Finance and Management MSc

• Dr Matthias Nnadi

The key objective for this course is that students develop a clear understanding of the basics of accounting. By the end of the course, students would be able to interpret accounting information with confidence and use it to make decisions and be able to communicate accounting numbers to others.

The course is split approximately 50/50 between Financial Accounting and Management Accounting.

Financial Accounting covers the preparation and presentation of accounts by firms for outside parties such as shareholders or creditors. Such preparation is governed by certain fundamental principles and various rules.

The first part of the lectures will cover accounting principles and provide understanding on how the key financial statements (income statement, balance sheet, cash flow statement) are prepared.

The module also covers the interpretation of financial statements. This involves learning financial ratio analysis and interpreting the information contained in a full set of annual accounts.

The last sessions are devoted to Management Accounting and cover internal accounting by managers for planning and control. Students will cover the nature and classification of costs, break-even analysis, allocation of overheads; preparing and using budgets, variance analysis.

On successful completion of this module a student should be able to:

1. Demonstrate understanding of the fundamental principles of financial accounting and prepare key financial statements from basic information.
2. Critically analyse and interpret company accounts.
3. Evaluate the different types of costs and conduct break even analysis.
4. Critically discuss the different ways in which overheads can be allocated.
5. Prepare budgets and interpret variances from budget.

• Professor Yacine Belghitar

This core module provides a foundation in the essentials of corporate financial management. The course focuses on three principal aspects of corporate finance: the investment decision; the cost of capital; and the financing and payout decisions. Based on recent theoretical and empirical developments, the course explores the framework in which corporations make their financial and investment decisions.

• The Objective Function for Corporations
• Corporate Governance
• Making Investment Decisions with the NPV Rule
• Valuing Bonds and Common Stocks
• Introduction to Risk and Return
• Portfolio Theory and the CAPM
• How Corporations Issue Securities
• Capital Structure
• Payout Policy

On successful completion of this module a student should be able to:

1. Evaluate the impact of the separation of corporate ownership, management and control.
2. Appreciate and incorporate risk in project appraisal and investment.
3. Estimate and evaluate the capital structure and dividend policy of the company.
4. Understand and appreciate the complexity and contradictions of the current academic literature in financial management and its implications for professional practice.

• Professor Constantinos Alexiou

To introduce the concepts and techniques of Microeconomics (e.g. market analysis, price theory, rationality)  and Macroeconomics (e.g. inflation, exchange rates and interest rates) in a way which provides a core foundation for later applied financial analysis in a range of other core and elective courses on the MSc in Finance and Management and MSc in Investment Management. 

In the Context of the Financial markets, it is imperative that students be aware of the fundamental principles and concepts pertaining to Economic Theory per se. Studying economics not only does it provide knowledge for making decisions but it also offers a tool with which to approach questions such as the desirability of a particular financial investment opportunity, the benefits and costs of alternative careers, or the likely impacts of public policies.

The initial few sessions are spent on discussion of the concept of equilibrium as it applies to the micro and macro structures of a broad range of financial markets. In next four sessions, an understanding of choice theory and rational economic decision making as it applies to the levels and structure of prices of assets in a broad range of financial markets is developed. Finally, remaining sessions are devoted to discussion of the concepts and ideas in macroeconomics which have a direct relevance to financial markets. Particularly, discussion is centered on understanding of monetary economics and the institutional context to which it applies. Discussion of structure of money and capital markets rounds up this module.

On successful completion of this module a student should be able to:

1. Assess the concept of equilibrium as it applies to the micro and macro structures of a broad range of financial markets.
2. Discuss and justify the rationale of choice theory and rational economic decision making as it applies to the levels and structure of prices of assets in a broad range of financial markets.
3. Appraise the monetary institutional context as this is reflected by money and capital markets.
4. Examine the use of relevant geometric and quantitative models to explain and analyse monetary and financial phenomena.
5. Assess and effectively discuss real world problems that relate to global financial markets.

• Dr Walter Gontarek

The course begins in Part I with an overview of the international financial markets, the major financial institution participants and product types. Students will understand the roles, motivations and behaviours of market players including the importance of risk-taking. The role of regulation will be highlighted and examined in Part II. This will include the aims and structures of regulation. In Part III, students will examine using a seminal textbook on business ethics the role and limitations of ethics in financial markets, ethical decision-making frameworks, and evaluate real world cases of lapses in culture and impact upon society and the markets. The challenge of identifying and promoting ethical behaviour will be acknowledged.

