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Why a short professional program is better than an MBA?

Posted on by Imarticus Learning

By Reshma Krishnan
Over 50 percent of the students that come to Imarticus Learning and attend our FMVC, CIBOP, CIBIT programs are MBA students. During their counseling sessions as well as their interview prep and mock interviews, we always ask them what they learnt in their MBA and what made them attend Imarticus.

The answers are always the same – I learnt nothing in my MBA. Why is that? MBA’s are extremely popular, so why are they so futile? It’s not the MBA that is futile. The right MBA done at the right time and from the right school is useful, but the majority of MBA’s are not well designed. Here are our top reasons for why short professional programs are better than an MBA.

What is an MBA? An MBA is a multi disciplinary course of study that helps you understand the various facets of running a business, ergo the name, a master of business administration. An MBA assumes that you have come far enough in your career to put the theories you learn during the course– marketing, finance, and operations, into some sort of context. A context that cannot be built without some understanding of how a business functions.

MBA’s are useful but only to those who come in with 5-6 years of relevant work experience. Having already worked on a shop floor of a store or coded for a company, they do an MBA to understand the other facets, which they can then apply to their experience.

This is what generally happens abroad. In India however, the stress on academics and degrees mean that most people do an MBA right after college without any experience leading to a two-year course of study that adds no value, not even to the resume.

But then, you ask, how do we stand out against others during a job hunt? You stand out by doing a course that is tailor-made where the curriculum has been designed in conjunction with specialists and endorsed by companies. A short course does not expect you to have work experience and it’s sole purpose is to help you find a job, and it does that by training you specifically for a role which makes you more employable as you are able to add value to a company from day one.

1. Short professional programs are job-specific – all our programs have been designed by industry experts and tailor made to job requirements. For instance the CIBOP program is designed for Investment Banking Operations roles. For three months, you will be taught by domain specialists, who have worked in these roles giving you real life examples.

2. Professional programs are shorter – Because you spend only three months, you start working sooner and spend less time in the classroom and more time gaining valuable work experience that you can then use to apply to a more prestigious and useful MBA program

3. Short programs focus on getting you a job– our short programs are tailored to a job, which attracts companies because they know our candidates are job-ready.

Imarticus Learning offers the internationally-accredited CIBOP program, designed for careers in Investment Banking. This program provides you an in-depth understanding of complex financial products and their Trade Lifecycles, along with Operational Risk and Regulations.

Industry Report: Investments and Developments Part – II

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[Read Part 1]
This report analysis would be mainly dealing with all the key investments and developments in Indian banking sector.
Starting from the basic, central level, the RBL Bank Limited, a private sector bank in India, has reportedly raised about Rs. 330 crore as a result of their association with CDC Group Plc. This is a UK based financial development institution and will be helping the RBL bank, to strengthen their capital base, in order to meet their future needs.
The World Bank has reportedly signed an agreement with The State Bank of India, which is worth Rs. 4200 crore. This agreement basically deals with connecting all the solar rooftop projects in India, which are also known as GRPV, and will be receiving financing as a part of this agreement.
JP Morgan Chase, which is considered to be the largest bank in America, has been in talks of expanding their operations in India. They have gotten a head start on the same, with three new branches in, Delhi, Bangalore and Chennai which will be an addition to the current branch in Mumbai.
An investment management company, known as the Canada Pension Plan, has reportedly bought a large stake, which it bought away from a Japan based, banking corporation called Sumitro Mitsui. These said stakes were in Kotak Mahindra Bank Ltd.
India’s very first small finance bank, began its operations by launching about ten branches in the state of Punjab. The Capital Small Finance Bank as it is officially known aims at increasing the number of its branches to about twenty nine, in the current financial year of 2016-17.
Taking a step towards making India, as cashless economy, an e-wallet company, Freecharge, has partnered with Yes Bank and Mastercard. This partnership is in order to launch a new concept of Freecharge Go. This would be a virtual card, with the help of which consumers can pay for goods and services, at online shops as well as offline retailers.
This year, the economy of India would be majorly targeting at being self-sufficient and in the lieu of the same, te government of Andhra Pradesh has signed a Memorandum of Understanding (MoU) with Exim Bank of India, in order to promote exports within this state.
Moody’s, a Global Rating Agency, seems to have upgraded its outlook towards the Indian Banking System. This move is to stabilize its negative based on the assessments of about five drivers, which include improvement in operating environment, stable asset risk and capital scenario.
Rockefeller Foundation, a non-profit organization based out of America, has backed a private Equity Investor known as Lok Capital. This investor has a plan of investing up to USD 15 million in a couple of proposed small finance banks in India, over the period of next year.
The RBI, has reportedly given in principal approval, to about 11 applications, which were in favour of establishing payment banks. These banks may accept deposits, but they are to refrain from extending any loans.
With the chances of the economy and the cash inflow looking bright, the banking and investment industry shows great promise for aspirants.

