2013 瑪亞學院 系列講座

Introduction to Investment Banking

解密投資銀行

蔡鴻德執行長 瑪亞投資有限公司 Markis Capital Limited

What is Investment Banking? 2

Giving Advice Raising Capital

台灣有哪些外資投行? 你認識幾家?

台灣金控體系 – ex. Fubon FHC 4

Source: Fubon FHC IR Presentation

台灣金控體系 – ex. Fubon Securities 5

Source: Fubon FHC IR Presentation

Financial Services Landscape 6

Commercial Bank

Custody

Lending

Operations

Asset Management (Buy-Side)

Investment Team

Operations

Investment Bank (Sell-Side)

Global Research

Sales & Trading

(Markets)

Investment Banking

Operations

Merchant Banking

Private Equity

Venture Capital

Insurance

Investment Team

Distribution

Front, Middle, Back Office 7

Front Office

• Investment Banking

• Markets

• Sales & Trading

• Research

• Private Wealth Management

Middle Office

• Risk Management

• Compliance

• Operational Risk analysis

Back Office

• Operations

• Technology

• HR / Training

• Finance / Treasury / Audit

常見的前台工作機會

Equity Research Research Analyst, Research Associate/Assistant

Sales & Trading Research sales, sales trader, dealer, dealer assistant

Corporate access, desk analyst

IBD: Corporate Finance, Advisory

PWM: Private Wealth Management

The "Culture" of I-Banking 9

Bonus-oriented culture – "Total Comp" basis

Prestige – Front office vs. back office, star analysts

Challenge – "only the top candidates", long hours, BSD,

"work hard, play hard"

Fame – "advisor" to major companies, front page

transactions, In-the-know, on the inside.

"Benefits" – global travel, overtime meals, overtime taxi,

training & development, etc.

The Chinese Wall 10

•Individuals

•Pension Funds

•Insurance Companies

•Asset Managers

•Corporate Treasuries

•Sovereign Wealth Funds

•Corporations

•Governments

•Municipalities

Providers of Capital

Investment Banking

Chinese Wall

Sales & Trading

Research

Users of capital

Public side Private side

Strategic advisory

Securities underwriting

Corporate Finance 11

Basic Structure 12

Investment Bank (Sell-Side)

Global Research

Economics & Investment

Strategy

Fixed Income Research

Equity Research

Quantitative Research

Sales & Trading (Markets)

Equities

Fixed Income

Commodities

FX

Investment Banking

Capital markets

Advisory

Operations

IT

Compliance

HR

Legal

Overview of Investment Banking 13

Capital Markets

o Equity capital-raising o Initial public offerings (IPOs) o Follow-on offerings o Equity-linked (convertible)

o Debt capital-raising o High-grade or investment grade o High-yield o Syndicated loans o Tax-exempt

o Mergers & Acquisitions o Buyside o Sellside o Spin-offs / Splitoffs / Carve-outs o Hostile defense o Hostile takeovers / proxy fights o Joint Ventures

o Restructuring

Capital Markets Advisory

Underwriting Process 14

Source: Financial Markets + Institutions (2006)

Corporate Finance Activities

Value Company (Financial Models)

Write Selling Memo

Conduct Due Diligence

Identify and Contact Buyers

Create Management Presentation

Negotiate with Buyers

Close Transaction

Value Company (financial

models)

Conduct Due Diligence

Draft terms and determine price

offered

Negotiate with Seller

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Represent Companies for Sale Represent Companies Buying Other Companies

Advisory Services on M&A, Foreign Exchange, Valuation, Financial

Strategy, Issuing Debt and Equity, etc.