• This module will identify key financial intermediaries including banks and non-banks (i.e., FinTech firms, finance companies, mutual banks, multilateral banks, insurers, pensions, hedge funds, retail investors, shadow banks).
• Financial products overview includes equity, subordinated debt (notably issued by financial institutions including their motivation), senior debt (including loans, bonds) as well as the role and consequences of deposit-taking/money market activities for financial institutions given the regulatory context of this module.
• The role, advantages and dis-advantages and recent market developments associated with cash versus derivative markets will be identified and discussed. Lastly, simple securitisations of credit portfolios will be examined both as a funding tool but how it was misused before the crisis in sub-prime markets.
• Product types identified will include equity and debt (including loans and debt securities), investment banking/advisory, and asset/wealth management. Recent controversies will be looked at in market practice including the scope for market abuse, conflicts of interest, moral hazard, and financial institution misconduct. Various stakeholders will be identified for the key market types.
• Students will investigate criticisms of financial market policies and shortcomings of supervision and review the response by regulators in banking sector, focusing on the capital and liquidity provisions, and improved risk governance.
• Key corporate governance theories will also be identified. While current regulatory framework will be highlighted, the focus will shift towards ethical decision-making and an effective risk culture as a viable alternative to conventional supervision and legal shortcomings. Specifically, two ethical-decision making frameworks will be introduced in a case study format, one from Jennings (2013) and the other via Ferrell et al. (2011).
• Students will appreciate the role of governance within an ESG Framework.

On successful completion of this module a student should be able to:

1. Examine and explain different financial market structures, players including their roles and respective stakeholders.
2. Combine their knowledge of key financial markets, with their associated regulatory and supervisory framework, major product types, and the scope for misconduct, agency failures and moral hazard.
3. Discuss the key theories for corporate governance and risk governance practices for financial institutions, and how governance mechanism may interact to impact performance or risk-taking.
4. Assess and justify the potential for ethical behaviour and improved conduct to fill the void where law and regulations fail to succeed.
5. Identify and evaluate the role ESG (Environmental, Social and Governance) factors can play in determining the access to or cost of capital for firms and their performance.

• Dr Nemanja Radic

Finance is a highly quantitative subject and this core programme provides the relevant mathematical and statistical training necessary to be able to conduct appropriate empirical studies and apply theoretical financial models in practice.

The module will cover probability theory, sampling and estimation, hypothesis testing, regression analysis, and panel analysis.

On successful completion of this module a student should be able to:

1. Critically evaluate probability distributions and their properties
2. Assess various population parameters and their point and interval estimates.
3. Formulate null and alternate hypotheses, and to conduct a test of hypothesis about a population mean as well as a population proportion
4. Critically assess and apply a variety of statistical techniques for data analysis (i.e., OLS, logistic regression and regression with panel data).
5. Examine and asses financial theory and related empirical work covered in other subjects within the programme.

• Dr Vineet Agarwal

This module is designed to provide participants with the required skills for structuring their research projects including conceptualising research questions and writing literature reviews. It uses the positivist approach to finance and introduces the need for and validity of empirical models. The module also imparts a greater understanding of the empirical methods in finance and develops important skills in the assessment, analysis and interpretation of published financial research.

• Formulating research questions.
• Critically reviewing the literature.
• Asset pricing tests using cross-sectional and time-series regressions.
• Time-series analysis (stationarity, unit roots, and cointegration).
• Generalised Method of Moments.
• Event study method.

On successful completion of this module a student should be able to:

1. Conceptualise and formulate research questions.
2. Identify, compile, and critically evaluate relevant literature.
3. Select and assess a range of methodologies employed in empirical finance.
4. Assess the limitations of empirical methodologies and draw robust conclusions from empirical studies.
5. Design and conduct empirical research.

• Professor Sunil Poshakwale

This module aims to develop a solid understanding of foreign exchange and interest rate risks that multinational corporation encounter. The main focus is on developing insights on how and why these risks arise and what can be done to manage these risks. The other aim is to provide students with commonly used applications of derivatives in managing exchange rate and interest rate risks.

The initial sessions are used to introduce students to the world of foreign exchange markets, how exchange rates are quoted and interpreted and what role FOREX markets play in the international finance.

