An inside look at how Cornell’s investment banking training program readies MBA students on how to do a leveraged buyout analysis before they ever set foot on Wall Street

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The competition is fierce to get a spot in one of the top banks’ investment banking divisions. 

Firms are littered with recruits boasting Ivy League degrees and sparkling resumes, and every little step up helps when you’re fighting for a spot with the cream of the crop. 

Cornell’s SC Johnson’s College of Business believes it has a program that’s been more than just a little boost for its MBA students: An immersion course, taught by former Citi banker Drew Pascarella, the school’s current associate dean of MBA programs, that gives first-year students experience doing investment banking before they ever get to Wall Street. 

It is held in the spring semester of the first year of the MBA program, when most students already know where they’ll be working for the summer, Pascarella said. Their first semester, students will have taken traditional courses on accounting, modeling, and more, but the “secret sauce” to Cornell interns hitting the ground running is actually working out near-real life investment banking projects. 

How Cornell’s MBA students put theories into practice 

The first real-life example that the class starts with is usually a leveraged buyout, where the students have to create a presentation on whether a public company is worth taking private and what kind of returns a client, like a private equity firm, can expect. Pascarella said this year, the project was focused on Cinemark Holdings, a chain of movie theaters, and that students were given two weeks with their group to come up with their client presentations and not much else. 

“They can make mistakes, they can work through it all,” said Pascarella, who focused on technology companies when at Citi. “It really leads to where they can wake up in May and have the confidence of having done it before.” Students don’t go in completely blind — they have an understanding of what a leveraged buyout is, as a theory, from previous classes and lectures, and understand how to use Excel.  

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The end result of the project is a presentation on the students’ would-be advice to the client — and then the class moves on to a different type of deal. Mergers, IPOs, bond offerings — all are dry-run by students before they ever walk through the front doors of a bank. 

Pascarella acts, during the presentations, as the students’ would-be boss, and critiques the same way he would if his associates were presenting to him when he was still working on Wall Street. The goal is that his critiques will result in students not making the same mistakes while they are actually working on Wall Street. 

“You could go from really not even being able to spell LBO to being able to be dropped into a deal over the summer and knowing what to do,” he said.

Becoming a training ground for top investment banking recruits 

The immersion program itself isn’t new at all — in fact, …read more

Source:: Business Insider

      

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