What is a company profile and how do you create one in investment banking?
Maybe you’re a little tired of me, but I think of company profiles the same way I think of Wikipedia entries: a Ben Stiller-like hodgepodge of basic information that’s not particularly interesting, but always worth keeping in mind. wait.
The reason we create investment banking company profiles is to analyze the competitive industry landscape of our client’s company and to use in presentations to the client about possible deals (who can they buy from, who can buy them, who look out) .
Company profiles also help us keep track of who does what and where each player fits in, very CIA-esque, I know.
What does a company profile literally consist of?
It depends on what it is being used for.
For example, in a basic ‘Market Update’ PowerPoint presentation sent to a client, each company’s profile (of the client’s competitors/suppliers/customers, etc.) might just be a one-slide summary with a 3 sentence description, 5 numbers/multiples, recent news etc.: This super succinct form occurs when, for example, 5-15 competitors are profiled at once in a basic presentation.
In its longest form, let’s say that if you were detailing each potential acquisition target in a formal pitch book(!), a company profile might include several slides covering everything from historical financials to lengthy qualitative descriptions of cash flows. company income and detailed analysis of parts of the company (to follow immediate use requirements).
In this way, the profile of the company becomes heavy and moves beyond the realm of mere Wikipedia imitation.
Because company profiles are often just a collection of simple information spread out beautifully over a few slides, they’re considered in-house work and will likely be one of the first things your mentor-analyst hands you over the summer. As you can see from the above, you don’t need a 3.8 GPA from Stanford to achieve this.
How should you prepare for company profiles?
When you get into the bank, read a couple of past examples, internalize the language, structure, components, and metrics used, and pretty soon you’ll know how to create company profiles without even referencing past samples.
The first thing you’ll notice when reading the above examples is how calming they are; They’ll put you to sleep in no time.
The data, the language, the facts, the summary – it’s all common knowledge and sounds like BS. But your job isn’t to win some damn Excel or creative writing contest, so don’t try to break convention and write some Charles Dicken prose or design some amazingly original multiples when asked to try.
Instead, play it safe and create company profiles that blend in, not stand out.
If you want to impress the bankers here, then all you need to do is present with extreme conciseness: super plodding language combined with only the really important numbers/graphs etc. will wow the bankers as it saves them time and hides the “who cares” details.
Some students think they need to find interesting facts and figures about the company that cannot be easily accessed through a company search in some mid-rate intelligence database to impress here.
But believe me when I say that finding super original information like this takes a long time and is really not expected, and when you’ve slept 2 hours in 2 days, why would you go all sadomasochistic on yourself with fucking primal research?
That said, you can’t create all of your company profiles simply by taking text from a database search or (and yes, this is very common) by copying and pasting a Wikipedia entry into the company or text from the company’s website! the company!
Instead, you should write from scratch using the exact tone/type of language and structure you see in existing company profiles at banks, and with the kind of conciseness you see in them; as well as drawing their figures and numbers directly from the original sources and condensing them into their most essential and insightful form (just like with the spread of compositions, which we’ll talk about next).
that is, you should summarize the summaries, but do it accurately and in a customer-friendly way.
As an investment banking intern, you will probably be asked more often to simply update or double check existing company profiles.
This can really suck if the intern or first-year bank analyst who did the existing profiles did a horrible job with them, because bankers will expect a mere “update” to take no time at all, and yet you’ll almost be doing profiles. right from the start!!
Although he now has bright eyes and a bushy tail, don’t be discouraged if you do dozens of company profiles and they are never read, such is the nature of them. that is, banks will want profiles on hand ‘just in case’ a client requests them, or a deal becomes complicated.
If you have an investment banking internship coming up or are starting your analyst program soon, you should check out the most common tasks junior bankers perform. In this article we list the top 39 and explain the what/why/how so you can get started with a head start.
