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Investment Banking Discussion Thread

Discussion in 'Business, Careers & Education' started by jslade, Mar 9, 2012.

  1. Cantabrigian

    Cantabrigian Senior member

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    If there isn't any publically available information, I wouldn't worry about knowing about the firm before sitting down.

    I would, however, treat it like a job interview. No one in this industry is going to feel like he's getting much out of the time spent answering your questions. He's either considering hiring you or doing a favor to a friend.

    I'd read up on long / short funds generally - leverage ratios, long / short ratios, maybe know a little bit about prime brokerage and stock loan.

    If you know which sector (not clear from your post) learn a bit about that - as in recent news, some general background, etc.

    Something else useful is to talk about a stock you like. That will show (1) initiative, (2) some intrerest in the subject and (3) maybe allow you to answer general valuation questions a little more easily since you will have gone through it on your own.
     


  2. Cantabrigian

    Cantabrigian Senior member

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    Because it bears repeating, do not call and pretend to be a potential investor to get more information.

    200mm is a very small fund - they will quickly figure out it's you and that your somewhat shady / wasting people's time.
     


  3. Khayembii Communique

    Khayembii Communique Senior member

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    He's talking to me as a favor for a friend, but he sounds genuinely interested.

    I know mostly about all of the topics you mentioned, generally speaking, which makes me feel better, though today I'm going to be researching a ton. It focuses on the healthcare sector so I'm probably going to read up on that and maybe research some of their top holdings. Based on their SEC filings I can see their long positions but they seem to mostly change quarterly; is this common?

    I didn't call or ask for a login or anything, I'm just going to talk to the guy about what I know.
     


  4. Cantabrigian

    Cantabrigian Senior member

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    The top holdings could change weekly or perhaps even more frequently than that. Probably not but possibly.

    I wouldn't focus so much on a set of names. He doesn't care what you think of his fourth biggest holding though it will be good to bring up the fact that you looked at the list.

    What are the main stories in healthcare now? Which stocks have moved a lot recently and why? How do you think about a healthcare company - do you guess what will be approved by the FDA? Do you look for something with a strong, stable stream of revenue and buy that whenever the market sells off at it gets cheap?

    How is an insurer different from pharma is different from medical devices?

    To what extent do those stocks move with the larger market? Are the cyclical or counter cyclical?

    I know the answer to zero of those questions but if I were you, I'd have some idea bout that stuff. And that's where I'd spend my time rather than on which stocks showed up in their last 10Q.
     


  5. Khayembii Communique

    Khayembii Communique Senior member

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    I see what you're getting at. TBH I don't think he'll expect me to know much considering I'm trying to find an entry level position but I'd like to be prepared. I'm more concerned with their overall strategy and will probably ask questions to that extent instead of trying to get too detailed and getting in over my head.
     


  6. aspasp

    aspasp Senior member

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    It's hard to get a job on the buy side when it seems like you haven't done too much in finance already right?
     


  7. Khayembii Communique

    Khayembii Communique Senior member

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    Lol which is why this guy's speaking with me as a favor and not as a potential hire.
     


  8. Cantabrigian

    Cantabrigian Senior member

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    Long short HFs buy some stocks and sell short others in order to make money. Nothing more to it than that.

    Since they have a sector focus, I can guarantee you that they're fundamental rather than technical.

    If you aren't going to get into the sector, make sure you brush up in the basics - balance sheet, income statement and how they relate to each other.
     


  9. Khayembii Communique

    Khayembii Communique Senior member

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    I know they're fundamental, and that they focus primarily in emerging markets and take a "private-equity approach to investing". What that means specifically is where I am somewhat confused; I am guessing that means they look for companies with solid growth prospects in emerging markets, but I don't understand how that could be done in the short term if their portfolio is turning over so rapidly; would that simply mean they take a PE approach to equity valuation, and then leverage a long position to amplify returns on the spread?

    I suppose there are a variety of ways in which "private-equity approach to investing" could be interpreted but that's what I immediately thought when I heard it.

    I found these two documents which help, if anyone's interested.

    http://www.jlem.com/articles/jlem/LongShortEquityInvesting.pdf
    http://www.lindzon.com/docs/understanding.pdf
     
    Last edited: Sep 25, 2012


  10. Cantabrigian

    Cantabrigian Senior member

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    That is odd. PE approachfor a HF usually means that they'd take big stakes in companies (enough to give them a say in how things are run) and hold the stake for a while. So it is weird that the holdings change pretty frequently.
     


  11. Khayembii Communique

    Khayembii Communique Senior member

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    Okay, so based on your post it sounds like I'm right.

    I was wrong though on their holdings. I just looked at their past three filings and the majority of their most recent quarter-end filing holdings they have held for the past three quarters, and they probably go further back than that. However their stakes in these companies certainly aren't high. The 13G's they filed have like up to 12% ownership max (mostly less than 6%).
     
    Last edited: Sep 26, 2012


  12. Cantabrigian

    Cantabrigian Senior member

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    That's actually a decent percentage of a company. They probably won't get a board seat but management will talk to them.
     


  13. Khayembii Communique

    Khayembii Communique Senior member

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    Meh, went okay. He's actually just the CFO and not a manager so we didn't get technical, really. He just told me about his background, an overview of how his fund works then we started talking about me and how I could position myself to get in. Went about as well as it could have but I'm just disappointed he didn't offer to bring me on as a partner. :confused:
     


  14. AriGold

    AriGold Senior member

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    Don't worry about it man, something may come up you never know. At least you're on his radar.

    You're in WI? Man we should hang out i'm across the lake. We can talk banking/finance together. Whattdya say?
     


  15. Cantabrigian

    Cantabrigian Senior member

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    +1

    These informal things never result in something right away. You never know when a friend of his will be looking for someone and he can mention you. Given the environment now and your undergrad background, I'd focus on b-school.
     


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