The study trip for GEM MSC Finance students took place on the 27th and 28th January this year. The schedule for these two days was quite intense with five company visits in different areas of Paris.
Students travelled to Paris by train on Monday morning with tickets sponsored by the school. The first company they visited was the Credit Agricole Corporate and Investment Bank (CACIB), the corporate and investment banking division of Credit Agricole.
The study trip started with meetings at the Crédit Agricole’s headquarters located in Montrouge. Students were warmly welcomed by Mathilde Lamande (Head Human resources for interns, VIE, and apprenticeships) and Ragitha Paramalingam (Campus manager) who gave them an overall presentation about CACIB.
Created in 2004, CACIB is part of the business line “Grandes Clientèles” and accounts for 25% of group’s net banking income as of 2018. With its presence in 30 countries, serving nearly 8 000 clients, CACIB is playing a major role in the banking industry by offering finance and investment advisory services to mid and large cap companies and financial institutions. Its business lines are designed to offer solutions that range from “distributing to originating”. Some of these are:
- Client Coverage & International Network,
- Global Investment Banking (M&A, ECM),
- Global Market Debt (DCM, Sales, Trading),
- Structured Finance (financing projects),
- Debt Optimization & Distribution (Rating Advisory, Working Capital Advisory, Corporate Acquisition Finance),
- International Trade & Transaction Banking (cash management, supply chain finance solutions).
Students had the chance to meet Côme de Saint Céran, a GEM alumnus (2008), who has been Vice-President of Mergers & Acquisitions since 2015. The M&A department is split into a generalist team and some sector teams (like FIG, TMT, Metal & Mining). He described the day to day tasks of an Analyst during both buy-side and sell-side mandates and gave his feedback on the numerous deals he has been involved in.
Students were introduced to Pascaline Vrain (Associate) and Richard Leray (Analyst), who presented the Rating Advisory department to them. This department advises companies on their capital structure to ensure that they receive appropriate financing solutions. They also help companies negotiate with various credit rating agencies.
In the end, they attended a presentation by Naeem Khan (Global Head of Trade Finance). Mr. Khan gave an overview of his daily missions and introduced the students to the world of Trade Finance, where employees need to find efficient short- and medium-term financing solutions for clients; particularly people heavily involved in international importing and exporting. The expansion of this division is one of the bank’s strategic goals.
Author: Nicolas Almeida
After a fruitful event at CACIB, the cohort headed to PWC offices in Saint-Lazare.
On the following day, students visited Veolia in the morning. This was a great opportunity for the ones interested in a career in Corporate Finance.
Veolia Group has been the leading provider of energy, water and waste management services in the world for over 160 years. Veolia constantly pushes towards sustainable development and environmental services that provide safe drinking water and clean air. They supply potable water to over 90 million people, deliver waste management services to 63 million people and produce 56 MwH of energy.
Grenoble Ecole de Management has been in great relationships with companies such as Veolia to facilitate graduates into world class internships. The goal of this visit was for students to get an in-depth insight into the company and hear from their directors, and HR managers about the business culture.
Students arrived at Veolia’s newest building, in the centre of Aubervilliers, France. An introduction to Veolia’s business and key activities was presented by Denis Chesseron (Veolia Group Deputy Chief Financial Officer). He explained how the finance department supported the key activities and was a crucial cog in the machine. One of the goals at Veolia is that Finance should be a “part of purpose”, so the finance department needs to foster growth in the economic performance, social performance, environmental performance, customer satisfaction, and ethical performance of the company.
According to Mr. Chesseron, a “Double Reporting Line” system is needed to ensure transparency and efficiency. For example, all countries (except France) have one CFO for all three activities (Water, Waste and Energy), and one CEO that will report to the group’s CFO. In France each activity has individual CFOs, due to the size of the market and service provided in the country. The finance department employs 4,300 people. There are about seven finance operation roles (such as Internal Control and Compliance, Mergers & Acquisition and Investor Relations, etc.) in Veolia Group.
Subsequently, GEM alumnus Vincent Héricault (Structuring Manager at Veolia), introduced Project Finance to students. In project finance a team member evaluates a project’s construction, operation and risk-reward profile to raise 3rd party equity and long-term debt to finance a project with no recourse to shareholders. This was similar to the Capital Budgeting class seen at GEM. According to Mr. Héricault, lenders and equity providers rely solely on the future cash flow of the project (AssetCo) and not the historical values. For students to be successful in this role, they must have good finance and technical skills, know how to prioritise their time, and be good at the more client related commercial tasks such as negotiation, networking and presentation. They must also have a good understanding of Veolia’s core business activities.
The presentation ended with a Q&A session. Students asked questions on Veolia’s strategy and challenges such as the impact of the recent ban of imported plastic waste in India and China, Veolia’s position on commodity market for water, the group’s blueprint for increasing their external growth and how they handle municipality payments and possible cash management issues. Mr. Héricault encouraged students to apply for internships and full-time positions at the earliest.
