Finance Masters Programmes 2013/14

Transcription

1 Finance Masters Programmes 2013/14

2 2 Department of Finance Masters Programmes 2013/14

3 Department of Finance Masters Programmes 2013/14 3 Contents Welcome from the Head of Department 4 Department of Finance 5 The Department and the FMG 6 What we offer 7 The LSE advantage 9 MSc Finance (Full-time) 10 MSc Finance and Private Equity 18 MSc Finance and Economics 26 MSc Risk and Finance 34 Admissions 42 Careers 44 Faculty 46 LSE felt like an environment where I could be challenged, I could learn, expand my horizons and be my best. Trish Amoah-Ntim MSc Finance and Private Equity

4 4 Department of Finance Masters Programmes 2013/14 Welcome from the Head of the Department I ve always thought of LSE as an incredibly interesting and exciting place to teach, research and study. It s very different to most universities you might pass a government minister in the corridor or get into a lift with a CEO of a bank. The school is a hive of activity, both because of its location and its international reputation, from which students directly benefit. Of course, in terms of finance, LSE is extremely well located, being on the doorstep of one of the world s major financial centres. As such we can organise seminars, public lectures and participatory events of any kind very easily, bringing in the very best practitioners. LSE s events programme, through the Department and also more widely in the School, is second to none, globally. As with all teaching at LSE, the Department s programmes are extremely rigorous. The process of learning is one of being challenged by ideas; there s no learning by rote. We place a great deal of emphasis on research-based learning that is also relevant to the real world. The student body at LSE is tremendously international. It is the most international student body in the world and the Department of Finance very much reflects that; we have a terrific group of students and faculty from all corners of the globe. When selecting students we look for very smart people with excellent academic backgrounds; but in addition we also look for students that have other things about them: who have initiative, the ability to engage with other students and the ability to express themselves. We want our students to develop here, not just academically but also as people and we place a great deal of emphasis on that. I hope that this brochure gives you a flavour of what the Department of Finance at LSE can offer you. I very much look forward to meeting some of you in September Professor David Webb Head of Department

5 Department of Finance Masters Programmes 2013/14 5 Department of Finance The Department of Finance is one of the largest finance groups in Europe and is recognised as being one of the leading finance research groups in the world. We are a research-led department that is devoted to excellence in all fields of finance; our world-leading faculty operate at the forefront of their fields internationally and we have a pre-eminent reputation for both our consistently excellent and cutting-edge research and rigorous, innovative and applicable taught degree programmes. The development of the Department in recent years has been closely linked to the significant growth in finance research and teaching at LSE, benefiting from the pioneering work of the LSE s Financial Markets Group and Department of Economics, as well as the growth of London as one of the world s financial capitals. As a result, we offer our diverse and international student body a range of academically challenging finance programmes that equip them with the tools to become future leaders in the finance sector and in academia.

6 6 Department of Finance Masters Programmes 2013/14 The Department and the Financial Markets Group The research activities of the Department are closely linked to the Financial Markets Group (FMG). Since its founding in 1987 by Charles Goodhart, Mervyn King and David Walker, the FMG has become one of the leading centres in Europe for academic research into financial markets with strong links to the City and beyond. Its activities include weekly research seminars, funded research projects, post-doctoral research and a programme of major conferences and academic visitors that reflect its worldclass prominence and reputation. The FMG is currently headed by Professor Christopher Polk, who is also a member of Finance faculty. Recently, the FMG and the Paul Woolley Centre for the Study of Capital Market Dysfunctionality (headed by Professor Dimitri Vayanos, also a member of Finance Faculty) were particularly involved in supporting and contributing to LSE s major report into The Future of Finance. This is just one of many examples of ways in which our research continues to stimulate and lead debate in the finance field. The work of the FMG was a springboard for the founding of the Department of Finance, and its research-focused ethos is still the foundation of all that we do. Alongside the FMG, the Department maintains strong links with research centres at other institutions around the world, as well as with the wider financial sector. Our proximity to the City and our reputation for excellence means that we are regularly able to attract high-profile professionals and sector leaders to speak at Department events, and to participate in conferences and practitioner seminars. This, in conjunction with the remarkably rich and stimulating events programme offered by LSE, enables us to give our students exposure to a quality of speakers that is unsurpassed in the world. We teach finance differently from other places. We want our students to understand the foundations of finance, to be able to do some modelling and to understand where the formulas come from. We don t want them just to memorise formulas. I can give the example of a car; I want students to be able to drive it, but also to open the hood and understand how the engine works, how to take it apart and then rebuild it. Dr Jean-Pierre Zigrand Reader in Finance

