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FORTÉ
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FORTÉ INDUSTRY SNAPSHOT:
FIND YOUR FUTURE IN
FINANCE
More Women Leading
1 • FIND YOUR FUTURE IN FINANCE

Finance is an expansive industry with a host
of opportunities for a variety of women with
many different skill sets. It’s a meritocracy that
values hard work, intellectual curiosity, strong
communication skills, innovative thinking, and
the ability to execute on ideas. These are all
characteristics possessed not only by business
majors, but by women studying liberal arts,
STEM, and other “non-finance” majors.
Our goal is to demystify the finance industry,

provide a roadmap to different financial career
paths, and explain some financial industry
jargon. This piece won’t cover all the career
opportunities available, but it will provide a
strong foundation from which to continue
exploring areas that interest you most. With
so many opportunities available, especially for
women, there is no better time to explore the
finance industry and your place within it.
This industry snapshot was

developed with the support of:
© 2018 Forté Foundation. All rights reserved.
When considering a career in finance, you have many responsibility in the same firm. The opportunities and
options. You could work in a bank, either in a revenue career path options are endless.
or non-revenue generating position. You could work at
an asset management firm that invests the capital of Due to continuous focus on global economic growth,
its clients in public markets, private companies, or real the changing political landscape, and the dynamic tax
assets. You could work for those who have the capital and regulatory impacts, the finance industry continues
to invest (institutional investors). You could work for to innovate and expand. Everyone is looking for talent,
corporations Chevron, Dow Chemical, or Whirlpool that and finance firms are beginning to seek students earlier
need capital to expand or grow their businesses and in the recruiting cycle. So the earlier you can begin
finance experts to work in the budgeting, reporting and exploring the finance industry and understanding the
auditing functions that ensure the financial “health” career paths available, the better. You want to be able to
of the organization. All of these entities are part of the make an informed decision about what is best for your
finance ecosystem supporting global economic growth. personality and your skill set.
One of the wonderful things about working in the You are in luck. Many firms have targeted efforts to
finance industry is that it enables you to build a broad recruit and retain women. With that in mind, let’s get
skill set that you can draw on throughout your career. started demystifying the finance industry!
For example, you might spend two years honing your
skills at an investment bank, move on to a private equity
firm for two years, take a break to obtain your MBA, and
from there move into a corporate finance position and
progress to the C-suite. Or you can start as an analyst
in investment banking and become an expert in an
industry group, like healthcare, then advance to the
level of Managing Director as you increase your level of

WHAT IS FINANCE?
Selling and Buying Make the World Go Round
Finance is defined as the management, creation, It is easiest to view the financial services industry in two main
areas: the sell-side and the buy-side. The sell-side of the finance
and study of money, banking, credit, investment,
industry sells advice, services, and products to the buy-side of
assets and liabilities. It is the study of how money the industry, which uses the services, advice, and products to
is acquired and managed in order to create growth. invest in companies on behalf of clients. Sell-side firms act as
advisors, agents, or intermediaries. The buy-side firms commit
Finance and economics are interdependent. For
capital (their own money or money they manage on behalf of
example, if the government decreases the corporate others) to organizations through public or private investments.
tax rate, it is an economic policy that encourages
The sell-side of the industry is represented by investment
companies to expand. Those companies may go
banks. Investment banks are financial institutions that assist
to the finance industry and raise capital to grow, individuals, corporations, and governments in raising financial
thereby creating jobs and more disposable income capital. In many cases they act as trusted advisors to their
clients when making big decisions that impact the future of
for families that then helps the overall economy
organizations. They facilitate the buying and selling of stocks,
grow. Choosing a career in finance is exciting bonds, and other investments. They help companies “go public”
because it allows you to have a direct impact on the with an Initial Public Offering or raise additional capital through
issuing debt or additional equity. They serve as advisors to help
economy and the lives of many.
companies acquire or merge with
other companies or to divest of
In its simplest form, finance is the movement of capital from divisions or the company as a whole.
those who have it (e.g., pensions, endowments, foundations) Investment banks may be part of
to those who need it (e.g., corporations). The finance industry large, universal banks such as Bank
engages investors and facilitates the movement of money of America and J.P. Morgan Chase;
through capital markets transactions, private investments, and they may be large independent
products/services to the companies and individuals seeking investment banks such as Morgan
resources. As you can see, the finance industry has many players, Stanley and Lazard; or they may be
but at its core, it is simply the movement of capital. Let’s focus on boutique investment advisory firms
Financial Services first. such as Evercore and Guggenheim.
The sell-side of the industry has
many career paths that we’ll explore
later in this guide.
FIND YOUR FUTURE IN FINANCE • 4

The buy-side of the industry puts the capital from investors • R eal estate development or investing firms like Hines,
to work through direct investing in public markets or through Greystar, and Prologis
private investments. The buy-side includes: • I nsurance firms such as Liberty Mutual, Prudential, and Aetna
• A sset Management firms such as PIMCO, Invesco, and • P rivate wealth management firms or financial advisor firms
Capital Group such as Ameriprise, J.P. Morgan, and Edward Jones
• Hedge funds (a sub-component of investment management)
like Two Sigma, Bridgewater, and Citadel Now that you have a general understanding of the financial
• Private equity firms such as Carlyle, KKR, TA Associates, and services industry and some of its components, let’s get into
General Atlantic some of the details.
FINANCIAL SERVICES INDUSTRY
SELL-SIDE VS BUY-SIDE
Corporate Sales & Investment Private Private Wealth Real
Research Insurance
Investment Bank Trading Management Equity Management Estate
Corporate Banking Hedge Funds
Capital Markets Pension Plans
The image above represents the buy vs. sell side of

the industry and many of the career opportunities
available. This is not an all-inclusive list, but provides
an overview of the most common parts of the financial
ecosystem that women might consider for a first job
post-graduation and as future career stops on a long,
rewarding, and profitable career in finance.

INTRODUCTION TO
THE SELL-SIDE
What’s For Sale?
First, let’s look at the sell side, and specifically at banking, as it INVESTMENT BANKS are financial institutions that, acting
is one of the largest employers of undergraduate women in the as an intermediary, facilitate capital flows between investors and
finance industry. Banking provides myriad career paths, typically companies, as well as provide strategic and financial advice. They
has formal training programs with built-in networking, and leads help individuals, corporations, and governments raise capital
to a wide range of opportunities. through public offerings in equity and debt; advise on mergers
and acquisitions; and facilitate the buying and selling of stocks,
When looking at the banking landscape through the lens of bonds, and other investments. Examples of investment banks
finance, it is important to distinguish between the types of banks: include Morgan Stanley, Evercore, and Lazard.
commercial banks, investment banks, and universal banks.
UNIVERSAL BANKS have both commercial banks and
COMMERCIAL/RETAIL BANKS aggregate deposits, lend to investment banks. They provide all the above-mentioned products
businesses and consumers, and primarily deal in products such and services under an umbrella organization and are typically
as depository services (checking/savings accounts, certificates global institutions. Examples of universal banks include Bank of
of deposits), loans (mortgages, business loans), and treasury America, Citigroup, and Wells Fargo.
services. Examples of commercial banks include PNC Financial
Group and M & T Bank.
COMMERCIAL BANKS UNIVERSAL BANKS INVESTMENT BANKS

THE BROADER BANKING LANDSCAPE
Business Model
Business Model • Intermediating capital flows
• Aggregating deposits
between issuers and investors
• Provide strategic and financial advice
• Portfolio lending to businesses
and consumers
Primary Products
Primary Products • Public Debt & Equity
• Leveraged Finance
• Senior Debt
• Structured Products
• Treasury Services
• Mergers & Acquisitions
• Depository Services

VOCA B C HEAT SHEET
COMPETITIVE LANDSCAPE
(ONE PERSPECTIVE)
Bulge Bracket is a slang term to BULGE

BRACKET
describe the largest and most profitable
multi-national investment banks in the world, MIDDLE
such as J.P. Morgan, Goldman Sachs, Morgan MARKET
Stanley, Citigroup, Barclays, Bank of America

Merrill Lynch, Credit Suisse, and Deutsche BOUTIQUE
Bank. These firms usually have offices around

the world and offer every product and service LOW
CAPABILITIES HIGH
available to help companies acquire capital.
Middle Market banks are firms

with sizable annual revenues ranging from
$50mm to $1bn; they are typically in the US
and some other countries but not truly global.
They often focus on slightly smaller deals such
as those involving the 51st to 200th largest
companies in a given industry, versus the top
50 companies in that industry, where bulge STRUCTURE OF
bracket firms tend to focus. They provide only AN INVESTMENT
some of the products and services of a bulge BANK
bracket, but offer more than boutique firms.
Examples of middle market firms include PUBLIC PRIVATE
Macquarie Group, Guggenheim, BMO Capital
INFORMATION BARRIER
Equities Fixed Income
Markets, and Jefferies & Co. Sales &
Trading
Sales &
Trading
Investment
Banking “Issuers”
“Investors” Users of
Providers capital
Boutique investment banks of capital
are smaller and do not provide a full array Equity Credit

of products and services. Instead, they Research Research
specialize in some services such as mergers & MIDDLE OFFICE
acquisitions (M&A) or restructuring. Examples BACK OFFICE
of these boutique investment banks include FIRM-WIDE SUPPORT FUNCTIONS
Evercore Partners, Lazard, Centerview, and

Houlihan Lokey. Other boutique investment
banks focus on a particular industry such
as Technology. An example of a technology
industry-specific boutique bank would be
Qatalyst Partners LLP.

