Investment Houses that Accept Fresh Grads

[bluethehero]

Aside from financial advisory, equity research, investment management, and commercial banking, a finance graduate also has the option to pursue a career in investment banking. Obviously, the target for investment banking should be an investment house.

However, it appears that a lot of investment houses are not so accommodating to fresh graduates, even if "some" of these graduates are very much willing to learn and are hungry for career and professional development. The popular big investment houses that are not so accommodating to fresh graduates are ATR Kim Eng and FMIC (unless of course you are a genius in investment banking that you can do valuation in a snap).

If one wishes to become an investment banker, don't you think it is strongly advised for him to seek an investment banking career immediately after graduation? If you say otherwise, how should a finance graduate start his career now so that in a year or two, he will be hired by reputable investment houses for an investment banking career?

Lastly, what are the investment houses that are willing to accept fresh graduates that are really enthusiastic and serious in becoming an investment banker (assuming that there are generous i-houses).

[rabbaddal]

If one wishes to become an investment banker, don't you think it is strongly advised for him to seek an investment banking career immediately after graduation? If you say otherwise, how should a finance graduate start his career now so that in a year or two, he will be hired by reputable investment houses for an investment banking career?


The problem facing interested fresh grads in the Philippines is that investment houses don't have "1st-year analyst programs", unlike their counterparts in the US, HK or Singapore. Most of them have no formal system (for one reason or another) of making raw fresh grads move up the learning curve fast enough to make meaningful contributions in projects. Goldman analysts, for example, go through a combination of classes and project simulations throughout their analyst tenure. Their supervisors are required to act as their mentors and they are assigned responsibilities in a calculated manner to give them the opportunity to learn what they have to learn given their professional maturity. And their recruitment departments make an effort to travel to college campuses of select universities to recruit graduating students.

Philippine investment houses tend to recruit people informally through professional networks and connections. They could be finance people from private companies or - in the case of unibanks with i-house subsidiaries - people assigned from other departments like corporate banking, treasury or trust. They don't have a system to train fresh grads with raw skills nor do they have a system to evaluate the "fitness" of someone with no work experience whatsoever.

So what can fresh grads do? There's no straight answer except that they have to make their own effort to apply for jobs in these firms. They could find a way to network and get to know people. Or they can try other jobs that can serve as "stepping stones" and apply with the i-houses after 2 to 3 years; maybe they can take an MBA in-between. Any job that will require them to analyze corporate financial statements and write analytical memos would be good places to start.

As to whether it's advisable for fresh grads to pursue a career in investment banking right after graduation, that assumes that they can get a job offer first. If they can, the answer really depends on who you ask. Some people might advise against it, given that there's a risk that the fresh grad might receive inadequate supervision in such a tough job. Personally, I've gone through that process before and in my opinion, the skills gap is something that's very managable for people who are motivated and willing to take up the cudgels should their supervisors fall short. They'll just have to exert a little extra effort to self-study skills like financial modeling, writing memoranda and executing projects.

The popular big investment houses that are not so accommodating to fresh graduates are ATR Kim Eng and FMIC (unless of course you are a genius in investment banking that you can do valuation in a snap).


Or, as someone posted in an earlier thread, unless you are the child of very rich and well-connected parents who can pull strings with the senior executives in these firms. :D

[gox]

You do not have to seek an investment banking career immediately after graduation.

Most local investment bankers (even some of the best today) did not start working in investment houses right after graduation. They usually spend their first few years after college working in a department of a universal bank or honing their financial analysis in the finance departments of major corporations like Globe, P&G, Unilever, Ayala Land etc. Others start off with consulting work with SGV. These people usually get their MBAs after 4 years work experience, then enter the investment banking profession either in equities or corporate finance.

The top investment houses like ATR and FMIC are not that accomodating to fresh grads because they maintain a small staff of experienced professionals: maybe 3 MDs, 4 associates, and 4 analysts in one department. Usually replacements come in the form of interdepartmental transfers or pirating talent from a rival investment house. These small staffs usually handle 3-4 large deals a year, are usually former equities research people who covered Philippine industry for several years, or have MBAs and several years work experience in the foreign offices of the top international ibanks. I know the ATR staff is basically the old Filipino expats of Peregrine, which was the top Asian investment based in Hong Kong before it folded spectacularly during the Asian financial crisis. So I am sure the people working there are fairly senior.

