Capital markets jobs are quite diverse in terms of activities and responsibilities, ranging from risk and portfolio management to credit analysis. Professionals work for hedge funds, securities trading firms, private equity funds, and investment banks. The main sectors in which they find employment are government contracting, insurance, real estate, and commercial banking.
Capital market professionals employed in the insurance sector are mainly involved in underwriting and actuary. Those in the real estate sector specialize in risk and portfolio management while in commercial banking, the main focus is on compliance and credit analysis. In government contracting, professionals are primarily involved in government acquisition and contract analysis. Depending on the position, employers may require a degree in Management, Accounting, Investment Management, Finance, or Business Administration.
Banks and other finance providers (see here) are looking to hire business analysts with technical and analytical skills. They are tasked with strategic improvements, recommendations on methodologies and designs, process improvements. Companies usually require good knowledge of derivatives and financial products (see here) such as currencies, swaps, options and futures as well as market risk models and liquidity, credit (see here), and market risk.
This position requires knowledge of quality control, policy frameworks, quantitative techniques, and product and business portfolios. Officers are tasked with risk impact identification, data analysis, performance monitoring, and implementation and design of business processes. They help reduce compliance costs and losses resulting from inadequate risk management, monitor for unlawful operations, and help improve decision-making processes that involve risk. Their work involves activities related to risk mitigation, management, assessment, identification, and monitoring and reporting. Employers usually require that job applicants have good team, collaboration, problem solving, and analytical skills.
Settlements administrators often work at Capital Markets Operations divisions and have experience with repo trades, ETFs, municipal and corporate bonds, and equities. They are tasked with monitoring and analysis of escalations, resolution of security fails, and verification of trade input. Administrators also work with investment advisors, custodians, and brokerage firms and monitor for DTC trade discrepancies. Employers are typically looking for candidates with experience with DTC, ICI, and ADP.
Facilitating derivative trading, analysts confirm trade data against external platforms, broker confirms, and blotters. They also monitor for omissions and errors and support reconciliations. Analysts coordinate with investigation officers and the back office to resolve matters related to cash payments and rates. They respond to queries and liaise with the middle office, marketers, and traders regarding amendments and bookings.
Ideally, candidates have an undergraduate degree in Accounting, Commerce, Finance, Economics, or Mathematics. Employers also require experience with fixed income products and derivatives such as foreign exchange, futures, options, swaps, and bonds.
Analysts facilitate cost optimization by monitoring for discrepancies in benchmark reporting and analyzing trading patterns and business strategies. They are also tasked with adhoc forecasting. Analysts have experience with trade life cycle processes in different settings, including brokerage, securities trading, and capital markets. Ideally, candidates also have experience with accounting systems and platforms such as Sophis and eGL and knowledge of SQL, VBA, and Excel.
Other capital markets jobs in Canada include investment analyst, asset analyst, and institutional equity research associate.
The mergers and acquisitions market in Canada performed well in the first quarter of 2020 due to low interest rates, strong equity markets, and growth in different sectors. However, the second quarter is marked by uncertainty amidst Covid-19, border closings, and shutdowns and limited activity of many businesses domestically and internationally.
A recent report by investment banking firm Crosby summarizes the views of advisors such as investment bankers, accountants, and lawyers, and capital providers such as private equity groups, specialty lenders, debt funds, and banks. The report is also informed by the opinions of corporate players, business owners, and customers. The main conclusion is that the majority of deals are put on hold, including those in inclusivity, already in the market, and preparing to enter the market. Mergers and acquisitions that are carried out mainly involve synergistic and strategic players and companies that have been less impacted by the global pandemic and expect to close with no or little external financing. The reasons why deals are put on hold include limited financing, uncertainty with regard to future cash flows, and due diligence issues.
Experts also focus on the factors that drive mergers and acquisitions, some being succession, opportunistic bids, and need for additional capital. Succession is one factor as many businesses are expected to pass ownership in the wake of the global crisis. Other companies need fresh capital and may turn their attention to deals that were put on hold. Experts also expect opportunistic bids, especially for public entities with no controlling shareholders and undervalued shares.
Two mega-deals moved forward in 2020 – Brookfield Renewable Partners merged with Terraform Power and Alstom SA announced the acquisition of Bombardier Transportation. The latter deal is expected to boost Alstom's technological capabilities and expand their geographical coverage. Bombardier Transportation features a diverse product portfolio, ranging from monorail, people mover, and commuter to light rail and tram and metro solutions. Brookfield Renewable Partners also announced the acquisition of Terraform Power, which is the largest deal in the first quarter of 2020 ($12 billion).
In the first quarter, mid-market deals valued at below $250 million accounted for the majority of transactions or 94 percent. This contrasts with mega-deals – only 6 transactions moved forward, with a total value of $33.8 billion.
In the metals and mining industry, mega-deals include the merger of Shandong Gold Mining and TMAC Resources, acquisition of Guyana Goldfields by Zijin Mining Group, and merger of SSR Mining and Alacer Gold. The top deals account for a little over 88 percent of the total transaction value in the second quarter of 2020. The value of transactions in the technology sector stands at $1.32 billion, a drop of 9.8 percent compared to the first quarter. A total of 52 deals moved forward, which is a drop of over 43 percent in the second quarter. The three largest transactions are the acquisition of Rubikloud Technologies by software giant Kinaxis (60 million), of VIZIYA by application software producer Prometheus Group ($35.23 million), and the acquisition of Apteryx Imaging by dental software manufacturer Planet DDS.
The provinces with the most active M&A markets are Alberta, British Columbia, and Ontario. In British Columbia, a total of 127 deals moved forward, valued at $1 billion while in Alberta, the total deal value stands at $5.3 billion. Valued at $3.2 billion, 182 transactions were carried out in Ontario, making it the most active M&A market in Canada.
In 2019, the most active sectors included materials, industrials, healthcare, and technology. Other hot sectors in the mergers and acquisitions market were real estate, energy and power, and financials. According to experts in 2020, attractive markets will be sectors such as artificial intelligence, software as a service, digital health, and financial technology.