Tuesday, June 2, 2009

New MBA Students' Interest in Finance

We all know how tumultuous last year was. The economy nose-dived, and popular, highly regarded firms such as Lehman, Bear, AIG, and Merrill collapsed or disappeared. We dare to utter the bad words of finance: derivatives, securitization, sub-prime mortgages, and leverage. And then we wondered if the new crop of MBA students would flee from careers in finance or approach them with less rigor and passion as their elders did in previous years.

However, new Consortium MBA students at this year's 43rd Annual Orientation Program in Charlotte (above) still expressed a broad range of interests in financial services. Of the 300-plus new students, 81 indicated an interest in finance or in a specific sector of finance. That hardly differs from the trends in previous years, where those with similar interests often ranged from 70-90.

That there was not a significant decline in those considering finance could be attributed to the following:

1. New students are confident and optimistic there will be an economic recovery and are hopeful there will be opportunities across the board.

2. Many students were already in financial services, but now want to pursue a specialty. (A student who might have worked in commercial banking may now be interested in private equity. Or one who worked as a financial broker wants to pursue investment management.)

3. Some students were involved in unrelated careers, but want finance to help polish or round out their backgrounds.

4. Some had strong backgrounds in math and engineering and are inevitably attracted to the quantitative challenges of finance--without regard to financial upheaval around them.

5. Some want invaluable experience in finance in the first stages of a career. They want finance as a foundation before moving into other careers 5-10 years later (in, for example, real estate, entrepreneurship, or technology).

6. Those already in finance might have decided that the best time to return to school is when opportunities are scarce and the market is down.

The 81 said they would likely pursue careers across a wide range of opportunities: investment banking, commercial banking, real estate, corporate finance, venture capital, private equity, sales & trading, private wealth management, and asset management.

The number also doesn't account for those who while in business school decide they want to pursue finance after starting with a different interest.

Were there trends from other years? Fewer might be considering some of the roles in generalist investment-banking or in equity research. Few expressed interested in sales & trading or "exotics" trading. More appeared to be interested in wealth- and asset-management positions.

Among Consortium schools, some, as expected, had large numbers with finance interests: NYU, Carnegie Mellon, Virginia, Michigan, and Dartmouth, schools that usually attract many who may have an eye on banking, trading, or investing.

Some smaller schools had more than expected: Emory, e.g. New Consortium school Yale had a large number--more than might have been expected, because of its broad core curriculum and novel approach to management study and because of its public-policy heritage.

The actual numbers, by school, are shown below. In sum, the expected large drop didn't happen. What we should watch for is whether students will divert to other careers if opportunities for internships next summer dwindle more than they did this year.
Tracy Williams

No. of First-Year Consortium Students with Interests in Financial Services:








Carnegie Mellon-6







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