Author: Rajul Raman

Mergers and acquisitions are often used interchangeably. However, investment bankers and anyone with financial knowledge knows that they both have different meanings. 

Mergers and acquisitions is a generalised term used to describe the consolidation of companies through different financial transactions. The companies can have a merger, one can acquire another, or they can buy each other’s assets, among other things.

There are many moving parts under the merger and acquisition process, and it is important to be able to get through all of them seamlessly. Any mistakes can cost the company significant money and the investment banker, her/his reputation. 

If you are an aspiring i-Banker, this article will provide you with 3 resources to boost your knowledge of mergers and acquisitions:

1. The Investment Banking course by FMI

Mergers and acquisitions are a part of investment banking. So, it is important to know entirely about investment banking before diving into M&A. The IB course by FMI will provide you with all the skills and knowledge you will need while working in investment banking.

The course has a multitude of materials. It contains:

  • The basics of IB
  • Equity market
  • Financial analysis
  • Derivative market

And a lot more! The course is self-paced and you will have access to all material for 5 years. The best part is that you will get a course completion certificate that is accredited by LIBF! This will add to your resume greatly while also increasing your skills and knowledge tenfold. 

2. The Global Markets course by FMI

A client of yours may choose to merge with a company from another country. Or, a big MNC client might want to acquire a company in their host country. To execute these deals flawlessly, you need to have knowledge and understanding of the global markets. 

The Global Markets course will help you gain just that! This course includes topics like:

  • Introduction to the Global Markets
  • Currencies
  • Trade life cycle
  • A market-making simulation

These topics will help you gain a 360-degree view of the Global Market. 

If you finish this course, you will indeed feel more ready to work in M&A. In addition, you will also receive a course completion certificate that is accredited by LIBF!

3. The M&A Simulation

This is a practical simulation that will help you gain hands-on training about M&A by managing your funds. There are two main things you will learn from this simulation: asset selection and effective portfolio construction. 

By mastering these skills, you will find that M&A is not as hard as you might’ve thought! The simulation has been designed by experts and will be a very valuable addition to your resume. 

The simulation allows you to choose companies, make deals, check your portfolio, analyse your assets, and a lot more. You will be able to bid for companies as well. It is a must-try resource to understand mergers and acquisitions better.

How will these resources help investment bankers?

We agree that practical knowledge and experience are invaluable for becoming better investment bankers. However, having technical skills and expertise are important as well. These courses will provide you with the same. These resources provide not only theoretical knowledge but also their applications in the real world.

These courses are designed to provide you with a 360-degree knowledge of investment banking. By gaining this knowledge, you will feel ready for your role in IB and will see better performance and results.

Moreover, these courses contain simulations that help you gain practical knowledge through their hands-on learning model. The skills you will learn through the simulations paired with the theoretical knowledge will help you gain a better understanding of how to be an exemplary investment banker. 

These resources are investments worth making if you are serious about investment banking and having a successful career in the same. 

CONCLUSION

The Investment Banking, Global Markets and M&A Simulation are courses that will help you greatly in understanding M&A better. When you work as an investment banker, this will help you gain proficiency as you would have already practised some of these skills beforehand. Happy learning!


The currency market is a platform where participants can come together to buy and sell various currencies. It is also known as the foreign exchange or forex market. 

The currency market plays a pivotal role in international trade and resultantly, in the economy. However, not many people know about the currency market and how it operates. This article will present 10 facts about the currency market that your boss probably wishes you knew!

1. Currency exchange is an ancient concept

The concept of currency exchange has been in use for centuries. Some historians date it back to the time of the early human civilisations. The forex market, as we know it, was established much later. In 1973, when the gold standard for currencies was no longer used and free-floating currencies were introduced, the modern currency market was established. 

2. Currencies are traded in pairs

Unlike the stock market where an investor can buy a single share, currencies must be traded in pairs. This simply means that to buy a currency, you must sell another one. 

The exchange of the currencies happens at a preset or given rate. The currency pairs are written like this:

EUR/USD = 2

This means that 1 Euro will buy 2 US Dollars. Here Euro becomes the base currency as it appears first. USD becomes the counter currency or the quote currency.

3. Currency helps facilitate international trade

The currency market is crucial to facilitating international trade. Companies, banks, and governments in different countries use the forex market to trade.

