internship/coop offer: big 4 derivative valuations or CPPIB investment risk analyst

Hi all,

I recently got 2 internship offers and deciding what would be better for my career development.
1. Analyst gig at Big 4 derivative valuation team
2. Analyst gig at investment risk team at CPP Investment Board

Ideally I know the big 4 role could be bit more exciting as I get to deal with clients also help generate revenue for the firm but doing risk at CPPIB doesn't sound bad either.

Ideally I want to eventually break into trading or structuring (my background is math) and any suggestion would be nice!

thank you in advance!


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Comments (7)

Feb 28, 2012 - 3:21pm

The derivative valuation gig at the Big 4 won't put you in touch with clients. At best, you'll be talking to a senior/manager on the audit team responsible for the account. No client actually uses the Big 4 to valuate their derivatives other than for audit purposes.

CPPIB has a great name, and really depends on what you want to do longer-term. Derivative valuation would allow you to go into the structuring or treasury teams at the banks or other companies. Risk is risk - but could be leveraged into a portfolio construction role at CPPIB (superior, IMO).

Feb 28, 2012 - 7:44pm

Ah, so I guess derivative valuation at Big 4 is just mainly audit support work I guess. That doesn't sound too appealing then unless I will learn a lot about derivatives in general. To be honest, I was bit hesitant since I don't know anything about accounting..and supporting an audit with financial reporting sounds like doing the work without understanding the whole picture.

I guess if I do end up taking the risk role, I can try to leverage that into something better..but at the same time, I don't know if I will learn anything other than risk in general (also may be labelled as the risk guy which doesn't seem to help to me).

Thank you for your input Sovjet :)

Feb 29, 2012 - 9:22am

It's definitely audit support - but will have very little to do with accounting or the audit and you will learn a lot about derivatives.

Essentially, when a fund needs an audit, one of the main tasks of the audit team is determining the fair value of all securities. When these securities are not actively traded, and are derivative in nature, they involve the derivative valuation group, which uses FinCAD, MatLab, Excel and other packages to put a value on them.

This will also happen on a bank audit, as part of determining the values of complex amortizing swaps, forwards, private placements, etc.

It's a great experience, and well respected at the Big 4. However, it's a very small group typically (up to 10 people), which services most of the country from a central office (Toronto, NY). You will be well positioned to continue in derivatives - although you'll still have to hustle to get into structuring for example. Treasury should be a direct exit route though.

Mar 1, 2012 - 10:04am

Thanks Sovjet for your in-dept answer :) Sorry for being clueless on treasury..but just wondering why derivative valuation would have direct exit opportunity to treasury? I believe treasury is all about managing the risk for cash flow of a bank for say? would appreciate if you can give me a bit of input on this!

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