Investment Banking
T HE BIG P I CTURE
Investment banks deal directly with corporations, governments, municipalities, and individuals
to provide an advisory service. Remember, investment banks are INTERMEDIARIES between the
providers of capital and the users of capital. An Investment Bank provides information and services
(sales & trading and research) that are available to the public while also providing specific services
and guidances that are “private” and available only to the parties involved (investment and corporate
advisory services). Some of their services are mergers and acquisitions (M&A), restructuring including
divestitures, and capital raising through debt or equity issuances. Investment bankers will provide
advisory services on the private side, and then will help execute a transaction in the markets and keep
the flow of capital moving on the public side (a.k.a., global markets). Below is a short list of some
services that an investment bank will provide on the private and public sides.
The key revenue-generating career paths

SERVICES OF A CORPORATE INVESTMENT BANK in an investment bank are Corporate
Investment Banking, Sales & Trading, and
Research. We will explore these, as well
INVESTMENT BANKING GLOBAL MARKETS
as the non-revenue generating career
Advisory Sales & Trading paths: middle office, back office, and firm
• Mergers • Equities
wide support functions. Many women
• Acquisitions
• Hostile Defense (Spin-offs)
• Convertibles
choose to start as investment bankers
because of the skills they will develop in
• High Yield Bonds
• Restructuring
• Investment Grade Bonds
• Syndicate Loans
this role, as well as the strong training and
Origination / Capital Markets • Asset Backed Securities networking opportunities. If you choose
• Common Stocks • Foreign Exchange to be an investment banker, you’ll need
• Preferreds • Commodoties
to determine if you want to be a corporate
• High Yield Bonds • Derivatives
• Investment Grade Bonds • Public Finance
banker (a.k.a., coverage or industry banker)
• Syndicate Loans or a product banker. Although you can
• Asset Backed Securities change between areas, this basically means
Services
• Derivatives
• Research
that you need to decide if you want to be an
• Prime Brokerage industry expert or a subject matter expert.
• Investor Services / Custody

CORPORATE/COVERAGE/INDUSTRY BANKERS corporate activities. One subset of DCM is:
know a particular industry very well. They are industry experts.
L everaged Finance (“Lev Fin”) is the issuance of high-yield
If you pursue this route, you will develop strong relationships
debt to firms to finance acquisitions and other corporate
with companies in the industry, understand the industry
activities. The Lev Fin group tends to work with companies
landscape, and be aware of industry and sector trends. Typical
that are considered higher in risk for the capital.
industries are Healthcare, Industrials, Financials, Consumer
Retail, and TMT (Technology, Media, & Telecom). As an analyst • Restructuring is the improvement of the capital structure
corporate banker, you will work with other members of the
of a company to make it more profitable or efficient by
industry team to provide advisory services that demonstrate
changing the terms on existing debt or issuing new debt
you are an expert in that industry.
and retiring current debt instruments.
PRODUCT BANKERS are experts in a particular financial WHAT DOES AN INVESTMENT BANKER DO?
product such as debt, equity, or M&A. They are subject matter College graduates enter investment banking as analysts and
experts. Product bankers might provide expertise in the may be promoted to associate after two years. MBAs enter
capital raising function and help clients issue debt, they may investment banks as associates. When you join, you will be
complete an Initial Public Offering or an equity follow-on, part of deal teams that range in size from 3 to 10 people.
they may have in-depth knowledge on how to complete an The deal team is a matrix of people: it will be comprised
M&A transaction. If you choose this route, you will collaborate of corporate/coverage bankers and product bankers and it
with the corporate/industry bankers to bring the right product will include and it will include bankers at different levels.
to the client to meet the client’s needs. Product groups offer Investment banking transactions are a team effort and
guidance on particular types of transactions including: require collaboration, innovative thinking, intelligence, and
lots of hard work, culminating
• Mergers and Acquisitions (“M&A”) are transactions in
in many hours to make a
which the ownership of companies or their operating units transaction happen.
are transferred or combined. M&A allows enterprises to
grow, shrink, and/or change the nature of their business, Analysts (a.k.a., “junior
usually to bolster a competitive position. Some banks have bankers”) perform a variety
M&A practice areas while others allow an industry group to of functions. They conduct
do their own M&A. industry/product research,
assess the financial health of
• Equity Capital Markets (“ECM”) are equity and equity-
companies, perform financial
derived products including IPOs, secondary offerings/ analysis and modeling
follow-ons, and capital raises. (e.g., Discounted Cash Flow
Model), develop and prepare
• Debt Capital Markets (“DCM”) are transactions that
client presentation materials
raise and structure debt to finance acquisitions and other (PowerPoint presentations,

T HE I N SI D E SCOOP
pitch books, roadshow materials, board
materials, etc.) to market the firm’s services
and ideas to potential clients, and help
W hen recruiting investment bankers, firms look for students
with a very high GPA (3.5 or above), high SAT/ACT scores, and
execute live deals. Many analysts will work
demonstrated leadership and teamwork abilities. They want to
on two to five pitches at any given time and
see evidence of attention to detail, strong analytical/quantitative/
may only have one in five pitches lead to a
technical skills, proven written and oral communication skills,
live deal. Analysts need to be comfortable
creativity, unwavering work ethic, personality (positive attitude,
preparing 100-page pitch books that
sense of humor, enthusiasm), and an ability to work under
never get used or never result in winning a
pressure and adapt to different situations.
mandate or executing a deal.
Investment banking is one of the most prestigious areas in

finance, but also one of the most demanding in terms of hours
and work/life balance. As a junior banker, you will work between
80 and 120 hours per week and work six or seven days each
week. Unlike other finance professionals, the investment banker
An example of an is focused on client needs rather than market hours. In recent
investment banking “deal” years, investment banks have decreased the number of hours
was taking Facebook from required for junior bankers and associates and limited weekend
a private company to a hours, but the unpredictability can still weigh heavily on the
public company in 2012. investment banker’s personal life.
A group of Investment
Banks provided advisory Summer interns function like junior bankers and will often work
and execution services for on pitches and, hopefully, live deals. Their work hours are similar
this deal. to those of a full-time analyst.
While the prospect of long hours and hard work might be a

deterrent, investment banking provides a rigorous training
ground and a huge network that can serve as a gateway to
other areas of finance. IB programs are “feeders” for other areas
within finance such as private equity and asset management.
Investment banking firms hire lots of people and provide
an excellent foundation of knowledge and skills that can be
transported to other areas. In addition, investment bankers
are some of the highest paid professionals, and compensation
includes a base salary and bonus.
As one advances in investments banking, the hours may

decrease, but roles at the senior levels are still very demanding.
Today, the percentage of women in senior IB roles is lower than
in other areas of banking. For this reason, investment banks are
placing greater emphasis on recruiting and retaining women.

