The Business Careers Handbook 2020
Corporate and asset finance
What is corporate and asset finance? Most businesses need to invest in new technology and/or equipment so they can keep growing. For larger organisations, depending on the industry, this could be anything from aircraft, rail, real-estate, mining or manufacturing equipment. Given the scale and cost of these investments, it can be difficult for organisations to raise the money they need. These investments may easily run into the millions of dollars and, as such, traditional banking loans will not suffice. Investment banks and similar advisory organisations can help fund these investments by creating a bespoke financing package. This typically involves the bank taking an equity stake in the client organisation or structuring its investment to guarantee a return. Investment banks raise the funds required by selling the merits of the investment to other private investors or organisations, who are looking to invest their excess capital. There is often an overlap with the mergers and acquisition team, which may help an organisation to acquire the assets it needs rather than developing them. Those in corporate and asset finance are on the ‘sell’ side of the investment bank, which is distinct from the bank’s investment management or ‘buy’ side, where funds managers look for projects or organisations to invest in. The separation between the two is intended to prevent conflicts of interest.
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SPECIALISATIONS
Those in corporate and asset finance are on the ‘sell’ side of the investment bank, which is distinct from the bank’s investment management or ‘buy’ side.
What is the graduate experience in corporate and asset finance? Most corporate and asset finance graduate jobs are found in larger investment banks and some specialist corporate advisory organisations. However, given the size of the investment required and the access to private investors, corporate and asset finance is most synonymous with investment banks. Most investment banks structure their corporate and asset finance units by industry. For example, these banks may have technology, communications or energy divisions. Specialisation may help to better understand the complexities within a sector and service clients who have needs specific to their industry. For example, those working within the energy sector will be more familiar with the energy market and utilities, and can therefore help to manage assets such as battery storage or smart meters. Alternatively, those within the communications division may help clients with anything from emerging smartphone technology to communication infrastructure. As a graduate, you will be expected to support the development and execution of these financing packages. Your day-to-day work may involve desktop research, financial analysis and modelling, as well as other tasks supporting the due diligence process. The purpose of much of this research is to understand how an organisation looking for investment is expected to perform and its valuation following corporate and asset financing. Within each
corporate and asset financing division, you will also find specialist roles such as sales, marketing, finance, risk and operations. While the lifestyle may at times be less intense than the mergers and acquisition team of the investment bank, the hours are still long and you are expected to contribute as required. What are your career prospects in corporate and asset finance? Working in corporate and asset finance is an excellent starting point for a career in the banking and finance industry. You will develop deep technical knowledge of asset finance, corporate lending and leasing, as well as the management of client relationships. As the corporate and asset finance division is typically part of a larger investment bank, you will have the opportunity to move into other areas if you choose. Moreover, the prestige of working at an investment bank will place you in good standing to look for other opportunities further afield, for example, in private equity, venture capital or hedge funds. Alternatively, you may choose to work at a commercial bank in other finance roles. Choose this if you have: ■ Excellent quantitative and analytical skills ■ Creative problem-solving skills ■ An interest in finance and meeting customer needs. Interested in this specialisation? Jump to
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