As you can see from the title of this post, my first week of the summer programme in Global Markets has been fantastic. I cannot believe how lucky I am. It is such a nice feeling to do a job that you enjoy with people you like. Where should I start?
Preparing for the trading floor
The first three days, we had training in markets, mainly about trading, trading strategies, derivatives, equities and so on. Our instructor was a futures and FX trader for 11 years in the old days, so he had a lot of anecdotes to tell and emphasized the practical side of finance, which was quite helpful after one year of theory. I only got to know a few other Summer Associates because the US school Associates started a week earlier, but I will meet everyone next Monday when we have another training.
Finance meets reality
On Thursday, I started my first rotation on the principal investment desk. They take the bank's money and do leveraged buyouts of "illiquid assets", such as ports, pipelines, airports and so on, though now they are diversifying into the private equity space and starting to buy up running businesses as well. I'm helping out on three different deals to differing degrees, partly to learn, partly employing my language skills (some of the deals are in Germany), partly just doing excel modelling and things like that. It is very diverse in terms of the things they do. So in terms of the content, I couldn't be happier. I also enjoyed seeing the practical side of valuation, it is very different from what we learn at school! We learn that you project the cash flows to value a business. Here, what they seem to do is to use a simple EBITDA multiple based on comparable deals to determine the bid price, and then they go into complicated cash flow modelling and revenue forecasting to see how much debt they can use for the buyout. So rather than the output, the value - i.e. the bid price - is the key input, and all else follows. Of course, coming straight from school I did not approve of such short cuts, and I took one of the LBO models and decided to do a nice DCF model with it to get the value. And funnily enough, the value I got with my discounted cash flows was exactly the same they had gotten from the multiple, to the first digit behind the comma (at least if you call the five in 2.5 billion the first digit behind the comma ;-) ).
Lifestyle: pub at 6pm anyone?
But what I like just as much is the people on my team and the atmosphere of the trading floor, not to mention the lifestyle. The people on my team are extremely friendly and forthcoming and treat me very well, they joke a lot and are having a good time. The directors are also very approachable and friendly and sit with us and invite us for lunch and stuff like that. One day people were busy and only got sandwiches, but we have a really cool shop in the middle of the trading floor which sells fresh fruits, organic smoothies, sushi, fresh loose leaf peppermint tea and things like that. So that day I bought a sandwich of brown bread with ruccola, tomato, horseradish and roast beef, a lentil salad and a coconut banana smoothie. I think the old days when traders ordered pizza or burgers are over, luckily :-). The first day on the desk, I was enjoying it a lot and wanted to learn more, so I stayed quite long, I was there till 9:30 with two other associates but we were literally the last people left on the trading floor.
Yesterday, I was going to work till around 7 because my husband works till that time as well and we wanted to go for dinner, but then at 6 all the senior people and all the traders had already left, and one guy from my team just came around asking everyone "pub? pub?", so we went for a drink nearby at 6, wished each other a good weekend and each went our ways. We start at 9am and work till maximum 9 or 10 and often even shorter. This certainly beats working till midnight and sleeping in a hotel!
And the best is having the weekends completely off, without worrying about anything or doing assignments. I went shopping this morning, tonight I'll go to the cinema and dinner with friends, tomorrow probably hang out with my sister whom I haven't seen in a long time or go rollerblading in Hyde Park, and on Monday I have a training from 10-5 pm and will finally meet the rest of the other interns. I could not be happier. I wonder how my friends interning in M&A and consulting are doing?