VOCA B C HEAT S HEET
Initial Public Offering (IPO) the potential for investment. If the value arrived
or stock market launch is a process by which at through DCF analysis is higher than the
a private company transforms into a public current cost of the investment, the opportunity
company. Shares of a company are initially sold may be a good one.
to institutional investors, who then sell them to
the general public, on a securities exchange, for Due Diligence
the first time. is an investigation or audit of a potential
investment or product, and its purpose is
Mergers & Acquisitions (M&A) to verify facts, such as financial records and
are transactions in which the ownership of anything else deemed material. Due diligence
companies or their operating units is transferred may include analysis of the total value or
or combined. M&A allows enterprises to grow, capitalization of the company; an examination
shrink and/or change the nature of their of revenue, profit, and margin trends; a review
business, usually to bolster a competitive of competitors and the industry; and analysis of
position. Some banks have M&A practice the company’s management, share ownership,
areas, while others allow an IB division to do stock price history, and balance sheet.
their own M&A work. If you are looking for an
IB internship or full-time job, make sure you Valuation Analysis
understand where within a particular bank the is a process to estimate the approximate value
M&A work is done. or worth of an asset, whether it’s a business,
equity or fixed income security, commodity, real
Pitch Books estate, or other type of asset. The analyst may
Investment banking junior professionals spend use different approaches to valuation analysis
a good deal of time working on pitch books: for different types of assets, but always looks at
documents that are used to “pitch” potential the underlying fundamentals of the asset.
clients. The book contains the main attributes
of the company, potential returns, and the
qualifications of the bank making the pitch.
Discounted Cash Flow (DCF)

is a valuation method used to estimate the
attractiveness of an investment opportunity. DCF
analyses use future free cash flow projections
and discount them, using a required annual
rate, to arrive at present value estimates. A
present value estimate is then used to evaluate

Global/Capital Markets
T HE BIG P I CTURE
As discussed above, investment banks have a private side and a public side. Many undergraduates
consider the public side of finance to be a very rewarding and stimulating career and more in line
with their personality. In this part of the business, they develop relationships, intimately deal with the
financial markets, and provide industry-leading services to the buy side. These career paths typically
fall within the public side of the bank called Global Markets. Within Global Markets, the goal is to
bring capital to the marketplace. This includes research and making recommendations, distribution
“Sales”, and trading. This is where you can be creative and sell your ideas to the buy-side clients.
FOR EXAMPLE, a research analyst might cover Amazon and Wal-Mart and will have a deep knowledge of the companies and the
competitive landscape, create valuations, and provide a recommendation to buy stock in the company. Sales traders will use the
research reports generated by analysts to talk to their buy-side institutional clients such as State Street. The institutional client
reviews the information (more on this later) and sends a trade order to the sales person who, in turn, gives the trade order to the
trader. The trader monitors the market and executes the trade on the stock exchange. This trade will then flow through the middle
and back offices of an investment bank to be settled and placed in State Street’s custodial account and recorded in its portfolio.
RESEARCH Clients
ANALYST (Institutions,
HNWI)
Companies Research
(by sector) Trade Ideas
Execution Order
TRADER
Trade
Research
Reports Execute in
SALES TRADER Market
CREATING AND
SELLING IDEAS
TO CLIENTS
FORTÉ FINANCE 101: A WOMAN’S GUIDE TO A CAREER IN FINANCE • 12

TH E BIG PICTU RE
Sales & Trading
An investment bank relies on its sales department to sell A common question in
determining whether a student
bonds or shares of stocks in companies it underwrites or is best suited for Investment
sell trade ideas that their clients then execute with the Banking, Sales, Trading, or
investment bank. These transactions help create revenue Research is
(a.k.a., “Commissions” or “Fees”) for the bank. Investors who Do you like
want to buy or sell a certain stock or bond will place an order with
working on
a broker or sales representative who “writes” the ticket for the
order. The trader makes the trade in the public market.
group projects,
taking tests,
WHAT DOES A SALES their clients. Through developed relationships, or writing
TRADER DO? they will receive and execute the orders
and help clients build their portfolios of
papers?
Sales traders sit between clients and traders.
They maintain relationships with institutional investments, generating a strong reputation
Investment banking work
investors and are known as the distribution for themselves and the bank.
is a team sport. You’ll
pipeline. When a client calls in an order, work with a team for long
the sales person either gives a quote or WHAT DOES A TRADER DO? hours to complete a paper
asks the traders for a quote and provides Traders develop in-depth knowledge about
or presentation. It takes
intelligent market data to the clients (e.g., certain markets, companies, and industries.
autonomous work to do your
research reports). They bring orders to trading At an investment bank they typically have one
part of the group project and
desks and manage client relationships by of two roles: (1) “Making a market” by buying
collaboration to bring the
connecting clients to all the resources that or selling securities for a client’s account
group together to make the
a firm provides. Sales traders develop and and at the client’s request, or (2) proprietary
presentation a success. Sales
cultivate client relationships through sharing trading by buying and selling securities for
& trading is like taking a test –
tactical trade ideas or research and giving the investment bank’s own account. This is
intense pressure over a shorter
market intelligence based on what they and necessary so that the firm can hedge out its risk
period of time, and each day is
the traders are seeing in the markets. They when it is trying to make the best markets for
a fresh start. Research analysts
often have to negotiate between their clients its clients. They may trade higher volumes than
love writing papers; they dig
and traders when clients want to get the lowest what the client needs in order to get a lower
deep into all the details and
price for what they are buying and the highest price and then hedge out the additional share
understand the nuances, and
price for what they are selling. Sales traders purchases to make sure the firm is not exposed
then they write substantiated,
also work with investment bankers who have and/or is making a bit of profit themselves.
30- to 50-page papers to fully
IPOs, equity follow-ons, or debt issuances sell explain their position.
in the market. Most traders specialize in one type of security
or market such as equities, fixed income
Sales people have strong communication skills (bonds or cash equivalents), foreign currencies
and have the ability to cultivate relationships (Forex, FX), or derivatives. Equity traders spend
and understand their clients so that they time persuading other traders why their offer
can bring the right trade ideas and right is a good trade for their firm. Fixed income
transactions at the right time to add value for traders use their analytical skills to price and

sell inventories of bonds
and other financial
instruments. Derivatives Some trades are meant to VO CAB CH EAT S H E E T
traders must have strong be long term and some are
analytical abilities and short term. If you purchased Stock in contrast to futures
be very technically $1,000 worth of Facebook
Common stock where the price is
savvy. Finally, foreign traded on one of the locked in and the sale
stock at it’s opening price
exchange traders rely exchanges (NYSE is final.
of $38/share in 2012, you
on their knowledge of or NASDAQ, for
would have lost money at
macroeconomics and the end of that day. But the
example). Long
market events to gauge If you’re long
current value* of that trade is Bonds
the direction of markets. something, then you
$5,304, a 400% return over Debt instruments, own something. If you
the six year period. including government bought a security, you
Facebook stock valuation as of 7/15/18.
bonds, usually issued
*
are long that security.

by the US Treasury.
Short
Munis If you’re short
Municipal bonds are something, it means
from cities/states/ you sold something
government agencies. without really owning
A successful sales & trading career requires strong They are often linked it (thus you’re going
customer services skills and comfort with risk and to derivatives. to need to buy it at
volatility. Other key traits are the ability to make some point). It’s like
decisions quickly, resilience, a competitive nature, and Derivatives being in debt.
a positive attitude. In assessing candidates, interviewers A security that derives
may try to determine if a student has “fire in the belly” its value from another
and a passion for the markets. Bid
security. The price at which
Summer interns in sales & trading generally rotate someone wants to
among different areas such as equity, fixed income, Futures buy something.
commodities, and derivatives and “shadow” traders A futures agreement
and salespeople, since they don’t have the licensing or is a contract that locks Ask
experience required to execute trades. in a price for some The price at which
financial asset in the someone wants to sell
Students looking to enter sales & trading careers should future. something
be prepared for a fast-paced, high-pressure environment.
Sales & trading analysts and professionals work an Options Hedge
average of 60 to 70 hours a week. Their day starts around A contract that gives A way to minimize risk
6:30 a.m., looking at market data before the markets the buyer the right,
open, and it ends one or two hours after the markets on a trade by going
but not the obligation, into another trade
close. They are “tied to their desks” meaning they eat
lunch at the desk and have very few opportunities to to buy or sell a that tends to move in
step off the trade desk - not even for rest room breaks. financial asset at a the opposite direction.
However, unlike investment bankers, they rarely work given price. This is
weekends or evenings other than the occasional social
event to build and cultivate their client relationships.

