Ask an Associate working in Private Equity on Wall Street anything

[Hank Scorpio]

BB's do have some departments that deal with this, especially emerging capital markets. The bigger PE firms have the same thing, but there are a handful that cater to this. This applies to the elite PE firms.

Speaking only English isn't going to hurt you when looking for a job. Again, it all depends on what you do, but for the most part everyone else in your group will only speak English as well.

Most IB's aren't really looking for people that speak multiple languages. You would fit in well with the UN or for the FBI if you knew Arabic

 

[justicedivine]

Have you facilitated any relationships with figures whom you consider mentors in your career in finance?


A recurring idea in this thread is your passion for your work. Not sure if you covered this or not, What exactly about your work satisfies you?

Thank you.

 

[Hank Scorpio]

Have you facilitated any relationships with figures whom you consider mentors in your career in finance?


A recurring idea in this thread is your passion for your work. Not sure if you covered this or not, What exactly about your work satisfies you?

Thank you.

Of course, I have. I don't think I would've been able to make it as far as I have or done it with as much ease without maintaining some sort of "mentor" guidance. I mean, people can get through finance and IB without any mentors, but it makes it a lot easier to have someone to help guide you.

I love knowing that the work that's involved in IB actually makes a serious contribution and has a significance in the companies future and success. There's a saying in finance and it holds so much truth to it--"Bankers literally and figuratively keep the lights on at work."

To take a step further, I covered how bankers are partially the ones to blame for the 2008 financial collapse. This is because of the impact bankers have in the economy. I'm not saying I get a power trip off it, but it's very telling of the impact of your work if it directly effects the economy of the country.

Now that I'm in PE, the economic global impact is still there, but I'm now in a work environment where I have the ability and opportunity to have an individual impact amongst the success of my peers and for the company itself. Creativity holds no bar and I wouldn't change that.

 

[johnnyredstorm]

what do you think of the current stock market and the american economy in general? how do you feel about the dollar, gold and silver?

were you ever in a boiler room? if so, what was that experience like?


what do you think about goldman manipulating the price of aluminum?

 

[Hank Scorpio]

what do you think of the current stock market and the american economy in general? how do you feel about the dollar, gold and silver?

were you ever in a boiler room? if so, what was that experience like?


what do you think about goldman manipulating the price of aluminum?

I think the market is experiencing is a boom and we're entering the early stages of a bull market, but I don't think we'll ever be "out of the woods". I honestly think that previous ideologies that many people had regarding economic reactions and standardization have changed forever. To put it into simpler terms, I think there's a new "norm". We cannot have the same thought process as we had decades ago and apply those economic principles to stimulate our economy. The country and the economy has been evolving since the turn of the millennium and will continue to rapidly change. With this change, requires a different strategy on how to combat this new "norm". Bernanke and the Fed has it all wrong. "Quantitative Easing" won't help and we'll see it come back and bite us in the ***. That's my worst fear.

I think in all honesty that the Dollar is over-valued and there are other factors out there that are keeping it as high as it is. Comparatively speaking, the USD to other Asian currencies have a great divergence. it's almost astonishing to see how high the USD still is based off of economics imbalances and Asian undervaluation's. The USD isn't the only over-valued currency though. Australian Dollar, Swiss Franc and Canadian Dollar are all over-valued as well. A lot of this is happening because of investors and their own hidden agendas.

No, I was never in a boiler room I worked in an IB for two years. I was on a floor filled with Bankers. We worked on models, presentations and pitch books.

I don't have any thoughts on GS "manipulating" aluminum prices. It's too early to make any judgement yet. It's still all up in the air. I think the NYT is kind of reaching though with that article they put up a few days ago.

 

[nocomment6]

Hmmm, this new norm is interesting and I do agree, but could you maybe describe it with an example or maybe refer to someone who has described it accurately? An article essay or something?
BTW would you say your opinion is what most people in the financial world think? Those of course who don't receive media attention.
Would you think a conservative i.e. German approach would be better for the economy?

 

[Hank Scorpio]

Hmmm, this new norm is interesting and I do agree, but could you maybe describe it with an example or maybe refer to someone who has described it accurately? An article essay or something?
BTW would you say your opinion is what most people in the financial world think? Those of course who don't receive media attention.
Would you think a conservative i.e. German approach would be better for the economy?

IDK if there are any articles or essays that go into this specifically, but this of it like this:

1. A few years ago, we thought if you go to college and get a degree, you'd get a job. But now that's not the case, you have to compete with thousands of people unless you've done the right things in college and placed yourself in a position to get a job out of college.

2. It was once believed if you wanted to boost an economy, all you had to do was go into war. The last war we were in almost caused this country to go into bankruptcy.

3. The Fed used to lower interest rates to stop savings and increase spending. The Feds do this and people still save and there isn't as much spending as there once was.

4. When the economy was down, employment hiring would be down. Now that the economy is heading back up, employment hiring is still low and hasn't risen as anticipated.

The examples go on and on, but these are the ones I thought of off the top of my head.

I also think it's a safe bet to say that most people in finance share my opinion. Although, it all depends on who you speak too.

