Vault career guide to sales and trading 2007 pdf

Skip to content Skip to main nav. Getting Hired: Practical information on researching potential employers, networking, interviewing and getting in the door. On the Job: A look at life on the job and the industry culture. Talk Like a Pro: A glossary of industry jargon and key terms.

The human resources HR profession has changed a great deal over the past 15 years. Once seen as only administrative, HR now plays a major role in helping organizations run better and employees become more satisfied.

This Vault guide gives you the inside scoop on careers in HR, including recruiting, training and development, labor and employee relations, compensation and benefits and more.

Want to land a job or career in the private wealth management industry but don't know where to start? The Vault Career Guide to Private Wealth Management takes you inside the industry to make sure you can land the job you want. It covers the basics of equity and fixed income products to market and regulatory trends, and dissects career paths and job responsibilities at the both large and small firms.

The reasons for issuing bonds rather than stock are various. Perhaps the stock price of the issuer is down, and thus a bond issue is a better alternative. Or perhaps the firm does not wish to dilute its existing shareholders by issuing more equity. Or perhaps a company is quite profitable and wants the tax deduction from paying bond interest, while issuing stock offers no tax deduction.

These are all valid reasons for issuing bonds rather than equity. Sometimes in down markets, investor appetite for public offerings dwindles to the point where an equity deal just could not get done investors would not buy the issue.

The bond offering process resembles the IPO process. As covered in Chapter 5, the better the credit rating—and therefore, the safer the bonds—the lower the interest rate the company must pay on the bonds to entice investors to buy the issue. Clearly, a firm issuing debt will want to have the highest possible bond rating, and hence pay a lower interest rate. As with stock offerings, investment banks earn underwriting fees on bond offerings in the form of an underwriting discount on the proceeds of the offering.

The percentage fee for bond underwriting tends to be lower than for stock underwriting. For more detail on your role as an investment banker in stock and bond offerings, see Chapter 8. The major difference between a loan offering and either a bond or an equity offering is that a loan offering is a private process. As the loan is a private security, investors are given private information, such as forward-looking financials, and are restricted from investing in the same company in other public markets.

To get around this distinction, many institutional investors will request public- only information, so that they might play in any market they desire. The issuance process for a syndicated loan is very similar to the bond offering process. Unlike a bond offering, a loan offering generally does not involve a roadshow process.

Another subtle difference in loan offerings is that they are not always underwritten. For more information about the differences in the issuance of loans versus bonds, refer to the Vault Career Guide to Leveraged Finance. The s were the decade of friendly mergers, dominated by a few sectors of the economy. Mergers in the telecommunications, financial services, and technology industries were commanding headlines, as these sectors went through dramatic change, both regulatory and financial.

But giant mergers were occurring in virtually every industry witness one of the biggest of them all, the merger between Exxon and Mobil. In , the market hit bottom, decreasing in total volume by 40 percent. One must realize that existing shareholders must be convinced to sell their stock. Few shareholders are willing to sell their stock to an acquirer without first being paid a premium on the current stock price.

In addition, shareholders must also capture a takeover premium to relinquish control over the stock. The large shareholders of the target company typically demand such an extraction. These terms are often used interchangeably in the press, and Visit the Vault Finance Career Channel at www.

Acquisition — When a larger company takes over another smaller firm and clearly becomes the new owner, the purchase is typically called an acquisition on Wall Street. Typically, the target company ceases to exist post-transaction from a legal corporation point of view and the acquiring corporation swallows the business.

The stock of the acquiring company continues to be traded. Merger — A merger occurs when two companies, often roughly of the same size, combine to create a new company. For example, both Chrysler and Daimler-Benz ceased to exist when their firms merged, and a new combined company, DaimlerChrysler was created.

Or perhaps a big public firm aims to buy a competitor through a stock swap. Representing the target An I-bank that represents a potential seller has a much greater likelihood of completing a transaction and therefore being paid than an I-bank that represents a potential acquirer.