Research
THE BIG P I CTURE In order for sales traders to bring tactical and global macro views to
their clients, they rely heavily on their research groups. The research department at investment banks,
similar to research analysts on the buy side, are the foundation for understanding companies and
their value, and how that compares to the current trading value in the markets.
WHAT DOES A RESEARCH ANALYST DO? of global and domestic news and economic indicators.
Research analysts are financial professionals who have Quantitative analysts typically develop computer models to
expertise in evaluating investments. They are detectives on value securities and structure portfolios that are used by sales
the companies and industries they cover; they dig deep to traders, portfolio managers in the investment management
understand the products, services, competitive landscape, division, or program trading. The position usually requires
and the financial stability of the company, and then provide programming skills such as C++, Python, or Java, in addition
a buy, sell, or hold recommendation in the form of a research to superior analytical skills. All the research positions require
report. They look at financial statements and public filings strong communications skills because you have to meet with
(e.g., 10-Ks and 10-Qs), listen in on company shareholder clients as well.
meetings, and talk to the C-suite of the company as well as its
competitors. They take all this information and run financial
valuation analysis to compare what they think the company is
worth to the market trading value. They write 30- to 50-page
research reports and then synthesize that information to two Research analysts can work 60 to 80 hours per
to four pages for sales traders to use when talking to clients. week, and the work is heavily quantitative. They
Sometimes, research analysts talk to clients at the request of have the ability to focus on one subject in depth
the sales trader, as they are the firm’s expert on that company and be a “master of one idea.” They have an
and/or industry. analytical mindset combined with a high level of
intellectual curiosity as well as strong written and
If you decide to be a research analyst, you’ll need to further verbal communication skills. They work on longer
decide if you want to do equity research or credit research. projects and work longer hours during earnings
Both equity and credit research analysts impart their expertise seasons in order to incorporate new information
to clients and provide an analysis of US and world economies provided by companies into their models. If you
and the potential effects on their universe of companies. The like writing research reports and digging deep
difference is nuanced. Equity researchers also compare and to understand every nuance, then being a
contrast companies in their sector to form views of future research analyst could be the right career
path for you.
T HE IN S IDE S CO O P
performance for institutional accounts.
In many research departments (and sometimes in the In comparison to the investment banking
investment management division of a bank), there are and sales & trading internships at banks,
additional positions for economists and quantitative analysts. there are far fewer research internships.
Economists provide an opinion on the future of the market Interns in research departments will be
and general economy based on models that they develop assigned two to four companies to follow
and maintain, third-party models and analyses, and analyses and will likely have one or two stock pitches
during the summer to present ideas and
analysis to senior analysts.
Stock Pitch and statement of cash flows. It is a standard

This is a verbal or written summary or full practice for businesses to present financial
presentation of an investment opportunity and a statements that adhere to generally accepted
buy or sell recommendation to a client. There are accounting principles (GAAP) to maintain
six major components of a stock pitch: continuity of information and presentation
• Summary of the stock across international borders. Financial
• Company background including its business statements are often audited by government
model, management, and attractiveness agencies, accountants, and firms to ensure
• Investment thesis regarding whether the accuracy and for tax, financing, or investing
company is worth investing in purposes.
• Upcoming events that could impact the value
of a stock
• A valuation analysis Capital Structure
• Discussion of risk that could negate your is how a firm finances its overall operations
investment thesis and growth by using different sources of funds.
Debt comes in the form of bond issues or long-
Research report term notes payable, while equity is classified
A document prepared by an analyst or strategist as common stock, preferred stock, or retained
who is part of the investment research team in a earnings.
stock brokerage or investment bank. A research
report may focus on a specific stock or industry
sector, a currency, commodity or fixed-income
instrument, or even on a
geographic region or country.
Financial
Statements
for businesses usually include
statement of operations
(income statement), balance
sheet statements, statement
of stockholders equity
including retained earnings,

Additional Roles
Middle Office, Back Office, and Firm-wide Support
THE BIG P I CTURE

Middle Office
The revenue-generating roles of an investment The middle office sits (aptly) between the client-facing,
revenue-generating front office roles and the operational
bank, some of which are described above,
support of the back office. The middle office is semi client-
are often referred to as the “front office” of an facing and functions to assist in revenue generation. Some
investment bank. However, an investment bank firms include only risk management, credit, and compliance
in their middle office, while others add client-interaction
would not exist without the strong support of its groups such as trade processing. The goal of the middle
middle office, back office, and firm-wide support office is to ensure that the investment bank doesn’t engage
areas. These roles may not be client-facing or in activities that could be detrimental to the bank’s overall
health as a firm. Some roles that undergraduates actively
direct revenue-generating functions, but they pursue are:
are vital to the sustainability of the firm and its
products and services. They are the foundation • Compliance: These roles work with sales, trading, research,
investment bankers, and all other functions to ensure full
that must be solid for the investment bank to compliance with the rules and regulations of the governing
function effectively and grow. bodies. They monitor trading activity to prevent insider
trading and conflicts of interest and establish policies and
The front-line investment side of finance is not for everyone. procedures to be followed.
Some may not want the long, strenuous hours of an
investment banker, have a passion for the markets, want • Risk Management: Risk Managers are known as the
to be in a client-facing role, or the desire to be detectives “watch dogs” of the firm. They plan, design, and implement
and write a “thesis” every few weeks. The great thing about risk management process. They analyze, identify, and
finance is everyone can find a job in the industry that fits her quantify risks to the firm by position, market, credit, and
personality, skills, and work-life balance desires. counterparty. They must monitor the firm’s and clients’
portfolios to make sure that they are in the best interest
Here are some great career opportunities in the vital, but non- of all.
revenue-generating, areas of an investment bank. Although
these are not 9:00 to 5:00 jobs, the hours tend to be more • Trade Reconciliation & Client Reporting: This team
reasonable (approximately 50 hours a week) and don’t have interacts directly with the clients’ operations teams. They
the same intensity or stress often associated with the front capture the trades executed by traders in the front office,
office positions. enrich the trade data, and validate information including
settlement instructions, wire transfers, and trade details.
They create daily reconciliations of cash and positions and

report all activity to the clients. They also create fair market
valuations for complex trades such as swaps and derivatives.
For some firms, this function is called operations and sits in Firm-Wide Functions
the back office. Many undergraduates are interested in the finance
industry, but eventually want to become lawyers or strategy
consultants or work as marketing or recruiting professionals.
Back Office As we’ve said before, there’s a career path for everyone
The back office provides support so that the front office can in finance. Those who aspire to the legal profession but
do the jobs needed to make money for the investment bank. want some work experience prior to law school can work
Back office positions complete tasks associated with trades in the legal department of an investment bank on various
such as settlements, regulatory compliance, and clearing. contract negotiations. Recent undergraduates can work
These are very process-oriented roles and are the foundation on implementing new procedures, products, or growth
for an efficient firm. initiatives serving in a business analyst role for the CFO/COO.
Recent graduates can also work in the marketing department
• Operations: Some firms put the trade reconciliation of an investment bank, producing advertisements, pitches,
and client reporting function in the back office and call it and events that showcase the products and services that the
operations. This means that they handle trade clearing/ investment bankers, sales and trading groups, or research
settlement and report to clients all the fund accounting and analysts create. There are also large human resource
administration. They also function as wire or transfer agents departments at investment banks that focus on recruiting,
to make sure all cash and securities are moved efficiently compensation issues, or training and development.
between accounts. They also handle all corporate actions
(e.g., dividends, stock splits). There is definitely a place for anyone interested in finance
to be a part of this integral industry that impacts our global
• Technology/IT: IT is becoming the largest part of economy. It is especially suited for those who are passionate
investment banks. This function is responsible for creating about markets and helping companies grow.
and maintaining software, implementing new trading
software (off the shelf or proprietary), and technical support.

One More Thought on Buy-Side:
Other Parts of a Universal Bank

When you begin exploring the finance In all these cases, the roles found in investment
T HE B IG PICTU RE
management divisions of organizations like

industry, it might be confusing to
J.P. Morgan, Bank of America, and Citigroup are
see the sheer number of divisions in similar to the roles found at BlackRock, PIMCO
large investment banks and universal and other buy-side firms. As an explorer of the
finance industry, you may consider these roles
banks. For example, a universal bank appealing. You should evaluate whether you like
will include the investment bank, the brand and benefits of being part of a large
the retail bank, and an investment institution and, therefore, choose a role in the
investment management division of a bank. Or,
management division. The investment you may like the idea of working directly for a
management division is an umbrella buy-side investment management firm that is
term for two distinct hiring areas: smaller, more nimble, and has a different cultural
environment.
Asset Management and Wealth
Management. Wealth management,
depending on the institution, may
also be referred to as Private Wealth
Management or Private Banking. This
refers to the managing of investments
for wealthy families, individuals,
and sometimes endowments and
foundations. Asset Management
involves the investments of pension
funds, insurance companies, and
sovereign wealth funds in public and
private vehicles.