Honestly, IDK what will help this economy. The country is still trying to work this mess out using antiquated principles that don't seem to apply for this new "norm" that we have. Maybe if we can go back to being producers--we'll get back into shape. That's just one example.

 

[johnnyredstorm]

which is the better play on gold? GLD, a mining stock or buying physical gold?

how responsible do you think obamacare is for employers hiring less? what do you think about employers hiring more part time workers than full time, what effect do you think that could have on the economy and the middle class?

 

[Hank Scorpio]

which is the better play on gold? GLD, a mining stock or buying physical gold?

how responsible do you think obamacare is for employers hiring less? what do you think about employers hiring more part time workers than full time, what effect do you think that could have on the economy and the middle class?

I'm no longer answering questions that specifically pertain to securities or give out any "stock tips". The reason for this is because, I'm not a professional financial adviser and I don't have the professional qualifications to give out such information. I also don't want to be held responsible for people losing money, because they read something I said about a certain security or fund etc

I think ObamaCare ("OC") shares some of the responsibilities of being one of the driving catalysts of employers hiring less just so they're not obligated to provide healthcare insurance to employees, but I wouldn't put the entire blame on OC. The economy is recovering, but we're still not of the woods just yet. We have to take the state of the economy into consideration when discussion this issue.

Employers hiring more part-time workers than full-time workers is a practice that has been occurring for quiet sometime now. It enables companies to cut costs by keeping part-time workers instead of full-time workers, because they don't require a "minimum" set of hours, nor would they be obligated to receive any sort of healthcare benefit. Obviously, this directly effects the middle-class, because that's the country's largest demographic group and will be the most effected . Families have children to take care of and health care costs can add up over time, especially from the costs of prescription medications. Although, there are other alternatives to "combat" not getting healthcare from employers. Depending on where you live and what your household income is--there are many healthcare providing companies out there that will cover these families. Is the system perfect? No, but it's what we have going for us at the moment and we have to work with what we have.

 

[theworldisyours]

Thanks for all the replies! I only had a few questions but I really enjoyed reading through this thread!

 

[peep the kicks]

edit: nvm saw your answer

 

[Hank Scorpio]

Thanks for all the replies! I only had a few questions but I really enjoyed reading through this thread!

What are your questions?

 

[theworldisyours]

What are your questions?

I asked them on the first page and you answered already. I appreciate it. If I have more I won't hesitate to ask. Thanks again!

 

[justicedivine]

when it comes to networking, I'm sure you'd agree that the best way to get something that u want is by giving something others need. when u came from the perspective of say an undergrad college student, how did put this idea into activation ( if at all)?

 

[JL415]

how do you find the time to answer these questions?

 

[thejrob]

First off, thank you very much for your dedication to this thread. I can tell your opinion is as highly valued by others in the community as it has been to me.

I work in Real Estate Development and our firm is in the business of constantly working with firms to secure private equity as well as getting funded by large banks. Do you think more private funding will be put into the real estate market again soon or will that also be reflected in the new normal?

To be competitive moving forward what internal rates of return on private equity put into real estate do you expect to be desired? Currently it seems to be around 14%

 

[Hank Scorpio]

when it comes to networking, I'm sure you'd agree that the best way to get something that u want is by giving something others need. when u came from the perspective of say an undergrad college student, how did put this idea into activation ( if at all)?

I think the kind of networking you're alluding to isn't very conducive to professional networking. The type of networking you just spoke of is more like doing favors for people and having a "what have you done for me lately" type of mentality. In the long run, having this kind of mentality, especially when working with a group in high finance will prevent you from cultivating any kind of substantial professional relationship. Bottom line, it's really not what networking is all about.

When I mention professional networking, I mean making connections with people. Meeting people whom you never met and establishing some sort of common ground to work around and discuss about. That's really what professional networking is. When I was in undergrad, I interned at a lot of places to show my interest in high finance. While I networked with as many people as I could, I always made sure that I displayed passion and motivation towards achieving my goals. When you're an undergraduate kid meeting with professional, showing those attributes really leaves an impression on people. This also will help people remembering you. This is probably one of the most important things about networking. What can you do to set yourself apart from others?

When I was ready to go into the real world, I reached out to all the people whom I've met and they remembered who I was. When I told them what I was up to and my current activities--they were more than happy to help me out in whatever what they could. Kind like how I'm trying to help NT now. I grew up on NT and I've taken so much from this community and it's left an impact on my life. I wanted to give back and help. That's why I made this thread.

You understand what I mean now my professional networking? If you don't, please PM me. I don't want you to get the wrong idea about networking, because it's a very important aspect in life.

how do you find the time to answer these questions?

I try to stay as active as I can on the boards. While I'm at work, I do have some downtime. When it's slow for a minute or two, I'll answer some questions. I also have trouble sleeping, so I get to answer a lot of PM's in the middle of the night

First off, thank you very much for your dedication to this thread. I can tell your opinion is as highly valued by others in the community as it has been to me.

I work in Real Estate Development and our firm is in the business of constantly working with firms to secure private equity as well as getting funded by large banks. Do you think more private funding will be put into the real estate market again soon or will that also be reflected in the new normal?