Often, sell-side representation comes when a company asks an investment bank to help it sell a division, plant or subsidiary operation. If the client hopes to sell a semiconductor plant, for instance, the I-bankers will contact firms in that industry, as well as buyout firms that focus on purchasing technology or high-tech manufacturing operations.

Buyout Firms and LBOs Buyout firms, which are also called financial sponsors, acquire companies, either private or public. To complete an LBO, the financial sponsor invests some of its own cash, while borrowing other cash in the form of loans and bonds. These buyout firms also called LBO firms implement a management team they trust, improve sales and profits, and ultimately seek an exit strategy usually a sale or IPO for their investment within a few years.

These firms are driven to achieve a high return on investment ROI , and focus their efforts toward streamlining the acquired business and preparing the company for a future IPO or sale. It is quite common that a buyout firm will be the selling shareholder in an IPO or follow-on offering. There are a number of major financial sponsors that have raised billions of dollars each for purchasing companies. Morgan Partners, Blackstone, Thomas H. Yet with so much money left to invest, it appears the best is yet to come.

With so much money chasing these private companies, it comes as little surprise that some of the largest LBOs of all time were executed in Buy-side work is an entirely different animal. The advisory work itself is straightforward: the investment bank contacts the firm their client wishes to purchase, attempts to structure a palatable offer for all parties, and makes the deal a reality.

Again, the initial contact may be from the acquiring company. However, most of these proposals do not work out; few firms or owners are readily willing to sell their business.

And because the I-banks primarily collect fees based on completed transactions, their work often goes unpaid. Deals that do get done, though, are a boon for the I-bank representing the buyer because of their enormous profitability.

Typical fees depend on the size of the deal, but generally fall in the one-two percent range. A private placement differs little from a public offering aside from the fact that a private placement involves a firm selling stock or equity to private investors rather than to public investors. In this sense, it is very similar to a loan offering. Also, a typical private placement deal is smaller than a public transaction. Despite these differences, the primary reason for a private placement—to raise capital—is fundamentally the same as a public offering.

Why private placements? As mentioned previously, firms wishing to raise capital often discover that they are unable to go public for a number of reasons. The company may not be big enough; the markets may not have an appetite for IPOs, the company may be too young or not ready to be a public company, or the company may simply prefer not to have its stock be publicly traded.

Such firms with solidly growing businesses make excellent private placement candidates. Often, firms wishing to go public may be advised by investment bankers to first do a private placement, as they need to gain critical mass or size to justify an IPO.

Private placements, then, are usually the province of smaller companies aiming ultimately to go public. The process of raising private equity or debt changes only slightly from a public deal. One difference is that private placements do not require any securities to be registered with the SEC, nor do they involve a roadshow.

In place of the prospectus, I-banks draft a detailed Private Placement Memorandum PPM for short which divulges information similar to a prospectus. Instead of a roadshow, companies looking to sell private stock or debt will host potential investors as interest arises, and give presentations detailing how they will be the greatest thing since sliced bread. Often, one firm will be the sole or lead investor in a private placement.

In other words, if a company sells stock through a private placement, often only a handful of institutions will buy the stock offered. Conversely, in an IPO, shares of stock fall into the hands of literally thousands of buyers immediately after the deal is completed.

The bankers attempt to find a buyer by writing the PPM and then contacting potential strategic or financial buyers of the client. In the case of equity private placements, however, financial buyers are typically venture capitalists rather than buyout firms, which is an important distinction. Note that the same difference applies to private placements on the sell-side.

A sale occurs when a firm sells greater than 50 percent of its equity giving up control , but a private placement occurs usually when less than 50 percent of its equity is sold. Note that in private placements, the company typically offers convertible preferred stock, rather than common stock. In the case of debt private placements, the buyers tend to be insurance companies and other institutional investors that might be restricted as to the securities they can purchase.

However, as with equity private placements, the number of buyers tends to be small, often only a handful.