7 Department of Finance Masters Programmes 2013/14 7 What we offer The academic excellence of the training that we provide is also recognised beyond the academic community. Our students are highly sought-after by the leading financial institutions and are very successful at finding employment after their studies, of which you can see examples in the careers section at the back of this brochure. We also attract funded support for our programmes and students from external organisations; our MSc Finance and Private Equity programme was established with generous support from Abraaj Capital, and our MSc Risk and Finance programme has close links with Deutsche Bank. It is the combination of these factors, founded first and foremost on principles of academic excellence, which attracts the brightest students from around the world to study finance in the Department and benefit from our ethos of lively debate, penetrating enquiry and academic rigour. Through both world-class teaching and teaching resources the Department offers students a stimulating and diverse environment in which to pursue postgraduate studies in Finance, centred on five dynamic Masters Programmes and a doctoral programme. Every year, we accept around 300 of the most highly capable students on to our taught Masters Programmes: MSc Finance (Fulltime and Part-time), MSc Finance and Economics, MSc Finance and Private Equity, and MSc Risk and Finance. Each degree provides a structured programme of study based on at least one bespoke core course and various optional courses. In each case, the core course(s) provide the intellectual foundation of the degree, after which students have the opportunity to tailor their learning to support their own career or research interests through the selection of optional courses, which are detailed in the following Programme-specific pages. The foundation of all our teaching is an academically rigorous approach which combines the examination of theoretical concepts with practical real-world applications. This is achieved first and foremost through the high quality and academic rigour of our teaching, which is provided by Faculty members who are worldleaders in their field and who also maintain strong links with the finance sector. Additionally, students across all our programmes can expect to benefit from participation by visiting academics and finance sector professionals in the form of guest lectures and practitioner seminars. These not only offer important networking opportunities but also provide valuable insights into the real world that help to contextualise key topics covered in class. The combination of the cutting-edge research of Faculty members with the participation of finance professionals enables our Programmes to keep up-to-date with the most recent developments in the sector while maintaining their strong academic focus. As a result, our Masters programmes provide students with a rigorous and respected postgraduate degree which acts as the ideal foundation from which to pursue a career in finance or in further academic research. LSE Events page: lse.ac.uk/publicevents/ eventshome.aspx FMG: lse.ac.uk/fmg/home.aspx

8 8 Department of Finance Masters Programmes 2013/14 The Department works hard to provide a supportive environment for postgraduate study, which balances this academic training with a strong emphasis on supporting our students personal and professional development. At the start of their studies, all students are allocated an Academic Adviser or Programme Advisor from within the Department of Finance Faculty, to provide academic and pastoral guidance throughout the course of their Programme. Each programme also has a dedicated Programme Manager to provide administrative support and advice, and all our students have access to a full range of other facilities, including dedicated computing facilities within the Department, LSE s virtual learning environment and bespoke study materials for each course. Additionally, we offer a stimulating programme of non-academic events and activities for all our students. We place a particularly strong emphasis on career guidance and typically provide Department-wide career development sessions and networking events alongside each Programme s practitioner seminars and guest speaker lectures. We also arrange for our students to have access to a finance careers counsellor, for tailored career guidance relating to the finance sector. In conjunction with this, we organise a range of social events throughout the year which are designed to give students the chance to get to know their classmates and to network with students on other Finance Programmes. The highlight of these activities is our annual graduate residential weekend, which is attended by Finance Faculty and approximately 150 students from all our Programmes. When they say that it s diverse, they really mean it! We are all from different places and backgrounds, and we work really well together. I ve met people here that I hope I stay friends with for life. Mariam Kaan MSc Finance and Private Equity

9 Department of Finance Masters Programmes 2012/13 9 The LSE advantage All our students benefit from LSE s status as a world-class social sciences institution, which attracts some of the best researchers and teachers in their respective fields. Located in the heart of central London, the stimulating environment of LSE provides a rich intellectual challenge for students and access to pre-eminent researchers and speakers. A regular programme of conferences and public lectures attracts academic and political leaders from across the globe and provides a dynamic environment in which to study with a highly international cohort of students. LSE also houses the British Library of Political and Economic Science, the largest social science library in the world and is currently undergoing a transformation of its central London campus, to provide state-of-the-art facilities for all its students. LSE students and alumni also play a key role in a wide range of societies and groups covering sports, networking, specialist lectures, interests and more. Prominent examples that may be of interest to you include the Finance Society, Alternative Investments Society (and their leading conference), Hedge Fund Society and more, as well as the extensive Banking and Finance alumni network. In addition, as a student at LSE you will be at the heart of one of the world s most vibrant multicultural cities. Major cultural attractions such as theatreland, the West End, the Royal Opera House, the British Library and British Museum are all within walking distance of LSE. Whether you are into art, architecture, dance, film, music, theatre, sport, shopping or even green spaces and the great outdoors, London really does have it all. Students Union: lsesu.com About LSE: lse.ac.uk/aboutlse/abouthome.aspx LSE page about London: lse.ac.uk/lifeatlse/londonlife.aspx