To be competitive moving forward what internal rates of return on private equity put into real estate do you expect to be desired? Currently it seems to be around 14%

I absolutely think more real estate development companies will look to get raises and funding from the private sector. And I can say that it won't just be the real estate market who will be going to the private sector either. Obviously, the real estate market is going up, but not at the rate we'd hope it would. This is why more development companies are looking to the private equities markets to get this support.

Going into the "New Norm" thing I spoke on earlier--I think the way the gov't handles the housing market from this point forward will forever be changed. They don't want another mess on their plate and I think they learned their lesson from 2008. There will be a lot of standardizations and restrictions.

Well, I'm not too familiar with real estate internal rates, but I do know a little bit about REITs. Judging from my knowledge about REITs and how the real estate market is operating now, I can make a safe educated guess that 14% would be a bit much on the high end, slightly. The market isn't as good as it should be and interest rates are still floating on the shallow end. When it matures and picks up, I think we'll see it around 18-22%. I didn't pay much attention to the real estate market during 05-07 when it was supposed to be BOOMING, but I heard rates were around 30%. Insane.

 

[justicedivine]

thanks brother will do

 

[Hank Scorpio]

For everyone looking to improve networking skills--Trying reading this. It delves deeper into building relationships than just on a professional level.

It talks about building relationships on a human level. Worth the read IMO. I'm sure many people have heard of this book.

View media item 516744

 

[Top Boy]

Asked a similar question earlier, but now I can give you specifics that should help.

Im at the University of Nebraska-Omaha, Finance major, 3.08 GPA, going into sophomore year. I've actually only taken general educations classes. No major specific classes yet.

Gunning for a Financial Analyst position.. Those IB hours per week  

Where do you think would be the best place for me to seek an internship in my city? And is finding a mentor in the field of finance worth the time? Have some pretty legit connects in 100 Black Men and a majority of them are in the six figs. range.

I want to hit the ground running.

 

[secretzofwar]

For everyone looking to improve networking skills--Trying reading this. It delves deeper into building relationships than just on a professional level.

It talks about building relationships on a human level. Worth the read IMO. I'm sure many people have heard of this book.

View media item 516744

Timeless classic. What books are you reading these days Hank?

 

[Hank Scorpio]

Asked a similar question earlier, but now I can give you specifics that should help.

Im at the University of Nebraska-Omaha, Finance major, 3.08 GPA, going into sophomore year. I've actually only taken general educations classes. No major specific classes yet.

Gunning for a Financial Analyst position.. Those IB hours per week  

Where do you think would be the best place for me to seek an internship in my city? And is finding a mentor in the field of finance worth the time? Have some pretty legit connects in 100 Black Men and a majority of them are in the six figs. range.

I want to hit the ground running.

Take some finance concentrated courses and see how you like them. Your main focus at this point is to figure out what it is in finance you want to do. Finance is a broad field with many outlets to plug yourself into. You need to figure out what suits your personality best and how you can tailor yourself into an ideal candidate for that role.

When you say Financial Analyst, what do you mean? Because as I've stated in the first page--everyone who enters finance at an entry level has the title of an "Analyst". You have no choice but to be an analyst coming out of undergrad.

Honestly, I'm not too familiar with Nebraska, but I'd assume you can try to get an internship within the department of finance in your city or maybe even the comptrollers office? But before you get into any of that stuff, you need to first figure out what you want to do in finance. Then you've figured it out, you can search for internships that focus specifically on which arm of finance you wish to pursue. Also, it would be a good idea to join Finance/Investment clubs on campus and I would join the student government as well. Being apart of that stuff shows leadership skills and conveys you have the communication skills needed to communicate and service for others.

I'd suggest you build relationships with the guys you've mentioned. They can help you figure out what you want to do and can guide in the right career path.

Timeless classic. What books are you reading these days Hank?

I barely have any time to read, but when I do have time I read a lot of self-assessing books and I read a lot of essays from people in academia. I know some people at Columbia University and I love to follow their research and read their published works.

As for finance stuff--I've been reading some of Bill Priest's work, because I've gotten a chance to meet him in the last few weeks and dude is on another planet.

View media item 517073
Check it out. Really goes into the importance of cash flow.

 

[thejrob]

Thanks for the response Hank

 

[Hank Scorpio]

Give the thread a bump. Fell back a few pages.

 

[rell826]

I know you're not involved in trading, but what do you think of the decline of the NYMEX and just the industry in general? I was an intern at one of the bigger firms there back in 07 and that Summer electronic trading was becoming implemented because of pressure by the banks and the economy hadn't crashed yet. Since that happened, many of the firms have gone belly up because the money that used to be made paper trading isn't there anymore and the economy has yet to recover. 1/100 used to make real money and now its 1/1000. All the firms that are remaining at the NYMEX will be moved to the 3rd and 4th floor which is crazy because the entire building used to be occupied save for the 10th floor which was the conference area. People are still losing their jobs at firms outside of the actual building on Water St and more firms will probably be gone by the end of the year.