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Wall Street looks to academia for indicators
Professionals working in the finance world are beginning to appreciate the value-added of academic research in the field, says Narasimhan Jegadeesh, a professor and the Dean’s distinguished chair in finance at Goizueta. With traditional stock market indicators remaining mixed for some time, it seems reasonable that those working in the capital markets would look to solutions outside their realm. “Over time, practitioners have become much more interested in research, as they see the applicability, and we are responding,” he adds. Of course, today’s academicians still deal with conceptual issues, but much more of the financial research is becoming “application-oriented.” Jegadeesh believes that this practical expertise is especially important for Goizueta students who will eventually enter the field.
“Much of what appears on paper—the investment strategies we propose—needs to be tested. You need to run the model in real life to see what will result. When practical issues come into play, the theory doesn’t always work out. Ultimately, practitioners are concerned about the day-to-day profit and loss, and the theory has to deliver.”
Currently, Jegadeesh’s teaching schedule at Goizueta includes undergraduate courses in securities and portfolio analysis, as well as graduate level and PhD classes in empirical research into capital markets. His most recent research investigates whether gender plays a role in the performance and reputation of sell-side stock analysts—the individuals who play a crucial role in the collection and dissemination of information that is closely followed by investors and institutions. Jegadeesh has also co-authored a comprehensive study that examines the extent to which firms from different countries rely on alternative sources of capital, the locations where they raise capital, and the factors that affect these choices. He adds, “As markets continue to become more globally integrated, these choices will become increasingly important for firms.”
Jegadeesh’s professional experience continues to inform his cutting-edge research and teaching. He has contributed to the design of quantitative trading models for a hedge fund, in addition to working as a director in a tech business based in India and as a consultant to a number of finance companies in the U.S. He is currently serving as an expert witness in an intellectual property dispute case involving trading technology at competing hedge funds. Says Jegadeesh, “I am very much interested in the direct application of my research. Much of what appears on paper—the investment strategies we propose—needs to be tested. You need to run the model in real life to see what will result. When practical issues come into play, the theory doesn’t always work out. Ultimately, practitioners are concerned about the day-to-day profit and loss, and the theory has to deliver.”
Today, the professor’s academic awards, research association work, and publishing credits are extensive, indicative of his scholarship in the field of finance. Since coming to Goizueta, Jegadeesh believes he has found the perfect home for his academic pursuits. He notes, “The school has built a reputation for being well-rounded and research-focused. With the excellent faculty and the visibility of the BBA and MBA programs, that reputation will certainly continue to grow.”
Investment Banking 628/428
Events of the past few years haven’t made it any easier for those involved in investment banking to explain what it is they do. They’re too busy fielding questions about scandals. Unfortunately, the moral meltdown of a few has clouded a diverse field that plays a huge role in restructuring industry, financing governments, and facilitating saving and investment.
Goizueta Associate Professor in the Practice of Finance, J.B. Kurish, has been in and around investment banking for twenty years, during a “dramatically changing environment,” as he describes it.“Investment Banking is a dated term,” he adds. “It’s really about the financial services industry.” Various institutions in a number of fields offer banking, investment services, and insurance, as well as other financial products. In some cases, firms can be clients of each other in one financial niche and competitors in another. Additionally, advances in technology and increased regulation continue to affect the industry.
Through a variety of case studies, the students in Kurish’s classes follow the protagonists as they weigh their options and evaluate the trade-offs involved in financial decisions. Supplemental readings come not only from current events, but from literature investment banks prepare for their clients. “It’s access to real-world material,” notes Kurish, who receives the papers from his industry contacts. Access to such insight “really helps in terms of students buying into the class,” he adds. Several of those contacts speak to the class.
Though public finance is not as “glamorous” as mergers and acquisitions, it too finds a place in Kurish’s syllabus. Before winding his way back into academia, Kurish advised city and state governments about debt issuance and the like. He calls public finance “investment banking with a social conscious,” and thinks it’s important to discuss.
“People think that everyone in investment banking is the same. There are a lot of different jobs, a lot of different parts, a lot of different characteristics that make people successful,” he says. “You need to understand the business and evaluate yourself as well.”
For Brian T. Levine 94MBA, Wall Street is more than a distant concept. Hired directly out of Goizueta 13 years ago, he manages an equity trading desk at Goldman Sachs in New York City. Recently promoted to partner, Levine is responsible for overseeing trading risk in his department. He also helps to manage the firm’s automated trading and internalization initiatives within the equities division. It’s a hectic job with considerable demands, given the vagaries of the stock market.
Despite the pressures of his job, Levine is energized by working in the capital markets and following technological advances in the field. He notes, “The U.S. equity market is the most efficient financial market in the world. To stay ahead of the curve, technological innovation, in the form of systematic trading strategies, is critical. More than ever before, Wall Street’s leaders are creative thinkers who are unencumbered by the risks associated with rapid change.” He credits Goizueta’s approach to teaching for helping him in his current position. Says Levine, “I would say Emory’s team orientation was great preparation for Goldman’s non-star culture, which runs somewhat counter to the rest of Wall Street.”
Investment banking is a field that requires individuals who can adapt and follow market trends. As a vice president in the financial sponsors group at Deutsche Bank Securities in the New York City office, Patrick D. McNulty 00MBA understands that sector of the finance world well. He says that despite an anticipated slowdown in merger and acquisition activity, he is encouraged by the amount of private equity transactions in the works. “The current year remained robust in the leveraged buy-out and private equity markets,” he notes. The growing private equity marketplace will not only provide opportunities for McNulty’s clients going forward, he says, it may also provide significant career opportunities for the next crop of Goizueta graduates interested in the finance field.
In his current post at Deutsche Bank Securities, McNulty covers private equity clients, dealing with M&A advisory work, leveraged financing, and the raising of equity capital. After graduation from Goizueta and prior to Deutsche Bank Securities, McNulty rose in the ranks at UBS Securities to become a director in their mergers and acquisitions group. He credits Goizueta’s global focus, diverse student body, and vibrant learning environment for helping him to successfully bridge the gap from the academic to the professional world. He adds, “Being able to adapt is critical in today’s global markets. The diversity of the students’ backgrounds and cultures at Goizueta created a realistic learning environment that mirrors today’s work environment.
II. Academic Research Techniques Propel The Marketing Field