Part of an ongoing series "MBA in Finance: Forget It?"
My question:
Given the weakness in investment banking, hedge funds, and financial services in general, how do you react to applicants who say they want an MBA to enter IB, PE or a related field that has been devastated by the economic downturn? Is the reaction "What planet have you been on?" Or, are you willing to consider those applicants because you feel the market for these skills will come back in a couple of years? Would you like to know that IB et.al. is the primary goal? Would you like to see a Plan B? Is your reaction different if the applicant is coming from IB or a related field as opposed to someone seeking the MBA to change careers?
Bruce DelMonico, Director of Admissions at Yale's School of Management, responds:
Thanks so much for your email. That’s a really good question. Our reaction is definitely not “what planet have you been on.” We understand that finance hiring is down right now, but i-banking, private equity, and finance generally are not going away, so we want to make sure we continue to train future leaders in these areas. The same firms that came to campus to recruit last year are back this year (other than, of course, those like Lehman and Merrill that have morphed into Barclay’s and B of A). They are still making offers and hiring our students, just not always as many as in the past, for obvious reasons.
What they and other companies who recruit here tell us that they learned from the last downturn, where they stopped hiring entirely and realized later that there was a gap in their talent pool. So firms may be scaling back in their hiring given the current financial situation, but they realize that they still need to cultivate talent and promote a steady stream of employees through their ranks. We’re taking the same attitude – finance may be down right now, but it’s not out, and we want to be there helping with the solution. It may be easier and more natural to run away from the industry because it’s down, but I think the better – and bolder – move is to stay in when things are down and try to figure out how to make them better. That’s what we hope our finance students will do.
That got a bit philosophical near the end. But the bottom line is that we’re not trying to market-time things here – we want to bring in the strongest class possible. Who knows what the economy will be like two years from now, when these students will graduate. If they’re strong candidates and can articulate a compelling reason why they want to go to business school, we will give them a hard look. In terms of people coming from i-banking versus those who are changing careers, for everyone we look for the same thing: are you willing to put in the effort to make your goals a reality? It’s very tough to go straight into a hedge fund or PE firm from business school (although we do have, for example, a first year who beat out a lot of top candidates from other schools to land an internship this summer at Paulson & Co, so it is possible). Students should be willing to take the steps necessary to position themselves for success. So if they don’t have a finance background, they need to know that they’re not going to jump straight into PE. They need to get more general finance exposure first, build their skill set, and work their way up. The same with students who have a finance background but who want to move higher up in the finance food chain. It’s a matter of being patient, having a plan, and then executing on it. We’re looking for people who understand this and are willing to put in the effort.
