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Investment Banking Overview: An introduction to the industry

Goal of This Presentation. What is an Investment Bank?What are the opportunities?Learning more about the business. What Does an Investment Bank Do?. Raise capital for clientsAdvise corporations, states, or other entities on capital structure, strategy, business combinationsCreate and sell securi

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Investment Banking Overview: An introduction to the industry

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    1. Investment Banking Overview: An introduction to the industry Friday, November 3, 2006

    2. Goal of This Presentation What is an Investment Bank? What are the opportunities? Learning more about the business

    3. What Does an Investment Bank Do? Raise capital for clients Advise corporations, states, or other entities on capital structure, strategy, business combinations Create and sell securities to institutional and retail clients Manage money for institutional and retail clients Trade on a proprietary basis

    4. An Investment Bank’s Objectives To be the leading investment bank as measured by share of client activity, market rank and profitability Manage a diversified portfolio of business and asset classes, making prudent use of Firm capital Out-perform through market cycles Be the most relevant advisor to its target client base

    5. Investment Bank Organization

    6. GMI Business Construct

    7. GLOBAL MARKETS It’s not just sales and trading Global Markets encompasses sales, trading, structuring and origination activities in a variety of product areas. Global Markets professionals provide institutional clients worldwide with a comprehensive range of end-to-end products, services and solutions.

    8. Investment Banking Investment Banking professionals originate and execute transactions Client focus – identify and meet client needs Product focus – opportunistically position expertise with clients Investment Banking draws on the diverse resources of the firm to deliver the best advisory solutions Mergers & Acquisitions Advisory Restructuring Situations Equity and Debt Issuance Financial Sponsors and Leverage Finance Corporate Finance Investment Management and Private Client

    9. How Does Investment Banking Fit In? General Relationship Management: The RM is not only Merrill Lynch's ambassador to the company, but also the company's advocate within Merrill Lynch Product agnostic Advisory: Investment Banking the primary driver Primarily M&A Expertise of other groups drawn upon Capital Raising: Equity: Heavy involvement from equity capital markets Debt: Heavy involvement from debt capital markets Lending increasingly important: Some companies favor their lenders when choosing an investment bank Other Derivatives becoming increasingly important (opaque pricing) Private Equity creates opportunities Cross selling becoming increasingly important Today almost no interaction with research

    10. IBK: A Wide Range of Opportunities

    11. Investment Banking Organization

    12. What Do Investment Bankers Do? Idea Generation Strategic Alternatives Capital Raising Risk Management Problem Solving Pitch Book Production – Quantitative & Qualitative Analysis Client Contact

    13. What Does an Associate Do?

    14. What Makes a Successful Banker

    15. What Makes a Successful Banker Summer Associate Be a great first year associate First Year Associate Be a great associate Second Year Associate Start showing signs of being a great VP Third Year Associate Be a great VP

    16. ML Focus: Providing Custom Solutions To Clients For Complicated, Business Transforming Transactions $1.1B full recapitalization of AMERCO/UHaul Refinancing of bankruptcy exit financing $875mm Merrill Lynch commitment of capital Firm-wide effort spanning three years Variety of structures lending against a variety of assets and cash flow streams

    17. Learning About the Business: Do Your Homework Read the Wall Street Journal: Business Section (Credit Markets), Economic Commentary, Equity Markets section and Equity Volatility commentary Need to be current on major events in business world and current market levels Other good resources: Barron’s Economist Institutional Investor, Investment Dealers’ Digest, Derivatives Week Know what is going on in the markets (stocks, bonds, Federal Reserve) Learn as much as you can about the business and the different functions Understand the job: WHY you want to do it, WHAT you want to do

    18. Learning About the Firm Research each firm you are talking to Web site News stories over the past few months Know enough to have a general conversation about the firm Seek out and talk to former employees or summer associates about their experiences at a firm Every summer program is different, know the specifics

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