Industry or Product Groups

Consumer Products & Retail

Energy and Power

Financial Institutions

Healthcare

Global Industrial Group

Real Estate

Technology/Media/Telecom

Transportation & Services

Debt Capital Markets Group

Equity Capital Markets Group

Equity Corporate Finance Team

Financial Sponsors

Leveraged Finance

Global Syndicated Finance

Mergers & Acquisitions

Private Equity Placement Group

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Industry Groups Product Groups

Investment Banking – Corporate Titles 17

Managing Director

Analyst

Executive Director

Director

Associate Director/Associate

What Does An Investment Banker Do? 18

Financial Analysis

Communication

o Management, Board of Directors

o Internal Committees

Identify Potential Investors

Negotiation / Structuring Transactions

Due Diligence

Documentation

Client Relationship Management o Ongoing dialogue on financial

markets, industry developments, new products

o Long-term relationship as advisor to Senior Management and Boards

Idea Generation and Problem

Solving

o Strategic Alternatives

o Capital Raising

o Optimizing Capital Structure

o Risk Management, Dividend Policy

Assessment Of Opportunities

Origination Execution

Banking Skill Sets 19

Financial Modeling – Intricate (LBOs, structuring) to simple (comps)

Writing/Presentations – Selling memos, management

presentations, commitment memos, Roadshows,

Prospectus (or other filings)

Research – Gathering data, understanding legal aspects,

capital markets process & procedures

Communication & "Rain-making" – bringing in business, acts

as the relationship manager and client expert.

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Sales & Trading / Markets 21

Basic Structure 22

Investment Bank (Sell-Side)

Global Research

Economics & Investment

Strategy

Fixed Income Research

Equity Research

Quantitative Research

Sales & Trading (Markets)

Equities

Fixed Income

Commodities

FX

Investment Banking

Capital markets

Advisory

Operations

IT

Compliance

HR

Legal

外資 Sales & Trading 在台灣 架構

Foreign Institutional

Investors (FINI)

Custodian Broker

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本國 vs. 外資券商的經營模式

Client Type

Business Scope

Product Range

Risk Control

Culture

Research Scope

Perspective

Global Resources

Internal Control

Access to FINI

本國 vs.外資券商 外資券商優勢

Securities Firm – Market Share 25

證券商 百分比 證券商 百分比

Aug-13 % Aug-13 %

1 元大寶來 13.184 26 臺銀 1.102

2 凱基 8.573 27 東方匯理 0.951

3 永豐金 5.208 28 宏遠 0.877

4 富邦 5.205 29 中國信託 0.818

5 群益 4.960 30 香港商野村 0.739

6 元富 3.583 31 大眾 0.735

7 瑞士信貸 3.413 32 合庫 0.631

8 日盛 3.385 33 大慶 0.582

9 台灣摩根士丹利 3.275 34 香港上海匯豐 0.508

10 統一 3.117 35 法銀巴黎 0.492

11 兆豐 3.039 36 大昌 0.450

12 華南永昌 2.725 37 台灣工銀 0.449

13 瑞銀 2.279 38 港商法國興業 0.443

14 國票 2.070 39 亞東 0.406

15 美林 1.851 40 台灣企銀 0.387

16 港商德意志 1.802 41 土銀 0.320

17 高盛亞洲 1.780 42 大和國泰 0.313

18 第一金 1.631 43 台灣巴克萊資本 0.306

19 玉山 1.475 44 致和 0.298

20 摩根大通 1.341 45 鑫豐 0.277

21 國泰 1.335 46 台新 0.258

22 康和 1.271 47 渣打商銀 0.246

23 新光 1.173 48 德信 0.225

24 港商麥格理 1.165 49 永興 0.184

25 花旗環球 1.162 50 高橋 0.182

直接金融：前台架構

證券公司 資產管理公司

Head of Equity/FX/Fixed Income

研究部 業務部

Head of Research Head of Sales

交易室 投資研究部

Chief Investment Officer

Analysts

Sales

Sales Traders

Dealers

Fund Manager

Sales Traders

Dealers

Analysts

開單 開單 建議股票

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Tools of a Trader (I'm kidding) 27

