Getting into corporate finance
Corporate finance is an extremely competitive area of accountancy and finance - we examine each area in turn and look at the skills needed to get a foot into this.
Lead advisory
Involves advising on mergers and acquisitions (M&A), management buy-outs and disposals. "Lead advisory is a repeat-deal environment," says Louise Bridge, business director for Hays Accountancy & Finance. "Companies using the Big Four will often be acquiring, disposing and restructuring within the group."
Project finance
Formulates plans for financing large-scale public services projects with private sector capital. Encompasses privatisation, emerging markets and inward investments.
Valuations
Covers valuation of businesses, shares, brands and intellectual property, working closely with lead advisory groups. International assignments are frequent.
Transaction support/due diligence
Deals with business and financial reviews, specialist investigations, due diligence and working capital reports, in support of mergers and acquisitions, transactions and stock exchange listings.
Industry overview
"There is no great surprise that the demand for 0-3 years PQE is strongest given the post 9/11 slump in corporate finance activity and commensurate lack of conversion into the field," continues Louise Bridge. "The Big Four are recruiting those with skills in transaction services - there is also strong demand in corporate work and private equity."
The Big Four have moved away from concentrating solely on big-ticket deals (£100m plus) and are now diversifying into the middle market (£50-100m). London, Birmingham and Manchester are the main financial centres but Thames Valley and other smaller hubs have opportunities, especially mid-market.
Candidates with mid-cap or private equity backgrounds - not just those from investment banking, as had been the trend. There is also a steady demand for those with Private Finance Initiative (PFI) and Private Public Partnership (PPP) knowledge while strong decision support/business modelling candidates are also sought after.
What can I do?
Lead advisory
A common grounding would involve research to support origination and transactions, and modelling/valuation work. You will help prepare mandates, pitches and information memoranda. Greater responsibility will come your way (including client meetings and execution), and eventually you will start to run smaller deals from conception to completion.
You will eventually become fully advisory and regularly run the transactions you initiate. One of the advantages is that you can initiate and originate in your own right arguably earlier than in other value-added service lines – there is less emphasis on needing to be a partner, or even director.
Transaction services/ due diligence
This generally depends upon level of experience.
Newly qualified
This is more of an operational role - conducting much of the groundwork and contributing to reports.
Manager
Leads assignments and reports for sign-off; formulating views, opinions and strategies.
Assistant director
Generates new business - this is a natural progression to directorship/partnership in a specialist industry area.
Have I got what it takes?
Being sales driven, thriving on change and uncertainty and having a creative personality - these are some of the attributes needed as firms are looking for people to help them gain a competitive advantage. If you have no previous experience, then a first-time pass in the ACA will be expected, especially with the Big Four. However, due diligence is more of a realistic prospect as an entry means for those with no prior experience.
If you have experience in lead advisory, then an accounting qualification does not stand you in better stead. Your commercial exposure will be key, along with your business acumen, client-facing and negotiation skills. Advisory experience with large firms, boutiques, investment banks and housing associations will give you an edge while specific experience in general transactions and private equity is especially valued.
Where next?
Lead advisory
Promotion and career progression is "entirely meritocratic" continues Louise Bridge. In the Big Four, specialisation will tend to be industry or market-specific - for example, you could become a capital markets or private equity expert, or specialise in telecommunications or media. Strategic skills are also very important as successful advisors must have an innate ability to comprehend and interpret objectives.
Transaction services/due diligence
Often viewed as the first step into corporate finance, this includes working closely with lead advisors. However, the skills developed will be highly transferable to other investigative disciplines as well. Aside from corporate finance, your experience and knowledge will make you potentially marketable to other high-level roles in commerce and industry.