Industry Report: Banking Sector in India Part – I

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This article will be principally dealing with the basic understanding about the banking sector, specifically in India and all the aspects and components of the size of the market. According to the Reserve Bank of India, the banking sector in India is believed to be sufficiently capitalized and well regulated. Recent reports state that the financial and economic conditions in our country, are way better in comparison to the other countries, in the present times. This basically puts the Indian economy, which is considerably stable, against the other alarmingly unstable and equally dysfunctional economies, all over the globe. Studies conducted in various fields like Credit, market and liquidity risk conclude that the banks in India have shown a general tendency, of being resilient and have been able to withstand the global economic turmoil really well.
This may have been a result of the various innovative banking models, for instance, the payments and small finance banks, which have had a positive impact on the Indian banking industry in the recent times. In the financial year of 2015-2016, about 10 small finance banks and around 11 payment banks, have received the principle approval from the central bank. This is a part of the new measures put in place by the Reserve Bank of India, which show great signs of going a long way, in terms of helping in the restructuring of the domestic banking industry. Let’s talk facts and numbers now, in keeping with the same we need to focus on the numeric aspects of the banking units across the country.
Primarily, the Indian banking system is made up of around 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1589 urban cooperative banks and around 93550 rural cooperative banks, in addition to the existing cooperative credit institutions. 80% of the entire market, is supposedly controlled by the public sector banks, thereby evidently a very small share of the market is left in control of the private counterparts. While on the other hand, every bank out there has begun to encourage their customers, in order to manage all of their finances using mobiles phones.
While there have been a number of predictions and assumptions in terms of credit growth, especially with the current banking situation, as well as the Union Budget almost being right around the corner. There are various estimates made, among which the Standard and Poor, have gone on to make the estimates, that the credit growth in the Indian banking sector, is likely to improve to 11-13 per cent in this financial year, that is 2017. This is a great news in terms of growth and progress, from the past three years, when the second half of the year, 2014, showed less than 10 per cent credit growth. As the future prospects of the Indian banking sector seem extremely bright and by extension, so do the job prospects in terms of Corporate Finance, Investment Banking and so on. This is why many finance enthusiasts have begun to turn to professional training institutes like, Imarticus Learning, that help them achieve the perfect career roles.

Working in a Boutique vs a Bulge Bracket Investment Banking Firm

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There has been a lot of news in the media recently about how investment banking fees are at an all-time low and how those multi-million dollar bonuses are about to take a beating. But recently the Financial Times noted how boutique banks like Evercore and Moelis are doing well, and are attracting a great deal of interest.

Firms like Centerview and Moelis have even broken into the top 20 fee earners. But what are boutiques? What is it like working for one and where can you possibly go?

What are boutiques?

Boutiques are independent investment banks that have often been created by senior investment bankers. Houlihan Lokey, the largest boutique in the world, was created by ex-banker Scott Adelson. They often play on the founder’s strength, industry vertical specialization or regional focus, and focus primarily on deal advisory – M&A, Capital raising both in the public and private markets, restructuring and corporate finance.

Boutique banks call themselves independent and without conflict. Essentially this means because they focus only on advisory, there are no conflicts with regard to public trading. So they will never be in a position where they might be advising company A on sale while another department trades that stock.

Boutique structure

They are often top heavy, filled with rainmakers and senior bankers and feature a flat organizational structure. What does that mean? That means as an analyst you are going to work very hard but also gain more exposure while you put in the hours.

Analysts and associates are treated like resources, which are farmed out to deals. In a bulge bracket, it’s quite likely you will spend all your time creating pitches. In a boutique however, because of the flat structure, you might even be asked to come into meetings, be part of the execution and learn something.

An investment banking deal is made up of four parts- Origination, Execution (Marketing) and Execution (Negotiation) and Closing. A bulge bracket is often divided by Origination and Execution, which means you are either going to be making pitches or information memorandums.