10 10 Department of Finance Masters Programmes 2013/14 MSc Finance (Full-time)

11 Department of Finance Masters Programmes 2013/14 11 Ten months (September 2013 July 2014) 27, places / 1,842 applications for 2012 entry 1st class degree in any subject, a strong 2.1 degree may also be considered Must demonstrate quantitative ability GMAT or GRE required for students without a UK degree and is also recommended for students with UK degrees, especially those who have not achieved, or are not expected to achieve a 1st class, or those whose quantitative skills are not demonstrated by their undergraduate studies. The MSc Finance (Full-time) Programme is one of the world s leading generalist finance Master s degrees, ideal for those whose career objectives lie broadly with the financial services sector. It offers high level graduates, whose backgrounds may not necessarily be in finance, a unique opportunity to gain a comprehensive foundation and subsequent depth in the field. Being one of the most sought after degrees at LSE, the programme attracts some of the very best students from leading institutions from around the world. It has also built a strong reputation amongst employers, with alumni now working in a diversity of institutions including many leading investment banks, financial institutions, consultancies and boutique firms.

12 12 Department of Finance Masters Programmes 2013/14 Programme structure The programme begins with core courses in corporate finance and financial markets, which give a thorough grounding in the principles of finance seen both in general and in real world applications, taught in part using case studies. This same combination of rigour and relevance is continued in the advanced elective courses, which provide deeper practical insight into finance as practiced by leading financial institutions. Pre-session (September) Pre-sessional course Quantitative Methods Careers Skills Programme Michaelmas Term (October December) Core courses Corporate Finance Asset Markets Lent Term (January March) Elective courses Four half unit courses selected from: Applied Financial Valuation* Cases in Corporate Finance* Financial Engineering* Fixed Income Securities and Credit Markets* Risk Management and Financial Institutions* Topics in Portfolio Management* Other courses may be available with permission of the Programme Director * Exclusive to MSc Finance students Summer Term (April June) Review and Exams Submission of 6,000 word Dissertation in lieu of an exam

13 Department of Finance Masters Programmes 2013/14 13 Teaching and assessment The MSc Finance (Full-time) is taught over ten months following a mixed format of formal lectures and interactive class teaching. Taught in three-hour sessions, the teaching allows the study of core theoretical concepts, whilst also allowing students to gain a practical understanding of the application of these concepts. The majority of courses use case studies and practical homework problems to underpin the theory studied. All students are required to attend a three week pre-sessional course starting in September 2013, covering both essential material needed to take the core courses and a range of careers skills and practitioner and alumni events. Courses are assessed by a mixture of final examination, and projects or coursework. Students will be required to write a 6,000 word dissertation (replacing the exam) in one of the half unit elective courses selected. The programme allows you to tailor your course selection to your interests and career aspirations. As I wanted a career in Mergers and Acquisitions I chose two case study-based courses, however, I know a lot of people who wanted to go into trading, so they chose courses like Financial Engineering and Fixed Income. The flexibility of the second term is really great in this regard. Joy Gu Previous Degree: Economics, University of Chicago Destination: Nomura, Hong Kong

14 14 Department of Finance Masters Programmes 2013/14 Core Courses Asset Markets This course focuses on the three main asset classes fixed income, stocks, and derivatives giving a unified perspective of modern valuation methods. Starting with the present value formula the course then proceeds to fixed-income securities, focusing mainly on Government bonds, which we will value off the term structure of interest rates, using the present value formula. The connection with the principle of no-arbitrage will be emphasised. The course will then move to stocks, starting with portfolio theory and then deriving the relationship between risk and return (CAPM). The CAPM will provide a risk-adjusted discount rate, used to discount stocks cash flows with the present value formula. Alternative pricing models such as the APT and multi-factor will also be covered, and the models will be applied to issues of asset allocation and portfolio selection. The final topic will be derivatives, especially focusing on futures and options. After familiarising students with the use of derivatives, the course will cover the main valuation methods (binomial model, Black-Scholes) emphasising again the principle of no-arbitrage. Corporate Finance Corporate Finance is the study of how corporations raise capital and make investment decisions. The primary objective of the course is then to examine the financial decisions of firms with regard to their capital structure decisions (how to raise capital) and capital budgeting decisions (which investments to make). In the first part of the course we discuss the choice between debt and equity, initially in an idealised world and then we introduce real-world frictions such as taxes, financial distress, asymmetric information, corporate governance, and inefficient markets. We also discuss topics such as IPOs and convertible securities. In the second part of the course we introduce the techniques for valuing projects and companies, and also discuss topics such as mergers and acquisitions and real options. We could very easily just teach students the current financial tools, the current ways in which firms finance their investments for example, but in 18 months that would all be old news. What is constant, however, are the underlying theories of Corporate Finance, so what we do at LSE is to help our students to fully understand these theories, this intuition, so that in the future they can encounter new problems and be able to adapt. Professor Christopher Polk Lecturer, Corporate Finance

