Tuesday, July 24, 2007

2nd part of the summer: commodities

Time is flying by like crazy. less than 4 weeks to go till the end of the summer internship! I have just started with the commodities group, who create investment and hedging products around all kinds of commodities. The people are great and the work is very interesting. I am trying to learn the pricing tools as fast as possible so I can understand more of what they do, but the products are very complex so progress is slow. Also, I have been given a project understanding the fundamentals of lots of regional crude oil grades, for which I am interviewing crude oil traders in Singapore and New York, I am learning a lot!! Never knew that WTI and Brent production are a joke compared to crude grades like Nigerian Bonny Light or Light Louisiana Sweet :-). I love it. The hours are even better than on my last desk, something like 8am to 7pm. Unfortunately that doesn't mean I get much sleep, because we have events every day. Trainings, dinners, lunches, speeches... I don't get to write on my blog much or keep in touch with anyone.

Then on the weekends I try to catch up with everyone and again I don't sleep :-).

Thursday, July 19, 2007

back to reality

5 weeks of my summer internship are over, 4 weeks to go! I have learned a lot and met a lot of nice people. In terms of work, the first weeks have been quite interesting. This last week was a bit boring on the desk though because we had so many events outside of the desk that I couldn't really get into any task recently. This week we had a dinner with all the female MDs, which was quite impressive, and tomorrow we're going sailing all day. Not too bad, not too bad. On Saturday our school is hosting a barbecue for all finance Summer Associates in London from all business schools, that should be a lot of fun!

I can't wait for my next rotation in commodities, I have been fascinated by the oil markets since I did a master's in International Security Studies covering Central Asian, Western African and Middle Eastern security politics and economic development, and although I know the reality of investment banking is somehow on a different level than the high level of politics - actually, it is easy to get lost in the details of taxes, accounting, regulations and excel - at least I will have some connection to things I am interested in :-).

I also can't wait for my well-deserved holiday though, it has not been easy going from exams straight to work, and I really need a complete change, to get out of London and the MBA and finance world. This will definitely happen, because I am going to Uzbekistan the day after my internship ends. Believe me, the world of finance, private equity and money is very far away there, it's a great place to switch off and remember what life is all about. Family, dancing, food, children, history, nature, weddings.

Wednesday, July 11, 2007

Life on the buy-side

These days have been great for appreciating the beauty of working on the buy-side. Believe it or not, only a few days into my internship I got to write a due diligence plan for McKinsey, as they are doing the commercial due diligence on one of the deals we're working on, and I was happy I was the one specifying what they have to do, not the one who has to deliver all that in 4 weeks! Believe it or not, as it turned out I knew the McKinsey partner and Associate Principal of the project, and it is quite ironic they are working for my desk now! They'll be pretty well paid as well though :-).

Other than that, I've also been on a trip to Germany where we met with the management of one potential target one day, and today I came along to another meeting with tax advisors who were pitching a deal to us. The beauty is you don't need to be as well prepared or well-dressed, and they treat you very nicely. As a consultant, you have to be perfect and alert, and they can still be nasty to you if they want to. Today I wasn't even wearing a suit (I decided to go for smart casual today since many people on the trading floor, especially women, seem to do that), and the director asked me to come along to that meeting with PwC, and I said "is it ok? i'm not even wearing a suit today" and he said it wouldn't matter, it would be interesting for me, and I just came along, knew nothing, wasn't dressed to the occasion, but everything went perfectly well. It's much more relaxed.

Right now, I'm helping out on one ongoing deal and also on 3 or 4 opportunities, doing valuations, background checks etc., I'm learning a lot. The legal, fiscal and financial details are very hard to understand though. I'm struggling to understand 100 page documents flodded with words like Opco, Bidco, Rosco, bridge financing, withholding tax, quantum, SPV, ringfencing... you name it. At least I have won a LOT of respect for accountants and lawyers over the last weeks, I always thought those things were pretty straightforward, but it turns out they are not at all.

So much from me, now I will continue working. I just thought I'd take a break to post, because recently I have posted only pictures rather than stories.

Sunday, July 01, 2007

Enjoying Tate Modern and Natural History Museum in London

Though the sun has finally appeared this afternoon, the weather this weekend has been dreadful, raining heavily non-stop. I seized the opportunity to visit some of London's great and free museums and could not have had a better weekend. Today I went to the exhibition Global Cities in the Tate Modern Gallery. The cities featured were the biggest of them all, Tokyo, and furthermore London, Los Angeles, Shanghai, Mexico City, Mumbai, Sao Paolo (see photo by Andreas Gursky on the left), Istanbul, Cairo, and Johannesburg. The exhibition mixed pictures, videos, maps, satellite images, interviews and architectural models to illustrate themes, such as density, diversity, or speed. I'm a big fan of photography, but also enjoyed some of the videos a lot. If you go to the website of the exhibition, all the videos and photos of the exhibition are actually up there to be accessed by anyone, it is definitely worth it.

This is another collection of photos I liked. It shows the gates of gated communities and rich people's homes in Johannesburg who live behind fences hiding from the poor. These gated communities are only at their infant stage in London, and I don't think they exist anywhere in such a form in Western Europe, but given the crumbling of the social security systems in Continental Europe, I would not be surprised if we have gates like these in Berlin or Hamburg in 20 years time.

Yesterday, I went to the Natural History Museum in South Kensington, another free museum. It is amazing that all these world class museums in London are for free, but I'm sure they make a lot of money from their museum shops and cafes and restaurants (certainly from me anyway - I couldn't resist buying this Ally Capellino bag designed for the Tate Modern shop!). I loved the section on Primates, which contains many pictures and videos of monkeys around the world. Some of them are so cute. I hope I can go to East Africa one day to see them live.

The rest of the weekend I either slept, went for dinner with friends at Busaba Eathai in Mayfair, which is delicious, cheap and has a nice atmosphere. Now I just need to meet a friend in the pub and then I can call the weekend history :-).

The internship is still fine, I'm learning how to buy infrastructure assets and companies with 80% leverage and how to find potential deals, which is quite useful. Next week I even have to travel to Germany for two days to meet with the management of a potential target. Lifestyle continues to be very good, and I don't expect it to change over the next weeks. Overall, a very nice summer so far, I just hope the weather gets better so I can go to the coast next weekend.