back at London Business School tonight!

I am excited to be going back on campus tonight for the launch of the Women in Business club at London Business School! I can't wait meet the MBA class of 2013 (oh my God, five years have passed since I started my MBA!!!) and see what their dreams and aspirations are. If you are there, give me a shout!

MBA finances

I am graduating in 4 weeks, and am quite impressed by the cash flows I projected before starting the MBA. Though there were lots of deviations along the way, I had estimated that I should end the MBA with a balance of approximately 0, and this is what happened. I am disclosing my "profit and loss statement" for the 21 months of my MBA at London Business School. It is obviously rounded and approximated to the nearest 1000, and I have omitted holidays, clothes shopping etc.

Overall, you can see that I have managed to end the MBA without any debt. Actually the balance is higher than what I show because in reality my husband found a good job here after a while and we split the rent and other living expenses. So if you are coming to London Business School and want to make estimates, here's my recommendation for adapting the numbers to your situation:

- obviously, most of you won't be lucky enough to be paid by McKinsey without obligation to return ;-)
- if you have a partner, expect him/her to find a job after 3-6 months and enjoy :-)
- most banks and consultancies pay the sign on bonus tax free, somehow my bank refused to, so it was taxed which makes a big difference unfortunately
- Rent is one very big factor which will change the outcome. Even though I came here with my husband, we started off sharing, since he didn't have a job yet and we also didn't find studios that were cheap enough (we were willing to pay up to 230 pounds per week). I only knew one other couple that did that for the first year, and I think we were the only ones who did that for the two years. It's not easy of course, but that way we paid a rent of 837 pounds per month instead of 1200-1500 that we would have had to pay for a studio/1bedroom in this area. There were a lot of couples who had no income (and no McKinsey sponsorship and no scholarship) but opted for a 350 per week 1 bedroom. Of course it is more comfortable, but then I would have had about 15,000 pounds debt upon graduation, and now I am debt free, which feels great

So you see what to focus on: on the income side, internship salary, scholarships and bonuses are very important (I did two internships and obviously earned more than others), on the cost side, rent in London is the major factor (given that tuition fees are beyond your control).

I hope this helps. All numbers are given in GBP.

Net Income
McKinsey living expenses 15,000
Scholarship for tuition 20,000
Internship salary (20 weeks) 22,000
Internship bonus (so far) 15,000
Second year project 2,500
Total income 74,500
(excludes around 7,000 GBP in outstanding summer bonus and relocation allowance)

Cost
Tuition fees 41,000
Rent 17,640
Living expenses 18,900
Bills, phone etc. 1,050
Transport 1,050
Sum 79,640

london, the markets, and the second year MBA

Well, life in London is as exciting as ever. The big story in the markets is obviously the alleged $7 bn fraud at Societe Generale, though I am very sceptical about their version of the events. At least, the story solves one mystery I heard about at the end of my hedge fund internship. We, the analysts, would look at investment ideas, while the traders would manage the open positions and talk to sell-side traders to see what's going on in the market. I remember we had running gag for a while, as some traders in the market were telling our head trader that there was a mysterious "DAX man" in the market, that somone was buying up billions of dollars worth of DAX futures, and everybody was wondering who this crazy guy could be, buying billions of DAX futures while the market was so volatile and headed for a strong correction. We would speculate if it could be one of the Middle Eastern investment funds, or if it was someone who knew something. Or we would dismiss the story and think the story about the mysterious DAX man was a big joke. Well, it seems it wasn't a joke. It might be a mere coincidence and it might be that this was an unrelated event, but I somehow feel this new "rogue trader" might just be him.

And if that wasn't exciting enough, summer recruiting is starting off next week and the first years are freaking out. It is very stressful, especially with markets as they are, banks seem to have less slots for the summer and some people are disappointed not to have many interviews lined up. I have done some mock interviews over the last week and am happy that some people are really well prepared, but I still feel that some people are overconfident and should prepare harder, this year it won't be easy to land a, investment banking internship. So please prepare as hard as you can!! You have been warned :-).

In the world of academic finance, I am enjoying my course in Fixed Income Securities immensely. The professor, Suleyman Basak, has set himself a very high standard of making sure we know more "than the average smart guy on Wall Street who has read Fabozzi". In fact, two alumni from my school who work as prop traders now both told me his course was the best course ever preparing them for landing jobs at the most desired trading desks, so I am hoping to get a lot out of the course. I enjoyed the first two lectures so much that I dropped an advanced financial analysis course that I had signed up for for next term, and have signed up for a Financial Engineering course with professor Basak instead.

As a distraction from the world of finance and investment, I am working on a great paid second year consulting project for a tourism venture in the Scottish highlands, which we are very excited about. In a few weeks we will go up to the highlands for a week to check out everything on-site. From hedge fund internships to consulting projects in the Scottish highlands, Diwali parties and making friends from all over the world, I cannot believe how varied my MBA experience has been so far. Luckily it is still not over :-). Next week I'm setting off for a short holiday in South East Asia with three friends, followed by a trip to the Scottish highlands and then spring break! Life is good.

Advice for incoming first years

Well, the admits are arriving now and there can be no denying it anymore: yesterday, I had breakfast on Baker Street with a friend, when a girl I knew from admits weekend passed, and I think she introduced herself to my friend saying that she was a first year, and that's when we realized: we are second years now. How fast time passes! How can we be second years already? Now there are other people who are first years who don't care about us, because they know we'll be gone soon :-(. And in our class people will be going on exchange, working part-time and finishing early, so it won't be the same.

The good part is that now that I count as a wise old second year, I can pass on advice :-). There's quite a few things I wish I had known, and I wouldn't be able to call myself an angel if I wasn't there to make other people happy in their lives - while suffering the grave consequences of my mistakes ;-) - just kidding, I'm pretty happy right now, and the only thing that worries me is that somehow I know that one cannot be that happy forever, right now is probably the luckiest period in my life, so I better enjoy it. Okay, back to my advice:

Flathunting/flatmates: First of all, sorry to say that rental prices have skyrocketed this year (and you thought they couldn't go any higher...), so expect to pay a bit more than the '08s who may have quoted you what they pay. Sharing with 2 others is the best if you want to be economical (around 200 GBP per week), while living on your on will cost you around 300 GBP pw if you want to stay close to school, which is what you should in the first year. Even more important than money is happiness (can you feel the wisdom flowing through my words???), and for that I really urge you to choose your flatmates wisely. At the flathunter's pub crawl, you might sometimes think you just want to get it over with, and just agree to live with the first person who asks you, but I can tell you from experience this can turn out to be a nightmare. Make sure your ideas of how to live more or less match, and stay away from people who seem to try and shift all the responsibility of payments, contractual obligations etc. on you. I cannot stress enough how important it is to have a good personality match, otherwise it can turn out to be very nasty, and unfortunately in my case I had to live with one of the nastiest guys in the MBA for a year. Luckily that's over now. But don't expect all people to be decent and honest, just because they are in your MBA programme. Most people are very nice but there are a few outliers, and you don't want to end up sharing the bathroom with them by mistake.