Debt private placements are structured nearly identically to high yield bonds. Because private placements involve selling equity and debt to a single or limited number of buyers, the investor and the seller the company typically negotiate the terms of the deal. Investment bankers function as negotiators for the company, helping to convince the investor of the value of the firm. Fees involved in private placements work like those in public offerings. Usually they are a fixed percentage of the size of the transaction.

Of course, the fees depend on whether a deal is consummated or not. Financial Restructurings When a company cannot pay its cash obligations—for example, when it cannot meet its bond interest payments or its payments to other creditors such as vendors —it usually must file for bankruptcy court protection from creditors.

On the other hand, it can also restructure and remain in business. This restructuring, where the company remains in business, is often referred to as Chapter 11 bankruptcy. Conversely, when the firm is liquidated, this is referred to as Chapter 7 bankruptcy. What does it mean to restructure? The process can be thought of as twofold: financial restructuring and organizational restructuring. Restructuring from a financial viewpoint involves renegotiating payment terms on debt obligations, issuing new debt, and restructuring payables to vendors.

From an organizational viewpoint, a restructuring can involve a change in management, strategy and focus. In order to continue operating, the bankruptcy court will generally allow a restructuring of debt to include DIP Debtor-in-Possession loans. The topic of DIP loans brings about an interesting point. In the event of Chapter 7 liquidation, the most senior creditors are paid out first by the proceeds of the asset sale s.

Usually, once the debt holders have been paid out, there will be little to no value remaining for equity holders. This seniority is one of the many reasons that equity is essentially riskier than debt.

DIP loans are generally the most senior secured debt, followed by other loans, which are often secured. Bonds are usually senior or junior debt, but not secured. Finally, convertible notes are junior to regular bonds, preferred equity comes next, and common equity brings up the rear. A number of other examples come from an industry that is constantly wrestling with bankruptcy, the airlines.

Specifically, United Airlines operated for over 3 years in bankruptcy, exiting in July Aside from the airlines, bankruptcy stretches to many other household names including Eddie Bauer, Texaco, and even Interstate Bakeries, which owns Wonder Bread, Twinkies, and Hostess brands.

Although bankrupt companies are generally very risky investments, there stands to be a large reward if they are able to exit, or even improve their financial performance. A few well-known hedge funds that invest in distressed debt securities include Cerberus Capital, Highland Capital, and Oaktree Capital Management. Fees in restructuring work Typical investment banking fees in a restructuring depend on what new securities are issued post-bankruptcy and whether the company is sold,. However, the fees generally include a retainer fee paid upfront to the investment bank.

When a bank represents a bankrupt company, the brunt of the work is focused on analyzing and recommending financing alternatives. Thus, the fee structure resembles that of a private placement. How does the work differ from that of a private placement?

Because a firm in bankruptcy already has substantial cash flow problems, investment banks often charge minimal monthly retainers, hoping to cash in on the spread from issuing new securities or selling the company. Like other offerings, this can be a highly lucrative and steady business. This can be primarily traced to an overall healthy economy and record-low interest rates. However, as the credit cycle tends to ebb and flow, it is expected that sooner or later, many more firms will be declaring bankruptcy, which will translate into increased I-banking restructuring activity.

The stereotype of the corporate finance department is stuffy, arrogant white and male MBAs who frequent golf courses and talk on cell-phones nonstop. While this is increasingly less true, corporate finance remains the most white-shoe department in the typical investment bank. The atmosphere in corporate finance is, unlike that in sales and trading, often quiet and reserved. Junior bankers sit separated by cubicles, quietly crunching numbers. Depending on the firm, corporate finance can also be a tough place to work, with unforgiving bankers and expectations through the roof.

Although decreasing, stories of analyst abuse run rampant and some bankers come down hard on new analysts simply to scare and intimidate them. The lifestyle for corporate finance professionals can be a killer. In fact, many corporate finance workers find that they literally dedicate their lives to the job. Social life suffers, free time disappears, and stress multiplies.