For example, a British company has sold its products to an American company. The British company would expect the payment to be in GBP. So, the American company will have to start a foreign exchange of the currency through its bank. The U.S bank would transfer the amount to the British bank at the preset exchange rate. The American company’s account would be debited in USD. The British company’s account would be credited in GBP. 

4. There are three major currency market players

In the currency market, there are three major players/participants: corporations, governments, and central banks. 

Many corporations trade and enter the currency market to hedge their future international money transfers. For example, a Canadian company has a branch of its operations in the UK. The company will enter the forex market and lock in the exchange rate between CAD and GBP. This way when the company makes profits in the UK, the GBP will get converted into CAD at that preset rate. By locking in the exchange rate, the company has ensured that fluctuations in the rates do not hinder their earnings.

Governments and central banks of countries enter the currency market with the purpose of influencing the value of their currency. If a country’s currency decreases in value, more overseas investors would want to buy from that country. This is because they will be able to buy previously higher-priced goods/services at a lower price now. 

For example, the current exchange rate between USD/AUD = 2. So 1 USD buys you 2 AUDs. Let’s say, Investor X wants to buy a piece of land in Australia and he is in the USA. If the land costs 300,000 AUD, X would have to pay $600,000. If the Australian government and central bank devalued the currency by 0.5, X would only have to pay $450,000 to buy that piece of land. By devaluing the currency, the government and central bank can attract and generate more interest in their goods and services. This increases their exports and foreign trade.

5. The ‘Cable’ 

Cable is a term used for the exchange rate between USD and GBP. The pair together are referred to as ‘Cable’. This term has come from telegraph cables that connected the London Stock Exchange and the NYSE. The cables ran under the Atlantic Ocean. They were the primary way of communication between the two stock exchanges. 

6. Currency market is the biggest financial market

In 2020, the daily trading volume of the currency market crossed the $6 trillion mark! This makes the forex market the largest financial market in the world. Yes, it is a lot bigger than the stock market. The USD is the most traded currency in the market while the UK has the most traders. 

7. There are a few main currency pairs

1 .EUR/USD: the Euro versus the U.S. Dollar
2. USD/JPY: the U.S. Dollar versus the Japanese Yen
3. GBP/USD: the Great British Pound versus the U.S. Dollar
4. USD/CHF: the U.S. Dollar versus the Swiss Franc
5. USD/CAD: the U.S. Dollar versus the Canadian Dollar
6. AUD/USD: the Australian Dollar versus the U.S. Dollar

These pairs are the most commonly traded. They make up most of the transactions in the currency market.

8. The currency market is operational 24 hours

Yes, you read that correctly. Unlike the stock market, the currency market is operational 24 hours a day, five days a week. It closes on Friday evening Eastern Standard Time every week and reopens on Sunday evening EST. Due to the time differences, it is divided into three trading regions namely North America, Europe, and Australasia.

9. Bears and bulls

The traders in the currency market can be divided into two main categories: the bears and the bulls. The concept is similar to the one used in the stock market with the same terms. 

The bull forex traders are optimistic and believe that the market will likely go up. The bear forex traders have pessimistic sentiments and believe that the market will fall. 

10. Currency market is highly efficient

The currency market is so vast that a single entity will likely not affect its working. At any given time, there is a large volume of trades occurring in and across multiple time zones. This ensures that there is a flow of information across the world. This makes the currency market highly efficient. 

CONCLUSION

People usually don’t think about investing in the currency market because of a lack of knowledge. It requires a slightly advanced and in-depth learning and research compared to the stock market. To do so, you can check out this course by FMI on currencies and the currency market. 

Understanding the forex market
https://bitrebels.com/business/forex-market-developed/

The field of finance and banking has been constantly evolving. However, the pandemic has whipped up many challenges for investment banks. Some banks have had to pivot their business models to stay operational. 

Due to these changes, certain clear trends have emerged in the industry. These are pivotal in deciding where investment banking roles will be in 5 years. Here are some trends that we foresee in the IB industry:

1. Sustainable Investment Banking

Businesses are shifting not only their offered products and services toward more sustainable options but also their operation models. As this shift takes place, the investment banking industry is changing as well.

In the next 5 years, roles will increase in the sustainability/ sustainable investments area of investment banking. This is also due to the increasing popularity and usage of the ESG concept. ESG or environmental, social and governance criteria are standards used by conscious investors while screening investment opportunities and companies. 

