Report On Internship At NCB Capital
Introduction
NCB Capital is a joint stock company with a paid capital of SAR 1, 000 million, authorized and regulated by the capital markets authority. It was founded in 2007 as the investment banking and asset management arm of the National Commercial bank to provide clients with investment products and services. Today, NCB Capital is the largest asset management firm in the kingdom of Saudi Arabia, and the largest sharia compliant asset manager globally.
I joined NCB Capital as part of my COOP course on September 17th, 2017 for a six month internship In the Product Development Department as part of the Public equity Team. This report focuses on the organization in which I trained, how I joined this organization, the responsibilities and projects that I took on, as well as feedback and future plans.
Applying to NCB Capital I approached NCB Capital by writing a direct Email to the Talent Management Manager in the Human Resources Department, introducing myself and explaining the reason why I’m writing to her which was to explore the possibility of an internship at NCB Capital. I later on received a reply scheduling a thirty (30) minute phone interview the following day to which I confirmed. After conducting the phone interview, I was informed by email of a second one-on-one interview at NCB Capitals’ Head office with a Product Development Manager Mr. Osama Alharthi who later on became my mentor, and Ms. Hanadi Alsunaid an Analyst on the Public Equity Team. I received my internship acceptance email after four days from my initial Email and started my on-boarding process with NCB Capital. As part of the process I was asked to provide several documents including a copy of my ID, bank statement, and a personal photo. Approximately a month later I started my internship, and on my first day I was asked to sign confidentiality agreements and a compliance code. In a later discussion with co-workers, I was given several tips regarding my resume: to include less personal information, to continuously update my resume to include the workshops I’ve attended and the internship, and update the formatting and layout to distinguish it more from other resumes.
Product Development’s Role
The product Development Department is part of the Business Development Division. Product Development Teams are in charge of conceptualization, designing, and developing new Investment Funds. As well as determining what asset management funds gets released and its structure. NCB Capital’s product development department consists of three main teams: Private Equity Team, Public Equity Team, and the Real-Estate Team. NCB Capital has twenty three public mutual funds that ranges from Equity Funds, Money Market (income) funds, and Multi asset Funds. The Public Equity Team duties don’t end once a fund is launched, the team also oversee these funds and when necessary makes changes to the structure of the funds. As I joined the Public Equity Team I was given an overview of the public funds managed by NCB Capital, and the new funds that were expected to be launched, as well as the Investment Fund regulations (IFR). All of which I was expected to assist in and familiarize myself with. As part of the public Equity Team I was in constant contact with other teams and departments. I was, involved in team discussions, and included in meetings which was more than I expected my COOP experience to be. My views and assumption of the working world has changed, I have a better understanding of the relationship between an employer and an employee, and the relationship between the regulator, Asset management firms, and investors.
My Responsibilities
Simply Stated, a fund is a sum or source of money that will be allocated to a specific purpose. A fund is a structured product with market linked investments, with a predetermined investment strategy that could be based on a basket of securities, indices, commodities, debt issuance or foreign currencies. Each investment fund has its own objectives and specifications based on its type. For example, Equity funds offered by NCB Capital range from: Index Funds, Regional Equities, Global Equities, and thematic Funds. The same goes for Money Market (Income Funds) and Multi –Asset Funds. And each funds discloses semi-annual, annual and performance reports. Recent changes in the laws and regulations of the kingdom of Saudi Arabia affected investment products and financial instruments including NCB Capital’s public funds.
One of the main projects that I assisted on throughout my internship included the implementation of the Value Added Tax (VAT) imposed by the General Authority of Zakkat and Tax on all the public investment fund’s fees and expenses. Another project that I was a part of was creating two new public traded investment funds which were recently successfully launched by NCB Capital.