INTRODUCTION TO
THE BUY-SIDE
Buy Buy, Baby, Buy Buy
Now that we’ve explored the sell-side of the discuss some key opportunities on the buy-side
industry and its products and services, it is time including investment management, private
to turn to the buy-side. As a reminder, the buy- equity, private wealth management, insurance,
side of the industry engages with those who and real estate. Many women want to start on
have capital to deploy (e.g., pension plans, the buy-side or aspire to go to the buy-side due
foundations, etc.) and allow others to the perceived work-life balances, but also
(e.g., corporations) to use it in return for interest because it’s rewarding to see your investment
or dividends. The buy-side of the industry has ideas put to work.
many career paths. Some are a great place
to start upon completing your
undergraduate studies, and others
are best to pursue after several
years of experience on the sell-
side or in other areas of finance.
In the next few pages, we’ll

Investment Management
Investment management can be puzzling because of the lingo. Many people confuse investment management, asset
management, and hedge funds. In simple terms, Asset Management is a broad term to describe the management of a
wide variety of assets for institutions or individuals. It can include managing stocks, bonds, mutual funds, and other products
in the public or private markets, as well as managing real assets and financial planning. A subset of Asset Management is
Investment Management. This is the professional management of securities (shares, bonds, and other securities) and other
assets (e.g., real estate) in order to meet specified investment goals for investors. Simply stated, it is the buying and selling
of investments within a portfolio to generate a return. Hedge funds are just a type of investment management firm with
specific characteristics, which we’ll discuss below.
INVESTMENT MANAGEMENT VS ASSET MANAGEMENT
ASSET MANAGEMENT
INVESTMENT PRIVATE WEALTH
Hedge Funds Private Bank
The goal of investment management firms is to make money This is not a transaction-oriented business like the sell-side.
from money. They research, invest in, and hold stocks and bonds
for institutional and retail clients. Investment management firms Each investment management firm will have an investment
have an overall investment thesis and philosophy and may have philosophy that can include fundamental and technical analyses.
several portfolios representing different investment strategies to The firms sets an investment policy to outline its investment
offer the most customized options for their investors. Investment objectives, perform security analyses, construct a portfolio, and
managers have a FIDUCIARY duty to their clients and must revise and re-evaluate the portfolio. They follow the investment
ensure that their investment strategy is suitable for their clients. philosophy and create risk-adjusted returns for their investors.

There are many roles at an investment

T he buy-side analyst role at and written communication
management firm. The portfolio manager’s abilities to convince others.
an investment management
job is to pick a portfolio of stocks, bonds, or
firm can be an alternative to
combination of the two that is based on the For many individuals, the
sell-side roles. The hours are
firm’s investment strategy and provides the trajectory is to learn as an
typically similar to those of
highest possible returns for its investors. analyst and then become a
other market-based roles:
The portfolio manager role is often the portfolio manager. Many stay
60 to 70 hours per week and
long-term goal of many undergraduates. at the same firm for many years
rarely on weekends, unless
However, as you start at the firm, you will after either starting at the firm
it’s earnings season. There
begin as an analyst. The analyst role at an post-graduation or moving
can be some travel in this
investment management firm is similar to to the firm from a sell-side
job, as research analysts and
the research analyst role at a sell-side bank. investment banking or research
portfolio managers often
The analyst performs fundamental analyses analyst position. Often, those
meet with companies that
of companies, becoming an expert on who exit from an investment
they will potentially invest in
a company to determine if it should go management job stay on the
as well as those companies’
into the investment portfolio. This might buy-side, going to another
competitors or suppliers to best
include reviewing its financial statements; investment management firm,
understand the competitive
speaking with the company’s C-suite; and a hedge fund, or in some cases,
landscape to make the most
meeting with its competitors, suppliers, a private equity firm.
informed investment decision
and customers. If she likes the company,
They become experts in the
she presents the idea to the portfolio Investment management firms
companies they cover.
manager(s) to sell them on adding the are concentrated in major
company to the investment manager’s business centers like New
Most large, buy-side firms
portfolio. York, Boston, Chicago, and Los
have both a training program
and a formal mentorship Angeles. However, if you want
Investment management firms have to return to your home town
program. Firms recruit women
other roles to consider such as trading, or explore a city that isn’t in
for their analyst roles who
operations, risk management, and IT. the mainstream of financial
are intelligent, innately
Similar to the sell-side investment bank, investing, there are investment
inquisitive, self-motivated,
there are non-investment-related roles that management firms elsewhere,
resourceful, focused, and
are integral to the efficient functioning including Dallas, Houston,
strong communicators.
of the firm. The individuals in these roles St. Louis, Minneapolis, and
As we’ve said, analysts in
often talk to their counter-parts at the sell- Baltimore, just to name
investment management are
side investment bank. a few. Some investment
like detectives looking at all
the information to “solve” management firms that hire
the decision of whether the undergraduates are BlackRock,
company should be included Fidelity, T. Rowe Price, State
in the portfolio. Analysts need Street, PIMCO, Capital Group,
to have confidence in their and Invesco.
analyses, and strong verbal

Asset Allocation
The implementation of an investment strategy that attempts to balance risk versus reward by adjusting
the percentage of each asset in an investment portfolio according to the investor’s risk tolerance, goals,
and investment time frame is called asset allocation.
Investment Strategies
There are numerous strategies that investment managers employ to provide optimal returns for their
investors, including:
• Fundamental investing – performing company-specific, bottom-up analysis of companies

and selecting those with the highest value potential
• Sector investing – investing in a particular industry (e.g., technology)
• Index investing – purchasing the same weights and types of securities in an index (a.k.a.,
passive investing)
• Growth investing – focusing on stocks with future earning potential
• Value investing – selecting stocks that trade for less than their intrinsic value (undervalued)
• Global investing – building a diversified portfolio of securities from countries all over the globe
• Emerging markets investing – focusing on investing in emerging and under-developed

countries
• Short selling – selling a security not owned by the seller
• Arbitrage – simultaneous purchasing and selling of an asset to profit from the price difference

ALTERNATE INVESTMENTS
As we continue to explore the buy-side of the finance industry, it is important to explain Alternatives as an
asset class. Many investors will invest in the stocks and bonds of public companies, relying on excellent,
fundamental analysis and strong risk management for returns, and they will hold positions believing that
they will increase in value (long positions only). However, many seek diversification and higher returns
than may be achieved through long-only positions. For that reason, they will allocate a portion of their
assets to the alternatives asset class. They are looking for reduced correlation to fixed income and public
equity markets, reduced volatility, and additional returns. The cost to investors in looking at alternative
investment vehicles is liquidity, as many of the alternative funds require capital to be locked up for a
period of time. Alternative investments include hedge funds, private equity, and real estate.
Hedge Funds haven’t helped their image, and Hollywood has perpetuated
Hedge funds are a sub-set of the Investment the perception that hedge fund managers subscribe to a
“Greed is Good” philosophy. The more infamous hedge fund
Management Industry. A hedge fund is a lightly blow-ups include Long Term Capital Management, which in
regulated, pooled investment vehicle that may 1998 lost $4bn triggered by the Russia market crisis; Madoff
use a variety of investment techniques and invest Investment Securities, where in 1999 Madoff stole millions
through his Ponzi scheme; and Bill Ackman’s Pershing Square,
in a vast array of assets to generate higher returns who devastated investors because of his strong convictions
for a certain level of risk when compared to typical on one stock, Valeant. As in all industries, there are some bad
investment management firms. These funds have apples. However, the hedge fund industry has grown over many
decades and is a strong, viable career path.
a different legal structure and operate under
regulations that allow them to invest in a wider Hedge funds differ from investment management firms in four
variety of assets and use a different investment main ways:
1
philosophy. INVESTORS: To invest in a hedge fund, you must be
an accredited investor (those with $1mm of assets
There are many myths about hedge funds. Many people
and annual income of $200,000 over the last two years) or
outside the finance industry believe that hedge funds and their
a qualified purchaser ($5mm in assets and $1mm in annual
managers are all looking to make money through the riskiest
income). Most investors in hedge funds are institutional
strategies and that they are a “secret society” in which only the
investors like pensions, endowments, and foundations who are
elite can participate. High profile scandals
seeking a portion of alternative investing to boost their returns.

2 INVESTMENT STRATEGIES: Unlike investment
management firms, which typically only invest in
long positions (securities they plan to hold in hopes that they
shorts sales of stock to minimize overall market exposure.
• Event Driven: Investment managers maintain positions in

appreciate), hedge funds invest in many ways including selling companies currently or prospectively involved in corporate
short, utilizing leverage, and using derivatives. As their name transactions including mergers, restructurings, financial
implies, they use different securities and investing philosophies distress, tender offers, shareholder buybacks, debt exchanges,
to hedge out market risks and global macro risk in order to security issuances, or other capital structure adjustments. They
increase returns. These strategies have more risk and, therefore, bet on a change in the value of their investment due to an
investors will demand more return. event.
3 REGULATION: Unlike investment management firms

that are governed by the Securities Acts of 1934 and
1940 and whose regulations are designed to protect investors,
• Arbitrage: These funds use market-neutral strategies that take
advantage of perceived mispricing. They may include relative
arbitrage (exploiting pricing inefficiencies across asset classes
hedge funds may not be required to register with the SEC or file such as pairs trading or dividend arbitrage), convertible
public reports unless they are large. Under the Dodd Frank Act arbitrage (purchasing convertible bonds and hedging
that was initiated in 2010, only hedge funds with $150mm in equity risk by selling short the underlying common stock),
AUM or more are required to register with the SEC. fixed income arbitrage (exploiting short-term anomalies in
bon attributes such as the yield cure or the spread between
4 COMPENSATION: One of the major differences between

