January 10-14, 2005
The Financial Economics Institute sponsored a trip that allowed sixteen CMC students to visit some of the leading financial institutions in New York City over winter break. The students met with CMC alumni, who graciously hosted the group and provided significant first-hand knowledge of their firms and the financial services industry.
The group visited six financial firms: Kohlberg, Kravis, Roberts, & Co. (KKR), Banc of America Securities, Merrill Lynch; Bear Stearns; Goldman Sachs; and Onyx Capital Management. In addition, the students visited the factory of Fresh Direct, an online grocery business founded by CMC Trustee Perry Lerner ’65.
On Tuesday, January 11th, the students visited KKR and Banc of America Securities in the morning, and enjoyed some free time to tour the city in the afternoon. That evening, the students were able to meet some CMC alumni from the New York area during a cocktail reception at the Harvard Club, which was hosed by FEI Advisor Joseph Petrowski and his wife, Debra (P’08).
Henry Kravis hosted the group at KKR, which was a major highlight of the trip. Kravis explained how his firm developed the process of management buyouts and has managed to stay at the top of the industry. Today, when buyouts are a “commodity business” and anyone can find the money to buy a company, KKR differentiates itself, Kravis said, by “act[ing] and think[ing] like industrialists”. When it comes to hiring, Kravis looks for people with a well-rounded, liberal arts education, and demonstrated integrity, passion, curiosity, and creativity.
Brian Badertscher ’95, a managing director, hosted the group’s visit to Banc of America Securities. He provided an inside look at the entrepreneurial culture of the firm and provided advice on how to position oneself for a job in New York City. Students also heard from four analysts at the firm.
On Wednesday the group visited Merrill Lynch in the morning and Bear Stearns in the afternoon. During the evening the students toured the Fresh Direct factory with Perry Lerner.
Harry McMahon ’75, Vice Chairman at Merrill Lynch, coordinated the visit to his firm where the students had a roundtable discussion with two analysts and an associate from the investment banking side of the firm. This session was very candid and informative, and the students walked away with some great insight into the banking business. They commented that the analysts’ role will be approximately the same at every investment bank, so what is important is finding the place with which you best fit. Investment banking requires a lot of time and effort, but one representative claimed that the analyst program is “essentially a form of graduate school, except you get paid.” Another representative added that “you don’t always work 100-hour weeks;” sometimes you’re home by “8:30 in the afternoon.”
The visit to Bear Stearns was hosted by Tim Galbraith ’87, vice president of the asset management division. Mr. Galbraith’s description of asset management made it seem like a very exciting and rewarding job for someone with finance experience. The group also met with some managing directors from Bear Stearns, who emphasized that their firm is a meritocracy, and that they encourage innovation and creativity—perhaps more so than the leading investment banks do.
The group’s tour of the Fresh Direct factory was, of course, very different from the visits to the offices of investment banks. Here the students got a close look at how this online business makes its fresh food and sorts out orders for accurate and on-time delivery. Afterwards, the group had a question and answer session with Perry Lerner and the firm’s CEO, who described how Fresh Direct has succeeded where many others (including Webvan) have failed. “The Fresh Direct visit was incredible! I was impressed by the size and scope of the operations,” said Diane Tran, a senior on the trip.
On Thursday, the final day of visiting companies, the group visited Goldman Sachs in the morning and Onyx Capital Management in the afternoon.
At Goldman Sachs, the group was hosted by Cody Smith ’79, a managing director and a member of the FEI’s Board of Advisors. Students heard from analysts representing sales and trading, mergers and acquisitions, and equity capital markets. A recruiter also spoke about the hiring process and the summer internship, where college juniors spend ten weeks with a specific industry group. Goldman Sachs emphasized a team culture and individual humility.
The group’s visit to hedge fund Onyx Capital Management was hosted by portfolio manager Jason Goldberg ’96. Goldberg prepared a presentation on hedge funds, including how they have performed, what kinds of trades they make, and how they make their decisions. He was also very helpful in answering questions about careers in finance. Goldberg recommends that finance students take courses in psychology and basic programming.
Overall, the New York City trip was an excellent opportunity to meet with employees of some of the leading financial firms in New York in order to better understand the industry. “The trip was an opportunity that’s unique to CMC,” says Eva Nazarewicz, a senior on the trip and FEI research analyst. The Institute appreciates all those who helped facilitate the trip.