In the last blog in this particular series Aideen Murphy, Partner with Barden and expert in practice and tax careers, takes a look at corporate finance, and asks ‘what is it REALLY about!?
“Corporate Finance” – a career that attracts those who are seeking a truly fast-paced, every-changing and challenging work environment. But corporate finance isn’t a ‘one size fits all’ career because it’s not a ‘one-size fits all’ service!
Corporate finance covers a broad spectrum of activities and different firms offer varying services to their clients, thus offering you various career paths.
Let’s take a look at the different areas and specialities that a career in corporate finance can entail.
Capital Advisory focuses on advising clients on how to best utilise their wealth 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 out new-investors or choosing from a range of borrowing options, clients rely on their capital advisors to identify which option is best suited to their business.
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 equates to 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 accurately evaluate the risks and opportunities of the proposed transaction.
These teams are often very number focused as they use complex financial models to assist their clients in accurately identifying the true value of their assets. Valuation teams calculate the worth of fixed assets, intellectual property or very complex financial instruments, amongst many other things. These valuations can be used by clients to make key strategic decisions, so precise and accurate models are fundamental to ensure these teams help their clients make the best business decisions.
Deal advisory itself can cover a wide range of activities that tends 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 identify whether it is a good/bad time to sell.
Deal advisory teams can be involved in seeking out potential buyers for their client, or on the flip side, identifying strategic opportunities for their clients to acquire a new business that has 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 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 map out a way in which the business can get back on track and resume growth in the medium/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 the ones we have outlined here. Also, different firms have different names for their teams; for example, one firm’s ‘Deal Advisory’ team is another firm’s ‘M&A’ team; a ‘Valuations’ team might be referred to as 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 it is you will actually be involved in and what you will gain exposure to in 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.
To view other blogs in this series follow the links below…
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