2.
Careers in Finance 2
Investment Banking 2
Private Equity (PE) 3
Venture Capital (VC) 3
Equity Research 4
Broking/Trading 5
Banking 5
Insurance 6
Mutual Funds/Asset Management 6
Hedge Funds 7
Corporate Finance 7
Treasury 7
Other Finance Careers - Microfinance & Fintech 8
Role Overview 9
Roles in Investment Banking 9
Roles in Private Equity/Venture Capital 9
Roles in Equity Research 10
Roles in Insurance 10
Roles in Mutual Funds/Hedge Funds 11
Roles in Corporate Finance/Treasury 11
Roles in other finance careers 11
Sample Job Descriptions 13
Real work samples 17
Key Success Factors 19
Career Journeys 20
Leveraging MBA - Projects & Electives 22
Resume & Interview Tips 23
Resume - Key points 23
Interview - Key points 23
Sample Interview Questions 23
Resources 25
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3.
Careers in Finance
Finance is one of the most important functions in any organization, since it enables businesses
to grow. Several finance functions are specialized and are typically carried out by specific firms
and individuals. Careers in finance can be in the following areas:
Investment
Banking
Equity
Research
Banking Mutual
Funds / Asset
Management
Corporate
Finance
Wealth
Management
PE/VC Broking/
Trading
Insurance Hedge Funds Treasury Other Fin.
Careers
A career in any of the above areas needs good understanding of financial statements, financial
analysis, financial modeling, business strategy, competition, economics and markets and
customers. The following sections outline the typical functions of the above areas of finance:
Investment Banking
Investment banks help organizations with
transactions and financing. Typically they would
❏ Provide advise of all kinds of
transactions such as mergers,
acquisitions, sales, leveraged buyouts,
spin-offs, joint ventures, divestitures,
restructuring to companies, government
and financial institutions
❏ Underwrite new debt & equity securities
❏ Facilitate M&A & restructuring
❏ Trade for institutions and private
investors
❏ Advise on risk management
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4.
Private Equity (PE)
Private Equity firms raise funds from
investors (called as limited partners (LPs))
such as insurance companies, endowment
funds, pension funds, fund of funds, high
networth individuals and families and invest
these funds in companies which are typically
not publicly traded. PE firms raise funds for
specific investment categories.
PE firms charge a ‘carry’ (industry standard
is 2%) and also charge the investors ‘share of
profits’ (also called ‘super carry’ , typically
around 20%). The share of profits kicks in at
the ‘hurdle rate’, which is the minimum
return rate which has to be earned, before PE
firm is entitled to profits.
PE firms help large companies with
❏ Large amounts of capital
❏ Active involvement towards growth with connects from influential partners
❏ High returns - Since PE firms have to provide high returns to their investors, they help
companies with connects
Typical deals done by PE firms are leveraged buyouts, growth capital, mezzanine funding etc.
Venture Capital (VC)
Venture Capital (VC) firms operate in a similar fashion to PE firms. They however invest in early
stage ventures and the investment size is smaller than the PE firms. Most active lead investors,
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5.
as per Crunchbase is mentioned here:
Equity Research
Equity Research firms analyse companies based on
fundamentals and provide buy/sell/hold recommendations to
institutional and individual investors. Investment banks,
institutions, clients use this research for their investments.
Typical equity research report would include:
❏ Industry outlook
❏ Management overview
❏ Historical financial results and ratio analysis
❏ Forecasting of financials
❏ Valuation
❏ Recommendation
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6.
Broking/Trading
Brokers/Traders buy/sell securities, bonds,
forex, commodities, derivatives and other
financial instruments, on the behalf of clients.
While traders trade on behalf of brokers or
institutions, brokers are also responsible to
get more clients, engage them and manage
their portfolios as well.
In broking/trading technological changes are
happening very swiftly and one needs to be
aware about these. For example, Zerodha is
one of the latest entrants in the brokerage
industry and it already has 10% of daily retail
trading volumes across NSE/BSE/MCX.
Banking
Banks typically accept deposits from
individuals and institutions and lend to
individuals and institutions. Banks earn their
revenues based on the difference between the
interest rates of deposits and loans.
Typically banks have retail and corporate
functions, wherein retail deals with
individuals while corporate deals with
institutions. Banks are very important to the
entire financial industry.