Study Group: don't worry about this, and don't freak out. At Orientation, they will make it sound as if you will see your study group more than you will see you boyfriend or best friends, so you will freak out and look at these new people and think "but I don't want to spend more time with them than with my boyfriend!", and everybody will be tense and unhappy and have very high expectations which are bound to be disappointed. Luckily, it will turn out to be nothing like that after the first one or two months, it's not a big deal, and it has its advantages, in my case all people in my study group happened to be some who I might not have become friends with otherwise, but because we spent time working together on projects, having lunches and dinner together etc., actually these are people I know very well now, people I can trust, and people I am always happy to bump into now that our study group ceases to exist (just last night it happened I was stranded in a club in Shoreditch and bumped into my Egyptian study group mate who was also stranded there, since both our partners have gone on holiday already leaving us to finish the investment banking internships alone, which obviously makes a lot of sense). So, see it as a chance to get to know some people you might otherwise not have known, and try to stay relaxed about the whole thing, people freak out and are very tense at the beginning because of high expectations, and this can create a lot of conflict.

Parties: yes, there will be many parties. All I can advise is to go everywhere almost every day in the first term, particularly if you're single (if you have a partner, just take them along every time, or sometimes spend a quiet evening with them instead, which is also very relaxing), because the first term really is when all the things are going on. I was quite active in September, but then a bit more relaxed thinking "well, this will go on for two years, so I don't have to go to each and every event, I can go next term", but actually you will notice that suddenly starting in January recruiting will start, and cliques will form, and there will be less and less big parties involving the whole class. So my advice is for you to party as much as possible in the first term and meet all your classmates, because later people become absorbed in their own world and it is harder to get through to them.

Jobsearch: I was one to spend months trying to decide what to do - though in the end I decided on Sales & Trading, which had been my plan when I came to London Business School and long before. But all I can say is try to know as fast as possible and get ready. I think I've said this before: most of the people who knew what they wanted got great jobs, but the people who were clueless and didn't know what to do with themselves even in February and randomly applied to McKinsey, Goldman Sachs, Google and everyone else in the universe, usually didn't make it and were less lucky (though they found good things later). But try to be focused early, talk to all the 2nd years who will be a great help, and also, don't confine yourself only to companies that come on campus. Some of my classmates are interning now with really good private equity firms, such as Terra Firma and Actis Capital, and believe me it is not because they came on campus! Some people say "but they don't come on campus" as if that meant you are not allowed to apply, while actually you are. UBS Asset Management also didn't recruit on campus but somehow two of my classmates are interning there. Quite a few of my classmates are working at some hedge funds here in London, and none of them were on campus. So check out alumni and other contacts, go to all the speaker events and conferences, and you will have a much broader view of what you can do.

So much for my advice, I hope it helps! Enjoy the first weeks of your programme!!

The first year ends as it should - with the Italian Festa d'Estate

If there is one common theme that makes London and London Business School special, it is the diversity and the opportunity to explore new things every weekend. One particularly popular activity for LBS students is to organize all kinds of national parties - readers of this blog will have heard about Diwali, Mexican Independence Day, the Salsa Party, Tatoo... Lots of great parties that have made this year a very special one.

Yesterday, we had our final exams - Cost Accounting and Finance 2 - and after that, it was time for a final party of the first year. And since it was the final one, it had to be a particularly festive one. What better way than to celebrate an Italian Festa d'Estate in Soho, in a club called Cafe de Paris.

I was happy to bump into some friends that I hadn't seen for a while and probably won't see for an even longer while - this is me with a Russian friend whose Italian husband just finished the Executive MBA - they are moving to Abu Dhabi next month. And me? I'm just a German girl who has been dreaming of living in London since she was 13, and now I'm here and am about to start my first job tomorrow morning.

Electives for next year - Finance, Finance and more Finance

It's time to choose electives for next year, there are many great ones so the choice is not easy. In the end, it turns out my elective portfolio will be very finance focused, which I didn't necessarily plan, but most of the top teachers here happen to be the finance or economics guys, and I cannot risk taking a class in which I don't learn anything. Based on my background in psychology, there is not much I can learn from Organisational Behaviour or Marketing classes, or even Decision Sciences, so I feel like Finance & Economics is the way to go. These are my preferences as I have submitted them:

Autumn 2007:
- Global Capital Markets and Currencies (Economics)
- Options & Futures (Finance)
- Mergers, LBOs and other Corporate Reorganisations (Finance)
- Managing Corporate Turnarounds (Strategy)

Spring 2008 - University of Chicago GSB
- Entrepreneurial Finance and Private Equity (Entrepreneurship)
- Cases in Financial Management (Finance)
- Cases in Financial Risk Management (Finance)
- Time Series Analysis for Forecasting and Modelling (Statistics)

Summer 2008:
- Credit Risk (Finance)
- Financial Engineering & Risk Management*
- Equity Investment*

I will probably replace the latter two with the Creativity and Personal Mastery (CPM) course, but I'm unsure about it. I'm not sure if I should work on my personality or on my technical skills. If I look at the times I am unhappy (which are the times one might choose to take philosophical courses), it is usually because sometimes I feel like I haven't lived up to my aspirations or worse, that I will not live up to my aspirations. But somehow I feel that if I spend my time working on achieving my aspirations, rather than questioning them or agonizing about them, I will be happier in the end. It is a very weird decision to make, and I wish I could postpone it till next year, which I can't. I should probably go for CPM, because the other two courses won't add that much to what I will learn in other electives, particularly after doing some hardcore finance at Chicago GSB. Let's see.

