Wednesday, June 30, 2010

Next Up: Class of '12

A brand new class of Consortium students has just taken the stage at business schools across the country--including new Consortium school Cornell. Over 300 attended the Orientation Program in Orlando in early June.

It's their turn to make their marks, explore what schools have to offer, endure core courses, and dive into the tough, frantic world of recruiting. Two years later, we promise, they'll emerge comfortably proclaiming that these will have been two extraordinary years: case work, study groups, all-nighters, corporate presentations, technical interviews, career strategizing, finance problem sets, business policy, operations research, investment analysis, internship offers, networks, new friends and the spring-break trip to China, Russia, South America or Africa.

In the current class, about 80-100 have indicated they have some interest in finance. Within finance, their interests cover a broad span--from community banking to venture capital. This crop of potential bankers, advisors, brokers, analysts, traders and financiers, remember, started applying to business school just as the financial system was on the brink of collapse. Many were in the middle of the fracas--at banks, brokerage firms, trading firms and mutual funds. While the world of finance was in the middle of uncertainty, chaos and frenzy, they were making tough decisions to go to business school.

The events of past two years have not discouraged students from considering finance. The 80-100 number is typical of any Consortium year. Many come from financial institutions and want to return to finance, but perhaps in a different role, at a smaller organization, and with more responsibility. Many might have come from banks, but want to return to financial management at a corporation. Some have little experience in finance, but have the interests, aptitude and guts to try banking, trading, or investment research.

While the numbers have hardly changed, what students are thinking of doing within finance appears to be evolving over the past few years. As always, opportunities, experiences and compensation influence what people want to do (and perhaps in that order nowadays, unlike 5-10 years ago).

An unscientific sampling of this year's first-year students suggest large numbers of them are interested in investment management and private banking. That is likely due to the growing number of opportunities among the big-name firms and the efforts by the same firms to promote these areas of finance.

Investment banking is not as popular as was in five years ago, but there are always still more than a few with their sights on Morgan Stanley or Consortium sponsors Goldman Sachs and Bank of America. That several Consortium students gained prestigious internships at top banks this summer is an encouraging sign to the class that follows. That fact might encourage more first-year students to pursue it once they get to campus.

Venture capital and private equity appear to be as popular as ever among first-year students. That might reflect a growing entrepreneurial interest and also efforts on their part to specialize in certain industries or attain the ultimate investment-management experience. Opportunities in these areas are fleeting and often hard to find. Yet these firms hire MBA's and value their skills and experiences.

One surprise among this year's group is a continued interest in real estate--after the industry's problems the past few years. This, however, might reflect students' long-term views of the market and their efforts to do what they really want to do.

It's not a shock that fewer students have indicated they are interested in trading. Many have done their homework and know the erratic tendencies of trading firms, big banks and hedge funds in hiring MBA's. They hire them, but sometimes without rhyme, reason or logic. Many quant-oriented Consortium students like trading and are interested, but are realistic about opportunities in the realm.

As in previous years, students interested in finance tend to be concentrated in certain Consortium schools--NYU, Dartmouth, Yale, Michigan, Carnegie Mellon, and Virginia. Cornell was new this year and contributed a large list of Consortium students interested in finance. New Consortium arrivals next year, UCLA and UC-Berkeley, will no doubt influence the aggregate interests of the Consortium first-year class.

Many Consortium first-year students still get a chance to explore their interests a few times before they start classes, as some are invited to late-summer "boot camps," sponsored by big banks or invited to participate in other pre-business-school programs. By the time school starts, they will have polished their strategies. They need to (and have been advised to), because once school starts, the b-school pace becomes an incessant whirlwind.

Uncertainty still engulfs the marketplace. Yet it's ponderous concern about the pace of the recovery (and the return of the glory days of deals, transactions, investor returns and clients) that keep people wondering. Not concern about the viability of a financial system, as the way things were two years ago, when this group was gathering application forms.

Nonetheless, it's always the first-year class that helps boost moods and gets everybody hopeful and spirited about the years ahead.

Tracy Williams

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