Example: Commodities Org Chart

Investor

Corporate

Light structuring

Product design

Complex structuring

Commodities

Trading Structuring Sales

Proprietary Trading

Market making

Desk analysts

Research Origination

Physical deals

Private

transactions

Fundamental

analysis

Price forecasts

Product design

Mid office

Back office

Credit

Legal

Compliance

Others

Hedge Funds

Institutional Clients

Retail clients

Cash

Derivatives

Equity

Fixed Income

Credit

IBK Investor

Sales DCM, ECM

M&A

Strategic

investments

Strategic

divestments

Corporate

Sales Flow

Hedging

Budget Hedging

Prime

Brokerage

Futures and

Options

…

Others

Origination

Financing

Public

Sector

直接金融: Sell Side

證券公司

Head of Equity/FX/Fixed Income

研究部 業務部

Head of Research Head of Sales

Analysts

Sales

Sales Traders

Dealers

分析師：分析產業趨勢及公司營運狀況，提供投資建議給Buy Side分析師

業務員：提供基金經理人整個市場的看法

交易業務員：視消息面、籌碼面、技術面變化提供短線操作建議給Buy Side的Sales

Traders

交易員：收到來自Buy Side的下單，判斷股價走勢，以低買高賣為原則，分次丟單

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直接金融: Buy Side

資產管理公司

交易室 投資研究部

Chief Investment Officer

Fund Manager

Sales Traders

Dealers

Analysts

分析師：分析產業及公司基本面，與Sell Side分析師交換意見，出具報告，提供買賣建議給基金經理人

基金經理人：基金操盤人，接受建議與報告後開單到交易室作進出

短線交易業務員：追蹤消息面、籌碼面、技術面變化，下單到交易室作進出

交易員：判斷大盤走勢，決定何時下單

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投信/各類 基金經理人 31

32

Breadth of Hedge Fund Investment

Strategies 33

Equity Hedge

30.02%

Equity Market Neutral

2.23%

Equity Non-Hedge

4.51%

Emerging Markets (Total)

4.03%

Distressed Securities

4.70%

Convertible Arbitrage

3.32%

Event-Driven

13.77%

FI: Arbitrage 2.57%

FI: Diversified 1.78%

FI: High Yield 0.79%

FI: MBS 2.63%

FI: Convertible Bonds

0.08%

Macro 10.68%

Merger Arbitrage 1.40%

Market Timing 0.37%

Regulation D 0.24%

Sector (Total)

4.77%

Short Selling

0.30%

Relative Value Arbitrage

11.80%

Equity Research 34

Basic Structure 35

Investment Bank (Sell-Side)

Global Research

Economics & Investment

Strategy

Fixed Income Research

Equity Research

Quantitative Research

Sales & Trading (Markets)

Equities

Fixed Income

Commodities

FX

Investment Banking

Capital markets

Advisory

Operations

IT

Compliance

HR

Legal

影響股票價值之因素

企業價值

市場現

況

投資人對公司的看法

個股新

聞

營收，利潤，

未來發展

現金流

量

每股資

產淨值

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公司

投資分析師 投資人

The Role of Research 37

提高透明度，增加資訊之提供

Sell-side 分析報告多，增加預測正確性

股票流動性↑使公司股價上升，籌資成本降低。

外資研究報告的迷思

外資研究報告 ≠ 買賣超

外資研究報告 ≠ 預見未來

外資研究報告 ≠ 實際操作

媒體及社會大眾 ≠ 客戶

目標價 = 預測值

外資研究報告 = 參考資料

外資研究部 = 研究合規 (Reg AC, Reg FD, etc.)

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39

Equity Research Methodology 40

1. Review Public Information

2. Conversations w/ company management for detailed

information

3. Prepare 3-yr Prelim Earnings Model

4. Review Financial Assumptions

5. Assessment

6. Finalize Earnings Model

Minimum initiation requirements 41

Company description

5-year P&L, cash flow, balance sheet (2-3 years forecast)

Most recent results, commentary

Risks

Rating, price target

Compliance – analyst certification (Reg AC), editorial,

compliance review, restricted list

Report Submission Process 42

1. Submit initiation form

2. Upload model

3. Draft report

4. Research Recommendation Committee (RRC)

5. Editorial

6. Compliance

Valuation Considerations

10-15 year projection, PV versus

current

Asset-Based Valuations

P/E, P/B, EV/EBITDA, Efficiency,

Margins

ratios vs. peers

company value (multiples history)

