Sunday, February 9, 2020

The Art and Science of Finance


After interning in New York City this past summer, I was fortunate enough to receive a full-time offer to be an investment banking analyst starting in August 2020. The role is focused on mergers and acquisitions in the financial institutions' space (insurance, banks, asset management, etc.). To best prepare myself for the role, I decided to take a class this Spring related to mergers and acquisitions. The course is designed for TCU MBA students, but they allowed several undergraduates to take the class. I thought that surrounding myself with professionals would promote intellectual growth and give me knowledge regarding real-world experiences.

My internship this past summer gave me great insight into the investment banking industry. Although I have heard a lot about the industry as I prepared for my interviews, I never fully grasped the role and responsibilities of an investment banking analyst. It was indeed an experience I had to do myself and could not merely read about it. There are so many nuances in the industry, and it helped me realize that most jobs I have in the future will rely on my ability to learn on the job.

My Mergers & Acquisitions class has proved to be a worthwhile experience thus far. Several of the MBA students have had experiences in valuation services and the private credit space that provide light on many scenarios that I have not had the opportunity to work on yet. Each week we are assigned multiple "cases" to analyze and prepare responses to a given financial transaction. For example, we did a case regarding the potential acquisition of Pixar by Disney. We read the background information regarding the two companies and perform analysis to come to an opinion regarding the possible financial transaction. Each class period is entirely discussion-based and provides tremendous insights into others' points of view regarding the scenario. It is an excellent experience to hear the opinions of many well-informed MBA students regarding various financial transactions and financial structures for the transactions.

One of the most exciting aspects of finance is that it is both an art and a science. The MBA students have provided great insight into this industry. Although the numbers may show one story, the intangible aspects of a financial transaction may offer more insight into whether the project is or is not a good idea. Often, a financial transaction may be a great idea on paper. Yet, it may not be an excellent idea execution wise. One of the difficulties surrounding the acquisition of Pixar by Disney was the drastic differences in company cultures.

Furthermore, the financials of the transaction described the transaction in a negative light. However, the class concluded that Disney would lose market share without partnering with Disney and made the most sense for Disney to make the acquisition of Pixar. As we know, Disney did, in fact, acquire Pixar in real-life, and it has been one of Disney's most successful partnerships since inception.

The learning experiences I have had in this M&A class in a few short weeks have provided me great insight into the mergers and acquisition space. I have learned from MBAs, and the other undergraduates in this class as people viewed the transaction from a different perspective than my own. By hearing these perspectives, I have been able to recognize my own biases and better analyze cases in the future. I hope to further my knowledge surrounding the M&A (mergers and acquisitions) space to best prepare myself for my future role as an investment banking analyst.

1 comment:

  1. congratulations on your successful internship and job offer. Good for you, Ben. Thanks for the great post.

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