It is not uncommon to find analysts and associates wearing rumpled pants and wrinkled shirts, exhibiting the wear and tear of all-nighters. Fortunately, these long hours pay remarkable dividends in the form of six-figure salaries and huge year-end bonuses. Personality-wise, bankers tend to be highly intelligent, motivated, and not lacking in confidence. Money is very much a driving motivation for bankers, and many anticipate working for just a few years to earn as much as possible, before finding less demanding work.

Analysts and associates tend also to be ambitious, intelligent and pedigreed. The deal team Investment bankers generally work in deal teams which, depending on the size of a deal, vary somewhat in makeup. In this chapter we will provide an overview of the roles and lifestyles of the positions in corporate finance, from analyst to managing director.

Often, a person in corporate finance is generally called an I-banker. In fact, at most smaller firms, underwriting and transaction advisory are not separated, and bankers typically pitch whatever business they can scout out within their industry sector. The Players Analysts Analysts are the grunts of the corporate finance world. They often toil endlessly with little thanks, little pay when figured on an hourly basis , and barely enough free time to sleep four hours a night.

Typically hired directly out of top undergraduate universities, this crop of bright, highly motivated kids does the financial modeling and basic entry-level duties associated with any corporate finance deal. Modeling every night until 2 a. Furthermore, when not at the office, analysts can be found feverishly typing on their blackberries.

Not surprisingly, after two years, many analysts leave the industry. Unfortunately, many bankers recognize the transient nature of analysts, and work them hard to get the most out of them they can. The unfortunate analyst that screws up or talks back too much may never get quality work, spending his days bored until 11 p. These are the analysts that do not get called to work on live transactions, and do menial work or just put together pitchbooks all of the time.

The very best analysts often get identified early by top performing MDs and VPs, thus finding themselves staffed on many live transactions. When it comes to analyst pay, much depends on whether the analyst is in New York or not. Bonuses at this level are also force-ranked, thus identifying and compensating top talent. At most firms, analysts also get dinner every night for free if they work late, and have little time to spend their income, often meaning fat checking and savings accounts and ample fodder to fund business school or law school down the road.

At regional firms, pay typically is 20 percent less than that of their New York counterparts. Be wary, however, of the small regional firm or branch office of a Wall Street firm that pays at the low end of the scale and still shackles analysts to their cubicles. Regardless of location, while the salary generally does not improve much for second-year analysts, the bonus will dramatically increase for those second-years who demonstrate high performance. Associates Much like analysts, associates hit the grindstone hard.

Working to hour weeks, usually fresh out of top-tier MBA programs, associates stress over pitchbooks and models all night, become experts with financial modeling on Excel, and sometimes shake their heads wondering what the point is.

Unlike analysts, however, associates more quickly become involved with clients and, most importantly, are not at the bottom of the totem pole. Associates quickly learn to play quarterback and hand-off menial modeling work and research projects to analysts.

Associates who worked as analysts before grad school have a little more experience under their belts. The overall level of business awareness and knowledge a bright MBA has, however, makes a tremendous difference, and associates quickly earn the luxury of more complicated work, client contact, and bigger bonuses. Associates are at least much better paid than analysts. At most firms, associates start in August and get their first prorated bonus in January.

Newly minted MBAs cash in on signing bonuses and forgivable loans as well, especially on Wall Street. Vice Presidents Upon attaining the position of vice president at most firms, after four or five years as associates , those in corporate finance enter the realm of real bankers. The lifestyle becomes more manageable once the associate moves up to VP.

On the plus side, weekends sometimes free up, all-nighters drop off, and the general level of responsibility increases—VPs are the ones telling associates and analysts to stay late on Friday nights. On the negative side, the wear and tear of traveling that accompanies VP-level banker responsibilities can be difficult. As a VP, one begins to handle client relationships, and thus spends much more time on the road than analysts or associates.

As a VP, you can look forward to being on the road at least two to four days per week, usually visiting current and potential clients. VPs are perfect candidates to baby-sit company management on roadshows. Typically, MDs set their own hours, deal with clients at the highest level, and disappear whenever a drafting session takes place, leaving this grueling work to others. We will examine these drafting sessions in depth later.

