Finance Institute Example of equity research report

About the author

The article was written by Tanmay DAGA (ESSEC Business School, Global Bachelor of Business Administration, 2017-2021).

My experience as a portfolio manager in a central bank

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My experience as a portfolio manager in a central bank

During my studies at ESSEC Business School, I had the chance to attend the SimTrade course. This course helped me to secure an internship as a risk manager at Bank Al-Maghrib (the central bank of Morocco) as I was asked during my interviews technical questions about financial markets that were covered during the course.

Youssef_Louraoui

In this article, Youssef LOURAOUI (ESSEC Business School, Global Bachelor of Business Administration, 2020) shares his experience as an intern in the risk management department (middle office) at the Central Bank of Morocco (Bank Al-Maghrib) in 2020.

Bank Al-Maghrib

The central bank of Morocco was founded in 1959 after Morocco proclaimed its independence. It is a 100% state-owned bank that regulates the markets and the economy by implementing monetary and economic policies to ensure the welfare in terms of the parity of prices and the control of inflation. Inflation is a major economic indicator that possesses strategic importance and is part of the major focus for the central bank.

Bank Al-Maghrib

I describe below my experience at Bank Al-Maghrib.

My internship at Bank Al-Maghrib

I was affected at the middle office department, which is in charge of measuring risk exposures and profits and losses on the positions taken by the bank on an investment portfolio of 27,4 billion euros of foreign reserve. One of the key risk exposure metrics is volatility measured by the standard deviation statistically defined as the dispersion of a random variable (asset prices or returns in my case) from its expected value. The standard deviation indicates how much the current return is deviating from its expected historical returns. It is one of the most widely used metrics for investors when analyzing the risk of an investment. Among other key exposures metric, there is what it is called the VaR (Value at Risk) at 99% and a 95% confidence level for 1-day and 30-day positions. In other words, the VaR is a metric used to compute how much loss can the portfolio incur at a % degree of confidence for a given time horizon.

Every day, the Head of the Middle Office organizes a general meeting where he talks about global debriefing of the main financial news that happened overnight and debriefing the middle office desk for the “watch out” assets that could have a potential investment opportunity. Accordingly, the team has also the task of staying in line with the investment decision that characterizes the organization, as it does not operate as an investment banking corporation nor a hedge fund in the risk and leverage used. As the central bank has the special task of keeping safe the national reserve and searching for a good mix to invest in a low risk asset (AAA bonds from European countries coupled with American treasury bonds).

My task aimed to get a hand on the investment mechanism in the middle office of the bank. The investment mechanism consists of the division of the overall portfolio into three main tranches where each one has its characteristics. The first tranche (called also the security tranche) is calculated by analyzing the national need for a currency that needs to be kept safe to establish welfare on the exchange market (based mainly on short term position in low-risk profile asset (Liquid and high rated bonds). The second tranche is based on buy and hold and a market strategy. The first one consists of taking a long position on more risky assets than the first tranche till maturity, there is no selling during the lifetime of the asset (riskier bonds and gold). The second strategy is based on buying and selling liquid assets for an expectation of yielding higher returns.

During my time at the middle office desk, I’ve managed to develop a tool to represent the investment mechanism used for asset allocation. The tool, developed in an Excel spreadsheet, is an intuitive and simplified model that enables the understanding of the investment mechanism. Indeed, it is capable of continuously refreshing the data by importing the most recent quotations (from data providers like Bloomberg or Reuters as the two main financial data providers) to allow for an update of the different exposures and thus allow to respect the proportions of portfolio allocations. It has also a dynamic risk management tool to effectively compute draw-downs (a peak-to-trough decline during a specific period for an investment) and stressed conditions, as I experienced how the markets reacted to the novel Covid-19 pandemic with one of the most historic market movements in a long time.

Some of the key learning outcomes:

  • The introduction to data analysis by manipulating large datasets

  • Portfolio optimization based on the Markowitz efficient frontier

  • Dynamic portfolio allocation based on the fundamentals of the modern portfolio theory

  • The theory of efficient markets to understand how the markets evolve and move in a different direction as a reaction to events.

Front office, middle office and back office

My internship was also a good opportunity to discover the different departments of the bank: the front office, the middle office, and the back office:

  • The front office directly deals with the individual or corporate clients of the bank. Salespeople propose adequate products and solutions to the clients (they are in front of them!). Traders intervene in the financial markets on behalf of the clients or for the bank itself (proprietary trading). To answer the demand of clients, financial engineers and quants also develop new products and the associated mathematical models to price them. One of the main trends that are emerging in the front office is the automatization with the help of AI and algorithmic trading that is taken some room in the trading desks. At this time the bank didn’t implement any technology based on high-frequency trading, but it is taking the financial industry by surprise and it goes a long way back, nearly decades ago since the first usage of algorithmic trading.

  • The middle office situated between the front office and the back office (somewhere in the middle!) deals with the risk management of the bank. Risk managers control the traders’ positions (respect of constraints such as value-at-risk limits and stress tests) and compute the profits and losses (P&L) on traders’ positions daily.

  • The back-office deals with the conformity and the security check of every trade to ensure a proper settlement.

Note that the frontiers between the front, middle, and back-office may change from one bank to another. And last but not the least, the IT people are also supporting all three departments to make the whole system work. In other words, they are in charge of the maintenance of the technical infrastructure that the bank uses daily to operate fluently, as all the departments are dependent on internal software to intermediate and operate in the market or to communicate between each department of the bank or with another organization. The IT desk has great importance in offering a flawless experience for the employees when using the internal electronic infrastructure. There is the backbone of the bank skeleton.

All in all, the SimTrade module served me well as I managed to gain quickly the necessary knowledge and bridge the gap that I had to be in the best position to achieve the missions I’ve been affected. I especially used the content of Period 2 of the SimTrade certificate, which deals with market information. The concepts of trading and investing were also obviously useful for the development of my portfolio management tools.

Related posts on the SimTrade blog

   ▶ All posts about Professional experiences

   ▶ Akshit GUPTA Portfolio manager – Job description

   ▶ William ARRATA My experiences as Fixed Income portfolio manager then Asset Liability Manager at Banque de France

   ▶ Alexandre VERLET Classic brain teasers from real-life interviews

   ▶ Jayati WALIA Capital Asset Pricing Model (CAPM)

   ▶ Youssef LOURAOUI Markowitz Modern Portfolio Theory

Useful resources

Bank of Morocco

About the author

The article was written in November 2020 by Youssef LOURAOUI (ESSEC Business School, Global Bachelor of Business Administration, 2020).