Alex is moving on in his career and after his experience in Danone, he explains us his next move to Lazard.

Hi Alex, could you introduce yourself  please?

Hi Philippe, sure. I am the son of a French salesman and a Cuban-American mother. I was raised in France and Asia, with over twenty stays in the USA. I ended up pursuing my studies in France and I am very interested in international relations, business development and finance at a global level. To me, when you add cross-cultural complexity to business relationships, it adds endless depths of worthwhile challenge to all the aspects of your job. Before graduating with a Master’s degree, I took a gap year to go work in the People’s Republic of China and experience the dynamic and changing environment there. I held positions at Mazars and Danone, which gave me the chance to experience many aspects of international business in China and Chinese culture. After obtaining my Master’s degree in Paris, I decided to do a 6th-month internship at Lazard’s in the Equity Capital Markets team in Paris.

What was does an Equity Capital Markets team do ?

In most leading investment banks, the Equity Capital Markets team is part of the investment banking division. The team focuses on helping companies raise capital on financial markets, through a variety of “products”. The main products are new company shares, bonds convertible into shares at the option of the holder, bonds exchangeable into shares that the issuing company owns in another company, the disposal of stock that a company owns from another company, etc. The role of the investment bank is to help tailor and price a product to meet the company’s needs and reduce its cost of financing. There are different moments in the financial cycles which favor certain products over others. For example, today, convertible bonds offer many advantages over capital increases through the issue of new shares. There are many reasons and metrics which lead to such conclusions, but we won’t get into the details here.

What professionals work in an Equity Capital Markets team ?

The ECM team is composed of an “origination” team which pitches companies and advises them on potential transactions, a syndication desk which manages the execution of deals by building a “book” of investors who are willing to subscribe to the offering by the company, and law professionals who participate in writing out and approving the contracts, such as the “terms sheets”, in which investors will find the description and the price of a product, and the underwriting contract in which banks pledge to underwrite part of the amount the company intends to offer.

What did you like in your job ?

It was at the crossroads of financial and market analysis, valuation, financial markets and marketing. I was able to work on many different companies and sectors and learned a lot about the drivers of financial markets.

What was your best experience at Lazard ?

Lazard, along with Natixis, the French bank with which it signed a partnership, was a Joint Bookrunner on Air France-KLM’s €661 million convertible bond offering on June 18th, which means it had a leading role in managing the deal amongst the other banks which were part of the bank syndicate that underwrote the deal. I remember it was the first pitch I had worked on when I started at Lazard. The preparation of the operation itself was challenging, because of the Air France Flight 447 plane crash on June 1st and the French State’s 15.7% stake in the airline company.

What are the basic skills one needs to succeed in investment banking ?

I guess I won’t be a prophet by saying the ability to work long hours and handle important issues at the last minute. That’s true, especially in ECM, many deals are patched up in a limited amount of time, especially because financial markets move fast and companies also monitor what their competitors do before deciding to launch an operation of their own. One has to know how to work fast, to extract core ideas from data and be pragmatic. The job is very detail-oriented, although we drastically improve these skills with the job. Above all, being ambitious with the quality of your work you want to hand in, knowing how to work as a team and sharing knowledge all the time, for the sake of efficiency and your teammates’ learning curve, are key elements for a well-rounded investment banker, just like it may be the case in many other jobs in fact.

Amidst the current financial crisis, what is your point of view on the future of the job and the role of investment banks ?

We could definitely discuss this interesting topic for hours, days and weeks! The current crisis will definitely determine many things in the future, both for financial institutions and for our generation of young graduates. In my opinion, when you’re in the business, you can already notice signs that the financial markets are gradually being reshaped with certain products being contained. For instance, credit default swaps, which were the atomic product that brought A.I.G. tumbling down, will not be able to be easily negotiated over-the-counter any more and contracts will probably have to obtain mandatory registration in clearing rooms. More generally speaking, the model of the independent investment bank has already disappeared. The market is going to favor a consolidation of diversified players which can operate both segments of financing, namely retail banking and corporate banking. Banks such as Lehman Brothers which were extremely leveraged and not diversified will never have the aura and confidence of investors as in the past. Therefore, market demand and expectations will also contribute to the remodeling of banks, and probably even more than regulation will, which in my opinion is a good thing because it would show that the market punishes the mistakes that developed fatal risks in the past. However, independent financial authorities, backed by governments, should always have the last word and set the rules. If you’re interested in pursuing a career in banking, there will be a lot of opportunities. My first recommendation would be to look into all the different aspects of banks and be sure to aim for the job that suits you most. Many jobs in banks are not promoted as much as they should be and many new positions will be created, especially in risk management for example. Moreover, as we gradually gain experience and hold senior positions in the field, I think we can set out and look for what we can do to improve the way we work, the business of our bank and the standard of its services. As a banker, the quality of advice and understanding of market trends and risks is key to the added value you can bring to clients and the competitive advantage of your bank. As soon as you have a long-term approach, I assume you realize that there is a lot of challenging and interesting work waiting for you if you’re ready to tackle the job!

Thank you for your time Alex.

Thank you Phil, I hope the big picture of my short experience will be useful to others.