As ESG slowly becomes the standard practice across investment banks, new roles are coming up. They want to see more socially conscious applicants as investing in sustainable products and portfolios becomes the need of the hour. 

Having this mindset is not only limited to people who want to specifically join this area of investment banking. It is slowly but surely becoming a norm for all investment banking roles. In 5 years, most roles will likely have ESG skills as a mandate.


2. Technology-driven IB

Digitisation is another major trend that is already changing investment banking roles. Of course, the basic requirement of all investment banking roles is to be tech-savvy. 

But now more advanced technology such as AI is slowly gaining momentum in the IB industry. Investment banks are hiring more candidates who can work on and in conjunction with AI programs. AI is already being used in the form of chat boxes and algorithms by banks to serve their customers. 

Leveraging data is another trend that is changing investment banking roles. More investment banks are using their client data to analyse trends and understand key client interests and relationships. Knowing how to understand and use this data will also likely become an important factor in hiring a few years down the line. 

3. Purpose-driven IB

Purpose-driven investment banking works in conjunction with the ESG standards. This trend is here to stay! A lot of investment banks are investing an increasing amount of money and resources into companies with a purpose and mission to give back to society. This is influencing investment banking roles and their evolution. 

Investment banks are on the hunt for more socially and morally conscious employees. And likewise, employees are on the hunt for investment banks that do meaningful work in the cold world of finance. Since there is a rise in companies with a purpose, employees who can value and harness this purpose to make their investments successful are in need. 

4. Flexibility

There is no doubt that younger people do not find the life of an investment banker very appealing. The exhausting work hours and work culture is not ideal for them. Seeing this, a lot of investment banks are changing things up.

Employees are being offered more flexible work timings and even a hybrid work environment after the pandemic. Banks are reevaluating their work culture and practices to bring about change. So, you can expect investment banking roles to become more informal, flexible, and holistic in their design.

Conclusion

Investment banking roles are going through a sea of changes on multiple fronts. In general, they are becoming more purpose-oriented and employee-centric. To understand investment banking, IB roles, and the latest trends in-depth, you can avail this course by FMI.

We all know that stock markets, also known as equity markets, are a hot topic especially owing to current events such as the pandemic, the predicted recession, and Russia’s war on Ukraine. But why do stock markets exist?

What is a stock market

The stock market is a platform where shares/equity of companies are traded. A company issues its shares in the stock market and buyers can choose to invest in them and get a certain portion of ownership in the company. Companies mainly float their shares in the equity market to raise capital to expand and grow their business.

In this article, we take you through some lesser known facts about equity markets. These can be helpful if you’re an active trader, an aspiring one or someone looking to work in financial services or investment banking. 

1. Equity markets have been around for a long time

In the Netherlands, around the 1600s, the Dutch East India Company created the first “modern” stock exchange as we all know it. They started by issuing paper shares that people could buy and sell. As a result, the Amsterdam Stock Exchange is the first equity market to exist. 

Amsterdam Stock Exchange is now known as Euronext Stock Exchange and is the oldest one to exist in the world

2. New York Stock Exchange (NYSE) is the largest stock exchange by market cap

The infamous NYSE has the largest market capitalisation when compared to stock exchanges across the world. The market cap of NYSE has crossed the $26 trillion mark! This number equates to more than one-third of the total global market cap of all exchanges in the world. 

To put this in perspective, the market cap of BSE is a little over $2 trillion. NYSE’s market cap is over 12 times that of BSE.

3. BSE is Asia’s oldest stock exchange

BSE or the Bombay Stock Exchange is Asia’s oldest and largest stock exchange. It was founded by Premchand Roychand in the late 19th century. During its early days, five stock brokers used to come together to sit under a banyan tree and trade. 

BSE has come a long way from those humble beginnings. It has over 5000 listed companies which also makes BSE the largest equity market in Asia. There are many other stock exchanges all around India, but BSE and NSE are the main ones. 

In the USA, NYSE is the largest stock exchange. It is, in fact, the largest stock exchange in the world! NASDAQ, another New York-based stock exchange, takes the second pace of the second largest stock exchange in the world by market cap. The oldest stock exchange in the US is the Philadelphia Stock Exchange which was set up around 1790. In 2007, NASDAQ overtook the PSE for a hefty sum.

