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April 9, 2008
The Student Finance Association at Louisiana State University’s annual trip to New York City began early on Saturday, March 15th. During the five day trip, members of the SFA at LSU were given the opportunity to see the translation of their education in finance into the actual workings of some of the industry’s top companies. The trip was comprised of meetings with various companies, LSU alumni, and sight-seeing. Having arrived in New York City at noon, we had the opportunity to become familiar with the city, exploring the many attractions that the city has to offer for the rest of that afternoon and Sunday.
Our first meeting was Monday morning with a financial information software company named FactSet. FactSet provides services to a wide range of clients, such as, investment banks, portfolio managers, and private equity firms. The company is growing rapidly and currently has a 10% market share in its industry. FactSet is also the name of the company’s software program that gives financial professionals quick and user-friendly access to financial information. During our visit with the company, we were given an actual demonstration of FactSet’s capacity to provide one of the most advanced financial information research tools on the market. LSU finance students will soon have the opportunity to benefit from the company’s innovative research tools as every computer in the SMART lab will be installed with FactSet before the end of the semester. At the end of our visit with the company, our contacts at FactSet even offered to come down to LSU to give a demonstration once FactSet is installed in the SMART lab.
The second meeting on Monday was with Michael Linn from Blackrock, a provider of global investment management, risk management, and advisory services to institutional and retail clients around the world. Mr. Linn, an LSU alum, inspired all of us with his distinguished and exciting career path. He manages a fund-of-funds that invests in hedge funds and also private equity. It may be said of hedge fund managers that many are called but few are chosen, as fund-of-funds managers require extensive training, skill, and experience to obtain the position. The most interesting aspect of the meeting was his explanation of his fund management techniques and his personal advice about how to achieve such success.
Our last meeting of the day took us to Broadpoint Securities. Broadpoint Securities offers services in primary issuance and secondary trading of mortgage-backed securities, asset-backed securities, collateralized mortgage obligations and derivatives, and commercial mortgage backed securities, as well as capital raising services. It serves individuals and small to mid-sized companies in the United States. Steve Corwen of Broadpoint explained how the company values collateralized mortgage obligations (CMOs) and answered all our questions about the industry. During the meeting, we received a Bloomberg print-out of a CMO and were shown what the professionals look for in its valuation. In light of the recent mortgage crisis, it was very interesting to learn more about the important valuation indicators of a CMO. We then concluded our educational and productive day with a group dinner in Little Italy which has been one of the nice traditions of annual SFA at LSU New York trips.
Tuesday morning we got a tour of the impressive, ultra-modern Bloomberg headquarters. Bloomberg is an information-services, news and media company that provides business and financial professionals with the tools and data they need in decision-making. Bloomberg is by far the most widely used financial information services provider in the world. There was a Bloomberg terminal at every company we visited, indicating the importance of getting the Bloomberg certification as a finance student at LSU.
In the afternoon, John C. Calabrese and Jing Liu from Guggenheim Capital Markets invited us to lunch at a unique New York City restaurant. Guggenheim is a boutique-trading firm focused on asset-backed and structured fixed-income products. Some examples of their products include residential/commercial mortgage backed securities, and CDOs. The presentation started with the explanation of pass-throughs and continued into the different, more profitable, structured fixed-income products. These structured products are more profitable for Guggenheim because investors with different risk appetites can be reached while paying a lower overall coupon. The presentation was given by Jing , another LSU alum, demonstrating once again that a MS in Finance graduate from LSU can become successful on Wall Street. Tuesday evening we had a relaxed dinner hosted by Mr. Morales at his hotel with the entire group, Mr. Calabrese, and Jing. In the company of such finance experts, the interesting topics of dinner conversation gave us another opportunity to learn about fixed-income investments. After dinner Mr. Calabrese and Mr. Jing stressed that they are very interested in hiring the top finance students from LSU which excited each and every one of us at the prospect of such real career opportunities.
Wednesday morning we took the subway to Wall Street to visit the New York Stock Exchange, the center of the financial world. We were very fortunate to be able to set up a visit since it has become increasingly difficult to schedule visits since 9/11. During the first part of the visit, we listened to a presentation about the history with the technological improvements and the current functioning of the New York Stock Exchange. We were then brought to the actual trading floor where we all took pictures. Finally, the last item on our agenda and the highlight of our trip was our Wednesday afternoon visit at Bear Stearns. After the company’s stock price plummeted earlier in the week, and it was then taken over by JP Morgan for $2 per share, it seemed likely that our meeting would be canceled. However, they met with us anyway and we are very thankful to Mr. Jon Landis for his hospitality. We received valuable advice about how to obtain an internship at a prestigious investment bank. The recruiter emphasized that students from schools such as LSU may also obtain prestigious internships despite the fact that most investment banks recruit from higher ranked schools. She gave an example of a current employee, who graduated from a small school, that just received a full-time offer after finishing his internship. After the recruiting advice we got to see Mr. Morales, Mr. fixed-income himself, give a price on a mortgage-backed security deal. He came up with the right price after looking at Bloomberg print for no more than one minute and asking a couple questions to the Mr. Landis, a BearStearns fixed-income specialist. This experience humbled all of us and showed that we still have a lot to learn!
This trip gave us the opportunity to talk face-to-face with successful finance alumni and other significant people from Wall Street before giving them our resume. The finance alumni were very inspiring to all of us and I believe that this trip laid the foundation for a consistent influx of LSU finance students into the center of the financial world. The trip had the perfect balance between spare time that could be used to explore the city and preparing a career in finance. We were able to see up close how exciting and rewarding it is to work on Wall Street. Amongst other valuable lessons, I have realized the importance of obtaining the Chartered Financial Analyst (CFA) and Bloomberg certifications. In addition, a recurrent theme of advice throughout the trip stressed the importance of obtaining an MS in Finance rather than an MBA if one plans to work on Wall Street. Since the investment banking business is mostly learned on the job, it is not necessary to have extensive work experience such as that required by most MBA programs and a more focused curriculum such as in the MS in Finance program is preferable. This advice was very helpful since some of the students in our group are at the point of deciding between the two. Current finance students should realize that a bachelor’s and master’s degree in finance, preferably within five years, as well as Bloomberg and CFA certifications is an excellent preparation for a career on Wall Street.
This unforgettable trip would not have been possible without the extended efforts of Mr. Morales and his staff consisting of Chelsea Robertson and Taylor Schulte. Mr. Morales’ reputation and business contacts on Wall Street have been and will be of enormous value for finance students at LSU. Thus, on behalf of all the participating students I would like to thank Mr. Morales, his staff, as well as the company representatives and the LSU alumni, for giving us this great opportunity.
Arnoud Krijt
MS Finance
Louisiana State University
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