Several roles in sales, project financing,
operations etc are available across banks for
MBA students.
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7.
Insurance
Insurance helps in protecting against losses.
Insurance is available for losses due to death,
health, car, travel, retirement, home,
investments etc.
Roles in the insurance industry include Sales,
Underwriting, Claims and Actuary.
Mutual Funds/Asset Management
Mutual Funds help investors to invest in
securities in a diversified manner. It also
provides better liquidity and is managed by
professionals.
Mutual Funds have several types of funds,
based on the investors’ risk taking ability.
Roles in Mutual Funds could be in sales and
portfolio management.
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8.
Hedge Funds
Hedge funds are similar to Mutual Funds, however these have very aggressive investment
strategies. These hedge risks and try to get good returns through specific investment strategies.
These generally invest in liquid assets. Hedge funds cannot take investments from general public
; only private investors with high risk appetite can invest in hedge funds. Hedge funds charge 2%
as fixed fees and 20% of profits as success fees.
Corporate Finance
Corporate finance professionals enable maximising shareholder value through long term and
short term financial planning. Responsibilities for this role include:
❏ Planning financial requirements
❏ Raising funds in effective manner
❏ Investing funds in assets
❏ Monitoring capital allocation and RoI
❏ Working capital management
This role includes all finance function with respect to the specific organization. This is a critical
role in the corporate setup. Typically all large organizations would have an entire corporate
finance team.
Treasury
Treasury management functions are available in banks as well as corporates. Typical
responsibilities include cash and liquidity management, risk management and corporate
finance.
Treasury departments in banks may include sub-departments for trading securities, bonds and
other financial instruments.
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9.
Other Finance Careers - Microfinance & Fintech
Microfinance provides finance to unbanked and poor alongwith range of finance products and
services such as savings, insurance, payment services and fund transfers. There are several roles
in this domain such as strategy and operations.
Payment wallets, app based banking and other
technologies have changed the way the
traditional finance works for individuals.
Blockchain is expected to bring about
significant changes in payment mechanisms
and other financial transactions. Careers in
these areas are not yet well carved out,
however, there would be a huge demand for
talented professionals.
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10.
Role Overview
Roles in Investment Banking
Typical roles in investment banking are mentioned below :
Role Description
Analyst
(Typically
undergrad hires)
❏ Preparation of pitchbooks
❏ Analytical work, financial modeling and research
❏ Coordination activities
Associate
(Typically MBA
hires)
❏ Partly work of analyst
❏ Manage analysts and coordinating between VP & analyst
❏ Working with clients
VP ❏ Lead analysts and associates
❏ Maintain and develop relationships with client
❏ Source deals
Director ❏ Source deals & close them
❏ Strategizing & anticipating deals, deal structures
Managing Director ❏ Lead firm
❏ Develop clients
❏ Strategizing & anticipating deals, deal structures
Roles in Private Equity/Venture Capital
Typical roles in PE/VC are mentioned below :
Role Description
Analyst
(Typically
undergrad hires)
❏ Prospecting for investee companies
❏ Initial analysis & creating presentations for senior management
Associate
(Typically MBA
❏ Screening of deals
❏ Managing advisors such as investment bankers, lawyers etc.
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11.
hires)
VP ❏ Lead execution of deals
❏ Source investments
Director/Managing
Director
❏ Strategy - Investment focus
❏ Raising investments
Roles in Equity Research
Typical roles in equity research are mentioned below :
Role Description
Associate ❏ Fundamental research
❏ Financial modeling
Analyst ❏ Calls with clients
❏ Recommendations and reports
Senior Analyst ❏ Lead team of associates and analysts for specific industry
Head ❏ Overlook and lead the firm
Roles in Insurance
Typical roles in insurance are mentioned below :
Role Description
Portfolio Manager ❏ Managing the investment portfolio of insurance company
Sales ❏ B2B and B2C sales, marketing
Analytics/ Big
Data/ML
❏ Analytics for effective insurance policies and to personalize
policies as per individual customers
Risk Management ❏ Managing short term and long term risks
BU Head ❏ P&L responsibility
❏ Head of Specific Geography/Specific Insurance Area
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12.