Yesterday I handed back my laptop and blackberry to McKinsey so I am officially part of the alumni now. It is weird not to have a blackberry after 3 years!!! I did not write a good bye email in the end. I guess I would have done it if I had resigned in a normal fashion, but because I mainly resigned because they wouldn't let me do anything else but work for them over the summer of the MBA, and because that they said if I want to come back after the summer to just call them, I would have found it weird to send an official "I'm leaving"-Email. So I left in silence, though I called some people who were closest. Luckily, the person I got on best and worked with the most during my time with McKinsey was elected partner last week, so I still heard about it before leaving. I really wanted him to become partner of the Firm, so I was happy it happened before I left.

Funnily enough, whenever I thought of writing a good bye email, or whenever I thought of how I feel while working there, all I could think of was this Charles Dickens quote from "A Tale of Two Cities". It would have been wholly inappropriate to write such negative thoughts in my farewell, but in actual fact it sums up quite well the contradictory feelings I had. So if I had written an honest goodbye, it would have been this:

"It was the best of times, it was the worst of times;
it was the age of wisdom, it was the age of foolishness;
it was the epoch of belief, it was the epoch of incredulity;
it was the season of Light, it was the season of Darkness;
it was the spring of hope, it was the winter of despair;
we had everything before us, we had nothing before us;
we were all going directly to Heaven, we were all going the other way."

We'll bring the MBAT trophy home to London again

Last year, KV was the first to post that London Business School had won the MBAT trophy. This year, I will be even faster and I'm posting this before the tournament is even over.

I'm confident we're bringing home the trophy because this is what we have won so far:
1. 7k cross country run
2. Cricket
3. Salsa
4. Swimming
5. Women's Rugby
6. Tug of War :-)
7. Squash

We're also in the finals for tennis, basket ball and volleyball, and men's rugby tomorrow. Then we won several glorious 2nd places which are tough psychologically but still bring in points, such as in Chess, table tennis, women's football (my team -we gave our best but were beaten in the end by the IESE), mountain biking ...

So I will confirm tomorrow, but believe me, London Business School students fought hard and absolutely ROCKED this weekend!! Our favourite word these days was "amazing". All the teams are amazing and giving their best. Another word was "civilians", but I will explain this later. We had fun!

Admits of 2009, start training hard, because we want to win again next year!

Just another weekend in London

Recently, I have often posted on specific topics (career, applications etc.), that I feel admits or applicants may not actually get a good feel for what life is like here. I do not intend to use this blog as a diary, as this would become quite repetitive, but it might be helpful to give an update on what life is like here in London once in a while. What have I been up to this weekend?

SATURDAY
Saturday started off with our Cost Accounting midterm exam. They like to schedule our exams for Saturdays, apparently because there are not enough lecture theatres available during the week to accommodate all of us at once. The exam was hard and there was a lot of time pressure. I was happy though, because I find when exams are easy the results are much more unfair, because then professors subtract points for every little deviation from the ideal solution. On the other hand, in hard exams the normal distribution kicks in automatically and the professors do not need to force it onto the results. So I think it went well. Usually, I would head over to the Windsor, our closest pub, straight after the exam, but this time I had different plans.

MBAT is next week, and I realized that I need to buy new sports shoes! Some time last week, I started thinking about how old my Adidas running shoes actually were, and it hit me that I had bought them some time in 2001! It was shocking. Then I took a closer look at the shoes and was embarrassed I have been wearing them all the time, they were dirty and falling apart. Anyway, so I went with two classmates to a huge sports department store in the South of London, and bought new running shoes as well as football shoes, since I'm playing women's football at MBAT. I also helped my friend pick roller blades so we can go roller blading in Hyde Park together as soon as the weather gets better again. Then the other two checked out climbing equipment, since they are planning to climb Mont Blanc in June. We spent 2 or 3 hours there and only came back around 4pm.

Then, I went for a birthday party of a Croatian classmate. He lives with another Indian and one Turkish classmates of mine, and I hadn't spoken to them properly in months, since times have been hectic and we are in different streams, so I decided to go there and make sure I get to talk to catch up with some people, finally! They had nice Sangria and very good music - I even heard Rachid Taha at some point :-).

In the evening, most people headed over to school for the "SANZA (South Africa New Zealand Australia) - Party" hosted in the school, but I decided not to go. Instead, some of us went out for pizza close to Baker Street. After that , my day was still not over, instead I watched "the Goodfellas" on DVD with my husband. The film is okay, but I don't know why people (or should I say guys? ;-) ) rave about it. The guy seemed utterly stupid to me from the start and I was not surprised by how he ended. I think it would help some people to ask "why?" once in a while instead of being at awe about people who seem to have money that came from nowhere. Anyway, then I fell asleep :-).

SUNDAY
I had to get up early today because my parents paid me a short visit. They came back from holiday in the US via London Heathrow and had about 6 hours between their flights, so they came into Paddington with the Heathrow Express and we met up. We walked towards Westbourne Grove in Notting Hill/Bayswater in the cold rain - welcome to London! We went to a nice Lebanese cafe - I think it is called Al fresco - and had hot tea to warm up and lovely hot mashed aubergine with chick peas and pita bread. Then we went for coffee and I brought them back to Paddington station. It was cold and rainy the whole time, but that was okay because I knew I had a lot of work to do for school. I'll be away for MBAT next week so I need to get everything done before we go to Paris.

First I had to do the Cost Accounting assignment on customer profitability due tomorrow morning. Despite the exam, we still have an assigment due Monday morning 9am. Luckily it was one of the easier ones, so it didn't take me too long. The previous ones have been a nightmare requiring a couple of hours of effort on a Sunday night, but this time luckily it was short. But that was offset by the nightmare that is our current Macroeconomics assignment. Because I missed one class and didn't do my reading at the beginning of the term, I missed all of the theory and formulas on capital accumulation, growth accounting, labour productivity and so on. Of course, the assignment covers exactly the topics I missed and consists of 8 questions requiring calculations, theory, application, everything. So I had to read a few chapters in our Macroeconomics book and did all the calculations, since this was the most straightforward part. I haven't answered the qualitative questions yet though, these will require some more thinking on my part.

Then I was hungry and went to Brick Lane in the East End with my husband. There was some Bangladeshi celebration going on and the streets were full of people and food stalls. We still decided to eat at our favourite place though - the Sweet and Spicy. We always order the same - Pilaw Rice, Karahi Gosht, Tarka Dal, Peshawari Nan (try this coconut bread if you haven't!!). Then we were stuffed and decided to walk to Moorgate instead of taking the tube at Aldgate East, thereby enjoying the stroll through the City.