15 Department of Finance Masters Programmes 2013/14 15 Elective courses Applied Financial Valuation This course covers advanced topics in Corporate Finance and Valuation and introduces students to valuation techniques for both securities and projects. The first part of the course introduces students to performance evaluation and draws implications of prospective performance evaluation for the pricing of stocks in efficient markets. This is followed by a focus on the determination of intrinsic security prices and then finally the course provides empirical evidence on returns to trading strategies based on fundamental analysis. Each of the topics introduced in the course covers both institutional details and results of relevant academic research (theoretical and empirical), supported by case studies. Cases in Corporate Finance This course examines how to apply corporate finance concepts in a wide variety of business situations via the use of case studies. The course builds on concepts in business strategy, valuation techniques, and capital structure theories covered in previous courses to see how to apply these tools in a systematic and rigorous way when approaching complicated real-life corporate finance problems. Examples of topics include capital structure, risk management, initial public offerings, entrepreneurial finance, international corporate finance and family firms. Financial Engineering This course covers the basics in derivatives theory, and how to apply them to a multitude of financial securities and structured products. The pricing of such engineered products is covered first in theory and then the course reviews selected case studies in order to gain a better understanding of their practical usage and also implements some of the models numerically. Risk Management and Financial Institutions This course gives an overview of risk management in the context of portfolios of fixed income securities and derivatives, as well as dealing with credit risk. Throughout, the course spends a significant amount of time on practical applications of the theories that are introduced. The limitations of current approaches are also discussed. Fixed Income Securities and Credit Markets This course provides a thorough grounding in recent developments in fixed income securities pricing, hedging and portfolio management. It covers topics including the analysis of the main products traded in the credit markets, an analysis of the main credit derivatives, the specific tools used in the industry to evaluate and hedge these products and the process of securitisation, with particular reference to collateralised default obligations and mortgage-based securities. Topics in Portfolio Management This course provides analytical and statistical tools for the management of investment portfolios. The course focuses on stocks, bonds and currencies, with some attention paid to alternative asset classes such as commodities, real estate, and hedge funds. It considers portfolio risk management, international diversification, currency management for international investors, asset allocation, trade implementation costs and trading strategies, and portfolio performance measurement and attribution. Full details of all of these courses can be found on LSE s online Calendar: graduate.htm

16 16 Department of Finance Masters Programmes 2013/14 The Class GMAT Total: Average 720 GRE Quantitative Section: Average 91% Male: Female ratio: M: 53% F: 47% Middle Eastern 2% Russian 3% North American 10% Nationality South American 1% British 11% African 2% Previous degrees Indian and S Asian 12% East and SE Asian 30% Mathematics 5% Other 6% Science 6% Accounting and Finance 16% European 29% Management 5% Business Administration 14% Economics 47% The thing that unifies my classmates is not just the fact that they are all academically the best in their fields, but that they have also done a lot of things outside of academic study. Some have had one or two years work experience but most have come straight from their undergraduate degrees. Everyone on the programme is very determined and enthusiastic to learn about finance and to work well in a group, which makes for a really good working environment. There have also been some great networking events, meeting alumni from the programme, which allows you to see how they are able to apply what we are learning in their jobs. Dev Singhvi Previous Degree: Accounting and Finance, LSE {Student Quote Box + photo} Destination: PwC The thing that unifies my classmates is the fact tha that they have also done a lot of things outside of a work experience and some have come straight from

17 Department of Finance Masters Programmes 2013/14 17 I decided to come to LSE because of its outstanding worldwide reputation, the excellent faculty and also the great feedback I d received from MSc Finance alumni. Now that I m about to graduate I d say that the well-rounded structure of the programme, the great lecturers, the amazing students and the overall atmosphere at LSE is unbeatable and being able to take part in that in such a vibrant city as London is really a once in a lifetime experience. I think that it has really been one of the best years of my life. The faculty on the programme are really exceptional. They are leading researchers in the fields that they are teaching, which gives an extra dimension to all the classes we are taking. The discussions are always really interesting and dynamic, and they are always very open to hear your problems, and happy to take time to discuss things through with you. The closeness to the city and our future employers is also a really amazing benefit of studying at LSE. Being able not only to get practitioners to come in, but also to go out and meet future employers through the employer s presentations is a great benefit. In addition, the careers support for MSc Finance is really great. It s been really helpful knowing that whenever you have questions there is support available. LSE organises lots of fairs and company presentations that introduce you to a lot of different sectors and help you make a decision about where you want to work. What I ve enjoyed most about this programme is not only the intellectual challenge but the great friends I have made, the interaction with the faculty, and being here in London, which really is an adventure that gives you memories for life. Eric Surtevall Previous Degree: Business Administration, Lund University, Sweden Destination: Boston Consulting Group

