To pass this unit (requires a Mark of 50 or better) the student must pass the final examination.

CLASSES

Face-to-Face Teaching: Generally 18 hours.

Timetable: Detailed timetable for classes are on the Centre’s website at www.mafc.mq.edu.au

Consultation Times: 

Students who wish to contact any of the teaching staff may do so through:

• The unit’s iLearn site, in relation to general queries (so that all students may benefit); or 
• Individual consultation with the lecturer by email in the first instance, if necessary.

REQUIRED AND RECOMMENDED TEXTS AND/OR MATERIALS

Text: Nil

Course Resources:

• The unit notes and iLearn contain all the requisite material for the classes, assignments and final examination. The value of the unit will be maximised if you are able to review unit notes and readings prior to classes. Please critically assess the material in these readings.
• Students should assume any additional readings are examinable unless otherwise advised.

Lecture Notes: Available in printed form and electronically via iLearn.

Useful References: There are a number of useful sources to help assess current trends in the investment banking industry:

• Brokers report/SEC filings of Moellis, Lazard & Greenhills - these are ‘pure’ investment banks, but also Macquarie Bank and Goldman Sachs Annual Reports;
• Blogs: Matt Levine (Bloomberg); Financial Times (Alphaville)

Calculators: 

• A financial calculator that can handle time value of money calculations is required.
• In examinations, hand held calculators are permitted. Mobile phones and computers are not permitted.

Assumed Access:

• Access to a computer with word processing and spreadsheet capability is assumed, as is general computer literacy.
• Access to a laptop, taken to class, is desirable.

TECHNOLOGY USED AND REQUIRED

Unit iLearn Site: 

• Found by logging on to iLearn ilearn.mq.edu.au, then clicking on Investment Banking.
• This is where you will find links to forums, downloadable resources and other important pages.
• iLearn forums allow you to communicate with other students and lecturer(s) and may provide supplementary material.
• Please post questions to forums at least 24 hours prior to an assignment submission date or an examination date. Questions posted after that time may not be answered. Please try to not leave your questions to the last few days.

Important Notice: 

• It is important that you familiarise yourself with the unit’s iLearn site. 
• Students should check the unit’s iLearn site regularly (minimum twice a week and prior to all lectures) and look for updates and distribution of materials (including case studies) related to the unit or assessments and, if relevant, participate in forum discussions. 

1. What is Investment Banking?

We present an overview of the investment banking industry, and describe the typical organisation structure of investment banks. Investment banking covers a wide range of activities, however this unit focuses on

• Introduction
• What is investment banking
• Investment Banking league tables
• Investment Banking organisation structure
• Market trends
• Regulatory environment
• Review of valuation concepts
• Skills of the Investment Banker

2. Initial Public Offerings

In this topic we review the Initial Public Offering (“IPO”) process. The following topics are covered:

• Benefits of Equity Listing
• Characteristics of successful IPOs
• Alternative IPO structures
• Parties in IPO transactions
• Prospectus, disclosure requirements and listing rules
• IPO Offer structures

3. Mergers & Acquisitions

This topic reviews the motivations for M&A transactions, and analyses the variety of structures used in M&A transactions. The impact of regulatory requirements is considered.

• Identify target, value target and assess synergies
• Assess pro-forma impacts of transaction
• Select preferred acquisition structure
• Assess regulatory and other process issues
• Due diligence
• Funding the acquisition

4. Secondary Equity Offerings

This topic reviews the wide range of mechanisms for an existing listed company to raise additional equity capital, known as a secondary offering (“SEO”). Topics covered include:

• Alternative mechanisms for undertaking SEOs
• Issue timetables
• Disclosure requirements
• Bookbuild case study

5. Divestment / Demergers

This topic reviews the process whereby companies sell or demerge a portion of their business portfolio. Topics covered include:

