Finance and Valuations

Hi!

It’s been a while since the last post.. but then it is also time for New year Resolutions, and this new year my resolution is to blog regularly .. no matter what!

The block III that started on a rather good note.. just finishing our party at Simon’s we plunged into Corporate finance.. a subject that excites me…

Valuation of companies is really what I was looking for and this course by Prof. Pascal Gantenbein was really the one for me. Terms like DCF, LBO, WACC and blah blah all that mystery and “geek talk” surrounding these terms was finally uncovered..

What adds spice to the curry is that we had three company events as part of the course.. First was UBS with a Valuation workshop, wherein we analysed a hostile takeover situation on a recent M&A they advised. The second was another workshop with the Corporate finance guys at Mckinsey wherein we saw the application of the Mckinsey valuation hexagon in unlocking value in an organization.. in this case the merger of a leading FMCG company and the leading men’s personal products firm.

The third was a talk on the M&A sector with JP Morgan execs from London. We discussed the M&A trends, role of private equity and also tried to do some crystal gazing about what the future holds in store for these sectors.. and with subprime being the flavor of the season we had a real juicy discussion on that issue too.

The various approaches of evaluating companies have been eye openers for me as a person.. and I’m now.. simply put.. enriched J !

I feel like I can now start making music out of numerals and figures out of company annual reports and earnings forecasts.. and the drab black and white print in the FT and WSJ about takeovers and PEs … Chryslers and the KKRs sound like an orchestra in concert!

Man! In the third block managerial economics opened up a new dimension for me .. and in this block it has been the corporate finance course which has added a new perspective and dimension…

What is most important for me as an individual is that all these wonderful courses and discussions that have added new dimensions to my personality and opened a plethora of pathways for me.. in turn have reaffirmed my decision to take up the MBA. The more concepts that I encounter.. the more I feel happy to have opted for an MBA… Had I not taken up the MBA .. I would have very clearly missed a whole lot in my life!

Stuart

St. Gallen FAQ

I started a forum on Businessweek addressing the prospective St. Gallen MBA audience..(http://forums.businessweek.com/n/pfx/forum.aspx?tsn=1&nav=messages&webtag=bw-bschools&tid=73646)
and immediately i found myself amidst a flood of questions on and off the forum

Well the interest in the program is heartening.. Euphoria?? i checked with the adcom, they are visibly pleased but are having a hard time turning away so many good candidates..
but there is so much interest!!! and the program is rather selective.. just 35 candidates from across the globe…

as i’ve mentioned earlier this place is worshipped in the German speaking world.. and just at the first round we’re having troubles of imposing caps on the nationalities.. germans.. swiss.. indians .. americans.. even a rational cap of 15% means that only 5 students of a nationality would be able to enroll…in our present class we have 16 nationalities..(just 35 students!!) but the coming class is bound to be even more diverse..

each week we have prospective students share classes with us…. we even invited a group of prospective MBAs to our Diwali Party (http://mba-hsg.blogspot.com/2007/11/indian-connection.html)

guys and gals.. don’t miss the second deadline for sure..!!

I think i’ll take up a job in Zurich and then get to meet all the business wizzes of the next batch…

Anyways, the various questions that are frequently asked to me have spurred me to dedicate a post to the FAQs..In case i see interest.. I’ll keep updating FAQs in future posts too.

Q. Where do most St. Gallen MBA grads work?

Looking at the immediate two previous batches, most people are based in and around Zurich…and a majority of the rest are in Europe…this is primarily because of grads prefer working in switzerland owing to the high salaries but amazingly low tax rates here.. so most guys are based out of Zurich… I’d also prefer working here.. imagine u get a 120K swiss Francs and pay 10-15% or less in taxes.. !!! as against 50k-60k pounds in the UK with prohibitively high taxes … To add to the pleasure.. the cost of living in Switzerland in PPP terms is less compared to say London..

Q. Where do most company reps who visit St. gallen for workshops, presentations or recruitment come from? London / new york / elsewhere?

For recruitment,workshops and guest lectures, the company representatives come from a variety of offices.. Zurich, Frankfurt and London (in that order). Firms having big offices in Zurich send the Zurich guys while others send people from both Zurich and Frankfurt/London offices. So if a firm has a presence only in London.. the london guys will come..

Q. St Gallen Vs. IMD:

IMD is more towards industry and not so much towards I-Banking or consulting. Besides the candidates there are older…the median age of the IMD MBAs is atleast 4-6 years higher than that at St. Gallen.

St. Gallen has a reputation in finance, economics, business administration and international affairs that is unrivalled in German speaking Europe (not just Switzerland). The top consulting and I-Banking firms are full of St. Gallen executives. if on the other hand you want to go to the industry, the ABBs and Novartis and Hiltis of the world will offer you a large number of projects for your MBA summer internship even at St. Gallen. For instance, our Alumni meet in October was sponsored by Alstom. My buddies in St Gallen also applied to IMD but they somehow didn’t like it and hence didn’t join IMD.. so it is also a question of “fit” and preferences.

Q. St. Gallen MBA and Financial Times rankings:
Since the MBA program is new, it will debut in the FT rankings only in 2010.. but when it does it is going to cause major upsets in the ranking tables! For the moment though, it is worthwhile to have a look at the online businessweek comparisons of St. Gallen with other top European B-schools. http://bwnt.businessweek.com/premium_ft/compare.asp?r=1&schools=186&schools=187&schools=220&schools=538

what is worthy is looking at the career services sub-section in the comparison. Some stats that u’ll need are the average salary at St. gallen was CHF 110,000 (class of 2006)

Q. Funding the MBA deficit:
The university of St. Gallen provides funding help for students. EU nationals can avail a loan without collateral from Credit Suisse at a favorable interest rate of just 4% p.a. while non -EUs can avail a loan by the university.. more details in my post
http://mba-hsg.blogspot.com/2007/08/mba-ahoy.html

For more queries, mail me , leave a comment or ask a question on the businessweek forum.
cheers!
Stuart

Parties Galore!!