Roles in Mutual Funds/Hedge Funds
Typical roles in insurance are mentioned below :
Role Description
Fund Manager /
Investment Officer
❏ Managing the investment portfolio of Fund
Credit Analyst ❏ Credit analysis of different securities and financial instruments
from an investment perspective
Sales & Marketing ❏ Institutional sales, Marketing
Risk Management ❏ Managing short term and long term risks
Research & Product
Development
❏ Researching investment opportunities
❏ Developing new products
Roles in Corporate Finance/Treasury
Typical roles in corporate finance/treasury are mentioned below :
Role Description
M&A, Investment
Analysis
❏ Sourcing and analysing investment and M&A opportunities
❏ Due diligence and investment monitoring
Financing ❏ Investors & Bank Relationships
❏ Fund raising
Financial Planning,
Working Capital
Management
❏ Managing short and long term financing
❏ Impact of compliances, regulatory requirements on firm’s
financial health
Risk Management ❏ Managing short term and long term risks
Roles in other finance careers
Typical roles in other finance careers:
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13.
❏ Operations - Ensuring financial firm’s operations are smooth
❏ Analytics - Analysing customer data and providing better financial solutions
❏ Sales, Marketing, Business Development - Pitching financial products/services to High
Networth Individuals, Institutions etc.
❏ BU Head/P&L Management - Managing business units
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20.
Key Success Factors
❏ Financial Analysis
❏ Financial Modeling
❏ Understanding of business, industry and economy
❏ Excellent communications
❏ Networking and building relationships
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21.
Career Journeys
Rahul Jain (SPJIMR PGPM alum)
Year Role/Qualification Company/Institute
2007 B.Com Mithibhai College
2008 C.A. ICAI
2007-10 Consultant EY
2010-11 Senior Analyst Barclays
2012-14 Assistant Manager KPMG
2013-14 PGPM
CFA Level 2
SPJIMR
2014-16 Zonal Head, West, Finance &
Corporate Affairs
Ola & Taxiforsure
2016-18 Senior Manager, Corporate Finance Bankerbay
2018-19 VP Finance Locus.sh
https://www.linkedin.com/in/rahul-jain-3305a344/
Yash Bhatnagar (SPJIMR PGPM alum)
Year Role/Qualification Company/Institute
2010 BBA NMIMS
2010-11 Executive Angel Broking
2011-18 Trade Finance Officer | Credit
Manager | Branch Head
Bank of Baroda
2017-18 PGPM SPJIMR
2014-16 Advisor Government & Public Services PwC
https://www.linkedin.com/in/yash-bhatnagar-90294565/
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22.
Manisha Aithal (IIMB EPGP alum)
Year Role/Qualification Company/Institute
2005 Bachelor of Dental Sciences Mumbai University
2005-05 PGDM - Emergency Services Symbiosis
2005-05 Emergency Medical Services Deenanath Mangeshkar Hospital
2006-15 Associate Partner to Senior Partner GVK EMRI
2015-16 Task Force Member Karnataka Public Health Policy
2015-16 EPGP IIM Bangalore
2016-
present
Senior Manager Strategy & Finance
EA to CMD/Global Program Director
Enzen Global Solutions
https://www.linkedin.com/in/manishabala/
Ashish Ahuja (IIMA PGPX alum)
Year Role/Qualification Company/Institute
2008 B.Com HR College, Mumbai
2010 C.A. ICAI
2012 M.Com HR College, Mumbai
2005-05 Article Assistant N.J.Zaveri & Company
2014-16 Cofounder Seafood & Meat Co
2015-16 PGPX IIM Ahmedabad
2016-
present
Associate Director Deloitte
https://www.linkedin.com/in/ahujaashish1/
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Leveraging MBA - Projects & Electives
It is very important to leverage MBA experience to showcase to potential recruiters about one’s
interest in the given domain. Especially, when there is no prior relevant experience, projects and
electives during MBA could be of great help to learn about the domain, to be able to speak the
domain language and to excel in the job from the first day itself.
For roles in finance, academic projects on M&A, investment analysis, portfolio management
would be useful. Simulated portfolio management games also help showcase interest and
expertise. It would also be great if one can do a live project with large or small firms.
All available finance electives should be chosen by the student and he/she should try to excel in
the same and should be able to show that on resume.
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24.
