On September the 28th, GEM Finance Society and GEM Career Center had the pleasure to organise the FINANCE BOOTCAMP at Grenoble Ecole de Management.
In case you missed it, GEM Finance Society had the opportunity to ask our participants questions about the sector and their company. We will post each one of the interviews on our blog, so keep posted.
INTERVIEW WITH MRS GAILLOT FOR NATIXIS
Today, meeting with Mrs Gaillot, at Natixis. Good reading!
Short presentation of Natixis: Natixis is a French arm of the BPCE group. Created in November 2006 from the merger of the asset management and investment banking operations of Natexis Banque Populaire (Banque Populaire group) and IXIS (Groupe Caisse d’Epargne). Natixis operates on 3 core businesses: corporate and investment banking which includes M&A, Global Market, Global Finance departments among others. The investment solutions and insurances includes the Asset Management, Private Banking and insurances departments. And the specialized financial services business that offers a wide range of services like factoring, leasing, and securities services.
Banque Populaire group and Caisse d’Epargne group owns each 35% of the bank, while the rest is listed on the Paris Stock Exchange. The bank counts actually more than 16,000 collaborators throughout the world
During the financial crisis, the bank took a huge hit. The stock went from 23.3€ in October 2006 to 0.83€ in March 2009. The French government lent 7 billion euros to the company to save it from bankruptcy. Now the company is back on track with the stock priced between 6.5 and 7€.
Hello, Kathleen! Welcome to the Finance Bootcamp, thank you for coming. First of all, could you please tell us about your background and job?
Hi, GFS! I am currently working as an equity analyst on midcaps at Natixis. I graduated from Grenoble Ecole de Management (ESC program) in 2010 where I had the chance to intern as a financial auditor at EY and as a credit analyst at CIC bank. Then I joined Natixis right after my diploma as an equity analyst in sell-side with a focus on the automobile industry. I am still an equity analyst – I love my job – but I am now specialized in capital good companies.
The main part of my job is to issue an opinion on a precise stock, to say whether I recommend buying it or selling it, along with its target price after a certain time period, usually 6 months. The aim is to provide the client the information he needs to make the right choice in their investments.
This could be divided in three different steps. The first time that I look at a stock, I develop a financial model about the company. It can take me up to 6 months to build one. It is a very long process. I not only need to develop the historic of the company but also to talk to the management of the group to understand the strategy adopted and evaluate its future impact. Then with this data I make a valuation of the company. I usually use a mix of different methods, the most common being DCF and multiples. Then I write what is usually a 50-pages report presenting my analysis, the highlights and my recommendation. Finally, I sell my point of view to my clients who are mainly investment funds.
Another part of my job is to follow my covered companies in roadshow and to assist to the quarterly release of the financials to ask questions and update my data, report and identify a potential new trend.
Could you describe us a typical day of work?
Well, I usually enter the office at 7am. I spend one hour reading the news on the papers and Bloomberg to catch up with the news that I may have missed during the night. Then, at 8am, all the analysts meet up (around 30) and we have a 1-hour meeting where people present their analysis and opinions on stocks. The second part of the day comes, from 9am to 7pm I work on my projects. It varies from a day to another but I usually work on a financial model, if I have a new stock to look at, or I work on updating my stocks information and recommendations. I also spend some time on the phone talking to clients that seek my advices.
How is the corporate culture?
Well, the corporate culture is very nice. It is a smaller corporate and investment bank compare to its American and English peers therefore there is a much better access to the clients which is very valuable. Speaking of the equity analyst team, what is very nice is this flat structure. I am independent, I have my own deadline and organize my work as I want. This is something I really like, I did not want to be part of the huge M&A team with different level of managers and very strict deadlines. Here I manage my time, my projects and this is the same for the other analysts. The atmosphere within the team is very nice and friendly.
What are the main challenges you faced in your job?
I think there are two. The first challenge I faced is in roadshows and during my researches. The equity analyst is required to have many contacts with the management team of the groups he covers. Talking, questioning and challenging with CEOs, CFOs and executives of international group is very impressive and seems very stressful at the beginning. But now I really enjoy it.
The second one is to see its first mistake. My job is to give recommendation and target for a stock price at one point. It is possible to get wrong and to have misjudge a factor. It is very hard to see the stock price leaving the target point and then to receive calls from angry clients.
How is the bank coping with the release of MiFID II (Market in Financial Instruments Directive) and more generally with the constant pressure of the European Union to regulate the markets? And are you directly impacted?
First, my job will be very affected by MiFID II. Indeed, the research costs now need to be separated from the other costs which is a problem. Before the broker was charging the trade and execution price plus the associated research costs. Now it is necessary to differentiate them and the banks have started to think about it and to release their new invoicing method. Instead of paying every time he wants an information, the client will be able to subscribe to yearly-packages giving him access to the analysts and resources. The regulation is applicable from the 2nd of January 2018 so things are unlikely to change too much from this point.
More generally, since the 2008 crisis we see the multiplication of risk management and compliance services in each bank to cope with the new rules.
Thank you very much for your time, we really appreciate and it will be very useful for the students. To end this interview, do you have any advice for the students that want to break into finance?
Well, I would give you two advices. The first one is to choose your internship very wisely. It is your first step in the professional world. You will from this point develop your own personal network which is very important to choose the path you want to follow. Then, when you have your internship, work well, be motivated and curious, show as much as possible. It could seem obvious, but I had multiple trainees and what I can tell you is that some outperform but some do not reach the expectations by the end of the internship which represent a waste of time for the intern.
Apply and choose your internships wisely, work well, be motivated and it will work for you.
Interview carried out by Arthur Abadie
GEM Finance Society