MDs mostly develop and cultivate relationships with various companies in order to generate corporate finance business for the firm. MDs typically focus on one industry, develop relationships among management teams of companies in the industry, and visit these companies pitching ideas on a regular basis.

These visits are aptly called sales calls. Pay scales The formula for paying bankers varies dramatically from firm to firm. Some adhere to rigid formulas based on how much business a banker brought in, while others pay based on a subjective allocation of corporate finance profits. But slow markets and hence slow business can cut that number dramatically.

It is important to realize that for the most part, MDs act as relationship managers, and are essentially paid on commission. For top performers, compensation can be almost inconceivable. The Role of the Players What do corporate finance professionals actually do on a day-to-day basis to underwrite an offering? The process, though not simple, can easily be broken up into the same three phases that we described previously.

We will illustrate the role of the bankers by walking through the IPO process in more detail. Note that other types of equity or debt offerings closely mirror the IPO process.

Hiring the managers This phase in the process can vary in length substantially, lasting for many months or just a few short weeks. The length of the hiring phase depends on how many I-banks the company wishes to meet, when they want to go public, and how market conditions fare. Remember that two or more investment banks are usually tapped to manage a single equity or debt deal, complicating the hiring decisions that companies face.

MDs and sales calls Often when a large IPO candidate is preparing for an offering, word gets out on the Street that the company is looking to go public. I-bankers who have previously established a good relationship with the company have a distinct advantage. Typically, MDs meet informally with the company several times. This data, farmed out to a VP or associate and crucial to the valuation, is then used in the preparation of the pitchbook. A Word About Pitchbooks Pitchbooks come in two flavors: the general pitchbook and the deal- specific pitchbook.

Bankers use the general pitchbook to guide their introductions and presentations during sales calls. These pitchbooks contain general information and include a wide variety of selling points bankers make to potential clients.

Usually, general pitchbooks include an overview of the I-bank and detail its specific capabilities in research, corporate finance, sales and trading. The second flavor of pitchbooks is the deal-specific pitch. Deal-specific pitchbooks are highly customized and usually require analyst or associate all-nighters to put together although MDs, VPs, associates, and analysts all work closely together to create the book.

The most difficult aspect to creating this type of pitchbook is the financial modeling involved. In an IPO pitchbook, valuations, comparable company analyses, and industry analyses are but a few of the many specific topics covered in detail.

The most important piece of information in this kind of pitchbook is the valuation of the company going public. Prior to its initial public offering, a company has no public equity and therefore no clear market value of common stock. So, the investment bankers, through a mix of financial and industry expertise, including analysis of comparable public companies, develop a suitable offering size range and hence a marketable valuation range for the company.

Of course, the higher the valuation, the happier the potential client. At the same time, though, I-bankers must not be too aggressive in their valuation — if the market does not support the valuation and the IPO fails, the bank loses credibility. The pitch While analysts and associates are the members of the deal team who spend the most time working on the pitchbook, the MD is the one who actually visits the company with the books under his or her arm to make the pitch, perhaps with a VP.

The pitchbook serves as a guide for the presentation led by the MD to the company. This presentation generally concludes with the valuation. Companies invite many I-banks to present their pitches at separate meetings. These multiple rounds of presentations comprise what is often called the beauty contest or beauty pageant. The pitch comes from the managing director in charge of the deal.

For especially important pitches, an I-bank will send other top representatives from either its corporate finance, research or syndicate Visit the Vault Finance Career Channel at www. We will cover the syndicate and research departments later. Some companies opt to have their board of directors sit in on the pitch — the MD might face the added pressure of tough questions from the board during the presentation.

Selecting the managers After a company has seen all of the pitches in a beauty contest, it selects one firm as the lead manager, while some of the other firms are chosen as the co-managers. The number of firms chosen to manage a deal runs the gamut.

