Monday, February 19, 2007

Happy New Year of the Pig

One of the things I love about London is how international it is. I don't know how it feels for the indigenous minority here, but I love walking around the City or Trafalgar Square and hearing dozens of different languages. This weekend was Chinese New Year of the Pig and the Chinese Association of London hosted celebrations and fireworks in the centre. It was VERY crowded but a nice experience.

Other than that, tomorrow London Business School holds a new session of the Breakfast Series. These are free breakfasts hosted by the school where they invite interesting senior speakers (sometimes alumni, sometimes others) to share their personal experience. Tomorrow the CEO of a Nigerian investment holding company and alumni of our school is coming for breakfast and as you might have guessed I am going there to find out more about investment in Africa.

After a class in Decision & Risk Analysis, I will head to the City with some classmates to a lunch hosted by our summer employer, or specifically an Argentinian director of the bank who is also an alumnus of our school. After that I will meet one of my first round interviewers for coffee as it seems I have now found a team to work with over the summer. They do very interesting projects in infrastructure investment and all the people I've met from the team are extremely friendly and sociable, which I like a lot.

I have also just booked a flight to Barcelona where I will carry out an "organizational audit" of a company. We have to do this for our Managing Organizational Behaviour class, and since one of my study group mate's family has a large chemicals business in Barcelona, we decided to carry out our project with his company and enjoy some shopping, good food and the sun "on the side" (of course, the project will come first ;-) ).

So things are good except for most of the classes this term. I'm not getting much out of them. The only great class we had this term was Finance but this is over now and there are only some fluffy classes left - and though I have nothing against fluffy classes in general, specifically now I'm not getting anything out of Marketing or Organisational Behaviour. This term is great for lots of other extracurricular reasons, but in terms of academics it is quite disappointing. The good part is that there is hardly any serious work and I can enjoy my spare time for now. So taking everything that is happening into account, it seems to be true what the Chinese are saying - the Year of the Pig seems to be a lucky year.

Monday, February 12, 2007

The future of business schools in Africa

Shortly after writing my last blog entry on investing in Africa, I received an e-mail from the Africa Club of London Business School to attend the event "Building Business Leadership in Africa" that was hosted in our school today. I went there without really knowing who would be there and was impressed by the high profile of the speakers and audience.

The panel was made up by many Deans of the top African Business Schools (including "The LBS of Nigeria", the Lagos Business School (finally I know why my school has the domain and not!)) and also representatives from the Association of African Business Schools. In the audience, there were many African students or alumni from London Business School, as well as Africans working in London investment banks and consultancies, and locals from London interested in investing in Africa, including some fund managers. The panel discussion highlighted some of the issues facing African business schools that I want to mention here.

Whom do we serve?
Most African business schools are closely connected to state universities and were originally set up to serve the public sector. Over the last ten years, they have had to change to cater to the needs of multinationals for the training and development of their local staff. Additionally, the skills taught at business schools should be useful for local entrepreneurs. Depending on who your target group is, course content and style need to be very different, and it turned out most schools tried to do everything (as in the West) without a clear strategy.

Who is our competition?
There was an additional discussion of the level of aspiration African Business Schools should have. Should they try and emulate Harvard or London Business School? Is the the right model for them? Many in the audience as well as the panel agreed that doing business in Africa is not the same as doing business in the US (I especially liked the LBS Dean's joke that "just in time in Nigeria often means just in case"), and therefore the business schools should focus on providing content that is relevant for people who will do business in Africa. One useful suggestion from the audience was that instead of trying to learn from Harvard or Columbia, African Business Schools should cooperate closely with business schools in India or China, similarly countries in terms of growth (BTW did you know 7 out of the 10 fastest growing countries in the world are in Africa?) and other problems they face (corruption, bad infrastructure...).

