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Tales from the Front

10/15/2008 --

Ross alumni, dealing with Wall Street meltdown, offer perspective to graduates.

ANN ARBOR, Mich.—The unprecedented turmoil rocking the nation's financial sector has Ross alumni on Wall Street --- from the offices of embattled Lehman Brothers Inc. to private equity firms --- searching for ways to cope with the crisis. To be sure, this is a chaotic time for anyone involved in finance. Nobody knows yet how bad things will get or when it will end. Many are still trying to figure out how it got to this point.

The havoc of recent events has created an increasingly uncertain market, and newly minted MBAs may not land the exact job they were hoping for, especially if it's in financial services. But just as the smart investor finds opportunity during a time of stress, so can Ross graduates, these alumni say.

Daniel Bloomgarden, MBA '02, knows about life at the downturn of a cycle --- both as a seasoned professional and a new graduate. As a vice president at AllianceBernstein L.P., Bloomgarden analyzes clothing retailers for the firm. Advising the firm's portfolio managers as to where to put their money is tricky these days.

"There is no optimism," he says. "Any market is not easy but the fundamentals aren't making any sense right now. Investors are taking their money out of equities and it exacerbates the issue. When people take their money out, we have to sell stocks and it's a vicious cycle."

Bloomgarden is familiar with the plight of today's MBA graduate and says there are ways to deal with a tight job market. When he entered Ross, the economy was booming and graduates were evaluating multiple job offers. Then the 9/11 terrorist attacks slowed the economy; when he graduated, about 65 percent of his class had jobs.

This year's graduates should be prepared to accept jobs that may not be their first choice, he says. Eventually, they will wind up where they want.

"If you were looking to Wall Street, you might want to find a corporate finance job instead," he says. "Other companies are hiring. The MBAs graduating today need to have patience."

Ajeeth Sankaran, MBA '07, has a front-row seat for the Wall Street horror show. He joined the mortgage valuation desk at Lehman Brothers Inc. after graduating from Ross and watched with amazement as his employer, one of Wall Street's most venerable institutions, sank under the weight of its own leverage and declining values on investments. Lehman filed for bankruptcy and was sold to Barclays Capital.

"I saw a lot of people who had been there a long time who lost a lot of wealth," he says. "We saw stuff falling on a monthly basis. I still don't know why it happened so fast. From a capital perspective, it seemed fine. A year ago, when I was at school, I never would have thought this could have happened."

But Sankaran isn't feeling sorry for himself --- or the financial world.

"One thing I'm convinced of is that it's not the time to turn away and run," he says. "For me, it could be a great opportunity. There will be some layoffs and people will leave. It's a roller coaster, but the capital markets aren't going to just go away."

While graduates this year will have a harder time finding jobs in the financial services sector, there will be some opportunities as the industry continues its shake-out.

"There will be more risk and you might not be paid for that risk, but it's an exciting time in the industry if you can survive this," Sankaran says. "The best time to get into a business is at the bottom, especially if you're young."

Sankaran, though his future is uncertain, was able to step back from his own worries and look at the bigger picture of the unprecedented shocks on Wall Street.

"From my perspective, in some kind of sick way, it was actually kind of exciting," he says. "People are going to make movies about this."

Alan Gelband, BBA '65/MBA '67, is a cagey veteran but also a deal-maker coping with a very shaky credit market. The president of Alan Gelband Co. specializes in buying and selling middle-market companies, raising capital, and running a small hedge fund.

Right now, it's hard to get financing for a deal. And it's a difficult time to sell a company. Fortunately, Gelband has a sense of humor and, more important, decades of experience as an investor, analyst, and investment banker.

Gelband says the smart money is going into undervalued assets and closed-end funds. Look for big discounts on quality assets, he says, noting, "If the market wants to throw things away, I'll take them."

Gelband runs a small operation by Wall Street standards, so he relies on the contacts he's built up through the years in deal-making and through trade groups like the Association for Corporate Growth. MBA students working on projects together need to keep in touch with each other after graduation, especially at a time like this, he says.

The Ross School's action-based, multi-disciplinary approach trains students to see the big picture, sense opportunities, and exert leadership in corporate settings. That's a good skill set to have in a market that requires flexibility and agility when embarking on a career search, Gelband points out.

"The Michigan student is prepared to go out into the world to do anything," he says.

—Terry Kosdrosky

For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, bernied@umich.edu