The following sessions are devoted to the detailed discussion of underlying theoretical models which explain the relationship between interest rates, inflation, and other macro-economic variables and the exchange rates. How forward rates are determined in the market and why covered interest rate arbitrage and carry trades occur and how they are used by investors to exploit disequilibrium in the foreign exchange rates. This is followed by the discussion of why and how multinational corporations invest in foreign markets. The key determinants of FDI with a particular emphasis on emerging markets are explored in detail.

This is followed by discussion of basics of currency derivatives and how they work. The remaining sessions are devoted to the discussion of different types of foreign exchange exposures and how they affect market value. How transaction and operating exposure are managed by both internal hedging techniques and derivatives are discussed in detail using case studies.

A detailed discussion of how interest rate risks arise and how it affects the multinational corporations is followed by how these risks are managed. Students learn about interest rate and currency swaps, how they are set up and how they are valued. The final sessions are used for discussion of international capital budgeting process, how it is done and how key risks need to be considered and managed.

On successful completion of this module a student should be able to:

1. Discuss relationship between interest rates, inflation and purchasing power parity and exchange rate.
2. Identify and contrast different types of foreign exchange exposures.
3. Analyse and predict interest rate and exchange risks
4. Select and apply different types of derivatives for managing interest rate and exchange risks.
5. Evaluate the issues for multinational firms in their international capital budgeting decisions.

Strategic Management is concerned with the direction and scope of the organisation. This involves determining the purpose of the organisation, establishing objectives and formulating strategies to achieve the objectives. It predominantly explores how an organisation positions itself with regard to its changing environment and in particular its competitors, in order to gain and sustain competitive advantage. This means that strategic management considers how an organisation’s internal resources and capabilities can be developed to meet the changing demands of customers, in such a way as to achieve the expectations and objectives of its stakeholders.

The module begins by focusing on strategy at the strategic business unit level. It is orientated around five key questions: 1) where to compete? 2) how to gain competitive advantage? 3) what capabilities are required? 4) what capabilities do we have? 5) how do we change?

The module then explores corporate level strategy and the issue of strategy implementation and change. Throughout the module a range of tools and techniques for strategic analysis and choice will be introduced.”

On successful completion of this module a student should be able to:

1. Discuss and examine the key questions and associated challenges in formulating an organisation’s competitive and corporate-level strategies.
2. Evaluate how an organisation can gain and sustain competitive advantage through sensing and capitalising on changes in the external environment and through harnessing its internal resources and capabilities.
3. Appraise and differentiate between corporate, competitive (business unit) and functional strategies.
4. Select and apply a range of tools and techniques to illuminate the key questions of competitive strategy and corporate strategy.

• Dr Vineet Agarwal

A good understanding of techniques of valuation of firms as well as the different securities issued by firms is vital for managers and financial analysts. This understanding has a bearing on both financing decisions (issue of equity or debt) and investment decisions (identifying securities for inclusion in a portfolio, acquisitions, buy-backs, divestitures etc.). In addition, building sound financial models is critical for understanding and communicating valuations. This course provides the framework for valuing equity and firms as well as financial modelling to aid decision making.

• Different valuation approaches: discounted cash flow, relative valuation, and residual income valuation framework.
• Estimating the cost of capital using models like CAPM.
• Estimating earnings, cash flows, growth and terminal value.
• Issues in forecasting cashflows.
• Building a robust financial model

On successful completion of this module a student should be able to:

1. Discuss the principles of corporate valuation.
2. Estimate discount rates.
3. Assess and compare a range of valuation methods.
4. Assess and test assumptions and limitations of valuation models.
5. Build valuation models and scenarios using Excel.

• Dr Walter Gontarek

This module focuses on environmental, social and governance (ESG) criteria into financial decisions. It provides students with insight into how impact investors seek to generate environmental and social impacts in addition to financial returns.

Module targets students seeking careers in financial services who want to better understand the interaction of capital markets and policy issues.

The class will draw upon principles of finance, public policy and investment management to evaluate specific cases and investment tools in areas such as environmental markets and climate change, public finance and sustainable development. Students will be exposed to both traditional and alternative risk management approaches and investment theory frameworks, as well as a range of case studies on the role and impact of institutional investors, banks, financial supervisory authorities and governments in aligning financial markets with ESG goals.

