Know Your Trade … Cold
by Nikolaos De Maria, MBA '18 (4/27/17)
Here at Johnson, we pride ourselves on being a school full of career switchers. We take students who have little to no exposure in their intended career field and get them up to speed in an effective and efficient manner. Very few people who go on to be investment bankers after Johnson were bankers before Johnson. This shift requires a tremendous effort on the part of both students and faculty. Students must put in the work and faculty must provide the resources. Investment banking, in particular, is a rich and seemingly complicated profession for newcomers to the field. We constantly work to improve the skills needed to become a successful banker in each facet of the profession.
As I reflect on this past year, I laugh at the fact that I did not know what a credit or debit was at this time last year. I realize that this school has enabled me to go from knowing literally nothing about business to being able to completely understand strategy and finance (or very nearly so). How has this happened? First, the combination of courses gives a comprehensive, well-rounded, and in-depth understanding of all things finance, including financial modeling, financial statement analysis, valuation, intermediate accounting, and the investment banking practicum. Then, to really solidify understanding, our faculty arrange a series of lectures, appropriately called Lectures in Finance.
Last week, we had the honor of hosting Barry Ridings, MBA ’76, a managing director and vice chairman for Lazard Freres & Co. He walked us through the valuation of Six Flags during its 2013 bankruptcy. Restructuring is a unique field within investment banking; some call it a hybrid of law and finance. It’s quite possible that several people out of my class will end up going into restructuring groups, and restructuring is therefore part of our training in the Investment Banking Immersion (IBI). Ridings recounted how Lazard went about valuing the distressed firm, and how banks advising other interested parties valued the firm. While the mechanics among the banks were similar, the assumptions used in arriving at the final valuation were quite different. This difference of assumptions was the core of the debate between the various creditors and the debtor. In brief, Ridings — and Lazard — performed the valuation correctly, and subsequently won the court battle.
My point here is not to inundate you with the intricacies of restructuring; rather it is to say that there is a right way to be a banker and there is a wrong way to be a banker. Sometimes being wrong is not a result of one’s character, but of poor training. At Johnson, it is becoming clear that neither of these is acceptable. We receive leadership training centered on character, competence, compassion, and courage. We also receive world-class instruction from people such as Barry Ridings. At the heart of his message was the decree: Know your trade. It struck me like lightning. We cannot afford to be wrong in any capacity. We must be prepared to serve our clients with precision.
Johnson is dedicated to us knowing our trade. No matter how much preparation one does for a summer internship, it will inevitably be highly challenging and stressful. However, whether in a restructuring group or elsewhere, I have no doubt that the exposure and training that we experience at Johnson will enable us to hit the ground running and convert to full-time offers. Having access to world-class bankers such as Ridings is just one aspect of our education that gives us an edge.