4. The most expensive stock trades at around $500,000

Yes, you read that right! Berkshire Hathaway is the company that has the most expensive stock price in the whole world! Each stock trades anywhere between $350,000 – $500,000. Currently, it’s floating at around $450,000 which converts to more than ₹3 crores for ONE share. 

You might be wondering what Berkshire Hathaway does. It is an American conglomerate holding company with operations across the world. Its chairman is the very famous investor Warren Buffet. They have investments in public companies and have bought out several companies as well. 

5. Bull and bear lead the stock market sentiment

We hear these two words a lot. It can be confusing to understand what they mean in terms of the equity market. Bear and Bull are two “types” of markets or the two phases an equity market experiences. 

When the market is appreciating and gaining value and the sentiments are positive, it is known as the bull market. Some investors believe this is because the bull has its horns pointing upwards. 

On the other hand, when the market is depreciating, losing value, and experiencing negative sentiments, it is known as the bear market. 

Both are very common and normal phases of the market. As the economies flow, the markets correct themselves and keep going through highs and lows.

6. The S&P 500 index does not have 500 stocks!

This might sound absurd, but it’s true! The S&P 500 Index does not actually include 500 stocks. It has 505 stocks. The index does include 500 companies but some of the companies have issued many share classes. This has increased the number of stocks in the index.

7. Pirate Stock Exchange

In Somalia, a pirate stock exchange was founded around 2010. Here people can invest in pirate gangs and based on the ransoms they collect, the investors can get a profit from that. No one is entirely sure about how it works but it has made rounds in the news.

8. Long settling time

When shares used to be traded in the paper format, it used to take up to a month to settle the trade. Once digitisation started taking place in the equity market, the settlement time decreased to 14 days. Currently, an order or trade gets settled within two days.

9. Rule of 72

When people are investing their money in the equity market, they wonder how long it will take to double the investment amount. There is a simple formula that can help you estimate the amount of time your money will take to get doubled.

Simply, divide 72 by the rate of return of that share and you will get your answer. For example, Share A has a rate of return of 8%. 72/8 = 9 years. So, it will approximately take 9 years to double the investment amount.

10. Apple is the largest company by market cap!

Apple Inc. is the world’s largest company by market cap. It has a market cap of over $2.6 trillion as of April 2021. Apple is one of many US companies that are major players not only in the US stock markets but also in markets across the world.

Conclusion

We hope that you have learned something new about the equity market through these lesser-known facts. If you want to further expand your knowledge to succeed in investing, you can check out this course which offers a detailed overview of the equities market. Make sure you do thorough research before and while investing. Happy trading!

In an investment bank, Global Markets work in tandem with corporate, institutional, and government clients to execute trades and manage risk while providing quality research content. It is one of the most lucrative divisions of an investment bank. Within this division, students can tap into front office roles such as sales or trading; middle office roles such as trade support, risk, compliance, product control or IT; or back office roles such as operations, legal, marketing or HR. If you have the opportunity to interview for such a role as an iBanker, you must prepare well for such a job. 

In this article, we take you through the various tips and tricks that can help you ace your job interview in 30 days to land your dream role.

1. Pay attention to the types of interview questions

You can be asked the same type of interview question in different ways. Hence, a spin in the language of the question should not faze you. For example, you may be asked “tell me about yourself” as “walk me through your resume,” “tell me about your journey so far,” “How would you describe yourself” and so on. 

You should already have a pitch ready as these are the most basic interview questions. Fumbling on this might seem like you are ill-prepared or struggle to explain who you are. You should spend about 30 minutes each day perfecting the answer to this question. Also, remember the interviewer has a copy of your resume so you don’t need to explain verbatim what’s on it. Make this answer interesting by starting off with a brief summary of yourself, then your professional and educational journey and closing it off with something unique about yourself such as a hobby, an adventure you might have been on, involvement with the community service etc. While this is an open-ended question and candidates do have the tendency to talk endlessly, prepare such that you can wrap up this answer in 3-4 minutes. 

The other category of interview questions could relate directly to your resume and are usually an attempt to get to you know deeper – why you do/did things the way you did. Examples are:

  • “What’s your greatest strength?”
  • “What’s your greatest failure?”
  • “Tell me about a team activity that did not go as planned.”
  • “Why is your GPA on the low side?”
  • “What feedback did you receive from your most recent internship or job?