Sometimes a firm will sole manage a deal, and sometimes, especially on large global deals, four to six firms might be selected as managers. An average-sized offering will generally have three to four managers underwriting the offering—one lead manager and two or three co- managers. From here, the firms are organized from left to right, in order of importance. All parties in the working group involved in the deal meet for the first time, shake hands and get down to business.

The attendees and their roles are summarized in the table below. A research analyst may come for due diligence meetings. The co-manager s , or I-banking team with typically two or three I-bank s selected members instead of four.

Details discussed at the meeting include the exact size of the offering, the timetable for completing the deal, and other concerns the group may have. Usually a two- or three-month schedule is established as a beacon toward the completion of the offering. A sheet is distributed so all parties can list home, office, and cell phone numbers. Often, the organizational meeting wraps up in an hour or two and leads directly to due diligence. Due diligence Due diligence involves studying the company going public in as much detail as possible.

Much of this process involves interviewing senior management at the firm. Historically, this used to be a physical room at the company, but now is generally an online site. As with the organizational meeting, the moderator and lead questioner throughout the due diligence sessions is the senior banker in attendance from the lead manager.

While bankers tend to focus on the relevant operational, financial, and strategic issues at the firm, lawyers involved in the deal explore mostly legal issues, such as pending litigation. Drafting the prospectus Once due diligence wraps up, the IPO process moves quickly into the drafting stage. Drafting refers to the process by which the working group writes the S-1 registration statement, or prospectus.

This prospectus is the legal document used to shop the offering to potential investors. Unfortunately, writing by committee means a multitude of style clashes, disagreements, and tangential discussions, but the end result usually is a prospectus that most team members can live with.

On average, the drafting stage takes anywhere from four to seven drafting sessions, spread over a six- to week period. Initially, all of the top corporate finance representatives from each of the managers attend, but these meetings thin out to fewer and fewer members as they continue. The lead manager will always have at least a VP to represent the firm, but co- managers often settle on VPs, associates, and sometimes even analysts to represent their firms.

Drafting sessions are initially exciting to attend as an analyst or associate, as they offer client exposure, learning about a business, and getting out of the office. However, these sessions can quickly grow tiring and annoying.

Final drafting sessions at the printer can mean more all-nighters, as the group scrambles to finish the prospectus in order to file on time with the SEC. Printers are employed by companies to print and distribute prospectuses.

A typical public deal requires anywhere from 10, to 20, copies of the preliminary prospectus called the red herring or red and 5, to 10, copies of the final prospectus. Printers receive the final edited version from the working group, literally print the thousands of copies in-house and then mail them to potential investors in a deal. The list of investors comes from the managers.

As the last meeting before the prospectus is completed, printer meetings can last anywhere from a day to a week or even more. Why is this significant? Vault Career Guide to Investment Banking Corporate Finance companies are eager to move onto the next phase of the deal. This amounts to loads of pressure on the working group to finish the prospectus. For those in the working group, perfecting the prospectus means wrangling over commas, legal language, and grammar until the document is error-free.

Nothing is allowed to interrupt a printer meeting, meaning one or two all-nighters in a row is not unheard of for working groups.

On the plus side, printers stock anything and everything that a person could want to eat or drink. Needless to say, an abundance of coffee and fattening food keeps the group going during late hours. Marketing Designing marketing material Once a deal is filed with the SEC, the prospectus or S-1 becomes public domain.

The information and details of the upcoming IPO are publicly known. After the SEC approves the prospectus, the printer spits out thousands of copies, which are mailed to literally the entire universe of potential institutional investors. In the meantime, the MD and VP of the lead manager work closely with the CEO and CFO of the company to develop a roadshow presentation, which consists of essentially 20 to 40 slides for use during meetings with investors.

Junior team members in corporate finance help edit the roadshow slides and begin working on other marketing documents. The roadshow babysitting The actual roadshow begins soon after the reds are printed. The preliminary prospectus, called a red herring or red, helps salespeople and investors alike Visit the Vault Finance Career Channel at www.