What is our role in society?
This wasn't actually discussed directly but you could read between the lines that this wasn't very clear, and it might be tied to the lack of clarity on who the target group is. In the West, business schools are just there for people who want to go into business and make money to get their degree, learn something, expand their networks and move on. In the developing world, the same schools might be faced with much higher expectations. When people discuss business or entrepreneurship in Africa, it is always about increasing prosperity, making the countries better, improving efficiency, combating corruption etc.. That is the official story, but the question is if you serve mainly public sector workers and employees of multinationals, are you really working on the right side? Or should you build up entrepreneurial skills of the poor so that they can increase productivity and independence of the country? As I said it wasn't discussed, but I would like to know more about how these Deans actually see themselves and their roles in their country.

How do we improve teaching quality?
A large part of the discussion was centered on how to improve the quality of teaching, especially in terms of relevance for the private sector. It appeared that the links between business schools and the private sector were still quite weak (obviously there are huge differences between the schools). One idea implemented already by the
Institut Superieur de Management Senegal is to exchange teachers between the African Business schools. They talked of their intents to get Western teachers to teach some courses but had not yet worked out the funding. It seems that there is no "finance professors without frontiers" organization yet. I can't believe there are no good finance professors out there who wouldn't volunteer to teach a great course in Tanzania on Kenya for a few weeks for free. Actually, the Dean of LBS mentioned that it is easer for Tanzanian or Kenyan business schools to attract volunteer professors when compared to Nigerian schools. But there was also consensus that depending on donations and aid from outside wouldn't help. So the main conclusion was that the only way improve quality was to strengthen the ties with local entrepreneurs and tailor the program and the case studies to the realities of business in Africa.

Sunday, February 11, 2007

Weirdest questions from hedge fund and ibanking interviews

I have one final round interview to go tomorrow morning in the City, but am pretty relaxed since I already have two offers :-), so I feel like the recruiting is over and can safely share some of the funniest interview questions I got.

I already share
d my favourite brainteaser from a hedge fund interview. Overall I found the hedge funds much more innovative in asking questions, while the banks ask the typical brainteasers that everybody who has prepared a little bit already knows (can you believe I was asked "why are manhole covers round?"!!!). My next favourite question, also at a hedge fund was:

- "I have to ask you... do you like money?"
I looked the guy straight in the eye and said
- "yes, of course I like money".

He sighed in relief "that's good, because in the end this is all about making money, and if you care more about the details of the company than about the money, this is not the place. You look at a company, you buy, two weeks later you sell, you move on."
The question was tricky because every vault guide says in ibanking interviews you should never admit to being interested in money - you are supposed to care more about client service, industry trends etc.. Luckily I went with my intuition and turned out to be right.

The other interesting question from the hedge fund interviews were
- "okay, I have seen your CV, tell me about yourself but without mentioning anything on your CV, tell me who you are beyond your CV"

The banking questions were more mainstream in a way but nevertheless there were quite challenging or at least interesting ones

- "Imagine you have a client who tells you he always only decides based on price. If you quote him the lowest price, he will do business with you, if not, he will take his business somewhere else. What would you do?"

- "We have invited 15 of your classmates for the final round. Why should we take you and not your classmates?"

- "Tell me about a time in your work when you really felt the power of a team and what a team can achieve"
(I thought this was a much nicer question than "tell me about a time when you worked in a team...")

- "What do you think is the next big investment opportunity in the markets that can offer spectacular returns?"

All the other questions were pretty standard I believe -
- why do you want to do this?
- why do you want to leave consulting?
- draw me the US yield curve.
- How do you calculate forward rates?
- where do you think interest rates are going?
- where's gold?
- what do you think determines the oil price
- what's happening in Venezuela?
and so on, just checking awareness of the markets

Overall, I enjoyed most of the interviews since they were challenging, but I am very happy it is over we don't need to answer such questions any more :-).

By the way, for those preparing for sales & trading, global markets or hedge fund interviews, I found the following books helpful to get an overview of the industry and also to learn about derivatives - even for the summer positions they do ask a lot about options and it really helps to understand their background:
Inventing Money: Long-term Capital Management and the Search for Risk-free Profits
This is a great book to learn about derivatives and the story of the brains behind the derivatives industry, as well as the pitfalls of relying on formulas to invest billions.