If you see an anomaly on your resume such as a gap period, a shorter stint job, low grades or anything, you should assume you would be asked about it, so you must have an answer prepared. 

Another way to go about it is to have the best stories of your life outlined in your mind – this may be a project or internship where you experienced success, a leadership story and also one where you may have faced failure but were able to learn from the challenge. It’s also advisable to have your strengths and weaknesses charted out in your mind as that makes up for a popular question. Then, you can adapt each of these stories to any question that you are asked. 

2. Boost your accounting/finance knowledge

You will be asked technical questions in your interview. These can be guesstimate questions or specific questions related to your domain of work. You must be well-versed in the terms and concepts commonly used in global markets or investment banking. For example, in global markets, the life cycle of a trade is a popular question. You can prepare for using these exhaustive simulations.

Other questions may include:

  • Walk me through a cash flow statement.
  • I buy a piece of equipment, walk me through the impact on the 3 financial statements.
  • Why are increases in accounts receivable a cash reduction on the cash flow statement?
  • A company runs into financial distress and needs cash immediately. It sells a factory listed at $100 on its Balance Sheet for $80. What happens on the 3 statements, assuming a 40% tax rate?
  • What does it mean if a company’s Free Cash Flow is growing, but its Change in Working Capital is increasingly negative each year?

3. Demonstrate confidence and a winning attitude

No matter how well you prepare for your interview, you could still be hit with a question that you didn’t envision being asked. Or it might be a behavioural question as well. In such a situation, the interviewer is waiting to observe your attitude – do you panic, do you stay calm, do you ask follow up questions and so on. 

Think of this situation as an actual work scenario where you may be asked to do something you don’t fully comprehend. You would need to trust yourself and make an attempt at learning what the concept is. Similarly, an interview should mirror how you would act in the professional environment. Hence, stay confident as that would count as a major plus. Think of what you know about the topic, answer as coherently as you can, and be honest in communicating that you are eager to learn and have remarkable networking skills that can also aid your learning process. 

Conclusion

A 30-day period is sufficient to get ready for an interview in investment banking. If you spend this time on the right material, you will feel fully prepared and confident towards landing the job. Certain unique courses offer the exact concepts and knowledge you need for such specialised interviews such as this 30-day interview bundle. It can prepare you end-to-end for the role as well as for the path leading to it.

If you’re looking to work in investment banking, one of the divisions you can choose is global markets. This division enables a bank’s clients to trade financial products, raise capital, and manage risk. This can include primary and secondary markets (rates, credit, foreign exchange, fixed-income, securitisation and treasury). 

Within the global markets division, you will be required to understand the trade life cycle. It is the lifeblood of this division. Hence, in this article, we bring you two free simulations to help you take a peek into the life cycle of a trade. 

What is the life cycle of a trade

A trade’s life cycle includes all the steps involved in a trade, right from the time an order is placed to its price fluctuations to its validation all the way to the settlement of the trade. This is the central activity for stock exchanges, capital markets, hedge funds, investment banks and other financial institutions. If you are planning to work in any of these domains, you must be well-versed in this life cycle.

These two trade simulations are particularly beneficial for anyone aspiring to build a career path in the global markets division. Whether you work in the front office, as a technologist, or in risk management, compliance and internal audit, these real-time simulations will sharpen your expertise. You will also be able to understand:

  • how various teams in this division collaborate together
  • which parties are involved in the trade life cycle, such as custodians, CSDs and exchanges
  • the role of technology in executing trades on exchanges and OTC markets
  • the various terminologies of the trade life cycle such as trade capture, clearing, settling, and trade enrichment
  • the role of infrastructure divisions, such as technology, risk, and compliance in the trade life cycle
  • post trade responsibilities that investment banks are responsible for, such as reporting, valuation, and accounting

Two free simulations on life cycle of a trade

Anatomy of a Trade: This free simulation will help you understand the life cycle of a trade in depth by introducing you to all the terms used in this process and their meanings. By engaging with this simulation, you will be able to learn all the terms involved in the life cycle of a trade in an interactive and easy manner. You wouldn’t need to read a ton of material to comprehend these concepts such as swift message, reporting, settlement, trade capture, among others. 