18 18 Department of Finance Masters Programmes 2013/14 MSc Finance and Private Equity

19 Department of Finance Masters Programmes 2013/14 19 Ten months (September 2013 July 2014) 27, places / 636 applications for 2012 entry 1st class degree in any subject, a strong 2.1 degree may also be considered Must demonstrate quantitative ability An interest in Private Equity and Active Investing GMAT or GRE required for students without a UK degree and is also recommended for students with UK degrees, especially those who have not achieved, or are not expected to achieve a 1st class, or those whose quantitative skills are not demonstrated by their undergraduate studies. The MSc Finance and Private Equity programme is the first of its kind in the world, offering students a generalist Finance Masters with a special focus on the study and practice of private equity. Following a major investment initiative into the research and study of private equity at LSE by Abraaj Capital, students will benefit from being part of an exciting environment where world renowned academic faculty and leading practitioners discuss and contribute to the development of the field. The programme is built upon, and follows a similar structure to, the Department s highly successful MSc Finance (Full-time) Programme, with the addition of a dedicated course taught by the School s Abraaj Capital Chair in Private Equity. This will explore the structure of private equity (PE) funds and how they can be used in start-ups, in scaling-up cash flow businesses, and in restructuring firms facing financial distress via a range of lecture, discussion, research and practitioner-led teaching.

20 20 Department of Finance Masters Programmes 2013/14 Programme structure The first term of the programme follows that of the MSc Finance (Full-time), with core courses in corporate finance and financial markets. In the second term students take the flagship course and practitioner seminar series in Private Equity in addition to a range of advanced elective courses, which allow students to gain a deeper practical insight into finance as practiced by leading financial institutions. Pre-session (September) Pre-sessional Course Quantitative Methods Careers Skills Programme Michaelmas Term (October December) Core Courses Corporate Finance Asset Markets Lent Term (January March) Core Course Elective Courses Private Equity (Half Unit) Three half unit courses selected from: Applied Financial Valuation* Cases in Corporate Finance* Financial Engineering* Fixed Income Securities and Credit Markets* Risk Management and Financial Institutions* Topics in Portfolio Management* Other courses may be available with permission of the Programme Director * Exclusive to MSc Finance students Summer Term (April June) Review and Exams Dissertation Students will be required to write a 6,000 word dissertation as 60 per cent of the assessment in the Private Equity Course

21 Department of Finance Masters Programmes 2013/14 21 Teaching and assessment The MSc Finance and Private Equity is taught over ten months following a mixed format of formal lectures and interactive class teaching. Taught in three-hour sessions the teaching allows the study of core theoretical concepts, whilst also allowing students to gain a practical understanding of the application of these concepts. The majority of courses use case studies and practical homework problems to underpin the theory studied. All students are required to attend a three week pre-sessional course starting in September 2013, covering both essential material needed to take the core courses and a range of careers skills and practitioner and alumni events. Courses are assessed by a final examination, in addition to some coursework element. Students will be required to write a 6,000 word dissertation as 60 per cent of the assessment in the core course in private equity (the remaining 40 per cent being coursework and the assessment of class participation). I have a couple of years of experience as an entrepreneur as I took a year out of university to start my own business. I became interested in Venture Capital while I was trying to get funding. I then chose to study PE because I was keen to learn from the other side of the table. Christina Wei Previous Degree: Finance, Rutgers University Destination: Accenture

22 22 Department of Finance Masters Programmes 2013/14 Courses For descriptions of the core and elective courses taught in conjunction with the MSc Finance (Full-time), please see pages 14 and 15. Private Equity Core Course Starting by examining how private equity funds are raised and structured, this core course will examine how private equity can be used in start-ups, in scaling-up cash flow businesses, and in restructuring firms facing financial distress. It explores the link between private and venture capital on the one hand and public securities markets on the other. The course will examine the process through which private equity investors exit their investments. It will also give a detailed analysis of the types of finance used in private equity and an evaluation of the short and long-run performance of private equity investments. The course will include an evaluation of the performance of different types of private equity investment and a comparison with other forms of ownership will be undertaken. This course takes a rigorous theoretical examination of private equity, however also employs case study teaching and is taught in conjunction with a range of practitioners in the field. I ve really valued the practitioner seminars they have really given me direction. When I came to LSE I was clear that I wanted to do PE, but it s a fairly opaque industry and I wasn t sure how I really wanted to get involved. Through the practitioner seminars I developed a better understanding of the industry, I networked with those working in it and I now have a much better idea of what I would like to do. Matt Coady Previous Degree: Economics, University of British Columbia, Canada Destination: Silicon Valley Bank

