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“Corporate Finance” – a career that attracts those seeking a truly fast-paced, ever-changing, and challenging work environment. However, corporate finance isn’t a ‘one-size-fits-all’ career because it’s not a ‘one-size-fits-all’ service.
Corporate finance encompasses a broad spectrum of activities, and different firms offer varying services to their clients, thereby providing you with multiple career paths.
Let’s take a look at the different areas and specialities that a career in corporate finance can entail.
Capital Advisory
Capital Advisory focuses on advising clients on how to utilise their wealth best in order to increase growth and profit. This includes advising clients on the best way to manage existing capital or ensuring capital is strategically structured to achieve medium-long-term business goals.
Capital advisory professionals also assist their clients in analysing and selecting the optimal method of raising capital for business expansion, i.e. for a new venture, to accelerate growth or to raise funds for an IPO. Whether it’s selling stock, seeking new investors, or choosing from a range of borrowing options, clients rely on their capital advisors to identify the option best suited to their business.
Transaction Services
This one almost explains itself – these teams provide a ‘service’ during a ‘transaction’! The transaction is almost always a sale or purchase of a business, so teams will be working with either the buyer or the seller. Due diligence accounts for a large proportion of TS teams’ work, as it is an extremely important part of a transaction. For a seller, due diligence prepares the business for sale by forecasting potential future profits and growth and preparing data to answer questions that interested buyers are likely to ask. For a buyer, comprehensive due diligence is vital in order to evaluate the risks and opportunities of the proposed transaction accurately.
Valuations
These teams are often highly focused on numbers, as they utilise complex financial models to help their clients accurately determine the true value of their assets. Valuation teams calculate the worth of fixed assets, intellectual property, or complex financial instruments, among many other things. Clients can use these valuations to make key strategic decisions, so precise and accurate models are essential to ensure these teams help their clients make informed business decisions.
Deal Advisory
Deal advisory itself can cover a wide range of activities that tend to span the entire lifecycle of a transaction, hence can often be referred to as executing a transaction ‘from cradle to grave’. A client may want to sell part of their business and will rely on their deal advisors to perform an economic and market analysis to determine whether it is a good or bad time to sell.
Deal advisory teams can be involved in seeking out potential buyers for their clients or, on the other hand, identifying strategic opportunities for their clients to acquire a new business with strong growth potential. These teams are usually involved in the actual negotiations of a transaction, and their clients place their utmost trust in their advisors to achieve an optimal deal.
Restructuring
Restructuring services are usually most sought after when a business is experiencing financial turmoil. It involves assessing the various options available to the client to limit further financial losses, modifying their debt structure, devising a strategic plan to enable the business to recover, and mapping out a way for the business to get back on track and resume growth in the medium to long term.
In this article, we have touched on just some of the key areas that fall under the corporate finance umbrella. Teams can offer even more bespoke and niche services than those outlined here. Additionally, different firms have different names for their teams; for example, one firm’s ‘Deal Advisory’ team is referred to as another firm’s ‘M&A’ team, while a ‘Valuations’ team might be called a ‘Financial Modelling’ team elsewhere.
Beyond that, each area mentioned contains various nuances and differences, depending on the firm/team you join.
Sound like a bit of a minefield!?
Our advice – Do your research; find out what you will actually be involved in and what exposure you will gain to each of the firms you are considering. And definitely talk to one of our specialist Barden team members who can help you navigate the best corporate finance career path for you.
Connect with Aoibhín on LinkedIn or at aoibhin.byrne@barden.ie