At the end of the forum, students gathered in the lobby for an informal discussion with Mr. Héricault, Mr. Chesseron and Catherine Bothmer (Finance HR Manager). Mrs. Bothmer insisted that Veolia Group hires not only on academic-technical competencies, but also on how well the individual fits in the company’s culture. She stressed that it was vital that students have a genuine interest in the company and industry. On average, permanent employees’ tenured for 10 years with the Veolia.
Author: Josephine Jalarue
In the afternoon, the group was split in two sub-groups. One headed to Euronext offices in La Défense, while the other visited OFI Asset Management headquarters.
Students arrived in Euronext’s offices around 2pm on Tuesday. Located in the heart of Paris’s financial district – La Defence, Euronext’s French headquarters is a modern building that reflects the company’s growth ambitions. Euronext was originally created by the merger of the Amsterdam, Paris, and Brussels stock exchanges. Since then, the firm acquired the Lisbon Exchange, and merged with the New York Stock Exchange in 2007. The group was then acquired by Intercontinental Exchange, which subsequently spun off Euronext in 2014. Today, Euronext is the largest stock exchange in Europe and the fifth largest in the world with over 1400 listed companies and a total market capitalization of €4.5 Trillion.
Euronext offers its users (investors, trading members and listed companies) the possibility to cohabit in a diverse and international financial ecosystem with a broad array of financial products such as equities, Exchange Traded Funds (ETFs), warrants and certificates, bonds, derivatives, commodities and indices. Students had the chance to find out how the ETF industry works thanks to Serge Ngoube (ETF Product Manager).
The visit continued with the intervention of Pierre Gilguin (Facilities Manager), who took the students back in time to the origin of the stock exchange; when Euronext was called “Paris Stock Exchange” and when business took place in the wonderful Palais Brongniart. Then Mr. Gilguin spoke about the development of the structure, the transition from traditional to electronic market, and the growth related to the latest acquisitions in the recent years.
Students then got a glimpse of what it means to work in Euronext as a Corporate Actions Analyst thanks to Jordan Munck, who explained his typical day at Euronext and the history of the legendary bell that every CEO dreams to ring.
The visit ended with a very interesting presentation by Antoine Giraud on IPOs. He detailed the steps a company has to take in terms of strategy, price range and listing place to have the best impact on the market.
Students majoring in Quantitative Finance were particularly interested by this visit. They were presented a special point of view of the work done in a stock exchange; where many students dream of working “when they grow up”.
OFI Asset Management
Founded in 1971, OFI Asset Management is a leading French asset manager, with €73 billion in assets under management. Its principal shareholders are mutual insurance companies Macif and Matmut, with 60.9% and 25.8% respectively. OFI manages 104 funds incorporating different asset classes with different strategies. This diversified portfolio makes OFI AM able to enhance their performance in today’s competitive markets. The company also plays an important role in supporting sustainable development as it has been committed to responsible finance for more than 20 years. OFI AM is now considered an expert in the field of Social and Responsible Investing.
MSc Finance students had the chance to meet David Wertenschlag (Senior Credit Analyst) and Maxim Lory (Credit Research Analyst). OFI’s main asset classes are Fixed Income securities, therefore credit analysis plays a major role in the company. Mr. Wertenschlag and Mr. Lory presented the students with their daily tasks, and an overview of their credit analysis process. They underlined the importance of Credit Analysts being up to date with the market because any change in credit ratings is dealt with on a priority basis, within 1-2 days.
OFI AM has an experienced & skilled team working on credit analysis. Portfolio Managers also provide OFI AM with credit notes. OFI AM acts on behalf of the Portfolio Managers so they have to follow some strict mandates and maintain a certain level of risk.
Mr. Wertenschlag and Mr. Lory also stated the fact that OFI AM is independent in giving ratings so they may not necessarily align with the Portfolio Manager. They include relative value in their credit ratings which is basically the return for taking risk. Relative Value is a very important factor and therefore should be included in the rating as it shows the excess return for excess risk, which some investors like. This relative value is not used by any other rating agency since they only value the financial position of the company. Because the interest rates are very low at the moment and many companies are trying to tap in resources at these low rates, OFI AM assesses the motivation of the specific company to ensure the repayment.
In addition, the two representatives of the company also guided students through OFI’s credit portfolios as they focus more on BBB & BB rated bonds. OFI AM uses quantitative scoring built on machine learning by developing algorithms which use data in the market, such as news from rating agencies, to produce a score. This score is communicated to analysts who use it to decide the direction of their actions. OFI AM has bonds maturing anywhere between 1 and 40 years. The longer maturity ones are issued by companies that have consistent cash flows and a huge asset base. The two hosts of the cohort advised that when one has a sense of confidence in the payment of the coupon and principal at the end, it is better to invest in longer maturities securities for the extra yield.
At the end of this busy two-days trip, students came back to Grenoble by train with tickets once again, sponsored by the school. Their overall view of the study trip was excellent as they were astounded by the quality of the interlocutors in the companies. They were all happy with the organisation of the trip and the opportunity for networking it represented. They were very thankful towards the companies who welcomed them, GEM’s career centre and the MSC Finance program directors for providing them with a chance to learn more about these subjects outside of the textbook and gain valuable insights about the working life in these companies. Everyone learned something valuable that would help them during job applications or interviews.