Also a recent change, is the CMA’s decision to amend the Investment Fund Regulation (IFR), which resulted in changing current and future investment funds requirements and composition. Updating all the public investment funds to comply with the new IFR was part of my responsibilities as well. Throughout these projects and on a daily basses, each change to an investment fund has to be logged in and documented, significant and fundament changes has to be reported and approved internally and by the CMA before implementing and announcing them to current and possible investors. This process required working closely with other departments including compliance and legal. Additional Responsibilities Employees in the product development department have to always be up to date with the competitor’s products to maintain an effective competitive position in the market. Therefore, I was asked to individually conduct a market wide comparison research on the investment guidelines of five different main competitor, then report it back to my supervisor and share it internally.
Rotations and Presentations
After expressing my interest in visiting other departments and learning more about their roles in the organization, It was arranged for me to have daily rotations and sessions in other departments. Prior to each rotation/session I was given instructions and questions regarding the department’s duties to which I have to report back to my mentor after the rotation. My First Rotation was to the Fund Administration and middle office, Otherwise known as operations. Demonstrated to me was the systems used by a fund administrator such as Portia and Geneva as well as other systems that are used to valuate assets and funds, the valuation process includes creating the NAV Summary, Net position, and the valuation report for each fund individually on a daily basses.
Also demonstrated to me was the systems and websites used to monitor corporate actions. Such as, Tadawul, Bloomberg, and Thomson Reuters. And the Reconciliation process which happens on a daily basses once the market closes. Middle office uses some of the same systems as fund administration to calculate, for example, a fund’s performance which requires research, reporting, as well as data maintain skills and experience. Middle office is also responsible for updating the fund’s performance on the fund’s fact sheet.
My Second Rotation was to the Money Market Desk in Asset management. A Money Market fund’s investments are short-term investments with a main objective of earning interest while preserving the principal amount. Their portfolios usually consists of high quality and liquid instruments. The money market murabha transactions were demonstrated to me as well as the criteria used in choosing a counterparty which includes the deposit rate, liquidity limit and investment period. These brief extensive rotations helped me understand NCB Capital’s operations and organizational structure, as well as my position and role in the team.
In an exercise aimed to develop verbal communication and encourage participation, I presented a summary of a research study titled “The Science and Art of Manager Selection” written by Jaime Arguello and James Newman to the product development team, which was followed by an open discussion regarding the research study’s findings and how it relates to the departments role in the organization.
Academic Background and Project Goals
When creating a new investment fund the goal is always to provide a comprehensive solution to cover investment and individual needs. Knowledge in financial Instrument types and asset classes as well as knowledge in financial markets and institutions are important factors to achieving that goal.
Feedback
In a meeting with my mentor regarding my internship, I received feedback about my performance in the past 3 months and what will be expected of me moving forward. The feedback included areas of Strengths and improvement such as, faster task completion time and taking initiative. Moving forward he suggested increasing my responsibilities. Throughout my internship with the public equity team it became clear to me that a career in an investment management firm requires fundamental knowledge in Financial markets and institutions, accounting and economics. And when it comes to specifically Creating new investment funds and overseeing investment products it also requires a background in the principals of investment, portfolio theory and investment analysis, Strategic management and marketing. The majority of the work I’ve done in my internship required using computers and programs so, being up to date with new technology and news is also very crucial. However, the actual job experience differs from what we learned in college courses and projects. decisions have to be made on the spot. And making important decisions and being responsible for the consequences was challenging. However, I was able to overcome that with the confidence and support of my team.
Overall I believe NCB Capital provides interns with an effective work and learning environment, Further instructions and answers were always provided whenever needed. My Advice to students who are about to start their coop is to be involved and ask as many questions as you possible.
Future Plans
The COOP education experience had a huge impact on my future plans and goals. It helped me better define my goals, and paint a clearer path to reaching them by setting milestones along the way, one being committing to becoming a Charted Financial Advisor. It has also encouraged me to apply financial planning on a personal level.
In conclusion, My Internship at NCB Capital gave me the opportunity to grow both personally and professionally, working with and meeting hard working and accomplished individuals inspired me and motivated me to work harder and challenge myself more, and I feel prepared to join the work force.
