December 4 th , 200 9

1. Everything You Always Wanted to Know About Investment Banking(But Were Afraid to Ask) Gene MoldavskyManaging Director, Head of Corporate Finance, Alfa-Bank December4th, 2009

2. Why am I here on a Friday night? • Lecture objective: to share a slice of the real world • Investment Banking Experience • Managing Director, Head of Corporate Finance, Alfa Bank (2007-present) • Executive Director, UBS Investment Bank (2002-2006) • Vice President, Renaissance Capital (1997-2001) • Education • Boston University, School of Management • London School of Economics • Deals/Transactions • Over 50 Investment Banking transactions • Aggregate deals value exceeds US$25 billion • Examples • US$1.9 billion Svyazinvest privatization (1997) • US$2.0 billion merger between Rostelecom and Moscow MMT (2000) • US$3.4 billion public markets sale of MTS shares by Deutsche Telecom (2004/2005) • US$4.8 billion acquisition by Mittal Steel of KryvorizhStal (2005) • US$1.2 billion sale of Maxi Group to NLMK (2007) • US$400 million sale of Corbina Telecom to Golden Telecom / VimpelCom (2008) • US$1.2 billion rights offering of X5 shares (2008)

3. How is an Investment Bank different from all other banks?

4. What do Investment Bankers do all day? 1 Front Office: Where the money is made! • Middle Office: Where the money is not lost • Risk management – market and credit analysis minimizing risk of loans and trades made by the bank • Treasury – responsible for funding, capital structure, liquidity and maximizing return on cash on hand • Financial control – capital flows analysis, budgeting of the bank, reporting, global risk management, etc. • Back office: Where the money is not made • Operations – clearing/checking trades by Sales and Trading (settlement) • IT – front office support (PCs, Bloomberg), hedging algorithms, electronic trading, settlement systems, financial reporting • Compliance – compliance with government and internal regulations 2 3

5. How do Investment Bankers earn money for their firms?

6. How do Investment Bankers earn money for THEMSELVES? • Typical Compensation structure: salary and bonus • Stock payment / vesting an important consideration • Disproportionate bonus at senior levels (Director / Managing Director) Statistics Note: 2009 compensation expenses annualized. Number of employees for GS kept constant in 2009 vs 2008 Russian market compensation ranges • Investment Banking • Sales / Trading • Research • Investment Management • Private Equity

7. What is the landscape of Investment Banking in Russia?

8. What are the building blocks of making a career in Investment Banking? • Proper education • University name recognition • Proper coursework (finance, accounting, valuation, capital markets) • Supplemental boring reading (valuation methodology, “The Art of M&A”) • Supplemental fun reading (“Liar’s Poker,” “Bonfire of the Vanities,” “Barbarians at the Gate,” “Den of Thieves,” “The Last Tycoons,” “House of Cards”) • Getting the first job • Proactive behavior • Existing connections / relationships • Perfecting the interview process – making the right first impression • Doing the homework on the employer • Moving up the organization and making more money • Demonstrate the basics • outstanding mathematical skills • no mistakes on tasks performed • quick learner • positive attitude even in 15 hour days • team work behavior • improvement of internal processes; creativity • Develop management skills to oversee teams/departments • Develop deal origination skills (“smelling a deal”)

9. What other secrets do you want to know?