Sunday, 20 January 2013

Bateman Interviews: Investment research in three distinct fields, breaking in and more.

For the inaugural interview with Bateman Begins, I have with me a Chartered Accountant, CFA charter holder and one of the most active volunteers in the Indian CFA Society. With almost 10 years of experience in hedge funds research, credit analysis and bond trading analysis, he has been at the centre of a universe which most of us only dream of.

An avid educational volunteer and guest lecturer at several reputed institutions, there are few people better placed to advise prospective monkeys. So without further ado, I present to you Mr. Biharilal Deora in the very first of
Bateman Interviews:

Bateman: CA, CFA, CIPM, CFPcm – An impressive list of qualifications. Could you tell me something about your early years? What made you take up CA and what attracted you to finance later on?
My uncle was an independent Tax practitioner and I always looked up to him as a guide and this was what made me think about a career as a Chartered Accountant. I completed CA in 2004 with an All India Rank of 15th in CA Final examinations.  In my early days, I wanted to add on an international accreditation in Finance and free myself from a limitation of pure accountant. For this, there was only one choice - CFA, offered by CFA Institute, USA, which was known internationally no matter where you go.

Bateman: (So CA's, here's your answer to how to make the switch to international finance)
Well, you successfully made the jump from an Accounting job to a core analysis job with a $1.05 billion hedge fund. Could you tell us how you were able to make such a big change?
Well, any job search needs to be taken up as a project and worked on accordingly. I was working in an accounting/manufacturing firm, so I decided to utilize my extra time over weekends on working towards financial models, reports, etc; thinking about ways to analyse companies’ balance sheets. That helped me a lot in not only clearing interviews but also making sure that I was confident in projecting myself as a finance expert.

Bateman: That’s very impressive. Most people limit themselves to searching, but then I guess most people don’t get into hedge funds.
So could you tell us something about your experience at the hedge fund, and later on in Credit Research roles?
The hedge fund role was with Adventity (now Sutherland, a KPO that provides core analysis work for the fund) and largely into distressed investing in Airlines, Auto, Oil/Gas and Transportation sector. The work revolved around judging recovery value and covenant structure for the new restructured business. That’s where I started and rest all, i.e. moving into tracking investment grade bonds and later on working with bond trading desk, are extension of what I did earlier.
The route that I followed was KPO (Sutherland), Captive Unit (the credit analysis job) to bond-trading analysis.

Bateman: Seems like all KPO jobs are not dead end at all! Good to know the distinction and the exit opportunities.
But you are currently in an entrepreneurial role. How did that happen?
Somewhere in your career and life, you get a feeling of now or never, that’s where in 2012 I decide to call it shots and see if I can follow my hunch of going entrepreniual. This will allow me to spend more time on myself, learning as well as working towards making difference in imparting education to people.

Bateman: It takes guts to leave a cushy job and take the risk of going entrepreneurial. I hope your hunch pays off!
Next, a question whose answer I have been looking for, for a long time – what qualifications do BB banks look for in entry level analysts? In other words, what are the Ivy League equivalents in India?
It may matter initially when you start your career but beyond a point, it doesn’t really matter what qualifications you have; what matters is what kind of person you are and how you approach things. Even if you are from the best of colleges, it can only get you a seat at the interview table but post that it’s on you and you just might do miserably. So I don’t believe in tags of Ivy colleges or otherwise.

Bateman: Fair enough. But for all the hopeful 1st year analysts out there, could you tell them what you would look for while interviewing a prospective analyst?
A first year analyst should know concepts, have the required qualification and know things like modeling, communicating via writing, Powerpoint, etc. Thorough knowledge of financial analysis is a must.

Bateman: Speaking of qualifications, a much debated question – CFA. In developed markets the general consensus is that CFA is not helpful for IB. Do you agree? What about CA?
Only your own preparation can help you getting in to your desired job. I presume a CA, CFA and MBA Finance would have the desired level of technical knowledge, but if you don’t know what is required to be prepared to get that specific job, you will not get it. In other words, most qualifications can teach you basics of finance or analysis but to apply them in your role is entirely up to you.

Bateman: This is the first time I’ve heard it put this way, and I’m impressed. Theoretical knowledge can only get one so far, and that just ain’t far enough.
So lastly, what advice would you give to those who are trying to break into IB?
 I would advise you to look at job descriptions of such jobs and then work backwards towards developing those skills sets and experiences needed. This could include getting practical exposures through independent projects, reading books, analysing businesses etc.

Bateman: Great, thank you for your time and suggestions!
My pleasure.

To contact Mr. Biharilal Deora on Linkedin, click here.

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