Strong demand from corporate finance

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The corporate finance sector has long been a key area on which trainers have typically concentrated, and demand has never been greater. Last year, UK companies topped the cross-border takeover league, arranging takeovers worth more than $127bn (&euro119bn), according to an international survey released by KPMG, the accountancy firm.

The shift in focus to a more international approach to mergers and acquisitions has also demanded a wider knowledge of corporate valuation techniques and accounting. Large financial training companies such as BPP have been quick to expand the range of courses offered in areas such as financial modelling, advanced level project finance and venture capital/private equity.

Some trainers argue that for corporate financiers, being trained by pure accountancy firms can be a disadvantage, but the demand for open courses in corporate finance remains firm. 'There is a lack of good open courses taught by people with experience,' says Kate Creighton, BPP's head of corporate finance training. BPP is taking full advantage of the market demand by providing both open-course training and in-house training for accountancy firms and investment banks in corporate finance, which Creighton describes as a growing business.

There is strong demand too from the European investment banks for in-house training in corporate finance. BG Training, a leader in the field, still finds that corporate finance and related training accounts for some 60% of its business, despite diversification into areas such as fund management and equity research. It plans to expand into providing such training for corporates. The company has also been working on the use of derivatives in corporate finance at mid-levels, an area that is growing in importance.

But there is a shortage of good qualified trainers in the industry, and this appears to be particularly acute in corporate finance. It means, of course, that the good trainers are extremely busy. Gary Mond, an ex-corporate financier who launched his own financial consultancy, Redcliffe Associates, 18 months ago, has found the need to add staff and subcontract work.

He now employs a business valuation expert and uses the consultancy services of Michael Dance, a former corporate finance director of Hoare Govett.

Mond also teaches open corporate finance courses that are run through IFF Banking.

Meanwhile, Standard & Poor's, the rating agency, has started to offer one-week corporate finance training programmes in Europe, which include a day on structured finance for corporates, and specifically those interested in securitisation issues. The agency says it is increasingly committed to helping educate the market.

The heightened merger activity in the markets has also stimulated growth of other corporate finance-related training aids intended for the better management of mergers, such as Global Banker, which is being marketed by Lawrence Galitz of ACF Consulting.

Global Banker is a computer simulation that creates a model of two banks that are targets of a possible merger and then models the possible end product, complete with every individual involved.

The software is well-known among US banks in particular, where the group has a good reputation for simulating trading environments. But Galitz appreciates the need for diversification to keep up with the demands of the investment banks.

Just as advancing technology has created a demand for innovative teaching tools, so the growing demand for training in quantitative skills has fed on the technology that makes it easier to explain the subject. There is a boom in the market for various interactive means of undertaking financial modelling.

The Centre for Interactive Financial Training (CIFT) in the City offers workshops and courses on both a public and in-house basis that concentrate on the quantitative, high-end aspect of subjects, such as interest rate modelling, exotic options, advanced volatility workshops, structured finance and financial engineering, among others. It counts Deutsche Bank, SG Paribas, Tokai Bank, Merrill Lynch and Lehman Brothers among its clients.

Veronica Guggenbichler, CIFT's managing director, is a member of the advisory board for the Department of Continuing Education at Oxford University, which recently launched a part-time post-graduate diploma for quantitative analysts.

Dr Paul Wilmott, the academic director of the Continuing Professional Development Centre in the Department for Continuing Education, and the man responsible for the new Oxford course, believes that responsive and effective mathematical modelling will be at a premium as programme trading gathers pace and market transactions speed up. He also provides public courses and in-house courses for CIFT. 'This close link between CIFT and Oxford enables us to ensure we have access to the newest research in the financial field,' says Guggenbichler.

CIFT also provides one-to-one tuition for senior members of staff who may not wish to leave their offices for the training.

But increasingly, the demand for professional development has meant that a number of non-MBA business education degrees have begun to crop up to satisfy the demands of the investment banks. At the purely mathematical end, universities have stepped in to meet the strength of demand with courses that are often devised in conjunction with major investment banks.

Warwick Business School offers a one-year MSc in financial mathematics that is pitched at graduates with a good first degree or mature students who have already spent some time in investment banking.

Earlier this month, City University Business School launched two new MSc degrees aimed at the City, one of which is an MSc in finance, economics and econometrics.

The degree aims to provide qualified people when it comes to the quantitative analysis of financial markets.

But perhaps one of the strongest areas of demand for financial training in the City at the moment is for training in credit analysis, a field taken far more seriously by US banks than the European ones, until now. As the search by investors for yield has created the need for a greater understanding of risk, demand for expertise in credit analysis has exploded. BPP offers courses on three or four levels with different biases, as does Euromoney Training.

It is perhaps a reflection of the shortage of good credit analysis training available that the leading players in the market tend to be American. A firm that takes the subject seriously enough to make it the largest component of its business is Corporate Consulting Resources (CCR), run by American-born Anne-Marie Barcia. CCR believes the buzz in today's markets is in credit and fixed-income professionals, and is currently offering courses in high-yield credit analysis, derivative credit risk measurement and credit management in a portfolio context.

'Portfolio management of credit risk is one of the key strategic challenges for banks and fixed-income fund managers alike,' says CCR. This course is led by Karl Sees, who has extensive counterparty risk management and credit structuring experience in the investment banking industry.

He is also principal of CreditRisk Advisers, a specialist credit risk management consultancy.

While CCR offers open courses as well as tailored programmes, another successful training company in this field that offers only tailored programmes around the world is the husband and wife team of Pimley & Pimley, which is based in Princeton, New Jersey, in the US. Pimley & Pimley's tailored credit programmes have reportedly been used by Citibank as well as JP Morgan.