FSAC in NYC, Day Two Recap

FSAC Day Two Blog Post- Dominique Christiansen, Class of 2013

After a great first day in New York, as chronicled by Mavis Yu, we had another exciting day ahead of us for our second day. We had four meetings at Bank of America Merrill Lynch in midtown at One Bryant Park. We met with four Managing Directors from four very different sectors. The structure of each meeting consisted of each managing director giving us an overview of their personal career path and what their specific group was involved with at Merrill Lynch. Each Managing Director also touched upon the differences in the company culture and procedures since the merger with Bank of America.

First we met with Jonathan Yalmokas, Managing Director of Prime Brokerage. He gave us an overview of prime brokerage, which he viewed more or less as “hedge fund services”. They offer margin loans, lend stock for hedge funds to short, help them raise capital, and offer an array of consulting services. They also make money on the spread of financing. Since the merger with Merrill Lynch in 2009, Bank of America has been focused on gaining market share in prime brokerage services, which are dominated by Goldman Sachs and Morgan Stanley. Jonathan Yalmokas believed that Bank of America was previously underexposed to hedge funds. He gave us a detailed background on different hedge fund strategies that include: multi-strat and co-mingle structure, equity (long and short), and event funds that bet on the spread of a merger or acquisition.

Scott Bacigalupo, the managing director of Cash Trading for the Americas joined us next. He began as an analyst in the Investment Banking program at Merrill Lynch in 1994. He revealed to us that 94 of 100 of his analyst classmates went into Fixed Income, which was very attractive at the time in 1994. He was one of the few who went into equities and reaped the benefits during that time out of his analyst class. His over-arching message of advice was to veer away from the hot trends and products.  He also spoke of the difficulties in operations since the passing of the Dodd Frank Act.  It was very clear that while he understood the necessity and importance of the Volker Rule, but its hindrance made his job increasingly more tedious in regards to operations.

Gerry Walker, the managing director of High Yield Sales met with us next. Bank of America is the largest underwriter of corporate bonds in the US, and Gerry walked us through the specifics of a deal he closed this past week with Jaguar and Tata Motors of India. It was great to get an inside look at a recent and real-time event like that, which really helped to illustrate the concepts at hand.

Our last meeting at Merrill Lynch was with Chip Montgomery, the Managing Director of Senior Relationship Management. He personally manages 80 global clients that include Fidelity and T-Rowe Price. Chip is a legacy employee, having been involved in research and sales (mortgage and fixed income, among other areas) since his start at Merrill Lynch in 1985. Chip was very candid with us and receptive to any questions we had about his career path. During our conversation, he provided us with some great soundbites such as: “Follow up and follow through meticulously with your clients.” And “The key to building successful relationships is trust, consistency, and performance.”

After our meetings with Merrill Lynch, we took the train from Grand Central Station to Stamford, Connecticut, in which the headquarters of Gartner, Inc. is located. We met with Oregon alumnus Darren Crook, the current head of Investor Relations. Darren began as a sell side analyst, covering large cap entertainment stocks such as Disney. Upon his layoff from Jeffries, the opportunity to work at Gartner presented itself, and Darren says the switch in careers turned out to be the best thing for his work-life balance. He was very candid in his description of the competitive nature of being a Wall Street analyst.

Gartner offers products and services for companies that have IT (which according to their total accessible market, over 100,000 companies spend over 100M on IT). They offer three main services: research, consulting, and events. 70% of their revenue comes from the predictable and recurring stream of subscription revenue. In addition to Darren, we also spoke with a member of Gartner’s HR department, who described their 2-year finance rotation program in depth. Gartner is looking to significantly expand their sales force annually, and it seems like the rotation program might be a great way for an MBA to get their foot in the door with a unique and competitive firm!

 

 

 

Written by Mavis Yu

MBA Candidate 2013 University of Oregon Lundquist College of Business Finance and Securities Analysis Center Graduate Teaching Fellow – FSAC Facebook: http://www.facebook.com/UoFinanceSecuritiesAnalysisCenter 503-860-0726