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What is Complex Securities Valuation?
 
Complex securities valuation involves building financial models catered to exotic financial instruments. Strong quantitative and mathematical skills are just as essential as a deep understanding of financial products. If you decide to work in complex securities valuation, you will also need a wealth of knowledge regarding different securities and their embedded features.

Pablo Ortiz (MFE ’19)

Complex Securities Valuation at Grant Thornton LLP
Los Angeles, California

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The road so far has been tough and interesting. In valuation and consulting work, you are fully responsible for building a model from scratch in a couple of weeks and having it ready for the client. Being responsible, efficient and able to work through a problem independently are highly valued skills. In complex securities valuation, you have to develop models to value different securities, such as convertible notes, preferred stocks and other debt structures, for clients in a short time frame. The work is fast-paced and intense, and you must be detail-oriented. The common thread among all the securities you have to analyze is an embedded feature that requires either stochastic calculus or advanced math to model. This leads to an impressive range of projects and topics. Doing this job gives you get a deeper understanding of the different assumptions, shortfalls and nuances of the models. You always have to apply critical-thinking skills after you obtain your results and figure out if they make sense. That is the part I enjoy the most about the work: discussions with my teammates about how appropriate a model is, which features can you ignore and when to adjust for noisy data. This job combines people skills, critical thinking and math skills! I think this combination is what makes it interesting.

Efecan Koc (MFE ’18)

Senior Associate, Economic & Valuation Services (Complex Securities) at KPMG
New York City

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I deal with the valuation of alternative investments and complex securities, including convertible bonds, TSR-based performance shares, contingent considerations, exotic options and other derivatives, using the option pricing method, which includes Monte Carlo simulations, lattice-based binomial tree models and closed-form solutions.

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