#FTS2021 – Careers in Investment Banking & Private Equity by Arvind Mathur, CFA

Who else can better uncover the opportunities in Investment Banking (IB) and Private equity (PE) than the pioneer of VC/PE in Asia-Pacific region himself?

Starting with good news for all CFA program candidates and aspiring CFA program charterholders- ‘All of you have fantastic careers ahead’, Mr. Arvind further added that capital markets are very broad with a multitude of opportunities. Be it insurance market, listed securities market, PE market, investment banking markets, all of them offer wide range of opportunities. As CFA program candidates and CFA charterholders highly aspire to be a part of IB and PE sectors, Mr. Arvind has shared his perspective of how he looks at the future of PE and IB in Indian market as well in the global investing environment.

The world is your stage

As Mr. Mathur advised, Private Equity, Investment Banking, Pension funds, Insurance, Mutual Funds and Multilaterals, they are all interconnected. Pension funds and insurance companies are the largest provider of funds to PE. Similarly, multilaterals invests huge amount to PE. So, one should not look at them individually rather, with a broader view of overall industry.

Who wants to hire CFA Charterholders?

• Investment banks- As they are involved in raising funds for corporates, sovereign funds, bonds, private equity, assist in Mergers and Acquisitions (M&A), they require professionals who have financial analysis and valuation skills.
• Asset Managers- Again, for managing assets of pension funds, insurance companies, sovereign funds, university endowments etcetera, skills of a CFA charterholders are appropriate.  
• Regulators- Regulators (e.g. SEC) are realizing the need for finance professionals who can interpret and comprehend various financial shenanigans and analyse their impacts simultaneously.
• Audit firms- They are hiring CFA charterholders increasingly because knowledge of CFA charterholders is relevant to them in many ways.
• Financial educators
• Financial Consultants

Huge ecosystem

There is a huge ecosystem surrounding Private Equity and Investment banking where you can explore many opportunities as CFA charterholders. However whilst PE market is not much developed in Indian market, IPO market is well developed. Nevertheless, Mr. Mathur suggested that growth prospects are going to be constant in India for coming 50 years (after pandemic) which implies more wealth in the country and hence pointed towards increasing demand of finance professionals who can manage the wealth and assets efficiently.

Investment Banks

• Raise funds- Whoever wants to raise money in market, they go to investment banks. So majorly, as an investment banker, you are supposed to raise funds for IPO, bonds, PE or sovereign debt.
• Mergers and acquisitions- M&A is also very important business for investment banks.
• SPACs (Special Purpose Acquisition Company), acquisition finance as well as structure deals in derivatives are also developing arms of investment banking business.

Thus, there are various types of jobs available in market for those interested in IB. Besides, Mr. Mathur highlighted that big players are highly sought after by job seekers in investment banking, but it does not imply that smaller investment banks do not offer good opportunities. India has many such small investment banks which are highly professional and can further position you well in achieving your career goals. So, aiming for big players is good but smaller investment banks do not weigh less.

Furthermore, equity research in IB underpins the requirement of sector knowledge and in-depth research where CFA charterholders have an edge. In addition to this, Mr. Arvind discussed about the importance of being up to date with current trends along with technical knowledge when appearing for an interview in investment banking firms.

Private Equity

PE fund is a pool of capital where investors pool their money and a particular fund manager manages the fund. There are three main pillars of PE fund, i.e. General Partners (GPs), Limited Partners (LPs) and PORTCOs (Portfolio companies). However, job seekers believe job in PE fund means becoming a GP. But Mr. Mathur talked about other opportunities available in PE ecosystem. They are listed below-

• Family offices- There are many family offices in India with huge amount of wealth. They invest in PE funds and VC funds also so they recruit professionals to manage their family wealth.
• LPs- Limited partners are the institutional investors like pension funds, insurance companies, endowment funds and retail investors like high net-worth individuals. They also hire finance professionals who can invest their funds appropriately.
• PORTCOs- The portfolio companies need professionals who can help them raise funds from PE.
• Starting a new PE fund- If you are experienced professional, you can start your own PE fund. You can start with little funds and can begin creating your track records. In this regard, Mr. Arvind also discussed about life cycle of PE fund.
• Exiting a fund- PE funds are unlisted and have a life cycle of approx. 7-10 years. They exit through M&A or IPOs with the help of investment banking firm.

However, number of jobs in PE funds is limited. They hire people who can add value, including, consultants, placement agents, valuation experts, investment bankers, MBAs or experienced entrepreneurs who knows how a business runs. So, equipping one with required skills is foremost requirement.

Overall, one should look at entire ecosystem rather than just GPs, because it’s a smaller part. Also, as per the speaker, the PE market is going to grow tremendously in coming years.

Who else play in the space?

Many opportunities lie with multilaterals like Asian development bank, International Finance Corporation, World Bank, Asian Infrastructure Investment Bank, New Development Bank etcetera. They all invest in PE funds to some extent as well, so one can look for job in such institutions as well. However, whilst CFA charterholders are respected in the industry, other skills might also be required to bag a position in a highly competitive environment.

Finally, Mr. Arvind concluded that there is never too early or too late to learn new skills and start something. Whilst replying for a question by a viewer, he also added that he started his journey of earning CFA charter at the age of 49. In this digital era, information is available everywhere, so if one wants to make a career in IB or PE, there are plenty of resources- webinars, sessions, courses, case studies. Additionally, more skills you have, more useful you can be for an organisation (e.g. CA, MBA). Moreover, good networking and interpersonal skills were also highly recommended.