• Identifying and valuing the target business unit
• Assessing the pro-forma impact of divestment transaction
• Selecting the divestment process
• Assessing regulatory and other process issues
• Application of proceeds issues

6. Takeover Defences

This topic reviews the strategies available to companies who are actual, or potential, takeover targets. Topics covered include:

• Pro-active defence strategies and procedures
• Re-active defence strategies and procedures
• Directors’ duties and responsibilities
• Contents of target statements

7. Capital Management Transactions

This topic reviews the range of capital management transactions available to companies. Topics covered include:

• Motivations for Capital Management transactions
• Share Buyback and Return of Capital transaction structures
• Demergers – a combined divestment and capital management transaction?
• Multiple listings
• Dual listed structures

8. Conclusion and Review

This topic concludes the course with a review of key skills needed to undertake investment banking transactions, examines how the investment banker can add value in a transaction, and considers the issues in preparing a pitch document. Topics covered include:

• Review of key Investment Banking skills
• How does the Investment bank(er) add value?
• Preparing the pitch

This Unit Guide may be subject to change. The latest version is on the Centre’s website at www.mafc.mq.edu.au.

Students should read the Unit Guide carefully at the start of the term. It contains important information about the unit. If anything is unclear, please consult one of the unit lecturers.

University Policy on Grading:

• Macquarie University’s Academic Senate has established a Grading Policy available at http://www.mq.edu.au/policy/docs/grading/policy.html. Your final result will include: 
  • A Grade ranging from Fail Hurdle to High Distinction; and
  • A numerical Mark which is a summation of the individual assessment components, providing the examination component is passed.
• It is important to note:
  • The Policy does not require that a minimum or maximum number of students are to be failed in any unit; 
  • Grades will not be allocated to fit a predetermined distribution; and
  • Grades for all individual assessment items will be released to students, but Marks may not necessarily be released.

Specific Unit Grading: 

• To pass this unit (i.e. requires a Mark of 50 or better), the student must pass the final examination.
  • Students who have attained a total raw mark of 50% or greater in a unit, but have failed the unit’s exam requirement and who have demonstrated “sufficient effort” in the exam, will be granted a single opportunity to sit a Supplementary Exam which will be graded on a Pass/Fail basis. The unit Mark and Grade for students who pass this examination will be those corresponding to the original total raw mark of all their assessment tasks, including the original exam. That is, the Supplementary Hurdle Exam only determines the meeting of the hurdle requirement. Students who have attained a raw mark of 50% or greater in a unit, yet failed all attempts at the requirement, will be awarded a Fail Hurdle grade with a final Mark of 49.
• All final Marks and Grades in the Applied Finance Centre are determined by a grading committee and are not the sole responsibility of the unit convenor.
• The core criteria used to assess student work in this unit are: 
  • Knowledge and understanding: Understanding key ideas, knowledge and use of concepts.
  • Application: Ability to apply theoretical ideas and frameworks in practice and in a critically reflective way. 
  • Reasoning and analysis: Ability to analyse, use critical reasoning and principles to formulate a position, balancing theory and personal reflection. 
  • Professional literacy and research: Understanding of professional factors (language and landscape) and ability to undertake appropriate research. 
  • Communication and presentation: Ability to communicate and present effectively (written and oral, as relevant).
  • Use of mathematical and statistical ideas: Ability to use mathematical and statistical ideas, methods and formulae appropriately. 
• Performance in relation to each of these criteria are assessed against the University’s grading descriptors:

Review of Grade and final examination Script viewing:

• A student who has been awarded a final grade for a unit and who does not believe it is an accurate reflection of their performance, and has grounds for such a claim and can demonstrate those grounds, may apply to have their grade reviewed. 
• For information on requesting a review of grade and/or viewing your final exam script, please refer to the University’s Grade Appeal Policy at http://www.mq.edu.au/policy/docs/gradeappeal/policy.html and MAFC Program Rules at http://www.mafc.mq.edu.au.