Welcome to the Finance Club Kickoff Meeting Ross School of Business University of Michigan September 2005

2 Agenda Overview:  Financial Services  Timeline  Finance Club Overview Functional Areas:  Corp Finance  Investment Banking  Research/Asset Management  S&T  PWM Wrap Up  To Do’s  Company Presentations

3 Financial Services Landscape Finance Club EVC Club Investment Assoc. –Corporate Finance –Investment Banking –Capital Markets – Syndicate –Research –Sales & Trading –Asset Management –Private Wealth Mgmt. –Venture Capital –Private Equity –Turnaround Mgmt. –Asset Management –Equity Research –Inst. Sales & Trading –Private Wealth Mgmt. –Personal Investing

4 Internship Search Timeline It’s Sooner Than You Think On-campus interviews!Jan. / Feb. October 14Resume deadline for iMpact Oct Wall Street Forum Company presentationsSept. / Oct. Ross Corporate Finance Forum Informational interviews Nov. / Dec. Form study groups, review Course pack, and begin profiling potential employers Oct st Term Final Exams

5 Finance Club Overview “The Finance Club is a student-run organization that provides members interested in finance careers (or finance-related) the resources, tools, and guidance needed to successfully reach their professional goals.”  Members of the Finance Club have a strong commitment towards building Michigan’s brand in Finance.  Your Resources:  OCD  Alumni  Faculty  Second Years  Each Other

6 Quotes from Alumni & Recruiters “The Finance Club at Michigan is the best of its kind in the nation because it has to be.” “If you have to, miss a class. NEVER miss a Finance Club meeting.” “The most successful students are those that treat the Finance Club and the recruitment process as a fifth class.” “Sometimes we like to ask individuals what they did in Finance Club over the past week just to see if they have been preparing themselves”

7 Corporate Finance  CFO and management team  Forecast revenues/expenses - budgeting  Invest in projects to maximize shareholder value  Treasury  Cash management, Invest excess cash  Controller  Internal auditing  Risk Management  Country risk  Market risk  Strategy and Business Development

8 CF - Just the Facts Corporate Finance Firms Major corporations across industry, and banks Where North East, Mid-west, West Coast Hours 8:00 am to 5:30 pm Pros Lifestyle, work-life balance, C-level exposure, overall view of organization, CFO/CEO track Cons Can get monotonous, some positions potentially heavy on accounting, steady pace

9 Investment Banks  Raise debt and equity capital for clients  Maintain active securities markets enabling cost effective distribution  Financial advisory services  Mergers & acquisitions  Divestitures  Restructuring  Merchant banking (private equity investment)  Syndicate: selling securities to “the street”

10 Investment Bankers  Perform industry analysis  Create quantitative models to determine return on investment for all stakeholders  Perform sensitivity analyses based on different scenarios  Offer the client multiple financing options  Leverage the Capital Markets to execute these proposals

11 IBD - Just the Facts Investment Banking FirmsTop investment banks Where Primarily New York, also Chicago, L.A., San Francisco, London & Hong Kong Hours9am to whenever: expect 80+ hr. weeks Key Firms Citigroup, CSFB, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, National City, Piper Jaffrey, UBS Pros Challenging, fast-paced, top company interaction, strong compensation Cons Very demanding, less work-life balance, can be stressful, job security directly tied to the market

12 Research / Asset Management Research  Also known as a Sell-Side analyst  Generates investment ideas for investors  Conducts fundamental analysis of companies within an industry  Identifies factors and trends that drive a company’s or industry’s future growth and comments on valuation of securities  Examples: CSFB, Morgan Stanley Deutsche Bank Asset Management  Known as the Buy-Side  Manage a portfolio of securities for other investors  Buy-Side includes  Mutual funds, Pension funds, Insurance companies, Hedge funds  Examples: Fidelity, Janus, Oppenheimer, Apollo

13 Research - Just the Facts Sell-sideBuy-side FirmsTypically I-BanksFidelity, Janus WherePrimarily New YorkEverywhere Hours7am to 7 pm, plus weekends7am to 5:30pm, no weekends Pros Pay, entrepreneurial, access to top executives Pay, excitement, work/life balance, clear reward system Cons Long hours, hard to differentiate research Difficult to find jobs, tough market cycles

14 Sales & Trading  Represents the public or secondary market where investors can trade securities  Traders “make markets” in securities, providing liquidity to the market  Salespeople build relationships with the buy-side to draw trading business to its bank  Trading and sales desks must work together to be successful; many internship programs include rotations in both

15 S&T - Just the Facts SalesTrading FirmsTop investment banks WherePrimarily New York Hours 7am to 5:30pm + some evenings 7am to 5:30pm, no weekends Pros Pay, expense account lifestyle, entrepreneurial Pay, excitement, camaraderie, hours, clear reward system Cons Intensity/stress, insecurity, cyclical Intensity/stress, insecurity, narrow focus

16 Private Wealth Management  Develops and manages relationships with wealthy investors  Markets the investment services of the firm  Advises clients on investment opportunities  Analyzes client portfolios  Additionally, provides advice regarding banking, lending and wealth transfer needs

17 PWM - Just the Facts Private Wealth Management FirmsTop investment banks WherePrimarily New York, but smaller offices in most major cities Hours7:30 - 6:30 at a minimum - no weekends Key Firms UBS, Citigroup, Goldman Sachs, JPMorgan, Lehman Brothers, Northern Trust, Bessemer Trust, Morgan Stanley Pros Intellectual challenge, fast-paced, strong compensation, entrepreneurial, personal relationships with clients Cons Very demanding, solely responsible for P&L - need to have a strong grasp of a wide range of products and areas, not just investments

18 CONFUSED?  Conduct Self-assessment- interests, skills, sacrifices  Schedule OCD counseling appointments  Realize that finance is a wide field offering many different and exciting opportunities  Learn more about the functional areas  Ask questions- DUMB ONES TO US, smart ones to recruiters  Second-years are your best resources for information and first-years are your partners

19 To Do’s  Company presentations begin tomorrow  Resume book deadline of October 14  Start forming study groups  Sign up for FinClub06  Go to the Finance Club Website  Sign up for Finance Club

20 Company Presentations  On a daily basis, go to OCD Events and look up which companies are coming when – look for “Office Hours” too  Attire is business casual for every event unless stated  Research a company’s web page before they arrive (vault, wet feet, etc… are also great resources)  Ask great questions that show your knowledge about the company, industry, and market – stay away from personal/specific questions!  Be a good, courteous listener:  Do not walk around/leave  Do not talk  Do not disregard proper event attire  Do not eat food  Do not ask poorly thought out questions  DO NOT HAVE YOUR LAPTOPS UP  DO NOT HAVE YOUR CELL PHONES TURNED ON

21 Company Presentations  Be able to “talk the talk”  Read Wall Street Journal everyday  Review company/bank websites  Company overview section / investment bank  Investor relations / press releases  Investext for analyst reports, Vault.com, WetFeet  Be able to articulate early on:  Why do you want to do IB?  Why XYZ bank?  Tell me about yourself  Most important: listen, learn, and don’t eliminate yourself

22 Company Presentations  Good Questions:  Questions about their internship program  How the bank is organized  Questions about the bank’s strategy  Deals bankers have worked on  Trends in the investment banking industry  Bad Questions:  Too detailed – “Why did your bank’s credit card net income decline by XX% in the third quarter?”  Too vague / easily researched – “How big is your investment bank?”