Once home, I decided to do some more work, this time preparation for my internship though. I started reading "Options, Futures and other Derivatives" by John Hull. It is very well written and detailed, and I have high expectations to finally understand more than I currently understand in our Finance 2 class. I really need to prepare a little, because I believe I am one of the few people going into trading/structuring without any finance background and without any kind of quantitative background, so I have realized in recent weeks that it would help to get up to speed before I start.
(btw I have updated the post on impressions from the ibanking/finance job market, since the finance club has sent out and overview of who's going where. Not everyone filled it in, so again these are minimum estimates, but we have a great group of people going to the top ibanks and even quite a few people who landed jobs on the buy side, so things look great).

As you see now, after a few pages of the book I decided to call it a day though and thought I should write something here, because I probably won't till after the MBAT. I must say, living in London is very nice, and despite having to do some work for school on the weekends, it turns out there is still a lot of opportunity to explore London and socialize in between.

Summer term courses

Summer term is busier than expected but I love all the courses so far, which is great. Going surfing over spring break might have energized me, but I also think the content and professors this term are better than last term, so I'm thrilled. Courses so far:

Marketing Strategy: this is a simulation game, Markstrat, that we are playing over several weeks. My study group is Firm E and we need to make decisions on product launches, R&D, advertising campaigns etc. over 5 periods or so. I like dynamic simulation games and am putting in more time than I should.

Management Accounting: this is a subject I thought would be quite boring, but it turns out it may be one of the more useful subjects they teach at business school. It goes under the header of cost accounting, which doesn't sounds fascinating at first, but it turns out it is essential if you ever have your own business - how do you allocate costs to your products? I do not only think that it will be useful to me at some point in the future when I have my own business - I also wish I had learnt about this before working as a consultant, I remember several instances where this could have been useful.

Managing Organisational Behaviour Company Audit: I had written earlier I didn't enjoy the class itself last term, though for the final exam I finally did the reading and loved the book, Reframing Organizations. So I did get a lot out of the course via the book in the end (perhaps I should have done the readings right away!). Over the last 4 days I went to Spain with my study group to do an "organizational audit" of a medium sized family business. We interviewed the president and all of the senior management on their motivation, relationships among the management, frictions etc., it was very exciting, time passed very quickly and we learnt a lot.

Macroeconomics: I only attended the introductory class and it appears to be quite something. Our professor is a hardcore liberal economist French guy, which is a spectacular and unusual combination. The readings seem to be interesting (so far I enjoyed Paul Krugman's The Myth of the Asian Miracle), and now I just need to get over our Operations field trip next weekend till I can actually sit down and focus a bit more on Economics, since this was my goal at the beginning of the term.

Operations: so far nothing spectacular, we have started a factory simulation game outside of the classroom but I haven't been much involved yet since I was in Spain over the last week - luckily I have a good team that is running the game at the moment. Other than that, I look forward to our visit to the Porsche and BMW factories next week. To be honest, I have never liked Operations too much and simply will never like technical engineery stuff, I am trying to find it interesting but it seems to be against my nature. I promise to try hard to learn something useful though!

Finance 2: this will be tough. Our professor is a Russian mathematician specializing in interest rate derivatives, which tells you all you need to know. Right now we are reviewing capital structure though, which isn't one of my favourites - even though I know I have to learn it - but I can't wait till we move on to derivatives. Not that it will be easy, but I definitely need it for my internships, so I will work hard for this course.

So you may see, things are busy and there is more than enough to do. Especially since I enjoy the classes I do more than last term. I was going to study Russian on the side and also work on my financial modelling skills, but so far it doesn't look like this is going to happen any time soon! But the important thing is that I'm enjoying the academics again, which was important to me.

Impressions from the ground: the current job market in investment banking

Following Citigroup's announced layoffs - 1,000 of which are supposed to be in London - I think it is time to comment on the current job market for MBAs interested in joining global investment banks. I do not have any overall numbers and can only comment on what I can conclude based on what is happening with the class of 2008.

First of all, I think the headline of "1,000 bankers in London to lose their jobs", as proclaimed in yesterday's Evening Standard, sounds more threatening to future bankers than it is. Most cuts are made in back office and administrative jobs, obviously. Furthermore, if you talk about the few M&A or Sales & Trading jobs that will be shed, I would assume only those who are losing money would be shed - if you want to cut costs to improve profitability, you will not fire anyone who brings in profitable deals, as your profitability goes down if you fire profitable employees. So I believe, even those MBAs interning at Citigroup this summer should not be worried, though obviously I understand that some who may have rejected Deutsche or Lehman offers to join Citigroup over the summer might wonder if they made the right decision.

But moving on from Citigroup, our summer job recruiting season has given us some good insight into the job market in the finance industry. I remember when we started the year, I was impressed by how well the 2nd years had done last summer, but also concerned - if there were so many summer interns last year and they almost all received offers at the end of the summer or joined other investment banks full time, how many spaces would be left for us? I can now safely say that I believe hiring this year has been even better than last year, so my impression is that we are lucky enough to have entered the MBA and the summer recruiting season at a time when investment banks are competing hard to hire MBAs.

Why do I get this impression?
- First, what usually seems to interest most on the business week forum, what I would call the "Goldman Sachs Index" :-). Basically, their core school is Harvard and I believe if they could they would like to hire as many people as possible from Harvard and fill up the rest with Wharton students. When hiring is down, they will focus on their absolute core schools. But when they want to hire more, they will obviously expand their search and look at "lesser schools" such as Columbia, Chicago, London Business School etc. as well. This year, it seems they have made a record number of offers to our class. I don't actually know the number because I only know of those I know personally, so I only know they minimum number, but I know of at least 9 offers (across M&A, Trading and Private Wealth Management). Taking into account our class size, this would be similar to ~25 offers at INSEAD or Harvard. So it's not a bad start

- Secondly, you may have guessed, I could mention the Morgan Stanley index ;-). Morgan Stanley has always been happy to hire from London Business School, but they are also very prestigious if not to say elitist, so I think they have always been quite picky and only taken a handful of people whom they could not say no to. Well this year it has been quite different, I think they extended at least 10 offers in M&A as well as Sales & Trading that I know of, so again taking into account our class size, this is a considerable number. You can see that around 8-10% of our class will spend the summer at either Goldman or Morgan Stanley, which is not bad considering that only 40% aspire to work in finance