Using the prospectus and the selling memo as references, the salespeople of the investment banks managing the deal contact the institutional investors they cover and set up roadshow meetings. The syndicate department, the facilitators between the salesperson and corporate finance, finalizes the abundance of meetings and communicates the agenda to corporate finance and sales. And, on the roadshow itself, VPs or associates generally escort the company.

Despite the seemingly glamorous nature of a roadshow traveling all over the country in limos and chartered jets with your client, the CEO , the corporate finance professional acts as little more than a babysitter.

The most important duties of the junior corporate finance professionals often include making sure luggage gets from point A to point B, ensuring that hotel rooms are booked, and finding the limousine driver at the airport terminal. After a grueling two to three weeks and literally hundreds of presentations, the roadshow ends and the group flies home for much needed rest. The book details how investors have responded, how much stock they want if any , and at what price they are willing to buy into the offering.

This range is preset by the underwriting team before the roadshow and meant to tell investors what the company is worth and hence where it will price. Highly sought-after offerings will price at or even above the top of the range and those in less demand will price at the bottom of the range.

Hot IPOs with tremendous demand end up above the range and often trade up significantly on the first day in the market. The hottest offerings have closed two to three times higher than the initial offering price.

Memorable examples include Apple Computer in the s, Boston Chicken in the mids, and Netscape Communications and a slew of Internet stocks in late through early The process of going public is summarized graphically on pages More recently, though, hot offerings have seen more modest first-day rises. The biggest reason is that they have an already agreed-upon and approved prospectus from prior publicly filed documents. The language, content, and style of the prospectus usually stay updated year to year, as the company either files for additional offerings or files its annual report officially called the 10K.

They may not even have to develop a pitchbook to formally pitch the follow-on if the relationship is sound. Because the banking relationship is usually between individual bankers and individual executives at client companies, bankers can often take clients with them if they switch banks.

Because of their relative simplicity, follow-ons and bond deals quickly jump from the manager-choosing phase to the due diligence and drafting phase, which also progresses more quickly than it would for an IPO. The roadshow proceeds as before, with the company and a corporate finance VP or associate accompanying management to ensure that the logistics work out.

But because deals are similar, you might be able to conjure up a typical week in the life of an analyst, associate, vice president, or managing director in corporate finance. Analysts, especially those in their first year, spend countless hours staring at their computer monitors and working until midnight or all night. Many analysts do nothing but put together pitchbooks and models, rarely seeing the light of day. Hard working and talented analysts, however, tend to find their way out of the office and become involved in meetings related to live transactions.

A typical week for an analyst might involve the following: Monday Up at a. Monday morning, the analyst makes it into the office by 9. Lunch is a leisurely forty-five minutes spent with other analysts at a deli a few blocks away. Dinner is delivered at 8 and paid for by the firm, but this is no great joy — it is going to be a late night because of the model.

At midnight, the analyst has reached a stopping point and calls a car service to give him a free ride home. Tuesday The next day is similar, but the analyst spends all day working on a pitchbook for a meeting on Wednesday that a banker has set up. Of course, the banker waited until the day before the meeting to tell the analyst about it. After working all night and into the morning, including submitting numerous changes to the hour word processing department, the analyst finally gets home at 5 a.

Wednesday Unfortunately, there is a scheduled drafting session out of town on Wednesday relating to another transaction, and the flight is at 8 a. Many hours and coffees later, the VP and analyst get back on the plane, where the analyst falls dead asleep. After the flight touches down, the analyst returns to the office at 8 p. At midnight, the analyst heads home. He frantically works to complete a merger model: gathering information, keying in data, and working with an associate looking over his shoulder.

By the time he and the associate have finished the analysis, it is 1 a. Friday Friday is even worse. The merger model is delivered to the hands of the senior VP overseeing the work, but returned covered in red ink.

Changes take the better part of the day, and progress is slow. Projections have to be rejiggered, more research found, and new companies added to the list of comps. At 11 p. Saturday Even Saturday requires nearly 10 hours of work, but much of the afternoon the analyst waits by the phone to hear from the VP who is looking at the latest version of the models.

Sunday No rest on Sunday.