I work for an IB. I see a lot of ADs with the CFA charter. I know that these guys work 100 hours a week. I’m not sure how they found time to study for the CFA exam and pass it?
It would be difficult. My gf can can barely find time to study for her series 7.
AD’s = ? what do you do at your IB? i assume you’re not in investment banking. anyway, you don’t need the charter to do banking, and if you’re in banking you don’t need the charter either. but some people can do it, since when deals aren’t live and there’s not much going on in the overall transaction environment, junior bankers can actually have a fair amount of down time.
numi Wrote: ------------------------------------------------------- > AD’s = ? > what do you do at your IB? i assume you’re not in > investment banking. > anyway, you don’t need the charter to do banking, > and if you’re in banking you don’t need the > charter either. but some people can do it, since > when deals aren’t live and there’s not much going > on in the overall transaction environment, junior > bankers can actually have a fair amount of down > time. me thinks he means associate directors, which is a title that the swiss banks use (and maybe DB too?).
I’m not in IB. I thought that analyst and associate directors were there 100 hours a week? I guess its not busy in the morning and thats when they can study?
Err why would you need a cfa to be in IB? If you can make it in IB, the upside and exit ops are far more lucrative than studying for three exams Made IB’ers actually look down upon people trying to get their cfa
Maybe these ib people want to get into Investment Management?
if you have a background in IB, you definitely don’t need a CFA to make the jump to the buy-side. in fact, candidates coming from the top investment banks (at least at the junior ranks) have an infinitely easier time getting to the top buy-side firms than people that just pass the CFA exam. not sure how to make this more clear, but work experience is far more valuable than passing exams and getting the CFA charter is not exactly an analog for someone who’s done a three-year stint in investment banking
If your already working in IB the CFA charter is a waste of your time. You don’t have much of it to begin with.
Are you sure these guys work in actual IB (M&A, ECM or DCM)? I used to and don’t think I ever met a CFA. I met one guy who was a Level I candidate and never studied and so didn’t bother attending the exam.
i’m in investment banking and have L3 (though no charter as yet)… Not a lot of people have it here - however it did not hurt when interviewing… Doesn’t make too big a diff in exit ops but if 2 people are roughly the same, maybe the CFA will give them just the edge?
If you want to go to a hedge fund, I guarantee having the CFA will help. Won’t help for PE or VC though.
Now that I’m on the private equity side, I can definitely comment on how much value-add the CFA charter is for investment banking or PE…and it’s not very. The knowledge of accounting and financial statement analysis you gain through the CFA curriculum can definitely be useful, but at the end of the day, when IB’s and PE shops are interviewing you, what they really care most about is (1) your understanding of the deal process, and (2) your understanding of how and why certain transactions happened. The CFA curriculum can teach you some things here and there that may be theoretically relevant, but otherwise not analogous to practical work experience. Besides, just working on the deals themselves will teach you whatever it is that you need to know. In my view, if you’re interviewing for a position in IB/PE and can’t speak intelligently about the deals you’ve worked on, the CFA charter won’t save you. That’s why people in IB/PE don’t really look for the CFA charter and don’t really care about it…it’s really much more relevant to securities analysis, not transactions.
For posterity, I will add that I work for a PE shop and we do look for CFA Charterholders – to us, process is important but comparatively mechanics. Thinking about and understanding WHY a deal makes sense in the first place (and how to prop it) is more important. We can take the time through a training program to teach you the former; the latter I’d rather you already know.
Of course work experience is more important, but the CFA is helpful. It’s viewed like an MBA. Just as you don’t need an MBA, you don’t need the CFA - but both will help to establish credibility quicker and are therefore useful in the job searching process. I do agree with Numi, however, in that working on deals will teach you what you need to know BUT I’d add that having relevant theoretical knowledge of corp finance, DCF analysis, other asset valuation techniques, and a general understanding of how all the pieces of fit together (all things the CFA curriculum teaches) will give you a leg up in not only getting the job but doing better in it from the get-go. As to how IB’ers can study for the CFA exam…I have no idea. I’d say working more than 70 hours a week makes it very hard to pass.
DirtyZ Wrote: ------------------------------------------------------- > Of course work experience is more important, but > the CFA is helpful. It’s viewed like an MBA. > Just as you don’t need an MBA, you don’t need the > CFA - but both will help to establish credibility > quicker and are therefore useful in the job > searching process. I do agree with Numi, however, > in that working on deals will teach you what you > need to know BUT I’d add that having relevant > theoretical knowledge of corp finance, DCF > analysis, other asset valuation techniques, and a > general understanding of how all the pieces of fit > together (all things the CFA curriculum teaches) > will give you a leg up in not only getting the job > but doing better in it from the get-go. I guess my point was that people who come from banking backgrounds generally already know the basic modeling and valuation techniques you mentioned above, and more. I don’t know what’s covered in Level III since I didn’t take it, but from what I saw in Levels I and II, I don’t recall much in terms of corporate finance, accounting or valuation that a banker or PE professional wouldn’t already know…at least in terms of what’s relevant to most types of transactions. And because of this redundancy, that’s one reason you don’t see that many bankers doing the CFA program. On the other hand, if they wanted to switch out of transaction side and until public security investing, then I’d argue that the CFA was more useful. Having been in sell-side research, I used to think the models I built were pretty comprehensive and there was a lot that I learned that didn’t come from the CFA program. And to be absolutely fair, there was a lot that I learned in the CFA program that I hadn’t learned from my job, namely in areas besides equities and asset valuation. From my work, I learned the basics of corporate finance, DCF’s, and other mainstream valuation methods. It wasn’t that difficult to print out a research model, look at it, and identify where certain numbers or assumptions didn’t make sense. But most research models are just operating models, and it’s more of a matter of building them once and then maintaining or enhancing them. On the other hand, there are many different types of situations you see on the transaction side, and even though there are certain major “types” of transactions that you often see, there are different ways to structure them, and the different structures can sometimes lead to vastly different assumptions, tax implications, and forecasts. Bankers and PE professionals build many more models from scratch than research analysts (whose modeling is basically more maintenance than construction), and learning this added layer of accounting, valuation, and modeling comes from job experience, and unfortunately not from the CFA program. At the time, I didn’t really see why people put so much emphasis on transactional skills that you gain from experience with M&A, LBO, restructuring etc., as I thought the financial knowledge I developed in research was pretty good. And frankly, I didn’t really understand why so many guys on the PE or restructuring side wanted to hire investment bankers over equity research analysts (or even people with no experience whatsoever but who had the CFA charter). But now that I’m on the PE/buyout side and see the types of models that are being built here, I’m beginning to understand. While the stuff here isn’t nuclear physics, learning the accounting and valuation methods associated with transaction can take a lot of time and experience, and as I’m now working with transactional models every day, I have a new appreciation for the accounting knowledge and complexity of models here compared to the ones that I personally saw on the equities side. To make a long story short and not to digress further, from what I’ve seen in my professional experience, bankers don’t really need the charter unless they’re switching to portfolio management or securities investing, because the amount of incremental knowledge gained from the CFA program that would be essential or applicable to the job doesn’t seem to be all that much.
I agree Numi. The transactional side has a lot more complexities and nuances than a typical plain vanilla sell-side model. Cash is king…but experience is next.