hedge fund managers and typical investment managers
is the compensation. Hedge fund managers are compensated
Treasury and corporate bonds), and statistical arbitrage
(exploiting price differences between stocks, bonds, and
derivatives – options or futures -- diversifying away all or most
through a management fee, typically 1% to 2% of the investor’s market-wide risk).
assets (a.k.a., asset-based fee) as well as a “carry,” which is a
performance-based fee that is typically 20%. Therefore, if a • Macro: These funds invest based upon appraisals of
hedge fund has $1mm of an investor’s assets, the fund will international conditions, such as interest rates, currency
receive an asset fee of $10,000 to $20,000 each year to keep exchange rates, inflation, unemployment, industrial
it running, and if it produces 18% returns in a year on your production, foreign trade, and political stability. They may use
$1mm, the investor will pay $56,000 ($1mm x 18% x 20% leverage, shorts sales, or derivatives to maximize return, and
carry) for its efforts. some will specialize in illiquid assets in emerging markets.
There are now close to 10,000 hedge funds, managing Hedge funds have many of the same career path opportunities
approximately $3trillion on assets. Hedge funds employ many found in investment firms, including analyst, trader, operations,
different investment philosophies and strategies. The four major IT, and a portfolio manager (PM) who is most often the founder.
hedge funds strategies are: The PM likely held a similar position at a sell-side bank or
large investment management firm and decided to start his/
• Equity Hedged: These funds will invest in securities both her own firm. Although hedge funds used to be able to start
long and short as well as use derivatives. They typically consist with as little as $1mm and become successful, in today’s world
of a core holding of particular equity securities, hedged with of sophisticated institutional investors, hedge funds need to

launch with a minimum of $250mm to $500mm to reach
enough critical mass to be successful.
The analyst role at a hedge fund is similar to the investment VOCAB CHEAT SHEET
manager analyst role, conducting fundamental analysis on
AUM
the company, industry, and economy to help the PM and
Assets under Management is the amount of pooled
others make investment decisions about what to include in the
capital being managed.
portfolio. One of the key differences in the analyst position at
a hedge fund is the need to understand how selling short, use
CFA®
of leverage, and placing derivative trades in a portfolio impact
The CFA Charter is a certification, achieved through
the risk and returns being generated.
several levels of examinations, often sought by
Investment Management Professionals.
CFP Certification
Individuals can seek certifications such as the
Although some hedge funds hire directly from Certified Financial Planner designation to continue
undergraduate programs, it is very rare. Most
their education and increase their skills in financial
people who aspire to work at a hedge fund
planning.
will first need to work at a sell-side bank as an
investment banker or research analyst, or in
Leverage
their investment management division.
Leverage is using borrowed capital or equity for an
They may also go first to a large investment
TH E I N SI D E SCOOP
investment with the expectation that the profits

management firm (e.g., Fidelity) and then
made will be greater than the interest payable.
move over to a hedge fund.
Prime Brokers
Many aspire to work at a hedge fund
These brokers are part of the global markets
because of the work-life balance, laid-back
division of sell-side investment banks. They provide
culture, and high compensation potential.
centralized custody, clearing, and settlement of
Because hedge funds take more risks, they
trades for hedge funds. They also provide the
can make a lot of money and share their
financing (leverage and short positions), record
wealth in a true meritocracy. Occasionally,
keeping, accounting, and reporting for the fund’s
they can be impacted by a risky investment
investors. Prime brokers will cultivate relationships
strategy and be less stable than larger, more
to encourage hedge funds to execute trades through
established firms. The key to finding the right
the sell-side sales and trading functions.
hedge fund for you is cultural fit. Although there
are some very large hedge funds with 200 to 300
Fund Administrators
people, many funds manage billions of dollars
Hedge funds hire fund administrators to exercise
with fewer than 30 employees. There may be fewer
financial controls over the firm. They will calculate
positions available for transfer and promotion
Net Asset Values (NAVs), maintain the capital
in the smaller hedge funds as compared to the
accounts for investors in the fund, facilitate the
larger ones, however. The key is to find a firm with
payment of fees from the investors to the general
a culture that best aligns with your personality,
partner, and provide audit and tax preparation work.
philosophy, and career aspirations.

Private Equity management fee (asset-based fee) and an incentive fee or
carry. They receive their management fee to help the company
operate, but the majority of their profits come from the exit of a
Like hedge funds, private equity firms provide an
portfolio company for a large profit. That profit is shared 80% to
alternative asset class investing strategy. Private investors and 20% to the private equity firm.
equity firms are pooled amounts of capital that
Private Equity is a broad term that includes investing
purchase all or a part of a company’s equity
throughout the life cycle of a company. You can differentiate the
that is not on a public exchange. The investors investing into the following categories:
in private equity firms are typically institutional
• Angel/Seed Investing: This is funding by a pool of investors
investors such as pensions or endowments and
in the very early stage of a company. Angel investors step in
accredited investors who place their capital in a when a company has received money from friends/family and
fund. These funds make investments directly into has an idea that needs more capital to create a prototype or
find customers.
private companies or conduct buyouts of public
companies resulting in a delisting of the public • Venture Capital: This is the next phase of investing and is
equity (taking it private). The capital is used to fund sought by early stage companies with substantial growth
potential. They are likely pre-revenue and pre-earnings.
new technologies, expand working capital within a
There is a long incubation period before an investor will
company, assist in growth aspirations of a company see any returns on investment, and there is a high loss rate,
or help strengthen a company’s balance sheet. but “winners” can see 10x, 20x or even 100x their initial
investment.
Private equity firms will typically raise capital for a new fund
every four to seven years, and their investors will commit • Growth Capital: Investments made directly in growing
capital to the fund. The fund will have a finite life that includes companies is called growth capital. The companies are
an investing period (about six years) and a harvesting period typically making money but may require funds to add capital
(about four years). During the investing period, private equity equipment or to expand. The growth capital firms typically do
firms will search for companies that fit their investment thesis not take a controlling position in the company.
and complete due diligence on those companies. When they
find the right investment, the fund will have a capital call to • Mezzanine Capital: This is typically the middle spectrum
draw down a portion of the committed capital and invest in that of a private equity investment and usually provides debt
company. The fund may invest in the company through any part instruments to companies to add capital. These types of
of the company’s capital structure (debt or equity). Once bought, investments are priced to yield returns below equity but above
the company becomes part of the private equity fund’s portfolio. senior debt in a company’s capital structure and may provide
The private equity firm will then work to increase the value some equity participation for the investing firm.
of the portfolio company in order to exit from the company
during the harvesting period. Funds will typically exit from the • Distressed Investments: A private equity firm may make
investment either through an IPO, a sale to another private an investment in a struggling company (those about to go
equity firm, or a sale to a strategic buyer. bankrupt) and may invest in debt or assets of the company.
These investments might be made in a good company that
Similar to hedge funds, private equity firms charge a just has too much debt, in a bad company with or without debt

problems, or in a company with no real reason to exist but
in which the private equity firm sees synergies that others VOCAB CHEAT SHEET
do not.
Committed Capital
• Leveraged Buy Out (LBO): This is an equity investment in The amount of capital an investor
larger, more mature businesses capable of supporting debt commits to a private equity firm. It
service from free cash flows. This is typically a “control” deal is a percentage of the overall funds
where the target company is public and is taken private or raised. The investor will receive
is a private company such as a large family-owned business the same percentage in profits as
that has risk or succession planning issues. The private that of committed capital to overall
equity firm will grow the value of the company through funds raised.
debt financing and then will rely on its free cash flows to
repay the debt. Then the firm will optimize the underlying Capital Call/Drawdown
operations, find synergies to increase efficiency (or decrease A contractual agreement between
costs to improve profits) and may make acquisitions for an investor and the private equity
strategic growth. firm that obligates the investor to
contribute money to the fund when
requested. Although a capital call
can occur at one time, it is more
typical that the fund will request a
portion of the committed capital
Working at a private equity firm is a goal for many when it has a company to purchase
undergraduate women. The way to reach a private equity
or invest in.
firm’s most junior position, analyst, is to first spend two
or more years in investment banking or consulting.
Dry Powder
Although some private equity firms will hire directly from
T H E IN SI DE SCOOP
This is the difference between

undergraduate programs, this is not common. When they
committed capital and the capital
do hire directly, they typically require you to have had an
that has been drawn down. This is
investment banking internship and have strong valuation
also the amount of capital not yet
and modeling skills; these firms do not typically have
used by a private equity firm for
formal training programs, and so there is a steep learning
investing.
curve.
The hours at private equity firms are similar to investment Portfolio Company
banking: 80 to 100 hours per week. You will also do some This is a term for a company in
traveling to meet with potential companies. You’ll spend which a firm has invested and is
time with investment bankers who are bringing deals to part of the fund.
the firm or you’ll make cold calls to companies that aren’t
for sale but you believe show potential opportunity. For
many, looking for a company and then investing to help
that company grow is one of the most rewarding parts of
a career in private equity.

