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| Cornell attracts its share of Consortium finance MBAs |
Among the new MBAs, who's headed into financial services in 2013?
How many among the 300-plus have expressed an interest in concentrating in finance at school or a career in financial services? As they take new twists and turns over the next two years, what do they aspire to do when graduation comes in 2015?
Let's consider the current environment. The awful, dreadful financial crisis is receding into memory, although there is a haunting, lingering impact. The crisis and economic recession caused upheaval and changed the landscape at banks, broker/dealers, investment funds, insurance companies and private-equity firms. Financial institutions are rushing to hire just as many experts in compliance, risk management, regulation and technology as they are in luring investment bankers, brokers, wealth managers, and traders.
With steady improvements in the economy and with remarkable upturns in equity markets, this year's new MBA students won't need to whisper when they declare an interest in financial services. The job or role they dream of may actually exist in two years. Or the job or role may turn out to be something they never knew existed in their first days of a corporate-finance core course.
The new class of Consortium students, after the OP, will disperse and head off to 17 different Consortium business schools all across the country. Of the total, over 130 have expressed some degree of interest in financial services, even if it is a tentative or preliminary interest. That number already suggests renewed confidence. In previous years, especially during the morale-plummeting crisis years, fewer than 100 dared to raise a hand to say they were interested in banking, trading or investment research.
Many of them, like other non-finance MBA students, are in career transition. Some are opting for finance after stints in other fields (non-profits, public service, engineering, or marketing). Some are currently in banking or trading and will use the MBA (and what they learn in class) to leap from one segment to another (from, say, private banking to equity research).
No doubt they understand what they are about to take on. They know this isn't the 1980s, when an MBA graduate Dartmouth could join Morgan Stanley's corporate-finance unit and plan to be there for 20-plus years and, with confidence, take steady, resolute steps to managing director. They know it's possible Morgan Stanley may not exist (in the way we know it today) in 20 years. (Drexel Burnham, Bear Stearns, Salomon, and Lehman Brothers, favorite firms for MBAs in the 1980s, don't exist in 2013.)
They know they must plan a career in five-year segments. Even in finance, they know they must reinvent and rebrand themselves all the time and be willing to try something new when pushed against the wall. They know they must explore a variety of institutions, segments, roles, and options. They know, too, the best opportunity may not be at Goldman or Citigroup, but could be at a regional investment fund, at a financial institution in Brazil or at a futures brokerage in Chicago. If they don't know now, they will learn that roles in compliance, risk management and financial regulation are more valued by some banks than first-year jobs in M&A or on the currency desk.
MBA students in finance (including those at Consortium schools) tend to head to business schools with strengths in finance, where finance faculty are widely known and where finance recruiters swarm. They also head toward schools that already have a large concentration of students in finance. They want to be with others with similar aspirations or they don't want to be at a disadvantage. Like-minded students want to be with each other.
In this year's class, Cornell and NYU business schools will have the largest number of Consortium finance students. Michigan, Texas, Virginia, Yale and Indiana follow closely behind. These numbers are as expected, because these schools tend to support the largest numbers of Consortium students and some of them have historically attracted many students with an eye on Wall Street, banking, private equity, or investment management.
Students today, including Consortium students, are mindful to keep they must keep options open. When they are asked to indicate an interest before they start school, they will likely show many hands. Many finance students will say they will pursue finance, plus something else. Often, that will be finance and consulting or finance and marketing.
Consortium students in the Class of '15 are similarly spreading their wings, while they have primary objectives. Over a dozen expressed an interest in venture capital and are likely aware of the difficulty in securing a position in a major venture firm, particularly one that resides on Sand Hill Road in Silicon Valley. Venture-capital firms hire MBAs from top schools and cherish candidates with strong technical experiences (and degrees), but are notably erratic in how they bring on whom they hire.
Another dozen or so are interested in investment banking. That wouldn't be unusual in any class. Despite the topsy-turvy world of investment banking (Who's laying off or reducing staff this week?), investment banking is still an important segment of finance, it will always be here, and there still remains the lure of working for such firms as Goldman Sachs, Lazard Freres, and JPMorgan.
Many more also say they will explore financial management, which captures areas from private banking and asset management to corporate finance at non-financial companies. Others are interested in finance in specific industries: real estate and energy, e.g.
The pairing of finance and consulting seems to be as popular as ever. That might be a result of some students aiming for a particular firm experience (at, say, Goldman Sachs or Booz Allen or Blackstone), hopeful for an opportunity to have a prestigious, meaningful experience in their first few years and not necessarily loyal to a particular industry. Or they wish to be in an advisory function, which is what investment banking and consulting are about.
Not many expressed an interest in community banking, insurance, or financial brokerage.
Students willing to explore multiple concentrations also suggests a few more trends: (a) They know that the optimal dream job for an MBA graduate may not yet exist or is still in the making or (b) They may not yet be familiar with industry details to know they might be suitable for a certain segment. Many MBA candidates will learn over the next two years (or after they are hired by a financial institution) they are best suited for roles in risk management, audit, compliance or research. The business-school experience is supposed to permit students to explore, get their feet wet in alien territory, and test new fields.
The daunting rat race of the recruiting process hastens the exploration effort, and that's unfortunate. It thrusts the new student into a boiling pot, where they must make career decisions overnight. Students declare where they will go to school in April or May, and by August, before they have sat through one marketing case study, they are swept into the helter-skelter pace of finding a summer internship.
For now, they get to explore, contemplate, and plan.
Tracy Williams
See also:
CFN: Outlook for MBAs, 2013
CFN: Consortium Orientation Program, NOLA-Bound, 2013
CFN: Consortium Orientation Program, Minneapolis, 2012
CFN: Consortium Orientation Program, 2011
CFN: Consortium Orientation Program, Orlando, 2010
CFN: Consortium Orientation Program, Charlotte, 2009
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