• Environmental, social and governance (ESG) and finance in practice
• Climate finance and Impact investing
• Traditional vs. Alternative Investments in Environmental Finance (Stocks and Impact Funds; Green Bonds)
• Investment Stewardship (Board of directors and its committees; Shareholder stewardship and engagement; Shareholder protection and agency issues)
• Sustainable and responsible investments (SRI)
• Responsible business and firm value

On successful completion of this module a student should be able to:

1. Define and describe environmental trends and judge the potential risks and opportunities they present to financial markets, with a particular emphasis on climate risks.
2. Discuss the challenges arising from climate change for sustainable investing.
3. Assess how green initiatives could be financed, introduce green finance instruments and their evolving regulatory framework.
4. Evaluate how sustainability issues affect investment decisions made by institutional investors, corporate lenders, insurance companies, asset management funds, hedge funds, venture capitalists and retail investors, as well as business decisions made by corporate managers.
5. Assess corporate sustainability risks and opportunities from a financial perspective and plan how to manage/mitigate those risks.

• Dr Valentina Battista

• To provide an introduction to the individual and the group in the organisation – how and why people differ - and to introduce frameworks that aid interpersonal understanding, communication and relationships.
• To introduce the notion of personality and its application.
• To consider the importance of relationships at work.
• To introduce the concept of effective teams.
• To explore the concept of leadership style.
• To provide an introduction to power, politics and influence in organisations.

The module covers:

• Overview of organisational behaviour theory
• Individual and team characteristics, using Myers-Briggs
• Leadership and management
• Organisational power and politics
• Negotiation skills
• Presentation skills

On successful completion of this module a student should be able to:

1. Evaluate the factors that affect peoples’ (including their own) behaviour within teams and organisations.
2. Assemble and present organisational information in persuasive and interesting ways.
3. Select, apply and justify a range of leadership and management theories to real-life organisational settings.
4. Examine and discuss the nature and role of power and politics within organisations and describe/predict their impact.
5. Apply negotiation skills within organisations.

• Professor Andrea Moro

This module focuses on financing issues faced small business ventures, entrepreneurial firms as well as by very innovative and technological based start-ups. It explores the issues from the perspective of the entrepreneur, the investors and the providers of debt finance.

The module aims to provide students with awareness and understanding of the risk incurred by investing in an entrepreneurial firm (entrepreneurs, providers of equity and providers of debt) as well as to explain how technology is revolutionising the financial strategy start-ups can pursue.

Thus, it implies:

• a thorough examination and evaluation of traditional alternative financing strategies that small/entrepreneurial ventures can pursue by exploring both the traditional financial tools (bootstrap finance, business angels, venture capital, as well as bank finance) and the relatively new ones such as crowdfunding;
• the exploration of blockchain technology as a tool to finance high tech start-ups and the application of blockchain technology to smart contracts.

• Overview of the entrepreneurial venture and its peculiarities;
• Identification and valuation entrepreneurial opportunities and related risk;
• Exploration of equity funding (entrepreneur’s finance, bootstrap finance, business angels, venture capital, etc.);
• Exploration of debt finance (trade credit, short term finance, factoring, long term finance, leasing);
• Examination of evolution of financial needs with growth and exit strategies;
• Examination of innovative form of finance (tokens);
• Smart contracts: structure and use.

On successful completion of this module a student should be able to:

1. Discuss and contrast the peculiarities of entrepreneurial ventures and how they affect entrepreneurs’, investors’ and banks’ decision about financing entrepreneurial ventures;
2. Value and relate to the critical role that traditional financing tools play in new venture creation (in terms of start-up survival and firm’s growth) as well as the risk and advantages of the use of blockchain technology;
3. Formulate a deal structure for an entrepreneurial venture;
4. Evaluate the benefits and risks of the use of smart contracts in finance;
5. Select and assess different investment harvesting alternatives.

• Dr Vineet Agarwal

The global bond market exceeds $100 trillion which is more than the world’s stock markets. The market has become increasingly quantitative due to the proliferation of new products. Combined with increased volatility of financial prices and exposure to new sources of risk, there are now greater risks and opportunities for fixed income portfolio management.

This module provides the participants with a solid grounding in the mechanics of fixed income markets and introduces them to bond portfolio management techniques.