Real Estate
Real estate, also referred to as real asset investing,
is another alternative asset class. Many investors
choose to invest in real estate as part of their overall
asset allocation strategy to add diversification to
their portfolio. One of the beneficial features of real T HE I N SI D E SCO O P
estate is that it produces relatively consistent returns
that are a mixture of income and capital growth.
Real estate investing has a coupon-paying bond-like F or many undergraduates, the
real estate market is tangible and
component that provides a regular, steady income
desirable. You can participate in
stream (rental payments received from tenants less the real estate investing by joining
costs to operate the property) and it also has a stock- the real estate investing arm of
large asset management firms
like component in that the value has a propensity to
(e.g., Blackstone), by joining an
fluctuate (value of the property increasing/decreasing independent real estate developer
with the market). Like all securities, the goal of (e.g., Hines), or joining a real estate-
focused private equity firm (e.g.,
investing in real estate is for the asset to go up in value.
RealTerm). The initial position in
these firms is as an analyst. You will
There are risks inherent in real estate investing, as with any investing.
spend time looking at the markets
If you are unable to keep a property fully leased (or close to full), you
and finding either buildings with
lose the periodic payments that make real
full tenants and less market volatility
estate investing very attractive. Your ability
(changes in valuation) or areas
to keep the building full depends on the
where there is a large opportunity
strength of the leasing market – that is, the
for expansion and growth. This area
supply and demand for space similar to the
typically offers the best work-life
space you are trying to lease. In addition,
balance in the industry, with a 50
the capital appreciation (or depreciation) of
to 60 hour work week. Firms seek
the property generates the most volatility
people with a strong understanding
in real estate returns. Due to the way
of the real estate markets, a passion
appraisers and the markets impact the
for communicating, and strong
valuation placed on the property (the true
negotiation skills as well as an
supply and demand scenario), investors are
entrepreneurial spirit.
focused on finding investments in markets
that fluctuate less.

T HE I N SI D E SCOO P
Insurance
Insurance is one of the largest investors
on the buy side of the finance industry. As an undergraduate,
you can work in the However, this analyst
The insurance industry is a form of insurance industry as position tends to have a
more consistent work-life
risk management in which people pay a risk management
analyst, actuary, or balance and less stress.
premiums to an insurance company to
investment analyst. The
transfer the risk of loss from themselves risk management analyst Other undergraduates
may love dealing with
to the company. It is an industry that spends her time looking
at market risks, portfolio statistics and probability
exists to provide security in times of loss. and choose to become an
risks, credit risks, and
country risk; monitors actuary at an insurance
firm. Actuaries take
Insurance companies invest customer and then reports on
portfolio performance 10-12 exams in order to
premiums in the markets so that the become certified.
and risks; and ensures
returns generated by the investments management is aware
The work-life balance at
can be used to pay out claims. This of scenarios that can
impact the firm’s ability insurance companies
takes a lot of statistical analysis done by is one of the best
to have funds available
actuaries to determine the probability for payouts. in finance. Most
investment analysts, risk
of loss occurring (e.g., probability of
You could also join the management analysts,
fires or hurricanes), prudent investing in and even actuaries work
investment management
the public markets to generate returns, division of an insurance approximately 50 hours
per week.
and risk management of the portfolio to company and perform
analyses on investing
ensure that funds are available.
ideas in the public
markets (equity or fixed
income). This position is
similar to the research
analyst position in an
investment management
firm or hedge fund
discussed above.

Private Wealth Management
Private Wealth Management (a.k.a., Financial Planning, Financial Advising, and Private Banking) is
a high-level professional service that combines financial/investment advice, accounting/tax services,
retirement planning, and legal/real estate planning for a management fee. These wealth managers
are trusted advisors to high net worth individuals and families. They help plan and maintain a client’s
wealth based on their financial situation, goals, and risk tolerance. It is a strong, relationship-building
position. Financial advisors meet regularly with clients to update goals, review and rebalance financial
portfolios, and investigate other business opportunities; they proactively know what funds a client will
need to ensure that they can meet their cash flow needs while still maintaining or building their wealth.
Private Wealth Management positions can be found at sell-side banks in their investment
management division (see above) as well as in franchises such as Edward Jones, insurance companies
(e.g., Northwestern Mutual), or independent firms.
A career in Wealth Management has an at banks because of the comparative flexibility of

entrepreneurial nature, in that a good portion of the role.
long-term compensation is based on business
acquired. Unlike Investment Banking, where Many women desire to be private wealth managers.
clients are generally secured by partners, securing The majority who start in this career out of college
clients is a major part of the job for even very junior start in the investment management divisions of
professionals in wealth management, and this large banks. These programs tend to have a team
mentality, strong mentorship, and the ability to
TH E IN S ID E S CO OP
ability is important to professional survival.
grow within the team. Others may join a franchise
While young professionals can join teams to firm (e.g., Raymond James, Edward Jones) and
source clients, it is not a job for people who are build a rolodex while learning the business. Others
uncomfortable with cold-calling or sales. This may start as a research analyst or investment
discomfort leads to a good deal of turnover in the banker and move over to financial advising as they
field. On the positive side, this is an excellent field get older. Given that it is a trusted relationship with
for those looking for a finance job with better hours the individuals and families, it is important to gain
than banking and a less intense, less market-driven experience to earn the clients’ trust.
environment than sales and trading. Since there is
an emphasis on long-term relationship building Most people who are successful financial advisors
versus frequent transactions, it can be a desirable have great interpersonal skills; strong attention
role for those looking to be a trusted advisor and to to detail; the ability to prioritize, reflect and re-
become very involved in the lives of their clients. prioritize and communicate complicated material in
Women are often better represented in senior roles an effective manner.
in wealth management than in other revenue areas
CORPORATE FINANCE AND
INSTITUTIONAL INVESTORS
Wait! There’s more...
As we discussed in the beginning, finance is the analysis, modeling, forecasting, and strategic planning. They
also determine financing needs, analyze capital budgeting
movement of capital from those who have it
projects, do long-range financial planning, and consider
to those who need it. We want to spend a little possible acquisitions and asset values. The corporate finance
time talking about the two bookends of the team becomes a valuable partner in running and growing
the business.
finance industry and the career opportunities
there. At one end, you have companies and their
corporate finance departments (those who need
capital) and on the other end are institutional
Institutional Investors
Institutional investor are those who have the capital that
investors (those who have the capital). funds the entire industry. They are typically non-bank persons
or organizations that trade and invest. Below is a short
discussion of some of the different types of institutional
investors that funnel capital into the buy side of the
Corporate Finance industry. Each type of investor has positions available to

undergraduates. Most of these positions involve analysis,
Many women may consider starting a career in the finance
helping find investments (similar to a research analyst), and
division of a large company. Many find the corporate finance
completing due diligence on buy-side managers to pick
department at firms to be stimulating while providing a great
those who can help the investor grow.
work/life balance. Others may gravitate to corporate finance
after many years in investment banking, graduate school, or
• Endowment: A financial asset made to a non-profit
other positions on the buy side. The members of a corporate
group, institution or individual, consisting of investment
finance department report into the CFO of a company and
funds or other property that may or may not have a stated
often deal directly with investment bankers when they are
purpose at the bequest of the donor. Most endowments
looking for capital or acquisitions.
are designed to keep the principal amount intact while
using the investment income from dividends for charitable
Corporate finance is the division of a company that oversees
efforts.
the financial activities of a company -- using company
cash flows to run the business, grow the business, make
• Foundation: A non-profit organization that is usually
acquisitions, plan for its financial future, and manage cash
created via a single primary donation from an individual
on hand. They help the company deploy its assets through

or a business and whose funds and programs are managed
by its own trustees or directors. As such, rather than funding
its ongoing operations through periodic donations, a private
foundation generates income by investing its initial donation,
often disbursing the bulk of its investment income each year
to desired charitable activities.
• Pension Fund: A retirement plan that requires an employer

to make contributions into a pool of funds set aside for a
worker’s future benefit. The pool of funds is invested on the
employee’s behalf, and the earnings on the investments
generate income to the worker upon retirement.
• Family Offices: Private wealth management advisory firms

that serve ultra-high net worth individual (HNWI) investors.
These differ from traditional wealth management shops in
that they offer a total, outsourced solution to managing the
financial and investment side of an affluent individual or
family. For example, many family offices offer budgeting,
insurance, charitable giving, family-owned business, wealth
transfer, and tax services.
• F und of Hedge Funds: Pooled investment vehicle (like a

traditional hedge fund) that mixes and matches hedge funds
and other pooled investment vehicles. It blends different
strategies and asset classes to provide stable, long-term
returns over individual funds. The returns, risk, and volatility
can be controlled, and capital preservation is generally
important.