- Regarding the other investment banks, some of them have actually made a record number of offers this year. Deutsche has extended more than 15 offers and Lehman I believe almost 20 offers. Barclays must have extended at least 20 offers, because I know 5 in my stream alone who are joining Barclays Capital, then I know two others with offers from Barclays Global Investors, so my estimate of 20 offers is likely to be conservative. Then you have many other banks, such as Merrill, HSBC, JP Morgan, Credit Suisse, UBS etc. which have probably all extended around 5 offers each if not more

- Low yield: this is another indicator of how well it is going. I know some banks extended a lot of offers but won't actually get that many summer interns from our school because these people had too many other attractive offers. I know of one very good ibank that gave 7 offers for M&A jobs and only one guy took it

- The buy side: this is an area where our school can definitely improve compared to Harvard or Wharton. But I think we did quite well this year, and hopefully we can strengthen this area little by little. The Investment Management Club has definitely done a great job in marketing our class to investment management firms and hedge funds and it seems to have paid off. Fidelity, PIMCO and Capital Group have made several offers, as well as UBS Asset Management, T Rowe Price, and several smaller hedge funds and other buy side firms. There even seem to be quite a decent group of people going to private equity. I know there is someone going to Bridgepoint Capital, and someone else going to Actis Capital, which is big in PE investment in Africa and India. I can't say exactly, but I would think that about 20 of us are going to work in investment on the buy side

So where does this leave us? My impression is that of the 40% of us who came here with the aspiration of going into finance, about 15% are going into actual investment banking, about 10-15% into Sales & Trading/Markets, about 5-10% into Investment Management and about 5% into Private Wealth Management. So my impression is that those who came here with a clear idea of what they wanted to do, we have been lucky to enter an friendly environment, even though as I mentioned earlier the whole recruiting process did turn out to be more competitive than I had expected. At least, things look bright in the world economy, and I think the class of 2009 will encounter equally benign conditions next year.

Busy summer term ahead

Well, holidays are up and I better start blogging again, right? As Patxi pointed out, 1/3 of the MBA is already over, this is shocking! What has happened so far?

Autumn term:

• immediately adjusted to living in London, where I have been dreaming of living since I was 13 (funnily enough, when I was back home over the holidays I found a very old diary of mine where I talk of how I want to spend the summer in London and would love to live there when I'm "old" :-) )
• Made a lot of friends from all over the world
• Enjoyed learning about Finance and Economics, as well as learning better how to analyze industries
• Spent days and days agonizing over career choices

Spring term:

• Decided I will definitely make a career change
• Met many investment banks on campus and survived lots of interviews
• Signed my contract for the summer with an ibank in London
• Enjoyed Finance Class with Joao Cocco and pretty much suffered through all the rest
• Celebrated the end of term at the Salsa & Sangria party when the exams were over

And the summer term ahead will be very busy...

• Luckily, this is the last term of core courses. We have Macroeconomics, Operations, Marketing Strategy, and Management Accounting (whatever that is supposed to be)
• I'll also take my first elective, Finance 2, which is focus on derivatives as far as I know
• My study group is going on a trip to Barcelona to do research for our Organizational Behaviour project
• We will visit Eastern German Porsche & BMW factories for our operations class
• MBAT is coming up in May

So this should be enough to keep me busy over the next weeks. I also look forward to meeting the class of 2009 at admits weekend in a few weeks. I have been to some MBA info sessions here on campus so I have met a few applicants already, but in terms of admits so far I only know Rusgirl so far.

Is spring term really almost over already?

I have no idea how or why, but spring term is already drawing to a close. It hasn't really started yet and I feel we haven't done much, but it's over, and so is another chunk of my MBA. Time is racing ahead. How could spring term pass by so fast?

- Well, the first weeks were blurred due to the marathon of job interviews. We managed to squeeze in classes between one interview and the next, and half the classroom would be empty. Nobody really paid attention to classes. The only class we cared about was Finance, since we discussed Mergers & Acquisitions, Options and Foreign Exchange just in time for the interviews
- Then, the weather has also become quite mild and sunny in recent weeks. I went out a lot, running in Regent's Park, strolling around Hyde Park and walking around the East End
- Since we don't have classes on Fridays and had few assignments, many people went away over the weekends, so it has been quieter at school than in the first term

Wrapping up this term, I want to pick up on my first impression of spring term courses.

In classroom learning
Finance: as I said before, it was a great class and I look forward to Finance 2 next term, which will be more focused on options & futures, so it's a bit more abstract and I like that. Sometimes I wonder if I had been better of doing a PhD rather than an MBA since I realize I like the abstract stuff more than the applied practical stuff, but then I enjoy learning about a broad range of subjects, which you can't if you do a PhD

Discovering Entrepreneurial Opportunities: the cases of start-up companies are great, since they give you a great feel of the insecurity surrounding entrepreneurship. I especially enjoyed the Spreadshirt Case, it seems to be a very cool company and I am happy they are succeeding. I am somewhat drawn to entrepreneurship, though I prefer to do it in 5 years rather than now

Marketing: I'm not sure how much I would learn in Marketing with an experienced professor due to the subject matter, but unfortunately I haven't gotten anything out of this class. My curiosity about Marketing may be of a more critical or sociological nature - I find it quite interesting to observe how advertisements reflect gender stereotypes, success stereotypes, how they promote "stupid consumerism" and so on. But this critical angle seems to be out of place in the classroom.

Managing Organisational Behaviour: again a course that could be extremely valuable but has disappointed so far. The cases are actually quite interesting, but the learning is a bit limited so far.

Decision & Risk Analysis: the teacher is quite good, but in the end the class is little more than applied logic and statistics, so if you know your probabilities and have worked with Excel before, you are unlikely to get much out of this course. One important learning I have gotten out of this course is the value of modeling in general though. Previously, I think I always considered modeling as a sort of lesser activity and avoided it whenever I could while I was working at McKinsey. In fact, I managed to spend two years there as an analyst without ever building a complex financial model. Whenever a new project was announced as "advanced excel modeling skills required", I would avoid it. Now, I really see the value in models, and believe they can actually be very useful for investment decisions. It may be obvious to most of you, but coming from a social science background I was quite skeptical about the usefulness of modeling before, and this has changed completely.