The best thing about the St. Gallen MBA is the fact that u get to have sooooooooooooo many parties and aperos… so many events to socialise..and drink!! hee hee soon i’m gonna have wine flowing through my veins… red wine for sure!!

Block II, like block one was packed with events… to quote a significant few…we had the rocking Halloween Party with a wonderful gig (guitar + vocals) .. then we had the amazing diwali bash (indian fest) i wrote earlier about .. then u add a few birthday parties and nearly a dozen aperos…

To end it we had the great traditional HSG MBA end semester event!! mooooooooooooore wine … mooooooooooore food! moooooooooooore fun!!! all courtesy the mba office!!!

“Wolfgang for President!!!” .. i’m starting to like these guys…

in short …that’s a lot of wine.. oops! a lot of fun …in a block of just 5 weeks.. lol .. and the next blocks are not gonna be any different ..

going forward we have a big birthday bash tomorrow … and then on saturday we have another great party once again by the MBA office (“chorus : Wolfgang !! Wolfgang!!! President!! President!!”)

… this time at Simon’s place (remember Simon? my Econ professor! http://mba-hsg.blogspot.com/2007/11/simon-nomics.html) … So saturday evening we’re going to Simon’s place and…. we’ll start with coffee and cake ….and then later in the evening order beer and pizzas for the gang!! how cool is that!!!

Have u ever heard of an MBA prgrammes where you could do that??? I haven’t for sure!! HSG is amazing!!!

The beauty of this programme is that we’r a small batch and we hang out together.. and it is infectious.. even the profs and the admin is so much into this.. it is one large hell of a family

Later on saturday, a friend of ours is performing in a play.. we’re all going to cheer him up…

the week is so filled up.. block III has started on a good note

and as we get closer to christmas.. it is gonna get even more festive….

I would miss so much once i’m outta here!!

Block II: Opportunities Galore

Hey guys!

i have been very busy (lazy!) … the mba is (almost!) driving me nuts!
Meanwhile, the number of visitors to my blog are on an upswing .. and the admission applications to St. Gallen are too… we’ve had nearly half a dozen prospective students visit us from across the globe… and attend classes with us during the past few weeks…
You can come and join a class with us too .. in case u r interested .. write to the admissions manager : Heiko .. he’ll arrange it…

Also, been receiving emails from people from the Asia-pac, US, across the EU etc… MBA applicants with rather interesting profiles…. i think the coming batch (class of ‘09) is gonna be one hell of a group! just like us

Alrite… getting back to business.. i’d promised to summarize the various company events of block II.. and here they are.. to begin with we had a BCG workshop… and a senior exec from their India office made a presentation to us.. these guys were keen to show that they are very international and that they don’t want very good business level german at the outset.. (unlike Roland Berger.. who said German or else!!) ..

I agree that in case one wants to be effective as a consultant in switzerland/ Germany/Austria, one needs to be fluent in German so that you could talk to the guy on the shop-floor with equal ease as you did with the CEO… however, most progressive companies to invest in their employees and train them in skills (language skills included) .. however some firms don’t seem to get it!! They brag about international teams and blah blah and multi-country assignments … however, while recruiting they say try to emphasize too much on the language skills!!! damn who would make a better consultant ..a guy/gal fluent in german and no brains or a smart MBA who can get numbers and tons of data to spell out the true story? Skills like language, IT, et al can be acquired.. but people and personality traits.. hey that’s a scarce resource…

My discussions with the principals and senior consultants at all the top consultancy firms have led me to believe that language should not be the deciding factor.. but somehow the HR folk seem to be singing a different tune..

Anyway BCG is of the progressive kinds …and it was their HR manager who took pains to emphasize that they value people and subscribe to this philosophy…they’ll come back to the campus to engage us for recruitment in Jan/Feb’08..

Then we had a talk by the Managing Partner of Wegelin & Co. a boutique mid-size European investment firm based out of St. Gallen into an assortment of index funds based investment strategy. Something which sounds very banal.. but was very interesting!

Then we had a hedge fund presentation by a Goldman Sachs executive.. with rather interesting insights into the recent “happenings” (hurricanes!) in the hedge fund space.. (Bear Stearns anyone!)

Besides rather interesting presentation by ADIDAS about their new global management program : sports, high decibel music, soccer stars.. et al.. first company reps to come in casual attire.. most are dressed to kill (Will the I-Bankers in the house pls stand up!)..

Julius Baer’s CEO was here too.. with an interesting workshop about alternative investments… and so was the CEO of Grisons Peak another medium size boutique investment advisory fund set up by a top honcho at ABN AMRO

then we had two Mckinsey workshops : one on presentation skills and another on storylining and story telling..

there was a talk by Capital international about their graduate programs too… and the last event of the block was a workshop about interviewing with PWC..

a couple of the workshops listed above were not exclusive to MBA students.. but included, at times, PhD or masters students also.. but the smart MBA folk do get themselves noticed in the pack! and the difference is for people to see.. it gives u that great shot in the arm!!

so u see if u were interested in any of these companies.. u have some opportunities to network and know about these firms first hand..what say?

For those from outside the German speaking region: if u told somebody in this region u are a student at St. Gallen, u will see their eyes widen with awe .. this place is the Harvard of the region… I’ve seen people turn around and stare at out HSG jerseys.. Man this is the place to be!!

Cheers!!