High/low in cycle

current P/E justification

Valuation vs. TAIEX

P/E, P/BV, Div Yield, FCF Yield,

EV/EBITDA, EV/Sales

private market values for firms

individual units

break divisions as standalone

entities (sum of the parts)

calculate relative value for each

division

Arrive at blended valuation

Risk Assessment

TP over 12 months

Risk Ranking

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Industry Analysis 44

1. Define Scope of Industry

2. Identify Key Players

3. Determine Size Metric to Use (Revenues, Market Cap, Net Income, Capacity, etc.)

4. Collect Annual Historical Data for Key Players

5. Forecast Growth for key players

6. Forecast TAM (Determine concentration ratio of key players)

7. Calculate CAGR

8. Check reasonableness of assumptions

具備條件 45

英文聽說讀寫的重要性

具備基本金融財務分析知識

抗壓性強、積極、認真負責、謹慎細心

主動具企圖心 – 維持自己的好奇心

人際關係及溝通技巧 -訓練自己的表達能力

Operations / Talent Development 46

47

Competency Model 48

Strategic Thinking

• Business Knowledge

• Innovation and Creative Thinking

Business Results

• Execution

• Analytical Ability

People Leadership

• Talent Building

• Team Leadership

• Collaboration

Personal Effectiveness

• Communication

• Energy & Drive

• Decisiveness

• Character

分析師成長的經歷 49

Research Assistant

• 收集資訊

• 資料整理

Research Associate

• 基本面分析

• 財務模型

• 市場意識

• 企業質詢

Research Analyst

• 撰寫報告

• 推薦想法

• 行業知識

• 營業員盤問

• 建立企業關係

Star Analyst

• 投資策略

• 路演活動

• 客戶關係

• 媒體關係

• 團隊培訓和指導

Training Curriculum Topics 50

New Hire Orientation - Company's Value, Principles & Leadership, brand and history,

core businesses, global/regional structure

Managing Your Time

Developing your Personal Communication Style

Collaborative Negotiations

Performance Management

Mechanics of Business Writing / Presentation Skills

7 Habits of Highly Effective People (Steven Covey)

Financial Environment

Financial Skills – Intro to Corporate Finance, Market Data and Economics, Financial

Analysis, Operational Risk, etc.

Product Knowledge – Derivatives, FI, Equities, Capital Markets, Valuation, etc.

Desktop Applications – Word, Excel, PowerPoint,

Research Applications - research website, analytics, report/model upload platform

Interesting Reading 51

Liar's Poker (1990) Michael Lewis

Monkey Business: Swinging Through the Wall Street Jungle (2001) John Rolfe and Peter Troob

The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders (1988) Connie Bruck

Den of Thieves (1992) James B. Stewart

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (1990 & republished 2010) Ron Chernow

Best Practices for Equity Research Analysts: Essentials for Buy-Side and Sell-Side Analysts (2010) James J. Valentine

改變的勇氣：楊應超的首席人生 (2013)

投機到投資谷月涵股市基本分析 (2003)

Periodicals: Institutional Investors, Asia Money, FinanceAsia, Bloomberg Markets, Bloomberg Businessweek, The Economist, Forbes, Fortune, Harvard Business Review,

Movies 52

Trading Places (1983) - Comedy

Wall Street (1987)

Barbarians at the Gate (1993)

Boiler Room (2000)

Capitalism: A Love Story (2009) – documentary

Inside Job (2010) - documentary

Wall Street: Money Never Sleeps (2010)

Margin Call (2011)

Too Big to Fail (2011)

Arbitrage (2012)

Online Resources 53

http://www.opalesque.com/ - About Hedge Funds

http://www.wallstreetoasis.com/ - Wall street forum

http://www.mergersandinquisitions.com/ - another blog

http://www.efinancialcareers.hk/ - Job Website

http://chandoo.org/wp/ - Excel modeling tips

http://www.careers-in-finance.com/ - Career website

http://www.cfasociety.org/taiwan/Pages/default.aspx - CFA

蔡鴻德 (Teddy H. Tsai) 董事暨執行長 (Director & CEO)

801 高雄市前金區大同二路20號9樓之2

電話: +886-7-241-2329 分機 123 手機: 0910723698

電子郵件: teddy.tsai@markis.tw 網站: http://www.markis.tw

Q&A

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