Alumni and execs provide key insights at High-Yield and Restructuring conference
By Josh Howard, MBA ’19, and Alex Abosi, MBA ’19
The second week of April was packed. The second mergers and acquisitions case in the investment banking immersion, a valuations project, a weekend class on bankruptcy, class enrollment for the fall and a 6:15 a.m. bus ride on a frigid Friday morning. Even with the stress of the week and early hour, everyone was excited for Johnson’s third annual High-Yield and Restructuring (HYRx) conference.
Arriving in NYC to a beautiful, sunny 68-degree day immediately reinvigorated us after a five-hour bus ride and six months of winter in Ithaca. It seemed fitting that we be dropped in Manhattan to take the Roosevelt Island Tram, designed in the 70s by a Cornell professor. Hovering over the river we had both a beautiful view of Manhattan and the new Cornell Tech buildings on Roosevelt Island. Walking to the buildings, it was immediately understood why so many Cornellians decided to take the fintech intensive at Cornell Tech. Cornellians were everywhere, and we were greeted by friends we hadn’t seen in weeks or months who currently take classes at Cornell Tech.
Junior panel speakers
We filed in to see the speakers, both recent graduates and business executives, who had been working in their respective fields. The recent graduates, associates, and vice presidents started us off in a series of Q&As. It became clear almost immediately that the candor and honesty of the answers was a true insight into the life they now lead. A room packed full of soon-to-be bankers, many of which hadn’t had this type of opportunity, were silent and intently listening to every word.
Our recent alums came from places such as Moelis, Deutsche Bank, Evercore, and JP Morgan, each with their own perspective, experience, and skillset. The key unifier was Johnson—the shared experiences and the desire to make the next class stronger then the last. We heard answers to questions about work-life balance; interactions with analysts, vice presidents, directors, and managing directors; funny stories from the first day on the job; and what to truly expect once you hit the deck (we found out that we should really expect just about anything and everything). It was amazing how we could learn so much from a handful of recent graduates in just 45 minutes.
Senior panel speakers
After a short break we were greeted by another set of alums (and Chris Blum who admitted that if had gone to get an MBA, it would have been at Johnson), who were titans in their own rights. John Bonhomme, MBA ’07, regaled us with a story casually explaining selling a firm that was in the $100 million range. Matt Born, MBA ’97, explained how impactful his department in Fidelity is and how the organization is handled. Steve Pedone, MBA ’02, spoke of the changing landscape of Energy and Power under his watch. Chris Blum explained the direction of the leveraged finance department at Deutsche Bank and where he sees the industry going.
Just 45 minutes later, everyone in the room had an immense opportunity to speak and ask questions to people in such important positions. We were in both a meaningful and intangible way more prepared for our summer and/or full-time positions then we were just 45 minutes beforehand, and we all knew it.
Jeff Kowalsky, CIO of HSBC
Our own, Jason Rainer, MBA ’18, introduced his mentor Jeff Kowalsky next who is the chief investment officer of HSBC Bank USA. An hour later, I felt like I learned more about capital markets then I had learned in my entire life.
Jeff’s experiences, perspective, and PowerPoint deck were impactful and incredibly insightful. With the Q&A for Jeff running about another half an hour, its truly amazing to think that he spent so much time with us and prepared so much. Jeff and the other participants all speaking for so long and willing to take their own time is a testament to Johnson and the community.
Keynote speaker David Breazzano, MBA ’80
The keynote speaker for the conference was David Breazzano, MBA ’80, the co-founder and chief investment officer of DDJ Capital. David gave us a colorful recollection of his experience in the high-yield market. From his experience in fixed income at New York Life immediately after graduating from Cornell, and his experience as a portfolio manager, he led us to what inspired him to venture out on his own and ultimately establish DDJ Capital Management.
One of the most important takeaways I had from David’s talk was that great investment research can reap great insights and therefore great returns. One great anecdote he shared was his research insights into one of the largest aluminum smelters in the world and their little-known operations in one of the smallest countries in the world: Iceland. That company was Century Aluminum, and they operated a large aluminum factory in Iceland. He described Iceland as “the largest exporter of energy in the world,” because Iceland is the world’s largest source of geothermal energy and these mining companies could tap into that natural resource and therefore “export” the energy as they exported the aluminum they produced. The cost of energy in Iceland was very low and these companies could essentially make a healthy profit margin from their Icelandic operations.
According to David, at a time where aluminum prices were near their trough, the market believed companies like Century Aluminum were going to suffer. However, David and his colleagues were able to uncover just how profitable Century Aluminum’s operations in Iceland were by getting access to public documents that other research analysts had apparently missed. According to him, the cost of this information was “no more than $75 and a credit card.” With this new insight, they were able to purchase Century Aluminum bonds at a deep discount and profit when the price of aluminum normalized, making a healthy profit.
David’s final remarks at the HYRx Conference were insightful, eye-opening, and sometimes even funny. His preferred format, speaking with no prepared remarks, and welcoming interjecting questions from the audience, made for a really engaging dialogue. And even after his speech had come to an end, we were prepared to engage him once again and finish our conversations with him over drinks at the reception following the conference.
About Josh Howard, MBA ’19
Josh was born and raised in Manhattan. After receiving a combined BA/MA from Boston University in political science and public policy, he moved to DC to work for Costar Group (a commercial real estate information firm). Upon realizing his interest in finance and risk, he moved back to New York to pursue consulting at Accenture working with investment banks in a variety of capacities. Having spent his formative years around investment bankers, Josh knew early on that he wanted to pursue a career in investment banking. His desire to live in a smaller town to focus on school coupled with the intense investment banking immersion made Johnson a “no brainer” decision. After completing his first year at Johnson, Josh is interning at Citi in their global asset management group within the investment bank.
About Alex Abosi, MBA ’19
Alex is originally from Gaborone, Botswana, where he spent the majority of his childhood. He moved to the United States after enrolling at the University of Virginia, later earning a bachelors in finance from the McIntire School of Commerce. Prior to enrolling at Johnson, Alex spent four years on the investment and manager selection team of PFM Asset Management, where he was in charge of hedge fund research and manager due diligence. After Johnson, Alex plans on starting a career in investment banking, beginning at Barclays Capital’s global mergers and acquisitions team, where he will be interning this summer.