Hedgehogging (Penton Audio)
This is more of a fun read from the founder of hedge fund Traxis Partners, Barton Biggs. It gives a great insight into the more long-term macro-level thinking that characterizes successful investors.

Practical Speculation
Another great book on investing by former George Soros partner, Victor Niederhoffer. He writes about interesting myths and tricks in investing and about market psychology. It's good to read some of these broader books in case you are asked what kind of things you have read on investing or how you would invest your money, as these books give you some creative ideas on how to think about investing money.

Tuesday, February 06, 2007

First job offer

Yes, it seems like nothing can stand in the way of my transition to the finance world in London any more. After a long detour, it seems like my dream of working in Sales & Trading will come true. More details later. All I can say is that it has been much tougher than I thought. Along the way, I had some rejections based on the fact that the interviewers didn't believe I was really committed to a career change. But finally, somebody saw that I actually do want to work in investment banking rather than in consulting.

Now the challenge will be finding a great desk to work with, which will be exciting. In any case I am so happy this is over. These past weeks were really tough. They shortlist 40 people, and in the end they take 5 and reject some great candidates for reasons such as "you spoke a bit fast in the interview and some of your answers were too long" (true story!!!). Another great one I heard today was someone who was told after M&A interviews that his accounting knowledge was too weak, when the guy had worked as a tax accountant for 6 years prior to the MBA! You choose which explanation is more ridiculous, in any case they came from the same bank :-). It's very hard, and there are less people with offers than I expected, especially in markets. In IBD there are some offers but also less than expected. Probably, I can give a better picture next week when most things are decided, right now is really the first days of offers.

I wish everyone out there good luck! Hang in there and don't be discouraged by weird rejections, in the end it will work out.

One thing I have been impressed by throughout the whole process is how great the second years at London Business School are! They have been incredibly helpful sharing advice about interviewing, conducting mock interviews, calming us down, hosting workshops on brainteasers and excel valuations. I don't know how it is at other schools but I have great gratitude to the 2nd years and I hope I can be of equal help to the class of 2009 next year! Special thanks to fellow blogger King Myles from the Finance Club!

Did a woman write Shakespeare?

Provocative question, I know. But after reading the book Sweet Swan of Avon: Did a woman write Shakespeare? I am absolutely convinced. The evidence is overwhelming. The book is great, very entertaining and thought provoking. According to the book, the most likely author of the sonnets and plays attributed to William Shakespeare is Mary Sydney, the Countess of Pembroke.

Fascinating stuff to kill time with while you wait for calls from recruiters - and while we wait for the next Harry Potter book to be released - July 21st is the official date, why so late?

Thursday, February 01, 2007

Summer job interviewing craze

The summer job interviewing craze has started! It is a very exciting time, but many people are tired by the end of the week. Juggling 5 interviews, classes, phone calls, preparing, researching the markets, waiting for calls for final rounds, constant questions of "have you heard from Goldman yet?" is not easy!

Today I decided to just sleep till 11am just to get back into form. Then I had 3 interviews. The good part is that at least the investment banks seem crazy about hiring. Some people got offers right on Monday already! They basically walked into their 1st round interviews, and suddenly received offers at the end of the day. I interviewed with one bank on Tuesday which called us for the final round already tomorrow (Friday). It seems each bank wants to be first in extending offers.

In addition, it seems that some companies who are nor corporate partners (i.e. who do not get the privilege of being the first to interview on campus) suddenly realize lots of candidates will sign offers within the next week and start scheduling off-campus interviews. For months I did not get any calls and this week and last week 4 different companies called me to come in for interviews this or next week. You just can't do it, at least if you also want to attend classes like me! Right now I'm focusing on Fixed Income Sales & Trading though and hope that works out for the summer! Things are moving very fast here so next week I'll know more!

In any case it is a very exciting but also very intense time, and you have some exhausted people, some disappointed people and some happy people. I was going to post about interview questions, but the truth is the interviews are 80% fit I would say, all they really want to know is if you've thought about what you want to do.