23 Department of Finance Masters Programmes 2013/14 23 The Class GMAT Total: Average 724 GRE Quantitative Section: Average 91% Male: Female ratio: M: 65% F: 35% Russian 6% Oceania 3% Nationality South American 3% African 6% British 3% Previous degrees North American 18% East and SE Asian 18% Management 3% Mathematics 12% Other 3% Accounting and Finance 26% Middle Eastern 3% Indian and S Asian 3% European 38% Engineering 12% Economics 32% Business Administration 12%

24 24 Department of Finance Masters Programmes 2013/14 MSc Finance and Private Equity Programme Director, Dr Ulf Axelson (pictured), talks to the Department of Finance Graduate Admissions Manager, Thomas Watson Thomas Watson: Ulf, the MSc Finance and Private Equity programme is currently in its second year. Can you tell me a little about the background to the programme? Ulf Axelson: Well, it s actually the first Masters in Private Equity in the world. The general growth that we ve seen in Private Equity and Venture Capital over the past few decades has led to it becoming one of the most exciting areas to study in finance and economics, which makes it the perfect match with LSE. I think that it is very important that we teach our students about Private Equity as it s now such an important part of the economy; we see these types of investor helping firms at every level of their existence, be it start-ups, medium-sized or large firms. And of course it is also a very exciting area of research in finance, which is another reason why I think that we at LSE should be heavily involved in this area. TW: Leading on from that, what makes the research and teaching of Private Equity at LSE distinctive? UA: I think that LSE is really an ideal research environment for Private Equity for several reasons. Firstly it s obviously a great institution, whose research culture and environment allows us to tie together both finance and economics with the broader social sciences like no other place in the world. It is really crucial that when we study an important economic phenomenon like Private Equity we can ask questions like: Is this a type of investment activity that actually helps the economy and helps the world become better place or is it just some destructive shifting of assets? It is important to have an objective institution like LSE, with its reputation for rigorous academic research, make a contribution to this type of question. The other main advantage LSE holds is its location in the heart of London, which is really the home of the Private Equity community. LSE has a tradition of being the place where academics and practitioners meet and this is especially true within the Private Equity sphere. TW: Which in turn must add a great deal to the teaching experience? UA: Yes, exactly. And that s the great thing about this programme at LSE, it combines the research-led, academic rigour that we are famous for with some much more practical elements. In fact I honestly think that I think the Private Equity part of this programme is probably the most interactive course in any Masters programme, definitely at LSE but also I think in Europe! The way I try to teach Private Equity is through a case-based method, where we take real company situations, which we then discuss and talk about how we can apply what we ve learnt in other classes, in terms of theories of finance, to the real life situations. TW: And the programme is structured to build onto the Department s generalist MSc Finance UA: Yes, students who take the MSc Finance and Private Equity programme get the same foundation in terms of strong financing foundations that they do on the MSc Finance (Full-time) so all the standard valuation, asset pricing and corporate finance tools. They then get to take three of the optional courses, allowing them to specialise not just in Private Equity. It s really a great foundation to build on, definitely one of the best generalist MSc Finance programmes in the world. Then on top of that we try to really do something special in terms of a very applied Private Equity course, which is really the flagship of the programme.

25 Department of Finance Masters Programmes 2013/14 25 TW: From what I understand the Private Equity course is more than just the standard lecture teaching format? UA: The Private Equity course consists of two parts; one is a classroom experience based on a number of business cases that touch on the different aspects of Private Equity, and the second is the weekly practitioner seminars, where we invite leading professionals from different areas of the Private Equity industry into the class. It s great to have the interaction between practitioners and the academic side of things. Also a major part of the course is the dissertation, which turns out to have been very useful for the students as a way for them to get exposed to the particular area of Private Equity that interests them. Actually, several have got job opportunities through meeting people related to their dissertation research. During the course we aim to give to the students a number of different things. One is a general institutional knowledge of Private Equity there are a lot of mysterious institutional terms and it might seem like a very difficult universe if you re not initiated, so we supply the students with all the knowledge they need and then they also get to meet practitioners from the major Private Equity firms to get initiated into this club, so to speak. So that builds contacts for them and gives them job opportunities going forward. I also think it s about teaching a very applied type of course in what I would call active investing which is really how do we invest the money of wealthy individuals or companies into firms with a view to making these firms better and then becoming actively involved in their running? It is really a very important skill for students to have in basically any type of managerial capacity, whether it be in a normal firm, a Private Equity or a Venture Capital firm or if it is as just an asset manager that invests into Private Equity. TW: So finally, what type of student do you look for when recruiting for the programme? UA: Well, as with all of our degrees, they obviously have to be academically excellent. They do also have to be interested in Private Equity as well, but when I say Private Equity I mean it in a very broad sense. So we re talking about what I was referring to as active investing, which could be Venture Capital, where you think about investing in very small start-up firms, to the very large-scale end of things, the leveraged buyouts, where we think of investing in the biggest firms in the world and then thinking of ways of improving them. I also think that the students who thrive on this programme have to be very smart and articulate because that s a prerequisite within this industry and also the way that we teach the subject. It s very important that students are proactive and outgoing in the way that they talk to each other and talk to practitioners and we actually train them to do this, so you need to be an outgoing, proactive person. It s also a benefit, although not an absolute requirement, to have some type of work experience or internship experience so that there s been some exposure to firms before you enter the programme. But we re looking for students from very diverse backgrounds. Private Equity is a field that s actually starting to become very international and going in to all different parts of the world and our class definitely reflects that.

