Hey readers! Welcome back for another update on the Tepper Bloggers. All three have progressed nicely in their internships and are eager to share their experiences with you. We're happy to announce that we have a fourth blogger, Jackie Zhang, who will be joining us starting with our next post. Jackie is a Marketing Intern here in Pittsburgh and should round out our team nicely along with Kim's IT, Jay's Finance, and BK's Consulting experiences. I hope you enjoy and learn from this post and you'll be hearing from us again soon.
A few weeks have passed and I'm slowly getting assimilated with the work culture at Johnson & Johnson. I must say, it's taking me awhile. I feel like I just got here and yet it's been 4 weeks already! My impressions of the company are overall positive. I love that it's a big corporation full of people from diverse backgrounds and new things to learn. Everyone here has a story of their own and SO much to offer. They are so helpful and friendly, I literally can ask anyone anything and I won't feel dumb.
Lately I've been thinking about balancing work and social life. It's a toughy during the week. It seems like I have no time for myself. I get up around 7am, get to work around 8:30am and leave around 5pm, get home at 5:45pm. Settle, cook dinner, and it's 8:30pm already! Dilly dally for a bit and it's time for bed. The whole cycle begins again. My body is slowly transforming to just fat and bones because I never exercise. It's quite sad. The most exercise I get is my walk to the bathroom at work. I need to figure work-life balance. Suggestions?
Till next time! Have a good one!
-Kim
Hi Guys,
Things have gotten a lot busier over the last few days which means the nights and weekends have started getting longer and longer. Before I get into my personal experience in the Leveraged Finance group these past few weeks, I wanted to offer a brief primer on the Investment Banking Division and my specific group if to give you some idea as to how my internship is structured.
Groups in the Investment Banking Division are classified as either industry groups or products groups and unlike most Sales & Trading Internships, which rotate you through 3 desks over the course of 9 weeks (after a week of training) we spend our entire internship in one group. Industry groups are responsible for covering a particular sector, such as Technology, Media, Power & Utilities or Real Estate, etc. They manage relations with corporate clients and get specific expertise on their industry over a wide range of deals, be that M&A. Equity/Debt Offerings or Restructuring. On the other hand, the Product groups focus on one specific deal type, such as Mergers or Leveraged Finance and your deals range over all the different sectors but you become an expert in that one product.
Leveraged Finance is a product group and focuses on High-Yield Debt financed deals. These range from leveraged bond and loan origination to refinancing a company's bank debt (which is exactly what it sounds like -- you take out a new loan with the sole purpose of paying off the old one, generally to get a better rate or for strategic reasons). We also spend a good deal of focus on Leveraged Buyout (LBO) opportunities.
Going off the principle in Finance that greater risk must show greater returns; high yield debt is corporate debt that is rated below investment grade by ratings agencies (Moody's, Fitch, S&P) and offers percentage returns that are much greater than the High-Grade AAA rated bonds of blue chip companies. A Leveraged Buyout, therefore, is where a Private Equity investor will buy up full stake in a public company in order to take it private. The investor then makes changes to the company structure/operations/assets/strategy and soon after takes it public once again to reap the financial benefits. The assets of the target company are used as collateral for the acquisition --- creating the need for high-yield debt (reflecting the higher risk of an LBO) as a vehicle for potential investors who provide financing for the deal.
After the first week of training with the entire intern class, our joint Financial Sponsors/Leveraged Finance (FS/LF) intern class of 14 had another week of in-depth high-yield debt training, led by Analysts on up to Managing Directors in the FS/LF team. We covered topics from Debt Covenants (the legal documents surrounding the bond or loans we offer) to different Bank Loan and Bond options we offer to the basics of Bond Math. Now that we are done with both training regimens we are officially part of the FS/LF team. We spend most of our time helping our Analysts/Associates on the deals we get assigned to.
These include among other things, making Debt Comps (a "Comparable Companies" analysis - focusing on debt ratios of the company like Total Debt/EBITDA), which are useful when pitching a company's characteristics against their competitors to potential investors. We've also been building "Quick & Dirty" models (starting at the Income Statement and working down to a projection of EBITDA and Free Cash Flows over the next 5 - 10 years) in preparation for building the financial projection models we use to price and justify the bank lending/originating $XYZ Million of leveraged loan/bonds to/for a company or Financial sponsor. When people say banking gives you "modeling experience" -- this is actually what they are talking about.
Phew.... that was a lot of information condensed into a very quick breakdown. It is actually amazing to think back to less than a month ago when all this felt like a foreign language - working through it day-in-day-out is starting to make this second nature. If any of this is unclear or you are interested in learning a little more, feel free to reach out to me and I'll be happy to share more.
Hope everyone had a great Fourth of July,
Jay Kapoor
Hey Everybody!
I hope everyone is having a great summer. I am certainly having a very busy one. In case you guys don't remember, I am interning at Accenture as part of the Business Process Outsourcing group. I have to admit I had no idea what my project was about and what kinds of topics that I will be dealing with. I am just starting to get an idea of what my role is and how I can fit into the group. I think this is what everybody goes through in the beginning; you just feel overwhelmed and lost. You are not sure what you are supposed to be doing and you don't know what is expected of you. But I learned the best way to deal with that is to go out and reach out to people around you and ask for help. There are plenty of people willing to help and walk you through the process and help you successfully fit into the organization. I've already met somebody besides my supervisor who is willing to mentor and guide me during and beyond the internship period. So, when you are starting your internship, make sure to reach out to people and meet people who are willing to teach and nurture you.
In terms of the project, my boss wants me to experience different steps of procurement from finding clients to finding suppliers. He sends me a lot of materials to read over and takes me to different meetings so I can be acquainted with what actually happens in the 'Procurement' world. Also, he recently gave me a semester long project for which I have to give a presentation to about 40 people upon completion. I hope all the presentation skills I learned at Tepper will pay off, haha.
In the next post, I will try to share something more specific about the project I am doing and about my daily tasks. Until then, PZ!
BK
No comments:
Post a Comment