"Capital" means money. "Market" means parties that want to lend or borrow money. Capital Markets finds the money that a borrower needs and provides the rate of return that the lender wants. In essence, the Capital Markets group acts like a broker. They have to match the clients with the right currency and maturity of securities.
Capital Markets today is global, creative, and multicurrency.
GETTING INTO THE INDUSTRY
• If you're not an SOM student, take some economics, accounting, or marketing classes.
• Don't just read the American part of the newspaper. Know what's happening in Europe, Latin America, etc.
• Business today is global, so you must be comfortable and experienced with diversity and understand the global mindset.
• Don't be afraid to take risks. Coming to Wall Street will be a risk; but if you choose incorrectly, you can still recover and move in a better direction.
• Figure out what your skills are. What can you offer an employer? What makes you unique from other applicants?
• Be willing to just get in the door. Prove yourself no matter what the task or job. People will notice your efforts and accomplishments and it will give you a chance to better understand the culture and the differences between departments.
• Be ready. Companies expect you to hit the ground running. Things are fast paced, and you have to like that environment. Working without a lot of supervision and being a quick learner are essential.
INDUSTRY BACKGROUND
• The role of the Capital Markets manager has changed dramatically over the past 20 years. Technology is making it easier for two parties to find each other, so the broker has to become more creative.
• The business has moved from an American market to a global market. Money is available worldwide and it's important to know the sources.
• Pay attention to laws and regulation. These can affect the finance industry over night. Rule 415 changed the industry greatly when it became possible for companies to access fixed income markets easier.
• Capital Markets act as a intermediary between the trading floor and investment bankers.
Equity holders own the business, and debt holders lend to the business.
• Because America is a one-language and one-currency country, Europeans have an advantage over us. Most Europeans speak several languages and are more conscious of currency, tax regulations, and rates of return.
WHY CAPITAL MARKETS?
• You will need your MBA to become an officer/manager. It's a great place to start after graduation because it is in the heart of everything that is going on. The Rates department is an important area, because you get to meet key managers and it affects all other departments. All positions are located on the trading floor. It's exciting and fast paced, but unlike the traders who work from 6am to 6pm, you will work much longer. You will work more like an investment banker.
• You will be moved internationally. The key markets are London, Hong Kong, Latin America, Eastern Europe, Brazil, and Moscow. Brazil is the 3rd largest commodities market in the world. Russia will soon be the 4th largest market.
• Capital Markets is not just restricted to something that happens on Wall Street. Every CFO today is a Capital Markets expert. It's a knowledge that is needed in the private sector as businesses do business globally.
INTERVIEW TIPS
• Try to engage the interviewer in a conversation. Ask him/her early in the interview how they got into the business. This will give you an opportunity to learn more about the interviewer and what he/she is like.
• An interview question that is sometimes asked is " Do you like to sell?" This usually confuses students because this is not a position that requires selling skills such as with Traders. But on Wall Street, everyone is selling something, wheather it's yourself, your program, or your ideas. You've got to be able to communicate well and be willing to voice your opinion. You are surrounded by incredible sales people, and you will have to be able to hold your own ground.
SUGGESTIONS
• Read and listen to the following:
Newspapers - Barrons, Wall Street Journal, Financial Times, and the Globe's Sunday business section.
Magazines - Fortune, Forbes, and Business Week
Radio - Bloomberg in Boston, 1120 AM
• Learn about the various "indexes"
NASDEQ, S&P 500, Dow Jones
• Study Fixed Income information
Long Bond, 20 year Treasury, mortgage rates, prime rate