Konstanze Auer
Master of Finance Class of 2018
Konstanze is a Master of Finance student and Head of FS Jumpstart....
Master of Finance

Master of Finance: Corporate Finance Concentration

April 17, 2018
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I quit my job to pursue a Master of Finance at Frankfurt School of Finance & Management with the goal of becoming an Investment Banking professional. With that ambition, it was almost clear that I would decide for the concentration Corporate Finance as I will get the knowledge and skills required for my future career – and best of all: study in more detail about topics that I am passionate about.

Apart from general mandatory modules which every Master of Finance student takes, we have core modules from our chosen concentration which take place in the second and third semester.

In Equity Finance, we mainly learned about the theories and empirical evidences regarding Equity Capital Markets (asset pricing models, market efficiency, optimal portfolio selection, behavioral finance etc.). These also laid the foundation for our portfolio management game in which we invested $1,000,000 for seven weeks and in the end gave a presentation on our investment strategy, which left us asking ourselves ‘would you have invested in your classmates’ funds?’

In Debt Finance we focused on debt markets, instruments and their documentation, the financial crisis, debt securities (like MBS, CMO) as well as on various types of credit derivatives. But what does a DCM department actually do with all this knowledge? The one day in-class case study gave us the opportunity to apply the concepts we had learned in class and experience what “real life” in a DCM department would be like as we had to develop a strategy and pitch it to Daimler for their (fictional) upcoming bond issue.

Derivatives for Corporate Finance equipped us with the view of  the market itself as well as with an understanding for pricing derivatives and interpreting financial risk positions for corporates.

What we do is  not just theoretical. The professors make sure that everything  we are being taught has a “hands-on approach” as well. And this continues throughout the modules and is mainly achieved by projects and case studies.

Have you ever wondered what an Equity Research Analyst does? One of his tasks would be to evaluate whether a company’s stock is fairly priced and give a recommendation. Buy? Sell? Hold? So, for the Corporate Valuation module we valued VW as a group project, and applied  the valuation techniques we had learned in class and we didn’t  just come to understand the company on a quantitative level but also qualitatively with regards to their strategy and market environment.

What is missing in this big picture? We haven’t yet talked too much about any specific transactions or deals. In our module Case Studies in Investment Banking we analyzed various M&A transactions (e.g. Cadbury, Glencore, etc.) and ECM transactions like IPOs and Rights Issues in more detail. Have you ever read a whole IPO prospectus? Well, we have! For our own case study presentation we analyzed the IPO and the secondary offering of LinkedIn.

As you can see, we cover lots of Corporate Finance topics throughout  the five modules. If you don’t mind a lot of group work (but let’s be frank, at FS it’s quite difficult to avoid group work – anyways) and like Corporate Finance topics, then I would definitely recommend you choose this concentration. Choose your concentration according to your interests because you are doing your masters to expand your knowledge – not because a certain concentration or module looks nice on your CV. Your career path is not limited by the choice of your concentration – keep that in mind.

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