Anatomy of a Trade 2: This is another free simulation to help you ace your knowledge of trade concepts. This will help you understand the order of various steps in the life cycle of a trade. Since this is also a fun and engaging way to learn some complex terms, you will be able to get a hang of these quintessential trade terms quickly through the simulation.

For example, in this simulation, you will be able to pair the terms central to the lifecycle of a trade with its meanings. This innovative way of practising and perfecting the terms increases their memorability and keeps the user interested. For example, you might be given a definition such as: standard settlement instructions added to transactions, and you would need to match it with the right term that it is describing. For example, in this case, it is trade enrichment. You would be required to keep going and practice as many times as you like till you know all the correct answers.

Conclusion

Once you are clear with your understanding of the life cycle of a trade, you can use it to further learn about the global markets division of investment banking. This course on Global Markets will help you learn about the different desks found in global markets, the products and services they provide to their clients, and the roles available for people looking to forge a career in this fast-moving industry. Happy learning! 

It is common knowledge that an understanding of finance can be immensely helpful if you’re looking to work in investment banking. What’s lesser known is that learning economics is what can truly set you apart and help you excel further in IB. 

What’s the difference between finance and economics

Finance focuses on the tools and systems to manage money such as banking, investments, loans and so on. Economics, on the other hand, is a social science that is concerned with global or local markets, consumer behaviour, demand and supply, etc. 

Here’s an insightful breakdown of this difference by WallStreetMojo: “Economics and finance are just two sides of one coin. To succeed in finance, you need to know economics well. Economics is more about finding the equilibrium point of demand and supply, average cost and marginal cost, understanding the differences between fixed and variable costs, and many such theoretical concepts. and many such theoretical concepts. On the other hand, finance is the right extension of these concepts. Thus, it has often been seen that people who have made their mark in finance have had an economics background.”

https://brieflyfinance.com/finance-vs-economics-whats-the-relation-between-them/

While it may be less directly connected to investment banking, economics can help bridge the gap between you and a premier investment bank. Here’s how:

1. Economics aids in understanding the theory behind finance

As this Investopedia article rightly puts it, “Economics takes a more theoretical look, while finance is more applied, however, both are connected disciplines, with some overlap.”

Through economics, you will be able to comprehend financial concepts in context to the bigger picture, thus, building a stronger foundational understanding. For example, economics will help you figure out why markets act a certain way in a recession or a peak, and how it might impact a company’s short-term finances. 

2. Investment banks help an economy thrive

Thinking conversely, investment banks match investors and sellers, which is a key function of any economy. Hence, if you have a background in economics as an investment banker, you would also understand your role better. As an investment banking professional, the more you can differentiate yourself, the better — in terms of position, pay, learning curve — your career prospects would be. This understanding would also place you as an all-round finance professional. 

3. Diversify your career options

By learning economics for investment banking, you can expand your job portfolio as you will be highly suited for a career in either the corporate finance division or the global markets division of an investment bank. It is also incredibly valuable for people looking at a career in asset management. By understanding the practical approach to macroeconomics, in addition to economic theory, you can apply for various positions in these career pathways. 

How to learn economics for investment banking

If you are fairly certain that you want to work in investment banking but also want to sharpen your understanding of economics, you don’t necessarily need to study economics through a degree. Specialised online courses can help you concentrate on the specific concepts that you need to learn. 

For example, this unique course titled Economics for Investment Banking is a practical one covering important economic principles that impact financial markets. You can learn:

  • how different sectors of an economy interact and contribute to critical macro indicators such as GDP, inflation, and employment 
  • how to calculate GDP for financial markets
  • how the economic cycle impacts the financial markets, and the influence of central banks on economy at a macro level
  • how differences in actual and potential output drive inflation or unemployment
  • how different assets are impacted through the economic cycle

Conclusion

Economics is a great value addition to your profile as an investment banker. So, if you want to differentiate yourself and work in diverse divisions within an IB, you can direct your efforts towards learning basic economics concepts. This can help strengthen your theoretical understanding, deepen your expertise within your IB role, and widen your career opportunities. 

If you’ve kept your ears piqued to industry trends, you would know that ESG has been the talk of the town. Environment, social, and governance or ESG is a set of non-financial factors that investors are increasingly using to assess companies on their sustainability and social responsibility. Particularly, each of the three aspects address the following:

What is ESG

Environmental: How a company’s policies contribute to environmental protection. For example, what is the company actively doing to combat climate change?