Resume & Interview Tips
Resume - Key points
❏ Show ability to do financial modeling - put that at the top of the resume in summary or
somewhere near the summary
❏ Indicate academic, live and industry projects alongwith learnings, impact and takeaways
❏ Show electives with grades (if permitted) to showcase interest
Interview - Key points
Recruiters typically check the following from a competency perspective:
❏ Financial Analysis
❏ Cash flow and valuation
❏ Current affairs
❏ Problem solving
Recruiters also check on behaviour and fit. Typically they look at following competencies
❏ Leadership / Team work
❏ Long hours
❏ Client facing
❏ Why this specific company
❏ Ability to do sales (eventually at senior levels, this is to be done)
Sample Interview Questions
Behavioral and fitment questions
❏ What has been your biggest achievement?
❏ If you have done a finance internship, talk about that.
❏ If you have done finance project, talk about that.
❏ If you have scored highly in a finance course talk about that
❏ Are you willing to relocate?
❏ Answer affirmatively, unless there is a huge concern
❏ Which course did you like/dislike the most
❏ Tell about fin. courses which you had undertaken and which you liked
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25.
❏ About courses, which you disliked - talk about why did the course did not add
value, how it could have been better - be assertive
❏ Questions on ethics
❏ Be firm with your stand that you would always be ethically correct and do the
right thing
❏ Prepare well for these questions
Sample finance related interview questions
❏ Tell me the significance of financial statements
❏ Three statements – P&L, Balance Sheet and Cash Flow
❏ P&L – Operational efficiency, profitability
❏ Balance sheet – Assets, liabilities and capital structure
❏ Cash flow – Enables evaluation of company
❏ What is the difference between FCFF & FCFE
❏ Explain the cash flows to debt & equity holders vis-à-vis just equity holders
❏ Explain the formulas
❏ What is the difference between IRR and ROI
❏ IRR is that rate which makes NPV zero
❏ Considers time value of money
❏ ROI is (Expected value – Original Value)/Original Value
❏ How do you calculate WACC? What is CAPM?
❏ WACC is Weighted Average Cost of Capital
❏ WACC= Cost of Equity * Proportion of Equity + Cost of Debt *Proportion of
Debt*(1-Tax Rate)
❏ Cost of Equity is calculated by CAPM
❏ Cost of Equity = Risk free rate + Beta * Equity Risk Premium
❏ Cost of equity is always higher than cost of debt
❏ Tax shield
❏ Debt is less risky
❏ How do you value a company?
❏ Multiples based
❏ EV/Revenue, EV/EBITDA, EV/EBIT, P/E, P/BV
❏ DCF
❏ When is DCF not used for valuation
❏ Financial Institutions such as banks – since capex, WC and debt are not clearly
defined and these operate under regulations
❏ Volatile cash flows
❏ What makes a good financial model?
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❏ Assumptions
❏ Should be sound, well researched and through through
❏ Should be kept at one place and should be distinctly coloured
❏ Error checks – eg. Balance sheet balances
❏ Dashboard or Output sheet
❏ What is negative working capital? Is it beneficial?
❏ In the restaurant business, customers pay upfront, while suppliers provide 30+
days of credit. Thus, suppliers’ money is helping fuelling growth of company
❏ Online & discount retailers, grocery stores, restaurants, telecom companies
❏ What are the drivers of M&A
❏ Synergies
❏ New markets/geographies
❏ Technology
❏ Drive out competition
❏ What is pre-money and post-money valuation?
❏ Post money = Pre money + Investment received
❏ What are the advantages of doing an IPO?
❏ Increase in capital through large number of investors
❏ Higher liquidity
❏ Exit strategy for founders/initial investors
❏ Disadvantage - Higher regulations
❏ Disadvantage - Focus on quarterly results
❏ Economy related questions – GDP, Growth, regulations
❏ Stock market movements
❏ IL&FS debacle
❏ Banking crisis
❏ Walmart-Flipkart deal; possible Amazon – Future Group deal
❏ Blockchain & financial transactions
Resources
❏ http://aswathdamodaran.blogspot.com/
❏ https://www.investopedia.com/
❏ https://www.wallstreetmojo.com/
❏ https://www.moneycontrol.com/
❏ https://www.wallstreetoasis.com/
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