At a boutique, industry specialists often divide teams and so if you belong to one team, you will find yourself doing work across the deal process, which means you learn more. Pay is also a little different. Boutiques pay less at the entry level but your potential to earn gets higher closer to the top because bonuses become a large part of your pay structure.

Close a deal and you earn a significant portion of the bonus pool, which is of course spread across a smaller base than at a bulge bracket. You might earn more at a bulge bracket but you will learn less.

How about career progression?

Since they are flat structures with fewer options in terms of departments, there’s much less bureaucracy and more transparency with regards to promotions. But because there are fewer departments and not that many levels, there’s not that far you can go. But that doesn’t matter.

Associates and VP’s in boutiques can often be seen heading to bulge brackets if they don’t find proper career progression at their old firm. Because of their intensive deal experience, they are quickly absorbed into both Private Equity and Bulge Bracket investment banking teams both in the Equity Capital Market and Corporate Advisory.

What are India’s top boutique banks?
Avendus Capital, MAPE, Veda Corporate Advisors, O3 Capital, Spark Capital, Dinodia. You also have global boutiques like Lazard, Moelis and Co and Houghlin Lokey.

The Benefits of a CISI Certification with Imarticus Learning

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The Chartered Institute for Securities and Investments is considered to be the leading professional body, globally, for securities, investment, wealth and financial planning professionals. Founded in the year 1992 by the London Stock Exchange, today, it has taken up the role of a global community, spanning around 116 countries and boasting of about 40,000 members. It was conferred the title of ‘Chartered Institute of Securities and Investment’ in the year 2009 when it was granted a Royal Charter. Headquartered in London, this global professional body has its offices spread over various countries, including Sri Lanka, India, Singapore, Dubai, and Dublin.

This professional body is known to offer close to 40,000 CISI qualifications every year in around 70 countries, to qualify for which candidates have to take the Computer Based Test in the various centres worldwide. Apart from this, it is also the chief examining body in the industry and thereby, offers a number of industry memberships and training to the qualifying candidates. Apart from offering qualifications, the CISI is also known to offer, the CPD scheme, also known as, Continuing Professional Development scheme, which is basically rewarded to the members of, every level of seniority, geographical location, as well as industry specialization. The institute is known to have certain charitable objectives, which are as follows;
“To promote, for the public benefit, the advancement and dissemination of knowledge in the field of securities and investments to develop high ethical standards for practitioners in securities and investments and to promote such standards in the UK and overseas to act as an authoritative body for the purpose of consultation and research in matters of education or public interest concerning investment in securities.”

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Being a member of this prestigious organization, sends out a message to all your clients and colleagues, including the wider public, that you as a professional, are committed to professionalism, integrity, and excellence. Becoming a CISI endorsed member is the most beneficial in terms of networking for a professional. One can easily access the international network of 40,000 financial practitioners.
Apart from this, the CISI body organizes a number of formal mixers, like forums, events, and other social media activities, which involve and encourage their members to build an array of networks and connections, with similar professionals from across the country. Any professional who is affiliated by the designations of CISI can meet up and keep abreast with the current happenings in the financial markets, while at the same time can also discuss them, with the top level delegates from across the world at any given point. The CISI body also offers a number of training courses apart from its social events and conferences. In order to get an entry into this elite bunch of people, one has to acquire the much coveted CISI certification.
International Certification & Placement You will receive the industry endorsed Certified Investment Banking Operations Professional (CIBOP) certification and the optional CISI certified IOC (Investment Operations Certificate). The Imarticus Learning Career Services and Placements team provides you guidance and assistance throughout the program, giving you the best career opportunities in leading international firms.

Investment Banking – Why do Sellers use an Investment Banker? (I)

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If you looked at the economic times headlines today, you would have read how the Government has shortlisted three Investment Banks, also known as Merchant Banks, to manage the stake sale in the SUUTI portfolio companies. (Source)
This means the government has mandated Citibank, Morgan Stanley, and ICICI Securities, to sell their minority stakes in various listed and unlisted entities on their behalf. What does this mean? And how would the transaction take place? In this post and the next series of posts, we will try and understand how a deal takes place, what happens and what Investment Bankers actually do. These posts will help you prepare for Investment Banking and Corporate Finance interviews as this is a common question. This is part of our interview prep module in our FMVC course at Imarticus Learning, one of India’s leading Financial Modeling and Valuation courses.
Why do they need a banker at all?
I mean after all who knows your company best, you or an outsider. You, of course. And why should you really pay 4 percent of what you get to someone when you could do it yourself. Well Investment Bankers add immense value to a deal and this is why most major transactions use one.

