WCM Educational Recap #1: Summer In Review & Intro to Finance

WCM’s Mandate

Event Breakdown & Housekeeping

Summer In Review

  • The Federal Reserve cuts interest rates: rates were cut down to 1.0%-1.25%. Cheaper borrowing costs decrease the barriers to consumer spending, lower the incentives of keeping money in the bank, and could even create a potential liquidity trap.
  • Oil prices go negative: On April 20th, West Texas Intermediate crude oil fell to a low of -$40 per barrel. This happened because the sudden decrease in production resulted in the storage facilities being overextended.
  • SPACs become popular: Special Purpose Acquisition Companies (“SPACs”) are vehicles that raise public funds to pursue an M&A deal. 83 SPACs raised a record-breaking $30.6B during the pandemic.
  • Deals falling apart: Over $10B in mergers and acquisitions became at risk as a result of the pandemic. Included in the list of troubled deals is the prominent merger of LVMH and Tiffany.

What is Finance?

  1. Asset Management
  2. Private Equity
  3. Venture Capital
  4. Investment Banking
  5. Equity and Debt Research
  6. Sales and Trading

Overview of Buy-Side Roles

  1. Asset Management: firms that buy, sell, and manage a portfolio of stocks and investments on behalf of private or institutional clients
  2. Private Equity: firms that purchase companies using investor capital and debt, make improvements over 5–10 years, and then sell them for a return
  3. Venture Capital: similar to PE, except they invest in start-ups, early-stage, and emerging tech companies that have high growth potential

Overview of Sell-Side Roles

  1. Investment Banking: These are financial advisors that help companies and manage the process of buying and selling businesses (or raising funds in general)
  2. Equity Research: Teams that conduct analysis and produce reports with recommendations to buy, hold, or sell investments for their clients
  3. Sales and Trading: Salespeople who call institutional investors with ideas and opportunities, and traders who execute those orders in the market

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Western Capital Markets

WCM’s mission is to educate, develop and provide real-world opportunities for members of the Western community to explore their interest in finance.