Social: How a company manages its social obligations such as those towards its customers, employees, the community, and other stakeholders. For example, does the company use fair pay metrics?

Governance: How is the company’s leadership, executive pay, audits, shareholder rights and so on. 

Roles in ESG

Since ESG has become an integral criteria for socially-driven investors, it also must be taken seriously by anyone working or looking to work in the finance and investment banking industries. If you’re an aspirant, having essential ESG-related skills can help set you apart. 

In fact, today you can also forge a career as an ESG analyst whose job is to perform due diligence on a business activity or project in terms of ESG factors and offer financial advice. This can include evaluating the environmental impact of a project, sustainability of a venture, public opinion around a company’s activities, etc. Here are also some certifications you can get to gain important knowledge around ESG:

Education for ESG Roles

1. CFA Institute’s Certificate in ESG Investing: This program is for those looking to work in the finance or asset management sector. It is also approved by the UN Principles for Responsible Investment. It is great for building a foundation of ESG if you’re looking to start out. It explains each factor and its implications and has no minimum criteria to enrol. It requires approximately 130 hours of study.

2. The EFFAS’ Certified ESG Analyst (CESGA) is another program, which will help you become a Certified ESG Analyst. It is a diploma program that can equip you with advanced knowledge of ESG and its practical applications.

3. Further, universities too are recognising the need for ESG and introducing programs in this domain:

Other skills needed to work in ESG

While most skills to work in the ESG sector are the same as one would need to work in investing or finance, experts recommend starting early through an academic background in sustainable business or social impact. You should also consider building on these additional skills through relevant work experience: 

  • Ability to collaborate and work with investment teams
  • Solid communication skills
  • Knowledge of all relevant ESG regulations (such as GDPR guidelines)
  • A strong value for ethics
  • Analytical skills

Conclusion

Environmental, social, and governance or ESG might sound like a buzzword, however, its impact and importance is visible in current events and industries. For example, with climate change events such as the extreme heat wave in the UK or wildfires in California, ESG enthusiasts are increasingly interested in what companies are doing to manage these key issues as well as to evaluate whether an organisation’s activities contribute to them. 

Investors are regularly rating potential investment options on ESG criteria and making their decision based on how well a company performs. Hence, it wouldn’t be a stretch to say that the role of ESG in investment banking and the financial services sector is set to expand. In this case, it would be a smart move to educate yourself in this field as an IB or finance aspirant and take adequate measures to differentiate yourself as an ESG specialist.

A recession is a macroeconomic event marked by substantial economic decline in a region. It is identified by a fall in GDP for two successive quarters, accompanied by slow trade and industrial activity, and a rise in unemployment. 

One of the most noted recessions in history was the Great Recession of 2008 in the United States. It was a result of the collapse of the country’s housing bubble, which led to a credit crunch in the global economy. In its duration of 18 months, the unemployment rate doubled from 5% to 10%. 

Clearly, a recession has significant repercussions for those trying to enter the job market. With predictions of a recession risk upcoming anywhere in the next two years, if you’re looking to launch a career in finance, here are a few ways you can prepare yourself: 

1. Choose a field that is relatively immune to recession 

In the finance industry, this might seem like a far-fetched option yet it isn’t entirely so. Here are some areas you can look to work in despite a recession: 

  • Stressed Asset Management

Since the last recession especially, banks and most financial institutions have regularly reported stressed assets on their books. During healthy economic activity, these may not be in the limelight but during leaner times, stressed asset managers are expected to recover more from these default assets.
These positions are open throughout the year and carry more weight during the time leading up to a recession. So, if this is something you can imagine yourself doing, it’s worth looking into.

  • FinTech

Financial technology is a hot field in finance. While not fully recession proof, it is attracting applicants because of its massive growth and constant need for resources. Investors are pouring money into fintech startups, and banks too keep launching their fintech arms. Hence, recession or not, this is an area any financial services aspirant must keep their eyes on. 

  • Client-Facing Finance Roles

Even with the advent of AI, finance is a field that requires substantial relationship building with clients. If this is your strong suit, you should work on enhancing your communication skills so you can set yourself apart in roles that require client management. Relationship roles abound in corporate banking, retail banking, investor relations, investment banking, financial advisory and so on. 