  1. Most companies don’t have the expertise– Investment Bankers bring with them specialized knowledge on how to sell something. How to package a product in a way that showcases it best to optimize value. But how do they know the company well enough to do that? Well, they work very hard to gain both a broad working knowledge of the industry and specific knowledge about the sector. So yes, while you know your company very well, they probably know the industry, your competition, both domestic and international as well as you do and perhaps even better in some cases.
  2. Most companies don’t have the time– Are you going to focus on running the company or selling it. Selling a business is an extremely time consuming process from gathering all the information, to putting it together in one place, to contacting buyers, scheduling meetings, doing site visits and taking care of documentation. It’s also an important job; you can’t just put your EA on it, however good she might be. So do you pull your most efficient person out of their current job, or are you better off hiring someone who does this day in and day out?
  3. Being objective– Value is a very subjective thing. You might believe your company is work x but the market and the buyers might value it at Y.  Because you are too close to the transaction, sellers find it very hard to take an objective view because the value of a company is marred by conflicts and emotions. Yes, finance is a minefield of aspirations, attachments, ambitions, hard work, years of toil and legacy. Less said about inflated egos the better. So having a banker that can assess value from the outside is not just helpful but critical in achieving your objective.

 

Introduction to Investment Management

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What is Investment Management? What does the investment management industry constitute?

The world of finance can be complicated. To simplify for the sake of understanding, let us consider the financial world as broadly constituting of banks – (retail, commercial, and investment), insurance companies, and investment managers.

Banking: Retail and commercial banks are the ones most people are familiar with and are mostly straightforward. They take in money through deposits from customers, other banks, and shareholders. They then distribute this money through credit cards and loans to individuals, companies, and other banks.

Retail and commercial banks make money on the interest charged on these loans. Investment banks on the other hand are more complicated. They allow their clients, which include investment managers, to trade on the financial markets. They also deal with IPO, mergers, and acquisitions.

Insurance: Insurance companies take in money by charging for private and corporate insurance policies, in return for against the unexpected. They in turn are protected from being unable to payout on policy claims by moving money to a reinsurance company and therefore reducing exposure.

Investment Management: Investment managers also known as fund or asset managers do as the name suggests – they manage investments of private investors, corporates, banks, or insurance companies. Investment managers make their clients’ money grow by using investment banks to buy and sell investments.

Let us consider the funds managed by an investment manager as raw material whether in shares, bonds, commodities, or derivatives, and an investment manager as a machine that converts this raw material into a product by using a series of processes. The product is a fund. The goal of the fund is to make money for the investors. Thus, an investment manager uses an investor’s money to make money.

These processes vary greatly and depend on the investment strategy used. E.g.: passive vs. active investment. However, the principle remains the same. The fund aims to make a return by balancing risk and rewards and thus, in a process-driven manner ensures effective mobilization/channeling of its resource i.e. money from investors.

Thus, the players in the investment management industry can be classified into just two broad categories – the investment managers and the investors. Investment occurs directly i.e. investment contracts or more commonly via collective investment schemes. A mutual fund is a type of collective investment scheme. They provide an efficient way of pooling funds for investment purposes.

The Flow of funds in the asset management industry:

*PMS – Portfolio Management Services, AMC – Asset Management Services, WM – Wealth Managers.

What is the Investment Process? What role does the investment manager play? What is the role of portfolio performance measurement in the investment process?

Like any process, the investment process can be broadly classified based on four phases – Plan, Do, Check and Act. Similarly, it is pertinent to note that the investment management process, forming a part of the investment process cannot be improved without performance measurement. The following is an overview of the Investment Process.

From the above, it is clear that for the investment process to be complete it needs to be measured. This measuring of the portfolio performance should preferably be a part of the investment management process itself. In this case, it will contribute to improving the portfolio management process internally and thus contribute to process improvement. On the other hand, performance measurement can be undertaken by the investor as a part of the larger investment process. In this case, the same measures behave as a stricter audit function rather than a must-suited process improvement role.