CAs not preferred for M&A and IB roles?

• M&A is the crème de la crème of corporate finance roles, usually offering high salaries and a fat bonus.
• But the word on the street is that MBAs are preferred over CAs when it comes to Corporate M&A or an investment profile.
• To uncover the truth we spoke to Saradha Govindarajan, CFO at Veranda Learning, which is a listed ed-tech giant that has acquired stakes in J.K. Shah Classes for a whopping INR 337 crores.

The M&A scenario in India

After a sluggish Mergers and acquisitions (M&A) market over the past several months, the activity is predicted to get into full gear this year.

PwC India expects an upswing in the Indian market, especially in the small and mid-sized M&A transactions and growth funding.

Speaking of which, at our Bangalore event, one of our attendees asked a very fitting question, “Why aren’t CAs the first pick for Corporate M&A or an investment profile? Why do fresher MBAs get the most attention?”

Seriously, is there a bias against CAs when hiring for M&A or Investment Banking roles?

We decided to settle it once and for all. Here is what Saradha Govindarajan, Sriram Iyer, ex-MD at Accenture in India, and Dipanjan Basu, Co-founder and Partner at Fireside Ventures said.

Not many CAs seem interested in M&A roles.

Saradha says,

“As someone deeply involved in the world of mergers and acquisitions, I have seen firsthand how the industry operates and what it takes to succeed.

When it comes to hiring for our M&A team, we don’t discriminate between MBAs and Chartered Accountants.

However, I have noticed a trend: fewer CAs seem interested in these roles compared to MBAs, which could be a location issue. Maybe there aren’t enough CAs interested in M&A roles in Chennai, where I am based. But the truth is, we are neutral when it comes to hiring.”

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The Industry Bias: A Hard Truth

Dipanjan takes it up a notch and says that the industry has its biases. It’s not just MBAs vs CAs; there’s a strong inclination towards graduates from top-tier institutions like Harvard, Wharton, IIM, and IIT.

But the scenario is changing. Real competence has no substitute.

Communication and negotiation skills matter

Saradha continues and mentions that in their acquisition platform, they have completed about 18 M&As in just a year and a half. What they have learned is that M&A is essentially sales. It’s not about complex financial models or discounted cash flow (DCF) calculations.

“The real skills that matter are communication and negotiation. As I often say, there’s very little science or math in M&A, as it’s more of an art.” Saradha concludes.

The power of storytelling in M&A

Sriram drops the truth bomb,

“It comes down to storytelling skills. Compelling storytelling skills if I may add. And I have seen an average MBA doing a much better job than the average CA. It’s not about analytical prowess, but how you package and share the story.

As you climb the corporate ladder, you need to master the art of delivering relevant sound bites to senior executives.”

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The Secret Sauce: Curiosity

What sets apart great M&A professionals?

Dipanjan says,

“It’s curiosity. I find many finance professionals lacking the drive to keep asking WHY. Especially in venture capital, where data is scarce, you need intuition and the ability to spot future trends.”

Why aren’t you asking questions?

Dipanjan further mentioned that as professionals grow more senior, they become more hesitant. VPs and principals often worry that if they ask a question, how will they be viewed? Is this a dumb question? This cautiousness can be a barrier to true insight and innovation.

Young interns, even undergrads on the contrary, are not afraid to challenge our investment decisions, saying: “I don’t understand why you guys made this investment because it doesn’t make sense to me.”

This fearlessness is what we need more of in the industry.

Wrapping up

In conclusion, success in M&A isn’t about your degree or even your technical skills.

It’s about curiosity, storytelling, and the courage to ask tough questions.

Whether you are an MBA, or a CA, or come from a completely different background, these are the qualities that will set you apart in this exciting field.