This Post is part of the Careers in Australian Finance series.
What is M&A?
M&A is a very popular area for graduates to seek employment straight out of a business degree at University. The reasons for this are simple, everyone knows it pays well and everyone wants to get paid… but if this is your attitude then you are probably quite unlikely to get in, and even if you do you may find yourself out quite quickly. More on this in a minute…
So what goes on in the world of M&A? M&A is the transaction work involved in supporting a company as it either seeks to acquire or divest assets. M&A is a subset of broader Corporate Finance. M&A Analysts will spend a lot of time developing financial models and creating pitch books (as with a number of other career paths mentioned in this blog). The models and pitch books will contain analysis and recommendations to the management and board of the company that has hired you. The analysis will generally lead to a valuation of a component of the proposed M&A transacton, and a recommended course of action for the management team to take.
There are two sides to an M&A deal generally, the acquiring company and the target company, and M&A advisers are often hired by both sides.
For the acquiring company the advisers will analyse and recommend on what the value of the target is, what strategy should be used to attempt to acquire the target, and what price the target may be acquired for (which is often different from the intrinsic value of the target). The target company will hire advisers to get advice on what it is worth in order to determine at which point it is worth recommending a takeover offer to shareholders. It will often also seek advice on strategies that may help to extract a higher bid for the company.
What is it like working in M&A?
M&A generally involves long hours. Weekend work is definitely a strong possibility for Graduate and Junior Analysts, especially at the bigger firms, and late nights often turn into early mornings, especially when a deal is on (which is most of the time if your firm is doing much business). M&A is probably the highest paying career path a business graduate or junior analyst can take, with some firms paying 6 figures straight out of university.
What do I need to do to get a job in M&A?
People that get jobs in M&A straight out of University are basically the cream of the crop. Top grades (lots of High Distinctions), a strong passion for Financial Markets, and a very good suit! Most M&A teams put you through a stringent set of interviews and psychometric testing prior to making an offer. If you happen to have a lot of connections then this can help a lot too, as more senior M&A workers need to be able to generate work through their relationships with senior management and boards of companies. People that make it in M&A need to have a lot of endurance to stick out the hours, and need to have a strong passion for this type of work. Targeting a specific industry can help too, as most M&A teams will tend to specialise in a particular industry (you don’t see too many industry generalist M&A teams in the big Banks anyhow). Last but not least, be prepared for interviews that are often described as quite brutal. The people that succeed in the M&A game are some of the more motivated and determined business people going around, and most war stories I know of feature interviewees getting grilled and challenged in the interview process.
Who’s hiring in M&A in Australia
A good list to get you started:
Deutsche Bank: http://australia.db.com/australia/content/careers.htm
Nomura: http://www.nomura.com/asia/careers/index.shtml (although Nomura is a very new entrant at the time of writing)
Lazard (M&A team formerly Carnegie Wylie): http://www.lazard.com/careers/Careers_Contacts.aspx
Greenhill Caliburn: http://www.caliburn.com.au/content.asp?ModuleID=6&RowId=76
Merril Lynch (through Bank of America post subprime…): http://careers.bankofamerica.com/overview/overview.asp
ABN Amro (owned by the Dutch Government for all intents and purposes…): http://www.abnamro.com/career/career.cfm
The above list covers most of the bigger firms in Australia, and is a good starting list for companies in Australia and Asia-Pacific that hire in most of the career paths we will mention throughout this blog. These companies generally feature in the top echelons of League tables in Australia (and around the world).