Out of classroom learning
I have enjoyed for the amount of spare time I have this term to pursue other interests and read myself. I am especially grateful to Patxi for recommending me the book Rich Dad, Poor Dad (Rich Dad). I wish I had read it 10 years ago, but it is never too late, and it is helping me tremendously seeing personal finances from a different angle. Since I know I will need to improve my financial modeling skills for the summer, I was happy to encounter the bookFinancial Modeling Using Excel and VBA (Wiley Finance) by Chandan Sengupta. It is one of the few books I have found that are actually useful for self-study, and I feel I can really use it to teach myself all I need. Another book that I would count among one of the best non-fiction books out there is Flow: The Classic Work on How to Achieve Happiness by Csikszentmihalyi.

Other than that, I enjoy lunching and dining with my friends from school. Now is a time that you know who your friends are and you have had enough time to get to know each other closely. I have a lot of friends from other streams unfortunately, which makes hanging out a bit more difficult. Additionally, we know that time is passing too fast and that we will soon be working in different places over the summer and then many of us will go on exchange, so we don't actually have that much more time to spend together anymore, surprisingly. Luckily, some of the nicest people from my course are going to spend their summer in the same bank as me, and many more classmates will be somewhere in the City, so it will be easy to catch up over lunch and dinner :-).

What is left of spring term? Not much. We'll have three exams or so, but they are in the softer subjects, so there isn't really anything to do. My main aim for the next weeks is to get ready for MBAT in Paris in May, so I want to play a lot of Tennis in Regent's Park. I also need to get fit very fast because I will go surfing in Canary Islands over the Spring Break, and last time I did surfing I was horribly unprepared physically, as I underestimated how fit you need to be to surf a couple of hours per day. Now I have no excuse and really need to get ready.

First week of classes

Yes, the sun is shining again in London. The storm is over and it is not raining anymore. What a change. Other than the weather, which is a very important topic in Britain, the main topics at London Business School are the summer recruitment and the start of classes. I am very positive about classes so far, at least more so than in the first term. What did we have?

- Finance: as I already said, and Martha and Patxi wrote the same, Joao Cocco is a great teacher. He manages to teach at a very high level and fast pace and at the same time entertain and engage everyone. Finance continues to be my favourite class. This week we did mergers and acquisitions and analysed many newspaper articles on deals and discussed why share prices of acquirers, targets and competitors in the same industry moved the way they moved. Especially helpful for the hundreds of classmates applying for Investment Banking jobs!

- Decision and Risk analysis: so far we have not done much new but refreshed the statistics pre-course (which I waived), but it seems it will be mainly about using excel and building models, which I find very useful. The teacher is energetic and cheerful, so the class is entertaining.

- Discovering Entrepreneurial Opportunities: We do what the name suggests, try to find opportunities for new product development. In our first class we had a visit from an entrepreneur whose business failed and we discussed the case of his start-up and he shared his experience of the liquidation of his business. The teacher is also very good and senior.

- Managing Organisational Behaviour: I cannot comment much on the class or faculty as of yet because we spent most of the class watching a video. It was about Nick Leeson, the guy who traded Barings Bank into bankruptcy. I found the documentary fascinating. The link to MOB was to discuss what was wrong in the organisation to enable such a massive fraud to happen.

- Marketing: this maybe one of the more disappointing classes. Unfortunately in some core courses (same last term) the programme office has assigned us very junior teachers, and unfortunately sometimes people with PhDs from Harvard or MIT aren't necessarily great teachers. Especially with fluffy topics I find experience is key. Chicago GSB has an advertisement saying "Our full-time MBA faculty is the same as for the Executive MBA" and I wish it was the same for London Business School. But it's not.

In addition to those classes, summer jobs are on everyone's mind! On Thursday, Morgan Stanley hosted a lovely and delicious dinner for 20 female MBAs and they came with ~ 10 female Managing Directors from all divisions. They were great, charismatic women, we had lovely dinner and lots of wine and were laughing a lot, I don't think we ever talked about finance or investment banking, it was more about getting to know each other and also seeing how they managed to have kids and be MDs (all of them had children). It was a great evening and very inspiring. I also met a woman who is head of equity derivatives and has a degree in international politics like me. So we had a nice chat about how to leverage political insights for a career in trading.

Yesterday, I had my first interview with a hedge fund and got an interesting brainteaser: company A and company T both have oil fields, company T has one in Texas and company A has one under the arctic ocean. Both have a market capitalization of $1bn. Who has more barrels of oil in the field? Then: okay, where is the price of oil? Let's assume tomorrow the price of oil jumps from 50 to 100, whose market cap will rise more? It was quite fun and I solved them quickly, so it was no problem.

Then they asked if I could do DCF and LBO modelling, and they also gave me some questions like "ok, assume I have a company with an EBITDA of 10 and sales of 100 and CAPEX of 5, make some assumptions and tell me how you would value the company in your head? I tried the lazy way of saying I would just assume an EBITDA multiple and multiply it by the EBITDA :-), but then they still pressed for the DCF valuation, as expected.

I liked the experience and it was very good practice for the upcoming sales & trading interviews (only 1 week to go!). The question that always knocks me out is when they ask if I have ever invested money. The truth is that I never had a any money left, or when I was younger I did but I didn't really know about investments. As soon as I had $1,000 saved I would just go on a long holiday, spend it all and come back home and start saving again. But I don't think it makes sense to hastily start trading FX or whatever just so I can claim in interviews that I have done that. I hope it is okay. Not everybody has experience investing in their twenties, right?

You know the first term is over when...

- people are throwing farewell parties and wish each other happy holidays
- you start looking for Christmas presents
- you sleep 9h every night plus take long naps in the afternoon
- you finally get to see the Velázquez exhibition in the National Gallery that opened in early November

- you get to check out some a cool vintage dresses on Portobello Market
- you finally write to your best friends back home
- instead of complaining about assignments, you are sad that time passed so quickly
- you scan the job postings on the Career Services website, realise you have signed up to dozens of company presentations and that you should start writing cover letters soon

- you go to Royal Albert Hall to sing Christmas Carols
- you know it will soon be time to take some serious career decisions
- you start thinking about what to pack and prepare for the flight back home

Time to celebrate success

London Business School teams are very successful at the moment, winning global competitions. My stream mate Cindy was part of a team that won the HSBC Global Deal Competition in New York, beating schools like Columbia, Chicago and Kellogg. But I was especially happy that my friend Amit won the Alpha Challenge, a global stock picking competition, beating teams from Stanford, Wharton, Columbia and others. Pretty impressive! I can't believe how these people did it, it's not like we had a lot of spare time recently to fly to other continents!