26 26 Department of Finance Masters Programmes 2013/14 MSc Finance and Economics

27 Department of Finance Masters Programmes 2013/14 27 Ten months (September 2013 July 2014) Fees 22, places / 1298 applications for 2012 entry 1st class degree in a quantitative subject, eg, Economics, Finance, Engineering, Mathematics, Physics. A strong 2.1 degree may also be considered GMAT or GRE required for all applicants The MSc Finance and Economics programme is a specialist, interdisciplinary degree based in the Department of Finance, and taught in conjunction with the Department of Economics, one of the top-rated Economics Departments globally. Drawing on the strengths of these highly respected academic Departments, the programme, now over fifteen years old, has established itself as one the most highly regarded and sought after specialist finance degrees in the world. This programme offers exceptional graduates from quantitative disciplines the opportunity to develop their understanding of financial economics, financial econometrics and microeconomics to a very high level. The tools, advanced analytical techniques and deep understanding of the principles of finance that students take from the courses are directly applicable to a wide range of leading financial and other careers in the global financial services sector.

28 28 Department of Finance Masters Programmes 2013/14 Programme structure The research and teaching which informs the intellectual core of the programme enables students to examine financial markets through in-depth analysis based on financial and economic theory and statistical methods. The core courses emphasise analytical rigour and theoretical foundations, in addition to a wide range of practical applications. Students will learn about investments, asset pricing, derivatives and financial engineering through the coherent lens of financial economics. They will be equipped with a comprehensive tool-kit that economists use in many different areas, both in terms of theoretical models and empirical techniques. Econometric methods that are taught include time series analysis with applications to financial models and data. Through an extensive array of optional courses students can gain exposure to corporate and international finance, portfolio and risk management, as well as specialised modelling skills including programming in MATLAB. What makes this programme unique is that students are taught not only how to apply and use various well-known models, but also to understand the technical foundations underpinning those models. This allows students to acquire a deeper and self-confident comprehension as well as the crucial and highly marketable skills of being able to alter, amend, empirically test and adapt the models to new market environments. The programme s course load is supplemented by an examined pre-sessional mathematics and statistics course, and a nonexamined, in-term course in probability and stochastic calculus to complement the second half of financial economics. The programme is structured around three full-unit compulsory courses (each running over two terms), in financial economics, financial econometrics and microeconomics. In addition students select a combination of two half-unit optional finance courses offered by the Department (running over one term) to investigate specialist finance topics, writing their dissertation in one of the two optional courses. Pre-session (September) Introductory Course in Maths and Statistics Michaelmas Term (October December) Lent Term (January March) Microeconomics for MSc students Financial Economics* Financial Econometrics * This course is supplemented in Michaelmas Term by a compulsory, nonexamined course: Probability and Stochastic Calculus Applied Corporate Finance Corporate Finance Theory Financial Risk Analysis Fixed Income Markets Forecasting Financial Time Series Global Financial System International Finance Portfolio Management Quantitative Methods for Finance and Risk Analysis Summer Term (April June) Revision, Exams and Dissertation

29 Department of Finance Masters Programmes 2013/14 29 The courses Compulsory courses Microeconomics for MSc students This course aims to develop the basic tools for analysing problems of resource allocation used by economists working in research, government and business. The course deals with positive and normative problems. It aims to include modern developments without being overly mathematical, and to develop a capacity to apply economic concepts to real world problems. The first part of the course focuses on classical theories of consumer and producer behaviour and on the theory of competitive equilibrium, beginning with careful analysis of the optimisation problems of price-taking consumers and firms, before analysing market interaction and the formation of prices in the framework of perfect competition, and concludes with a basic introduction to decision making under certainty and game theory. The second part of the course focuses on models of imperfect competition and information economics, beginning with an analysis of models of monopoly, oligopoly, product differentiation, and public goods, before studying markets with imperfect and incomplete information including search, adverse selection, auctions, signalling, screening, and moral hazard. Special emphasis will be given to economic applications. Both the teaching faculty and your classmates are really smart. You want to work hard not only to pass your exams but because most people here are really curious and it s exciting to study such challenging subjects. Pierre Viandaz Previous degree: Engineering, Institute National des Telecommunications Destination: Goldman Sachs

