Ron Richter hears a common narrative among his students at Rutgers Business School. They want to become investment bankers. “Most finance majors are thinking about Wall Street,” says Richter, who has taught Working Capital Management to juniors and seniors at Rutgers for nearly three decades. “But Wall Street isn’t the only street,” he advises.
While the course has been around for a while, a new partnership — the formation of which was led by Richter — is geared toward the thought that finance doesn’t have to revolve around the traditions of Wall Street anymore. Now almost a year old, New Jersey-based Rutgers Business School and Citigroup’s Treasury and Trade Solutions division have teamed up to show finance-minded business majors a unique option for their skill set. With the cooperation, not only do students in Richter’s class take a day trip to visit Citigroup’s lesser-known but essential division in New York, they also work on a month-long case study under the mentorship of Citigroup staff members.
“Students often start out thinking only about investment banking, hedge funds, and bringing companies public,” Richter tells Poets&Quants for Undergrads. “Most don’t think about the corporate finance side, about trade finance, cash management, and fixed income, because they feel these jobs aren’t exciting. But all companies collect money and pay bills, and many deal with currencies, transactions, and foreign contracts every day.”
Working in corporate treasury means working with everyone spending or receiving cash, says Richter, which also means interacting with almost every department and division in a firm. To help ensure the financial health of the company, corporate treasurers help plan financial strategy, and advice and manage financial growths and risks through various means. To do their jobs, treasury staff work may include borrowing money, buying derivative products, doing analytical work, forecasting, and issuing stock or debt on a daily basis. In short, corporate treasury staff are busy people with unique challenges every day, says Richter. The responsibilities and potentially frantic environment come with a lucrative compensation package. According to Glassdoor, a corporate treasurer at a company like Genentech can earn over $250,000 annually. Six figures is standard for many corporate treasurers.
TAKING THE COURSE TO THE COMPANY
Citigroup’s Treasury and Trade Solutions division employs 22,000 employees across 100 countries in three areas. Their cash management staff develop working capital solutions, trade staff focuses on trade services and supply chain finance, and trade and multi-product offerings staff specialize in developing integrated payables solutions for the firm. When he isn’t teaching, Richter sits on the board of Junior Achievement of New Jersey, a nonprofit organization that teaches youth about financial literacy. It’s where he met Michael Fossaceca, Citigroup’s North America Region Head for Treasury and Trade Solutions, who was also on the board. As board members are invited to talk about their work from time to time, Richter says he heard about Fossaceca’s work and he knew he had to invite him to his class. “He was doing exactly what I was teaching,” Richter recalls.
Following a very well-received talk in Richter’s class, the partnership was solidified in spring 2017, where students worked in teams of five under the remote guidance of a Citibank executives on a case study from the treasury and trade solutions division. However, Richter realized that his students were sometimes hesitant to reach out to their professional mentors via phone or email without having first met them. So last fall, during the second iteration of the class, Richter took his students on the short trek to Citigroup’s New York City division office. During the four hour visit, students ate with Citibank staff, heard about the different work aspects of the treasury and trade solutions group, participated in roundtables where they got to ask questions, and finally received their case study briefing. “In the four hours, the students broke barriers and got a chance to see the real applications of what they were learning in class,” Richter says.
CONNECTIONS TO MENTORS PROVING VALUABLE TO STUDENTS
With the nature of the classroom setting, most biz majors spend the majority of their time learning within the walls of a traditional classroom. Besides the occasional case competition or other experiential learning opportunities, learning largely remains lecture-based.
Sometimes firms do come and visit campuses for presentations or recruiting, but even with that exposure, students like Marika Tsamutalis say it’s difficult to know exactly what they want to do in their selected majors.
“Some courses lack the connection to the real world and how we can apply what we learn in the classroom to business situations,” Tsamutalis, now a senior at Rutgers, says. “The exposure to mentors heightened our awareness of opportunities after graduation as they shared what they do everyday. It highlighted a side of finance that is often overlooked, but has many great entry opportunities for students after graduation.”
CREATING A CORPORATE TREASURY PIPELINE
Still, Citigroup’s participation in helping students explore the lesser-known finance areas is not totally altruistic. By investing resources to encourage interest in treasury and trade solutions, and by partnering as mentors, the organization is grooming an attractive crop of finance graduates who already have experience and skills in the area — and who have ties to the company.
“I think it’s a brilliant idea,” says Jim Kaitz, president and CEO of the Association of Financial Professionals (AFP). “Mike (Fossaceca) is someone I know well and treasury is often not taught at undergrad or even MBA levels. By investing time and working on practical case studies, these students can get a sense of what a career in the division would look like and this creates a pool of candidates for Citigroup.”
Tsamutalis says the Citigroup mentors — who also provide feedback on graded classroom presentations — have helped her class learn about the treasure industry outside of textbooks. Plus, she says, it has given her the experience of presenting in front of management — something rare for a classroom setting. “You don’t really hear of too many ‘field trips’ in college,” Tsamutalis says.
SCHOOLS DOING THEIR STUDENTS A ‘DISSERVICE’ NOT TEACHING CORPORATE TREASURY
The AFP also contributes to growing the awareness and knowledge of lesser known finance divisions through its certification programs and by hosting one of the largest networking events globally for finance professionals. Two certificate examples are the Certified Treasury Professional (CTP) and Certified Corporate Financial Planning & Analysis Professional (FP&A), which are both recognized globally. While individuals can apply for the certifications independently, AFP also has partnerships with over 20 business schools in the country, including Northern Illinois University’s College of Business, Arkansas State University’s College of Business, and Bellevue University’s College of Business, to have the CTP as part of their curriculum.
With the CTP certification program students learn about the corporate treasury function, cash and liquidity management, working capital management, capital markets and funding, and treasury operations and controls. Kaitz believes that treasury and trade solutions skills are often not adequately taught in schools because the educators are more familiar with the theoretical side than its practice. He says that many of the topical skills required for a candidate to be attractive for such positions are not taught in traditional finance programs, which mostly prepare students to be investment bankers.
To further encourage students into areas like corporate treasury, financial planning and analysis, Kaitz says he reaches out and speaks with schools throughout the year, to tell them about the certifications they offer. However, he says, the uptake is rare and slow. He is currently in talks with some schools about integrating the FP&A certificates into their curriculum.
“Universities need to understand what companies need from their students and not keep teaching the same thing,” Kaitz insists. “They are doing their students a disservice at an expensive price when students realize there’s this area they’re interested in but don’t have the skills for.”
I-BANKING SKILLS WITHOUT THE ‘TYPE-A PERSONALITY’
For Richter, his working capital management class is so popular now that, while it has traditionally only been offered at the New Brunswick campus of Rutgers Business School, he will travel to teach the class at the Newark campus starting this spring semester. With most other courses related to investment banking, all 50 seats in Richter’s class have been filled.
While he jokes that he hopes his class is popular because he’s a great teacher, the real reason, he says, could be because more students are realizing that there’s this treasury trade option under the investment banking division.
“Some students are alright taking risks, others are more willing to do 90 hours a week,” Richter maintains. “Students who are excited by my class and being exposed to treasury and financial planning are those who like finance and technology without a Type-A personality. The truth is that the best candidates want to do good work analytically in a ‘Steady Eddie’ position of constant revenue.”