It is tough to get your feet wet in investment banking as a fresh grad in the Philippines because investment houses put a preference on experienced professionals. Even if you do land a job in the industry, the quality of your work will not only depend on your initiative to learn, but it will largely depend on your bosses ability to mentor you and bring in quality deals to work on and learn from.

Just start building up experience in finance (whatever it is). If you happen to find a job work for a universal bank before an investment house gets back to you, then take it. Once in, make the initiative to get yourself known by the members of corfin dep.t of that universal bank. That is how many people do things, and if you dont like that type of approach or are uncomfortable being that aggressive, then ibanking is not the right job for you.

[bluethehero]

^that is actually an option sir. i am currently applying for a corporate credit/risk or financial analysis position (even entry-level) among banks. thank you very much for the inputs and reminders. :)

i hope in a week (or worse, month), i can finally get my feet on an entry level position in corporate finance, mapa investment bank man or commercial bank. i really appreciate the inputs. thanks everyone.

[Hulk]

Para sa akin these are the hierarchy of skills and abilities needed in Investment Banking:
1. Deal-making - persuading the client that you are "the FIRM" to deal with, requires a lot of relationship capital invested over a long period of time. Can be developed by joining and heading lots of professional organizations (FINEX, MBC, MAP, Rotary, FMAP, MART, ACI, TOAP, etc), plus creating a strong influential circle of friends
2. Spotting opportunities - recognizing potential even before the client realizes there is one. Andito na rin yung recognition na there are buyers for the underwritten securities. More difficult than it seems.
3. Number-pushing - valuation, computation, etc... relatively easy compared to the top 2, pick up a book if you need to learn or get a CFA charter like I did
4. Admin stuff - gopher ka, follow-ups, documentation, set-up meetings, para kang PA

Remember these skills and see whether your chosen path will develop these.


:frank:

[bluethehero]

^wow sir Hulk, those points are really worth remembering. are you working by any chance in an investment house?

[Hulk]

Yes I do.


:frank:

[bluethehero]

^for sure, your number one requirement will not be easily met by a fresh grad, especially being member of some of those prof orgs you cited (though one can perhaps participate on the endeavors conducted by them)

However, establishing oneself in a network of professionals can be done at the course of one's work.

[Hulk]

No one expects a fresh grad to do #1. You will probably start as a gopher and a bit of #3, but you will be surprised on how final decisions are made on valuations. :lol:


:frank:

[bluethehero]

^hahaha. can you elaborate on those final decisions sir? i mean, some examples of those final decisions made on valuations?

[vince 15]

Para sa akin these are the hierarchy of skills and abilities needed in Investment Banking:
1. Deal-making - persuading the client that you are "the FIRM" to deal with, requires a lot of relationship capital invested over a long period of time. Can be developed by joining and heading lots of professional organizations (FINEX, MBC, MAP, Rotary, FMAP, MART, ACI, TOAP, etc), plus creating a strong influential circle of friends
2. Spotting opportunities - recognizing potential even before the client realizes there is one. Andito na rin yung recognition na there are buyers for the underwritten securities. More difficult than it seems.
3. Number-pushing - valuation, computation, etc... relatively easy compared to the top 2, pick up a book if you need to learn or get a CFA charter like I did
4. Admin stuff - gopher ka, follow-ups, documentation, set-up meetings, para kang PA

Remember these skills and see whether your chosen path will develop these.


:frank:


I did 3 and 4 as an intern for a multinational a few years back. I learned a lot from the experience. I got to eat a lot, too, because they sent me to various hotels for the Stockholders' Meetings. :D

I truly believed - I still do, in fact - that I could succeed in the industry because I have the necessary skills to do that. However, as interesting as investment banking could be, there was something else that my heart was yearning for. And so, I decided to pursue that other line of work in spite of getting an offer from another multinational bank after I graduated from college.