30 30 Department of Finance Masters Programmes 2013/14 Financial Economics This course analyses investors behaviour, market equilibrium, and the pricing of securities, including derivatives, in intertemporal settings, utilising the methods of stochastic calculus. Topics will encompass choice under uncertainty, complete and incomplete asset markets, mean-variance portfolio theory and equilibrium asset pricing, pricing with no arbitrage, intertemporal asset pricing, Black-Scholes option and other contingent claims pricing models, the term structure of interest rates under uncertainty, and the pricing of interest rate linked and other derivative securities. Financial Econometrics This course considers techniques of empirical investigation in economics, emphasising time series methods, and introduces students to recent empirical findings based on asset pricing models. Computer exercises are used to familiarise students with key properties of asset return data. The course includes a selection of the following topics: multivariate regression; maximum likelihood and methods of moments estimation; hypothesis testing; omitted variables and misspecification; asymptotic theory; measurement error and instrumental variables; time-series modelling; predictability of asset returns; event study analysis; econometric tests of the CAPM and multifactor models; volatility modelling; generalised method of moments estimation. Probability and Stochastic Calculus This course is an introduction to stochastic processes in continuous time, with a view to finance applications. It is a mandatory course taught in Michaelmas Term and is essential preparation for the second half (Lent Term) of Financial Economics. The course is unexamined. Optional courses Applied Corporate Finance This course provides a thorough grounding in recent developments in applied corporate finance through a study of the empirical corporate finance literature and case studies. Corporate Finance A This course covers a range of topics in corporate finance starting with capital budgeting techniques, in relation to CAPM and other valuation instruments and then the driving forces behind capital structure decisions and choices over debt and equity finance Corporate Finance Theory This course considers theories of corporate capital structure and corporate governance, IPOs, takeovers and insolvency. Financial Risk Analysis This course investigates methods of financial risk assessment including advanced risk measurement for fixed income and derivative instruments, credit risk modelling, methods for risk-adjusted capital allocation, and modelling systemic and liquidity risk. Forecasting Financial Time Series This course examines the techniques involved in forecasting key variables in finance. Students will learn both the theory and practice of forecasting in finance. Global Financial System This course examines the academic and regulatory policy debates on the operation of the global financial system, analysing issues based on rigorous economic arguments. International Finance This course examines key issues in international finance, focusing on recent developments and incorporating theoretical, empirical, policy and institutional dimensions. In approach and content, the course is complementary to Global Financial System. Portfolio Management This course addresses empirical and applied problems in portfolio management. Quantitative Methods for Finance and Risk This course Analysis encompasses quantitative and statistical tools that are important in applied finance covering time-series econometrics; modelling financial returns; an introduction to the analysis of financial data using MATLAB; volatility models; Value-at-Risk.

31 Department of Finance Masters Programmes 2013/14 31 The Class GMAT Total: Average 709 GRE Quantitative Section: Average 91% Male: Female ratio: M: 75% F: 25% Russian 6% North American 3% Middle Eastern 4% Nationality South American 1% African 3% Central Asian 3% Indian and S Asian 14% East and SE Asian 34% Previous degrees Mathematics 14% Physics 2% Accounting and Finance 9% European 32% Engineering 5% Business Administration 9% Economics 61% Successful applicants typically have a strong quantitative background with at least a year each of calculus, linear algebra and probability/statistics. Students from noneconomics backgrounds usually have some exposure to economics courses.

32 32 Department of Finance Masters Programmes 2013/14 Teaching and assessment The MSc Finance and Economics is taught over 10 months following a mixed format of formal lectures and interactive class teaching. All core courses are assessed by final examination in the third term. Some of the half-unit optional courses have group/individual project work as part of the assessment, in addition to an unseen examination. Dissertation Students must write their dissertation (6,000 words) in lieu of the exam in one of their two optional courses. MSc Finance and Economics pre-sessional courses All students are required to attend a two week mandatory pre-sessional course in Mathematics and Statistics run by the Department of Economics which is essential preparation for the programme. The course refreshes and builds quantitative tools and techniques which will be relevant over the duration of the MSc and is examined at the end of the September. Additionally, a range of career skills and networking events will take place during the pre-sessional sessions. The Finance and Economics programme is unique in the way we seek to draw out, challenge, and extend students skills in finance, economics, and econometrics, both quantitatively and analytically. The deep knowledge base and advanced technical training that the programme provides are highly desirable in today s job market and enables students to thrive in the increasingly complex environment of global finance. Dr Amil Dasgupta Director of MSc Finance and Economics