Working with companies that are planning to become publicly traded or are already listed is a complex and exciting affair. Equity Capital Markets allows you to be part of it! Discover what Equity Capital Markets (ECM) is all about in this exclusive interview with Luna Jansen, an ECM analyst.
Luna Jansen (24) is currently working in the ECM team at Deloitte. She has completed both her bachelor’s degree in International Business Administration and her master’s degree in Accountancy at Tilburg University. Luna pursued her master’s degree during the COVID-19 pandemic, which made it challenging to explore career opportunities in the field. During her master’s, she was attracted to the audit track, but through internships, Luna realised that it didn’t quite align with her interests and aspirations.
“So, what did I want to do instead? I found it appealing to engage more in advisory work, which led me to join Deloitte’s Equity Capital Markets team. I have been working here since September 2022, and I am proud of the transactions I have had the opportunity to contribute so far.”
What is ECM?
Equity Capital Markets (ECM) refers to the division of Corporate Finance that focuses on raising capital for companies via the capital markets. It involves activities such as initial public offerings (IPOs), secondary offerings and debt-raising activities on the capital markets. ECM helps companies access the capital markets, raise funds, and facilitate ownership transfer.
As part of an ECM division, you get a deep understanding of how the capital markets operate. You gain insights into the dynamics of raising capital, investor behaviour, market trends, and regulatory frameworks – which can be a very strong basis for a successful career in Finance!
In a nutshell, ECM helps companies navigate the complexities of going public, raising additional capital, or restructuring ownership through primary and/or secondary offerings. It involves analysing market conditions, investor sentiment, and pricing strategies to optimise the offering process. Additionally, ECM plays a crucial role in providing liquidity to companies and enabling companies to fund growth initiatives or strategic objectives.
ECM in the greater finance world
This Corporate Finance division is not an island. ECM works closely with investment banking divisions that handle equity offerings and debt-raising transactions to advise on the various aspects of these transactions. It also collaborates with financial planning and analysis teams to align the financing with strategic objectives.
Besides that, ECM teams and law firms work closely together to facilitate capital market transactions to ensure compliance with relevant regulations, regulators, and prospectuses, provide legal advice on disclosure requirements, and assist in the regulatory filing process.
Last but not least, perhaps one of the closest divisions to ECM is Debt Capital Markets. While ECM differentiates itself by primarily focusing on capital market-related transactions, it’s also in a unique position to support companies with their debt-raising activities as well – activities which fall under Debt Capital Markets (DCM). DCM transactions relate to debt issuances and fixed-income products such as bonds and notes. The ECM and DCM divisions often collaborate closely. That’s because ECM involves special considerations concerning ownership dilution, valuation, and investor demand for equity and debt securities in the capital markets.
Why would you choose ECM?
ECM might not be the first thing you think about when you decide you want to start your career in Finance, but we’re here to tell you that it should definitely be in your top considerations! It is the Corporate Finance divisions that stays in touch with current market conditions, investor sentiment, regulatory changes the most. Its dynamism guarantees a great learning curve and an environment that will keep you on your toes.
And of course, its uniqueness also draws on working with IPOs. As Luna mentioned:
“I chose Equity Capital Markets over M&A because I find the IPO process very interesting. When a company prepares for an IPO, there are various aspects to consider, such as financial reporting, remuneration, equity story, corporate governance and the now widely discussed topic of ESG. Investors are placing increasing importance on companies addressing ESG factors, and this is also reflected in considerations when companies contemplate an IPO. Through our experience and expertise, we provide support and guidance to companies during the IPO process, which is usually a complex process.
Part of my work as an ECM analyst, I co-developed and managed the IPO Scanner. This automated tool, developed by our ECM team, is designed for IPO readiness. Companies can assess their preparedness for an IPO through a simple questionnaire. I am particularly proud of the fact that this project is now being rolled out in multiple European countries!”