The principal purpose of corporate finance is to monitor the capital structure of an organisation, as well as to increase its shareholder value through the sales of its investments and securities. The selling of bonds, debentures and common stocks also fall under the scope of this field.
There’s a broad spectrum of positions in this sector, and roles such as advisories to company shareholders or owners on the issue of management buy-outs and mergers and acquisitions, in order to increase the venture’s worth and sustainability, are common.
Populated by various professionals including lead advisors, accountants, auditors and even lawyers, a quick glance shows that all work towards the common goal of raising capital. Each role serves a different function, contributing to different parts of the process.
While lead advisors analyse the financial landscape to recommend the best and safest ways for a firm to raise capital, given its risk appetite, accountants and auditors perform transaction support work by verifying the financial security of potential merger companies instead.
They perform “undercover” labour, where they look into the accounts of organisations that have expressed interest in merging or getting acquired, checking to make sure that their accounts are “clean” – free of fraud allegations – and safe for acquisition.
Lawyers, on the other hand, attend to the legal aspects of these transactions. A lawyer in the field ensures that firms comply with legal aspects in mergers, acquisitions and all transactions. Thus, they need to be aware of red tape and loopholes to guide establishments successfully through a particular transaction.
Interested applicants will need to acquire sector-specific expertise if they intend to pursue a career in corporate finance, most of which will be obtained when the professional qualifications needed for the posts in question are taken up.
Aside from the necessary sector-specific qualifications needed, working in corporate finance calls for excellent communication skills to deal with various parties of interest. Graduates need to be both influential and persuasive when meeting brokers or striking deals with parties concerned, and an ability to get messages across to colleagues and decision-makers with no financial backgrounds is vital as well.
Confidence is an important trait for exuding professionalism when meeting clients – something graduates can gain with familiarity and experience. Teamwork and adaptability, apart from numeracy and analytical skills, are also valued.
A solid understanding of the areas of business that a firm or potential merger companies are involved in is also crucial. Keep in mind that career progression is dependent on capability to network and generate deal flow.
Pros and cons
Long hours and prolonged pressure are some expected working conditions in corporate finance, and the push to do well is amplified with constant monitoring of performance.
However, opportunities to work in talented teams are abound, often translating to less rank-oriented team dynamics and friendlier superior-subordinate relationships.