[bluethehero]

^i know kinda off-topic, pero ano naman yung something else that your heart was yearning for?

attending to stockholders' meetings and private meetings of companies is also a good thing because you get to learn and understand about the companies' financial conditions and meet "Bigatin" people from these companies.

[Hulk]

^hahaha. can you elaborate on those final decisions sir? i mean, some examples of those final decisions made on valuations?


Hehe! I am afraid I cannot elaborate, but you have to remember that investment banking is still part marketing, you have to satisfy the client, the investor, and the risk appetite of your firm.

The final valuation meeting could either be really serious or fun, with a bunch of guys good-naturedly jabbing prices at each other.

And yes, eating a lot of good food is a great perk of the job! *okay*


:frank:

[gox]

I completely agree with hulk's hierarchy of skills and abilities needed for investment banking.

Dealmaking, spotting opportunities, and coming up with creative solutions to difficult problems are KEY skills you will need in order to get far in this industry. You need to have the right connections and/or the personality to get the big deals. A good ibanker is one who can walk into a room full of powerful businessmen and charm them with his eloqeunce, intellect, and confidence. Thus, it is no coincidence that the best executives are not only bright finance minds, but very charismastic people. Those who are good at number crunching, but have no "dateng" are the ones who get left behind or end being associates for the rest of their lives. Those who can't think out of the box also have a difficult time getting ahead in the industry.

Master the basics through a CFA or MBA, but always work on building up your network, professional relationships, and communication skills.

Join alot of professional organizations. Hulks recommendations are all good. Other good networking tools for guys your age can be Singles For Christ and Young JC's. Get involved with your community. Things like Gawad Kalinga are also great for meeting powerful people. Join and be active in your alumni association. Learn golf. You will be suprised how easy it is to network with people through this game.

If valuation fancies you, try picking up books written by Aswath Damodaran. He is a very good teacher when it comes to the topic of valuation.

[gox]

I completely agree with hulk's hierarchy of skills and abilities needed for investment banking.

Dealmaking, spotting opportunities, and coming up with creative solutions to difficult problems are KEY skills you will need in order to get far in this industry. You need to have the right connections and/or the personality to get the big deals. A good ibanker is one who can walk into a room full of powerful businessmen and charm them with his eloqeunce, intellect, and confidence. Thus, it is no coincidence that the best executives are not only bright finance minds, but very charismastic people. Those who are good at number crunching, but have no "dateng" are the ones who get left behind or end being associates for the rest of their lives. Those who can't think out of the box also have a difficult time getting ahead in the industry.

Master the basics through a CFA or MBA, but always work on building up your network, professional relationships, and communication skills.

Join alot of professional organizations. Hulks recommendations are all good. Other good networking tools for guys your age can be Singles For Christ and Young JC's. Get involved with your community. Things like Gawad Kalinga are also great for meeting powerful people. Join and be active in your alumni association. Learn golf. You will be suprised how easy it is to network with people through this game.

If valuation fancies you, try picking up books written by Aswath Damodaran. He is a very good teacher when it comes to the topic of valuation.

[vince 15]

^i know kinda off-topic, pero ano naman yung something else that your heart was yearning for?

attending to stockholders' meetings and private meetings of companies is also a good thing because you get to learn and understand about the companies' financial conditions and meet "Bigatin" people from these companies.

I left the Philippines to pursue something else; and that is a career in the sports industry. Just in case you're thinking about it, no, I'm not a professional athlete. :D

The meetings did enable me to learn more about the different industries and the various key factors that lead to longevity and success. I also got to mingle with some of the firm's clients, which was very exciting.