A FEW FINAL
THOUGHTS...
As you may have already surmised from the • Commercial Banking: As discussed in the Introduction
to the sell-side of the industry, there are three types of
discussion above, the finance industry is broad
banks (retail/commercial banks, investment banks, and
and has myriad positions that you can explore universal banks). A commercial bank, as a stand-alone
now, post-graduation, and through a long, company or part of a universal bank, offers an array of career
opportunities. Consumer/Commercial banks are in the
successful career. In addition to the career
business of providing banking services to individuals, small
opportunities mentioned previously, there are a businesses, and large organizations. They provide aggregate
few more parts of the industry that are less well- depository services (checking and savings accounts), and
lending services (general loans, small business loans, and
known, but worth considering.
mortgages or other asset-backed loans such as car loans).
Today’s commercial banks are more diverse than ever. You
could choose to start at a large bank, regional bank, credit
union, or thrift. Some of the initial roles at commercial
banks are credit analyst, loan officer, bank teller, trust
officer, mortgage broker, or personal banker. Commercial
banks are looking for women who want a broad business
understanding and have high emotional intelligence and
strong communication skills.
• Mortgage companies: There are mortgage companies that

are independent of the mortgage divisions of a commercial
bank. You can choose to start your career as a loan officer
at a mortgage company. These individuals help people
obtain mortgages to purchase real estate. A mortgage loan
officer can work in the residential or commercial mortgage
industry, guiding applicants through the process. For many
states, there is a certification required to be a loan officer at a
mortgage company.
• Credit Card Companies: Credit card companies are the

banks and credit unions that issue credit cards to consumers
or small businesses. They also service cardholders’ accounts,
bill for purchases, accept payments, distribute rewards, and
more. They dictate where credit cards can be used, facilitate

payment processing at the point of sale, and administer policies are followed by large banking institutions and, thus,
secondary credit card benefits like travel insurance. There are seek opportunities at FINRA, the SEC, or CFTC.
four major credit card networks: Visa, Mastercard, American
Express, and Discover. You can start your career in one of the The finance industry is integral to the global economy
credit card divisions of a major bank (e.g., Citibank, Chase, and impacts every industry. It is constantly evolving and
Capital One), another financial institution such as a credit innovating to meet the needs of a changing world. In recent
union, or directly for one of the major credit card networks. years, there has been a merger between the finance industry
Entry-level jobs include call center representative, sales and technology: FinTech. The goal of FinTech is to compete
representative, marketing, operations, and processing. with traditional financial methods in the delivery of financial
services -- It is trying to disrupt the industry to make financial
• Credit Rating Agencies: Credit rating agencies rate a services more accessible to the general public. The use of
debtor’s (company’s) ability to pay back debt through mobile devices for mobile banking (e.g., making deposits) or
timely interest payments and the likelihood of default. A investing (e.g., Robinhood), new payment applications (e.g.,
ratings agency may assess the creditworthiness of issuers Venmo, Square), and cryptocurrencies (e.g., Bitcoin) are just a
of debt obligations, of debt instruments, and in some cases few examples. FinTech companies consist of both startups and
the servicers of the underlying debt, but not individual established financial and technology companies. For many
customers. The credit rating assigned facilitates the trading women, this exciting new era in the finance industry is the
of these debt instruments in the secondary market and perfect place to start a career as an analyst, programmer, or
affects the interest rate that a security pays out. The higher business developer so that new technologies can continue to
the ratings, the lower the interest rates. Some women choose push the boundaries of the finance industry and the means by
to work at one of the credit rating agencies (the largest are which companies and people transact and invest.
Moody’s, Fitch, and Standard & Poor’s) as an analyst. This
provides great understanding of bonds and the interest
rate impact on yields, which can lead to a career as an asset
manager and other buy-side investor in fixed income/credit
products.
• Regulators: For those who want to be part of the finance

industry, but like the idea of the government’s involvement
in the industry, working for a government agency or
regulator may be optimal. Women who like the idea of the
impact that economic policy has on the financial industry
may consider a career as an analyst at The Federal Reserve,
World Bank, or the International Monetary Fund. Others
may like the idea of ensuring that financial regulations and

The finance industry is a dynamic
and robust industry with career paths
for everyone. The industry can seem
daunting and complex, but we hope
this brief overview gives you a better
understanding of the components of
the finance ecosystem, introduces you
to some of the roles available, and
demystifies industry terms and jargon.

NOTES
No part of this publication may be reproduced, distributed,
or transmitted in any form by any means, electronic,
mechanical, photocopying, recording or otherwise, without
the prior written permission of Forté. For permission
contact us at [email protected].
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FORTÉ

FORTÉ INDUSTRY SNAPSHOT:

FIND YOUR FUTURE IN

1 • FIND YOUR FUTURE IN FINANCE

Our goal is to demystify the finance industry,

This industry snapshot was

3 • FIND YOUR FUTURE IN FINANCE

FIND YOUR FUTURE IN FINANCE • 4

FINANCIAL SERVICES INDUSTRY

Corporate Banking Hedge Funds

Capital Markets Pension Plans

The image above represents the buy vs. sell side of

5 • FIND YOUR FUTURE IN FINANCE

COMMERCIAL BANKS UNIVERSAL BANKS INVESTMENT BANKS

FIND YOUR FUTURE IN FINANCE • 6

Bulge Bracket is a slang term to BULGE

Stanley, Citigroup, Barclays, Bank of America

Bank. These firms usually have offices around

available to help companies acquire capital.

Middle Market banks are firms

are smaller and do not provide a full array Equity Credit

specialize in some services such as mergers & MIDDLE OFFICE

acquisitions (M&A) or restructuring. Examples BACK OFFICE

of these boutique investment banks include FIRM-WIDE SUPPORT FUNCTIONS

Evercore Partners, Lazard, Centerview, and

7 • FIND YOUR FUTURE IN FINANCE

The key revenue-generating career paths

FIND YOUR FUTURE IN FINANCE • 8

9 • FIND YOUR FUTURE IN FINANCE

Investment banking is one of the most prestigious areas in

While the prospect of long hours and hard work might be a

As one advances in investments banking, the hours may

FIND YOUR FUTURE IN FINANCE • 10

Discounted Cash Flow (DCF)

11 • FIND YOUR FUTURE IN FINANCE

FORTÉ FINANCE 101: A WOMAN’S GUIDE TO A CAREER IN FINANCE • 12

investment bank. These transactions help create revenue Research is

FORTÉ FINANCE 101: A WOMAN’S GUIDE TO A CAREER IN FINANCE • 13

are long that security.

FORTÉ FINANCE 101: A WOMAN’S GUIDE TO A CAREER IN FINANCE • 14

performance for institutional accounts.

Stock Pitch and statement of cash flows. It is a standard

FIND YOUR FUTURE IN FINANCE • 16

THE BIG P I CTURE

17 • FIND YOUR FUTURE IN FINANCE

FIND YOUR FUTURE IN FINANCE • 18

Other Parts of a Universal Bank

management divisions of organizations like

19 • FIND YOUR FUTURE IN FINANCE

FIND YOUR FUTURE IN FINANCE • 20

INVESTMENT MANAGEMENT VS ASSET MANAGEMENT

INVESTMENT PRIVATE WEALTH

Hedge Funds Private Bank

21 • FIND YOUR FUTURE IN FINANCE

There are many roles at an investment

FIND YOUR FUTURE IN FINANCE • 22

• Fundamental investing – performing company-specific, bottom-up analysis of companies

• Sector investing – investing in a particular industry (e.g., technology)

• Growth investing – focusing on stocks with future earning potential

• Emerging markets investing – focusing on investing in emerging and under-developed

• Short selling – selling a security not owned by the seller

23 • FIND YOUR FUTURE IN FINANCE

FIND YOUR FUTURE IN FINANCE • 24

• Fundamental investing – performing company-specific, bottom-up analysis of companies

• Sector investing – investing in a particular industry (e.g., technology)

• Growth investing – focusing on stocks with future earning potential

• Emerging markets investing – focusing on investing in emerging and under-developed

• Short selling – selling a security not owned by the seller

• Event Driven: Investment managers maintain positions in

• Pension Fund: A retirement plan that requires an employer

• Family Offices: Private wealth management advisory firms

• F und of Hedge Funds: Pooled investment vehicle (like a

• Mortgage companies: There are mortgage companies that

• Credit Card Companies: Credit card companies are the

• Regulators: For those who want to be part of the finance