2. What Is Investment Banking?  A segment within the financial services industry  A network of intermediaries that assists clients who need capital and those looking to invest capital  Commonly referred to in terms of “buy side” and “sell side” lines of business

3. The Largest Firms By Advisory Fees  J P Morgan  B of A Merrill Lynch  Goldman Sachs  Morgan Stanley  Citigroup  Deutsche Bank  Credit Suisse  Barclays  Wells Fargo  RBC Capital Markets

4. Sample of Largest Firms By Assets Managed  Blackrock  UBS  Allianz  Vanguard  State Street  PIMCO  Fidelity  AXA Group  J P Morgan  Credit Suisse

5. What Is The “Sell Side?”  Involves trading or the promotion of securities – research develops investment ideas, sales teams pitch the ideas, buy side clients execute the ideas through traders  Primary roles include:  Facilitation of transactions – serve as resource for particular, unique transactions  Market making – buy and sell stock on a regular basis at a publicly quoted price  Underwriting of securities – raise capital for clients from investors through public offerings  Equity and debt research (equity research analysis) – develop opinion on value, risk, and volatility of a covered security for communication to clients

6. What Is The “Buy Side?”  Involves clients looking to purchase (“buy”) investment securities or services. You can also have buy-side equity analysts…but they would work exclusively for the buy side entity  Buy side entities/clients include:  Private equity funds  Mutual funds  Life insurance companies  Hedge funds

7. The Largest Investment Banks Provide A Wide Range Of Services  Mergers and acquisitions advice  Hostile takeover advice  Sale of company or certain division/assets  Represent potential acquirers  Restructuring advice  Access to debt and capital markets  Create demand for client’s to be issued securities  Create specialized securities / derivatives  Synergies with their commercial bank

8. Access To Capital Markets Is Primary To Their Mission Debt Capital Markets  Fixed income derivatives  Debt instruments sales & trading  Syndicated loans  Fixed income research Equity Capital Markets  Equity derivatives  Equity instruments sales & trading  Equity research

9. Many Investment Banks Also Offer Access To Commercial Banking Services  Treasury / cash management services  Operating lines of credit  Lease financing  Letters of credit

10. Functional Areas May Be Thought Of In Broad Terms  Investment banking  Corporate Finance Coverage / Industry Groups - advise clients  Corporate Finance Product Groups – help execute transactions  Financing solutions  Capital Markets Product Groups – raise capital for clients  Secondary markets  Sales & Trading (equities, commodities, FX, etc)  Research  Proprietary trading & risk management

11. Industry Groups Are Different Than Product Groups  Industry Groups  Manage specific transactions for clients  Cover all clients within a specific industry  Generate acquisition ideas, evaluate share buyback programs, assist with optimal capital structure  Product Groups  Specialize in a particular service or instrument  Secondary markets  Sales & Trading (equities, commodities, FX, etc)  Research  Proprietary trading & risk management

12. In Summary…  Investment banks are in business to connect clients that need capital with those entities looking to provide capital  The industry thinks of itself in terms of buy side and sell side responsibilities  Opportunities exist in product areas, industry groups, and support functions

14. Your Interview Preparation Should Include…  A great resume’  A thorough understanding of what is investment banking  Confidence in what the particular job responsibilities will be  Why investment banking is the right career choice for you  Why this firm is the right fit  A solid grip on technical areas  Practicing your passion

15. A great resume’ communicates…  Transparent decision making  Your value  Your desire  Relevant experience  Technical abilities

16. Investment Banking Covers Many Areas  Buy side vs sell side  Industry vs product vs support groups  Equities vs debt vs commodities vs FX  Regional vs global banks

17. What Functional Area Is Of Most Interest?  Investment banking  Product / industry groups  Financing solutions  Secondary markets  Sales & trading  Research  Proprietary trading  Support areas  Treasury  Risk management

18. Investment Banking Is The Right Career Choice Because…  Be able to explain the origin of your interest  You’ve taken steps to prepare for a banking job  You understand the industry and role you’d play  There are areas of work in the past that were exciting to you and you’ll see them again in banking  There are aspects of work in the past in which you have excelled and you’ll see them again in banking  It excites you!

19. A Particular Bank Is The Right Choice Because…  You understand their culture and you’re a fit  They have a particular area of strength that is of interest to you  Their associate program holds some unique quality of value to you

20. You Must Have A Solid Grip On Technical Items  Thorough understanding of financial statements and how they work together  Balance sheet, income statement, statement of cash flows  Equity vs enterprise value  Equity value + net debt + pfd stock + minority int = Enterprise value  Time value of money  Present value  Future value  Valuation methodologies  Discounted cash flows  Public company comparables  Acquisition comparables  LBO analysis

21. You Must Also Demonstrate Your Passion  Are you “living” finance outside of the classroom?  Be knowledgeable of current deals in process  Know key rates (10 year Treasury, Libor)  Understand domestic and international political environments  Be familiar with stock market and key commodity trends (S&P 500, Nasdaq 100, gold, oil)  Know approximate exchange rates for key trade currencies (US dollar, British pound, Euro, Yen, etc.)  Study financing spreads and levels (new bond issues pricing, debt spreads over Libor, etc.)

22. Anticipating Questions Is Key To Success  What is investment banking?  Why investment banking?  Why would you be valuable to the firm?  What product or industry group is of interest to you?  What would your responsibilities be in your role?  What do you like to do in your spare time?  Where do you need to improve the most?

23. Anticipating Questions Is Key To Success  Do you invest money now?  When have you failed?  When have you led a team?  Talk about an ethical dilemma you have faced.  Discuss a recent merger or acquisition.  Where is the NASDAQ trading today?  Define EBITDA and what it represents?  Discuss the shape of a WACC curve and what the curve represents.

24. Be Yourself, But Demonstrate Your Desire  Show positive, constructive energy  Show the steps you have taken to prepare for this career  Demonstrate your grasp of key financial concepts  Highlight your passion…are you “living” finance now?