Tuesday, October 13, 2009
Banking or Bust--A Year Later
Ken Alozie's Bankingorbust website is now over a year old and continues to be useful to anybody in the early years of a career in investment banking and corporate finance--whether you are a first-year MBA student or a banking associate hustling to become a vice president.
Alozie is a Consortium alumnus from Michigan's Ross School, who worked at Lehman Brothers in corporate finance, among other firms. He has experience in mergers and acquisitions and leveraged buy-outs.
The site offers a textbook worth of information, guidance, tidbits, reminders, and warnings. It focuses on all aspects of technical skills and requirements. Banks and funds hire associates, assuming a minimal level of technical competence. Business schools teach this level of expertise. Alozie's site tries to package and summarize some of that expert knowledge.
Don't think of it as your first-course business-school finance text. It avoids details of theory and offers concrete summaries of what you need to know to do deals, to value firms, to assess debt capacity, to recapitalize balance sheets, to merge firms, or to issue stock publicly. In some ways, it is a focused refresher; in other ways, it's the real-world approach to corporate finance.
Accounting is the foundation of finance; hence, the site helps you improve your understanding of accounting concepts--especially those that help you improve modeling skills in preparing cash-flow projections, valuing firms, or analyzing of financial statements.
Beyond technical summaries, the site provides lots of tidbits and reminders. In a business driven (besides elaborate technical models) by people, contacts and networks, the site offers a long list of people you should know and why you should know them. For example, bankers ought to know who the leaders in the industry are--today or historically, heroes or villains (Carl Icahn, William Donaldson, or Dick Fuld). Or the few leaders who happen to be women or people of color (Ray McGuire at Citi, Kenneth Chenault at American Express, or John Rodgers at Ariel).
For students, the site helps in preparing for interviews--not just informational interviews, but tough, mind-boggling technical interviews where banks put students on the spot with technical questions that might stump even experienced managing diretors.
There are also tips and hints on how to be more competent with Excel spreadsheets and using them to create or devise the most esoteric of financial scenarios.
A glossary is included and helps students and professionals in transition with the industry's jargon--whether they are buzz words flaunted at cocktail gatherings or arcane accounting terminology used to merge two firms. Each term is described clearly and succinctly.
As a Consortium alumnus, Alozie designed the site with other Consortium students and alumni in finance in mind. Investment banking, private equity, or investment management can be contrued as one big, hard-to-penetrate club. The stakes are high, the risks enormous, and the payouts (in certain years) handsome. That makes the club hard, near-impossible to join. Alozie tries to help knock down doors to find an entrance to it.
A year later, Alozie continues to update the site. Today, he himself is polishing his own skills, expertise and experiences by studying for a Masters in finance at London Business School before he re-enters the club.