MPhil Economics at Oxford
I joined FTI Consulting’s Economic and Financial Consulting practice after completing my MPhil in Economics at Cambridge because I was looking for a job that would challenge me and provide a breadth of opportunities.
In my first year I have had the opportunity to work on a variety of cases, from helping advise an entity in a bidding process to valuing a multinational business involved in a litigious dispute. FTI Consulting is also supporting me in my studies towards achieving the ICAEW Chartered Accountant Qualification.
MPhys Physics at Durham
After finishing my degree and deciding not to pursue the subject further I was attracted to FTI by the opportunity to use the analytical skills I’d developed on real world business problems, and by the variety of work they did.
I was concerned at first that my lack of economics or finance background would be a disadvantage, but in fact FTI hires graduates from a variety of backgrounds and many of the partners have science degrees. In-house training courses and studying for a professional qualification (I am training for the CFA, supported by FTI) have helped me bridge the gaps in my knowledge. I have also found that people are patient and happy to take the time to explain concepts I might not have encountered before.
In my two years here, I’ve worked on a wide variety of cases including advising regulators and regulated businesses, econometric analysis, business valuation and energy industry disputes. Working in a legal context, as we often do, focuses the mind on producing high quality work since you are aware that it will be reviewed by another expert in the field with a strong incentive to find fault if possible. This means people at FTI have exacting standards and have developed a reputation for producing high quality work in every arena, not just in disputes.
I’ve also been able to use my skills to give something back. FTI works with the charity Pro-Bono Economics to help charitable organisations with analytical or economic problems as a volunteer. Through them I have worked with the Royal Institution to investigate what it can do to drive public engagement in the sciences.
Case study: Valuation of ACSA, the South African airport operating company
Background to the project
In 1998 the South African government privatised 25% of the nationalised airport operating company, of which 5% went to “Black Economic Empowerment” (BEE) investors. At the time of the sale, it was envisioned that the remaining government shareholding would be sold through an Initial Public Offering (“IPO”) of shares, allowing the BEE investors to join in and realise a return on their investment.
However the IPO never happened and the government repurchased the 20% owned by the strategic partner in 2006. This left the BEE investors holding a 5% minority shareholding in a government owned company.
The investors alleged that, after the share repurchase, the company was not run on a commercial basis, damaging the value of their investment. The investors wanted the government to repurchase their shares and FTI was engaged by ACSA to assess what would be a fair price, after two previous valuations from investment banks had been rejected.
We valued the company using several methods, including a comparison to other publicly traded companies. I was responsible for this comparative valuation analysis, as well as for calculating ACSA’s cost of capital.
This involved using data sources such as Bloomberg and Capital IQ to identify companies with similar characteristics, both financial and operational, to ACSA. This was a difficult task because there are only a small number of traded airport operating companies and they often operate under very different regulatory environments to each other. I adjusted the valuations to account for differences between the companies and used these figures to arrive at a value for ACSA.
The process required a significant level of professional judgement. I then formally wrote up my analysis to be included in a report which was submitted to the High Court of South Africa.