During my internship, I was also sent to the Bloomberg office a number of times to get trained. In addition, they signed us (they got two interns...the other intern was my kabarkada in high school and college) up for a two-day Bloomberg seminar, where we attended lectures on how to use Bloomberg more efficiently and effectively, and were fed first class meals at a five-star hotel. *okay*

They wanted to have us work for them while we were finishing our senior year in college, but the company had strict rules in regards to hiring interns. They were only allowed to get summer interns. *peace*

[bluethehero]

vince_15 amazing, good for you that as early as your internship, you have been exposed to that career. would you know how I can join Bloomberg seminars? I hope my firm can help me participate in those.

by the way, thanks for your thoughts and advice guys. looks like I will have an entry level position in CorpFin of an i-house after all.

gox now that I will start my first job, or rather, my career in an i-house, would you mind sharing me the various professional organizations that a 21 year-old entry-level analyst can participate in? and in the prof orgs you mentioned (Young JCs, Singles for Christ), how can i join these? especially Young Jaycees? and perhaps you can teach me how to play golf :D yun nga lang, pawisin ako, hehe. and in fairness, I think I am sociable and charismatic, though I will have to make sure that I will make it adaptable to the i-banking field. I am certainly willing to learn and hungry for professional development, but I know that I'm new to this field, so I will certainly work on the KEY SKILLs you mentioned. lastly, magkano kaya ang books ni Aswath Damodaran?

Hulk thanks for sharing to me the needed hierarchy of skills and abilities to succeed in this career. i will surely keep those in mind.

[vince 15]

bluethehero: You can check Bloomberg's web site occasionally. I'm sure they have a schedule of the seminars there. Likewise, if your office has a Bloomberg station and they let you access it, there's an option to look at the Bloomberg events there. Once you find out when Bloomberg will be sending representatives to Manila, you can probably ask your bosses to open up their wallets and pay for the fees.

I'm not sure but I think the company has to be subscribed to Bloomberg for them to be able to have an employee register for the event. Come to think of it, since you're going to work for an investment house, it's only logical for me to assume that they're already subscribed, so I guess you won't have to worry about that.

[bluethehero]

^yeah, I really hope the company is subscribed. that i still have to find out. in my understanding, not all investment houses/banks are subscribed to Bloomberg, but i really hope they are subscribed and that i will have the opportunity to attend to the seminars they hold. pero sa tingin ko naman, the company is subscribed.

one thing i like about the company that hired me is that in terms of location, it is literally neighbors with AIM. so in the event that I decide to review for the CFA exams (something which I hope the company can sponsor :D if i do good in the firm), I can walk from the office even 15 mins before the classes begin.

off-topic: are you in the States right now?

[vince 15]

Yes, I am in the US right now.

I have a few friends who are already reviewing for the CFA. I think they're going to take it before the year ends.

[Hulk]

^yeah, I really hope the company is subscribed. that i still have to find out. in my understanding, not all investment houses/banks are subscribed to Bloomberg, but i really hope they are subscribed and that i will have the opportunity to attend to the seminars they hold. pero sa tingin ko naman, the company is subscribed.

one thing i like about the company that hired me is that in terms of location, it is literally neighbors with AIM. so in the event that I decide to review for the CFA exams (something which I hope the company can sponsor :D if i do good in the firm), I can walk from the office even 15 mins before the classes begin.

off-topic: are you in the States right now?

Hmmm... near AIM... Unicap? Walang Bloomberg ang Unicap.
Professional orgs, try mo Toastmasters, pwede ka ring mag-active sa MART and IHAP, actively participate in the working committees of these two orgs.
:frank:

[bluethehero]

^sayang naman if walang subscription sa Bloomberg. will it be possible for you to share what are the i-houses that you know that have bloomberg subscriptions?

and thanks for the suggestions. i will try to figure out how to participate in the prof orgs. i hope that those prof orgs that you mentioned will have room for a 21 y/o and newbie in the i-house industry.

[malfoy2k]

^bluethehero, me nakikita akong mga openings for market analyst trainee sa jobsdb...un nga lang parang walang sweldo for 3 to 6 months..training lang talaga at depende pa kung papasa ka sa exam nila...hmm..sounds familiar to ha..ala "Pursuit of Happiness".....

[bluethehero]

^bluethehero, me nakikita akong mga openings for market analyst trainee sa jobsdb...un nga lang parang walang sweldo for 3 to 6 months..training lang talaga at depende pa kung papasa ka sa exam nila...hmm..sounds familiar to ha..ala "Pursuit of Happiness".....

i think similar yun sa research analyst, outsourced ata. i dunno, but i think it's not an investment house job.