2. Start researching and planning your target companies

At a time like a recession, desperation and despair can consume most people. To avoid being in such a situation, you should try to plan ahead as much as you can. Pick a list of up to 10 companies that are your true top choices. 

Research them thoroughly and deeply to ensure that you don’t miss any opportunity to network with them, be it through emails or career events at your university, even if they don’t have immediate openings. 

This will help you become a familiar name and face among the recruiters at the organisation and set you up as a passionate and driven professional. In case a position opens up and your credentials are a fit, they will remember to consider you. 

3. Reach Out to Your Network

Recession is a time that affects everyone in one way or the other. Hence, your network empathises and understands what you may be experiencing. Reaching out to them would be better than sending in one job application after the other and hearing back nothing. 

Be open-minded, flexible, and hopeful of the possibility that any connection can lead you to the role of your choice or something close to it. It might be an internship that becomes the segue to your new job or a different role suited entirely to your skill set. Hence, never give up on connecting or reaching out to a member of your network. 

Conclusion

A recession is not a favourable time for job applicants or companies. Yet, if you’re in this situation, you must focus your energy on what you can do. Finding jobs that are in recession-proof fields, being proactive in your job search and communication with potential companies, and maintaining and harnessing the power of a solid network are some things you can do to launch your finance career during an economically challenging time. 

A fund manager is an investment professional responsible for investing and managing a company’s portfolio of funds. This can include mutual funds, pensions, hedge funds, equity funds and so on. 

Fund managers are typically classified as active or passive managers. Active managers are involved in buying, selling, and holding investments actively in order to outperform the fund’s stated benchmark or index. Passive managers, on the other hand, try to achieve the existing returns of the benchmark by applying the same weight to the funds they are managing. 

The role of a fund manager is highly attractive and specialised. In terms of pay, similar to other investment banking professionals, it is a combination of base salary and bonuses. The base salary can range from $70,000 to $150,000 a year based on the position. 

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How you can become a fund manager

A fund manager must have certain technical and transferable skills to excel at their job. Their role is highly analytical and strategic, hence, requires sharp thinking, attention to detail, superior communication skills, and a focused approach. If you are looking to work in the investment banking industry and have an interest in capital markets, you can consider becoming a fund manager. Here are some skills and qualifications that can help you along the way:

1. A background in finance, mathematics, or economics

An education in finance, accounting, mathematics or economics can give you the requisite background and knowledge to work in the IB sector. While this is not specific to becoming a fund manager, it will create your foundation for working in this industry. If your undergraduate education is not in one of these fields, you can take introductory online courses in finance to build your knowledge base. 

2. A knack for studying and tracking market trends

As a fund manager, you will constantly need to track your client’s or company’s portfolio. This will require you to keep your eyes and ears peeled for market trends. A lack of this can lead to missing key opportunities and ultimately losses for your client. If you’re a natural at this, then the role of a fund manager is totally cut out for you. Alternatively, you can also actively learn how markets work and participate in them through simulations. For example, through this Marketing Making simulation, you can compete for client orders, manage their portfolios and risk and set your own bid / ask spread.

3. Financial Modelling

When investing in equity funds, you may be able to garner lucrative returns for your clients. This will require that you closely track and analyse these funds and their trajectory. Financial modelling is an excellent tool to forecast the growth of funds in your portfolio. It can also help you track how a fund is performing, benchmarked to expectations. You can start by taking a basic course in financial modelling in Excel, where you will learn how to build and analyse core financial statements such as an income statement, balance sheet, and cash flows. The sooner you are able to start experimenting with this, the better your skills would get, helping you differentiate yourself as a fund manager with more advanced modelling. 

4. A niche

Fund managers have multiple options to choose from in terms of both the funds and their investment strategy. Examples of funds are small-cap, midcap, large-cap funds, funds for emerging markets, balanced funds, sectoral funds, and pure equity funds. As an aspiring fund manager, you should direct your interest and time towards one or two categories of funds and advance your knowledge in those. This will help you become a specialist in the chosen niche. 

Conclusion

If you’re looking to become a fund manager, you can gain significantly by starting early and regularly keeping pace with how markets operate. This is a highly skilled role, which requires special training and a financial analysis acumen. A finance or related education is highly recommended. Further, 

  • a real-time understanding of how markets function either through an internship or job or simulations, 
  • learning financial modelling, and
  • choosing a niche can set you apart and prepare you well for the role of a fund manager.