To be honest, I don't find this term very stressful, unlike some others (Karlitos made a related post). If you had a tough job before the MBA, the MBA is a vacation. In comparison to my job, it is very relaxing and there is zero serious pressure. The only pressure you could have is the pressure you put on yourself. But still, there are things to do, so even though I have lots of evenings off and enjoy my private life, you cannot really leave London a lot. Second year will be different obviously, as KV's example shows :-). I look forward to it.

Finally: New Dean appointed

Just a quick update for those wondering who will replace Laura Tyson as our next Dean:

It will be Robin Buchanan, senior partner at Bain & Company (he's been partner since 1990 so seems to be a very senior guy). He has an MBA from Harvard Business School.

Sounds like a great choice. Especially the people in our school interested in consulting are very happy, but I think overall you can definitely expect things to go forward.

Midterm reflections on classes so far

6 weeks into the course, it is time for a reflection on the MBA core courses so far to follow up on my first impressions.

Microeconomics
The class I enjoyed the most. The only thing that upsets me is that I always think economics would have been the perfect undergrad for me. But at least now I get to study a little bit of it. The interesting thing is that I did not expect to like it, because I had a 5 day crash course in Microeconomics during my Mini-MBA taught by Besanko (back then I did not know he was a big guy in Microeconomics) and it was too much, it is not a subject you can absorb easily within a few days, especially because this professor liked maths and graphs even more than our current professor :-).

What I like about Microeconomics is that it is very challenging and also very relevant. In which other subject do you deal with very strategic topics such as pricing and market entry but actually discuss based on facts and formulas rather than exchanging random opinions (which can happen in strategy class - more about that later). We have only just covered the basics and are starting game theory now (our professor's favourite topic), but I have a feeling I will learn more about strategy in Microeconomics class than in strategy class

Ethics and Corporate Social Responsibility
The cases chosen for this class were excellent. I think all of them touched on extremely relevant and contentious topics that we might be confronted with. We started out with minor ethical dilemmas (such as putting information in a favourable light to sell at a higher price (is this how business works or not?), but then moved on the more political topic of corruption: what should an individual manager do in a situation where he is urged to bribe and it may be the only way to get a contract? Should managers act differently when they are expats? And in the very end, we got to topics of Corporate Social Responsibility, discussing pharmaceutical firms' responsibility to give away cheap drugs to developing country's and also Walmart's responsibility to the environment, its employees and its suppliers' employees. All of the cases were quite controversial. My favourite phrase of a classmate was "but we are just assuming this is corruption. I would prefer to call it relationship building!".

What left me a bit frustrated was that in the end I haven't advanced at all in this class. Yes, I have heard other opinions. But I have in no way been able to make up my mind. I still don't have a strong stance on these topics and mostly I still don't know if it makes sense to do what seems on the surface to be the "moral" thing to do. But it is still fascinating to see the diverse opinions. When you work together with people you sometimes assume everybody has the same moral values, but it was quite clear there are very different views. So I think it is great that we have had this class, but I can't say I have a clearer view on what is the right thing to do in all situations, it's tricky.

Accounting
I was quite disappointed to find out we would be taught actual accounting (recording transactions) as opposed to financial statement analysis. I assume they assume you need to learn bottom up and put balance sheets together yourself in order to understand them better, but I think if we used all the time we spend on pretending we have an ice cream shop and record transactions actually learning the theory and conventions of financial statements and digged into financial ratios, risk analysis etc., it would be much more fruitful. At my company, I had the great privilege to be taught in Financial Analysis by Kellogg professor Art Raviv, and the one phrase I remember very clearly from him is "Accounting is a myth, accounting is fiction, accounting doesn't exist!" and then went on to teach us how to actually dissect financial statements and get to the truth behind them. That was much more fun. We are getting a new teacher next week though, let's see if his approach is different. I'm upset though because I think accounting is very important and not many people are good at it, so it is a useful thing to learn, the problem is so far I haven't been able to get enthusiastic about what we are doing and haven't learned anything in the class.

Strategy
I haven't made my mind up about this class yet. It is definitely a very hard subject to teach. The cases are good and we watch a lot of videos, which is fun. I think I have to do some outside reading (the professor posts many optional readings on portal but I've never managed to have a look at them so far). It may be a subject where you only get as much out of it as you put in, so I need to put more effort into it. Next week we have our strategy group assignment, let's see if I get into it then.

Finance I
Obviously, I came to London Business School because I wanted to learn Finance. Our teacher is great and the speed is extremely fast. Despite some initial knowledge and my interest in the subject, I find it quite challenging and I learn a lot in every class. The first group assignment was great, we did a valuation of the Airbus superjumbo, and it was exciting to do the valuation at a time that you read about the delays and their impact on the breakeven in the FT. I wish I had more time to study finance, we learn so much and I get by, but I fear I might forget lots of it next year, so I hope they repeat the content once in a while.

So overall, my impressions are mixed. I've learned a bit less that I hoped to and have caught myself reading FT or writing sms to friends on my Blackberry in class, and that is something I really did not want to do, but sometimes we don't learn anything interesting and I have to do that, I am impatient and need to do something, either leave the classroom or read or write, whatever keeps me busy. Next weeks will be busy so I might pay more attention in all classes from now on.

Pictures from Diwali party

A few weeks ago, some classmates of mine complained that I never post pictures of the class on my blog. Then I posted some pictures from Tatoo on my blog, and others came to me and complained why I had posted pictures of others but not of them on my blog! :-). So it sounds like there is demand for more (maybe not from the viewers, but from the objects ;-) ). In any case, I think even for applicants it's nice to have an idea of the MBA students of a school. So here are some uncommented pictures from the Indian Diwali party a few days ago...










































































Next post (hopefully tomorrow) on the Lehman Brothers Women Workshop in their Canary Wharf offices. It was a great and very insightful event so it is definitely worth posting more about it.