The module will cover:

• Pricing of fixed and floating rate bonds.
• Measuring bond price volatility.
• Yield curves and bond pricing.
• Analysing callable and convertible bonds.
• Analysing mortgage-backed securities.
• Properties of interest rate derivatives and their use in altering portfolio characteristics.
• Credit risk analysis.
• Bond portfolio management

On successful completion of this module a student should be able to:

1. Assess the risks of investing in fixed interest securities.
2. Examine and assess the role of yield curves in bond pricing.
3. Assess the impact of embedded options on risk-return profile of bonds.
4. Evaluate credit risk models and their application in fixed interest investing.
5. Discuss and evaluate the bond portfolio management techniques using combination of bonds and interest rate derivatives.

• Professor Sunil Poshakwale

The landscape of investing has been constantly evolving. Most institutional and high net worth individuals include international stocks and alternative investments. Growing role of emerging markets in the global economy and high growth rates offer huge investment opportunities. Investing in alternative investments such hedge funds, commodities, real estate, precious metals, currencies, fine art, wine, etc. offers diversification of portfolio risk and increases return potential. However, despite these trends, there is not enough known or understood about the opportunities and challenges that investors face while investing in emerging markets and alternatives. The aim of this elective is to provide students with an in-depth understanding of the types of investment avenues, their characteristics, and rewards and risks. The module aims to offer both academic research and practical guidance on investing in these asset classes.

• The case for global investing and alternative assets
• Understanding characteristics of emerging markets, reasons for their growing role in international portfolios
• The risks and challenges of investing in emerging markets
• Boom to Bust: How, when, and why?
• Long- and short-term perspectives of investing in emerging markets
• Introduction to Alternative Investments and their characteristics
• Hedge funds, their key features, types and role in portfolio diversification
• Real Estate investments
• Investing in commodities

On successful completion of this module a student should be able to:

1. Describe what characterises markets as emerging markets and alternative investments.
2. Evaluate and justify the investment opportunities and benefits of investing in emerging markets and alternatives.
3. Appraise risks and challenges related to investing in these asset classes
4. Assess these assets and their attributes for diversification.
5. Reflect and learn from analytical work through research on these asset classes.

• Professor Yacine Belghitar
• Professor Andrea Moro

The module focuses on transactions significantly affecting the corporation’s assets, liabilities and/or equity claims and stresses the economic motives for undertaking them. Transactions are examined from the perspective of the corporation (e.g., firm managers), from the perspective of capital markets (e.g., investors, stockholders, creditors) as well as from the perspective of the society. The module integrates various technical skills learned earlier in the MSc programme such as accounting, corporate finance and strategy.

• Theoretical rationale of mergers, acquisitions, and restructuring.
• The range of restructuring choices.
• Strategies for takeover, merger, corporate turnaround, and corporate renewal.
• Corporate insolvency and reorganisation – insolvency and bankruptcy regimes in the UK, US, Continental Europe and other countries.
• The role of competition and shareholder protection regulation in the mergers, acquisition and restructuring.
• Financing strategies and tools.

On successful completion of this module a student should be able to:

1. Assess the financial, strategic and political causes and motivations driving mergers, acquisitions and restructuring transactions.
2. Evaluate the regulations on competition and shareholders’ protection and their impact on mergers and acquisitions.
3. Assess the financial consequences of restructuring for various stakeholders such as different types of lenders, shareholders, the board of directors and managers and how they generate conflicts of interests among them.
4. Justify and apply alternative valuation techniques to assess a deal.
5. Examine and assess the strategic and managerial implications of methods of payment and the criteria for successful restructuring and re-organization of firms in bankruptcy/ administration.

Private equity differs from public equity, which is generally the focus in corporate finance. Private equity has become a major source of capital for innovation, growth and corporate restructuring. To succeed as a PE professional, one needs to embrace and tackle various challenges relating to the financing of the company, its operations and the entrepreneurial & uncertain nature of business venturing. The module will cover the nature of and rationale for PE investing, the spectrum of PE activities and the potential conflicts among stakeholders. Another focus will be on value creation programmes to generate PE fund returns.

• The PEQ cycle, from fund raising to investing and exiting.
• Strategies to create firm value in private equity: due diligence, operational concept, exit strategies.
• Measures to align interests among stakeholders in PE.
• Consider the ethical implications of the PE model

Upon successful completion of this module, a student will be able to:

1. Discuss the idiosyncrasies of PE investments from the perspective of investors in this asset class.
2. Assess and contrast the various types of PE investment: venture capital, buyouts, restructuring, etc.
3. Propose and justify practical measures through which private equity firms can enhance the value of their portfolio companies.
4. Design a due diligence programme to critically assess the risks involved in a particular proposed PE transaction.