Financeprofessional.com interviews Mike Bronte, who works in the private equity arm of an investment bank.
Tell us a bit about your education. Did you study finance back in school? When and how did you decide that you wanted to get into the finance industry?
By educational background I am more a technical guy. I have a masters of science in electronic engineering and a major in communications. A year before graduating, I did not feel like going to work for a research department of a technology company. I wanted to develop a broader view. So I decided that I wanted to learn about finance as I was really interested, and it makes you think differently and broader about subjects.
After graduating I did a one-year financial course from which I learned a lot about financial markets, portfolio and investments, corporate finance and balance sheets. During that year I got more and more convinced to leave the tech industry and join the financial sector. The technology industry was too specialized for me and I was more attracted by the global character of the financial sector.
What appealed to you about finance?
Finance appealed to me because it is so broad: companies, world economy, financial markets. I also like volatility, which certainly describes the technology stock markets.
Can you tell us a bit about your career path? What other financial specializations did you consider? How and when did you learn you wanted to get into private equity?
During the year that I studied finance, I got convinced that I wanted to work on deals and not on projects. Projects (what consulting firms are working on) are interesting, but there is no real upside potential for doing it well. So I was attracted by deals.
I look at a deal as exciting, as there is a lot of upside (a good investment/trade sale or IPO) but also downside (a bad investment/bankruptcy). Then I was thinking about the part of the deal that I would like to be involved with. Investment bankers are mainly advisors and are not the decision makers in a deal process. The decision makers are the people on the buy side (asset managers, VC's, LBO people) or the sell side (the companies). So I thought that the most interesting part was being on the decision makers� side.
Joining a company would be interesting but then I would put all my eggs in one basket, in other words, that company. As I learned in college about spreading risk (portfolio management, negative correlation) I drew the conclusion that venture capital was the way to go, as I now spread my risk across many companies.
There was a moment that I considered investment banking, but going through all the newsgroups, talking with investment bankers and reading books like 'Monkey Business,' I did not really feel like fitting in in that world. The long hours, the number crunching and other reasons did not appeal to me. So after graduating (for a second time) I joined the venture capital world and have since then been working in this industry.
What about your personality or interests suits finance? Private equity?
I think that the fact that I like change--and thus volatility--suits finance. Of course I am also interested in the global economy and financial markets. What I like about private equity is that you are supposed to think a lot. Being creative and thinking about the reasons to do the investment in a start-up.
What would you say a typical day is like?
A typical day consists of being involved in a couple of companies. Some are portfolio companies, some are new potential deals. The portfolio companies need to be monitored and helped in the way we can [help them.] The new deals have to be investigated, and if they are interesting enough, we will do the due diligence and meet the management of the start-ups.
I also frequently speak with industry specialists and research analysts to keep me up to date on what is happening in the market. Sometimes I go to a conference--again to stay up to date--and to meet new people (VCs, people from blue chip companies and start-ups). I like the job, and it gives me a lot of satisfaction to work with companies that are on the cutting edge of technology.[FP]