Women in Business Conference 2006

Yesterday we held the Women in Business Conference at the London Business School. What an experience! It was very high profile and I met and listened to some very impressive women:

1) Vivienne Cox, Executive Vice President and CEO, Gas, Power & Renewables and Integrated Supply & Trading, BP

Vivienne is one of the top people at BP and also an excellent speaker and a very nice person. She spent some time talking about renewable energy, but the most interesting parts were her advice to succeed (and I think that goes for men and women alike). Her advice was: "find something that only you can do and know what only you can do". This is useful for two things:
- If you ever want to work flexible hours, go home early or in any way appear to put in less time than others (e.g. when you have children), she said it is crucial that you are still the best person to do that job. So you have to know what you excel at and make sure you leverage this skill on your job. That way, you are in a much more favourable negotiating position than if you are easily replaceable
- If you're a boss, you may find yourself in the position of having 1,000 things on your to do list and you may get overwhelmed by all the work. So knowing what only you can do also means that you know which things others can also do by exclusion. So her advice was if you are overwhelmed, only do the things that only you can do and delegate the rest. Also sound advice

2) Dorothee Blessing, Managing Director, Goldman Sachs IBD
Many who saw her agreed that Dorothee was the jewel of this conference. Finally, an example of a very smart and ambitious women who loves her job, has a big family (three children) and is an extremely good and helpful person. Her answers to the questions from the audience were very insightful and she listened very closely and thought very hard to give just the right answer to that person.

She shared some wisdom of hers that I will never forget. Lots of us were wondering "how is it possible?" to work fulltime in investment banking, travel around the world and have three children? Her answer was that the main problem is not about being a women. She said the most important thing is to know what you want in your life. This gives you determination and also makes you do only the things you love. In her case, she said she always knew she wanted a big family, no matter what. She then joined Goldman Sachs in Frankfurt and simply loved the job, so she also wanted to continue in that job. She said if you know exactly what you want and love your job, you will find a way to make things work.

The conclusion to this is that maybe many women who say they can't handle job and family or they need to withdraw from work because it doesn't work never loved their job in the first place? Maybe we just use children as an excuse to leave a place we didn't want to be in anyway? I'm not claiming it is going to be easy and Dorothee wasn't. I just found it very insightful that instead of agonizing over how hard it is to be a woman, we would do well investing this time in figuring out what exactly we want and which job we would really love, and then I completely agree with her that you will find a way to make it work, because in that case it is worthwile.

I am very thankful this busy MD flew in from Frankfurt to share this with us. She has changed the way I think within an hour, and how often can you say that about people? This leaves me now with the task of figuring out my dream job again - ouch!

3) Networking
There was also plenty of time to network in between and after the session. Apart from having more time to talk to my lovely female classmates (they are all so nice, so this is always great, even if I do it every day :-) ), I met an Irish alumna who is now CEO of her software startup, and funnily enough also a MiF alumna from Hamburg who is now a freelance consultant in Hamburg. I also met again a Goldman Sachs recruiter I had met already at a dinner two weeks ago, and it was a pleasure to talk to her again, and then I got the chance to talk for the first time to our excellent Finance professor, Francesca Cornelli. She is one of these rare persons simply everybody has to like. She is also an excellent teacher, the pace is fast but I enjoy the class very much. I came with some previous finance knowledge but we go much further than the basics I had in every lecture. We are in the 3rd week now and already dealing with calculating forward rates, it's great

The weeks ahead are going to be BUSY. It's not so much the workload from school (though there are five assignment piled up), but more the fact that every evening there are events, so if you want to take advantage of them you only have the weekend to do any work. The events for the coming days:
- Indian Diwali party on campus, including dinner, fireworks and Bollywood dancing
- Lehman Brothers Women's Workshop in their Canary Wharf offices
- Scholarship drinks reception with the Dean and the corporate sponsors of the school
- Lunch with the MD of HR of Deutsche Bank in their offices in the City
- Undergraduate recruiting at London School of Economics, Oxford and Cambridge - since I have time I am helping out my company to recruit smart German undergrads for our German office. Some of them might be lured by opportunities in London so we have to work hard to lure them back to Germany. I think I am well suited for this because I studied in the UK and actually applied to the London office out of undergrad, but somehow the German office found out and convinced me to forget about London and come to Germany

Apart from that - still working on figuring out the right path in my life. Yesterday I decided to take a day off from this. If you look at it from an outsider's perspective, all this talk about "should I do Consulting or Investment Banking?" probably sounds completely stupid. There are so many people in London who are designers, art dealers, architects, journalists and so on, and to them I assume it all sounds the same. What I'm doing now is I'm talking a lot to other McKinsey people and then to lots of other people, often with finance background. Among the McKinsey people (we are 8 in our MBA class) I think as good as 100% want to go back and think this is the best thing to do. Of the other people I talk to, many also think it makes sense to stay a couple of years longer. It's funny how fast things can change. I'll keep my mind open for a few more months and go to all the networking and informational events, so far they have been very helpful in giving me an idea of where I would enjoy working and where I most likely wouldn't.

Pictures from London Business School - Pictures of Diversity

Yesterday we celebrated the best event at London Business School so far - TATOO! Wonder why it's called TATOO? Well, this is why:


















TATOO is a celebration of the diversity of the school, and each country or region prepares food, drinks, songs, dances or whatever they feel like to present to the school. The clear winners for me?

1. RUSSIA





























The Russians served excellent food (something I had not expected!), the fact that they didn't serve vodka wasn't their fault (we could only get drinks from the MBar and the student associations, even the German stall couldn't serve beer!), but what I liked even more were their costumes, their dances and their music. Everybody enjoyed watching them very much.

2. INDIA






























The Indians prepared a little dance/play about a flirting game, it was a lot of fun, they had beautiful costumes and the music was beautiful. I know they practiced many times of the last week so I was also impressed by their time commitment, since we are all quite busy right now, and I think it was very sweet of them to sacrifice all their spare time over the last week to show the school community their dances. Thank you, India!

3. FRANCE





















What can I say? Excellent food! The cheese was great and the burning crèpes even better! The French sure showed everyone that they know what good food and hospitality are!

And... my classmates!




































And how could I forget? THE BAND!









It is a bit ironic when future investment bankers and management consultants start singing Rage against the Machine songs ("F* you, I won't do what you tell me!"), but hey, a bit of nostalgia should be allowed, right?

Overall, a beautiful party! And now back to work - fast!