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Breaking into IB/PE/AM without pre-MBA exp at top school?

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Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 04 Jul 2013, 11:50
Hello,

I was wondering how much luck people at top schools (top 7 US, LBS, INSEAD) are having for trying to break into finance from a non-finance background? I know that this difficulty level changes drastically depending on the economy and how the finance industry is doing, but I'm specifically interested in leaning about people's recruiting experiences from 2012-2013, and especially for the summer associate internship position at bulge bracket firms.

Most of my pre-MBA experience has been at a boutique strategy consulting firm, and I'm debating whether to start my MBA next year or wait another year to try to break into finance. I will have most likely passed my CFA Level 2 before next fall and have a very high GMAT score, and I believe that I have strong interpersonal skills. Thanks!

IB = Investment banking
PE = Private equity
AM = Asset management, including hedge funds, mutual funds, etc.
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 04 Jul 2013, 16:37
If you have CFA lvl 2, I don't think you would need an MBA.

That being said, lvl 2 is the weed-out level, so don't put your eggs in the no-MBA route until you've passed it.
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 04 Jul 2013, 17:12
dave785 wrote:
If you have CFA lvl 2, I don't think you would need an MBA.

That being said, lvl 2 is the weed-out level, so don't put your eggs in the no-MBA route until you've passed it.


Hi thanks for your input!

Most associate level recruiting at bulge bracket firms occur at the MBA level or direct-hires from current analysts, so I think that pursing for an MBA would offer me the best chance at breaking in and offer me the most possible choices should I receive multiple offers. I also plan on studying for an MBA for long-term reasons, such as networking/making new friends, breaking into the Western European market (targeting LBS and INSEAD as my top choices), and intellectual curiosity.
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 06 Jul 2013, 10:25
Out of the career options that you list, only Asset Management would really care that you had bothered to do the CFA.
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 06 Jul 2013, 14:35
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appliedsums wrote:
Hello,

I was wondering how much luck people at top schools (top 7 US, LBS, INSEAD) are having for trying to break into finance from a non-finance background? I know that this difficulty level changes drastically depending on the economy and how the finance industry is doing, but I'm specifically interested in leaning about people's recruiting experiences from 2012-2013, and especially for the summer associate internship position at bulge bracket firms.

Most of my pre-MBA experience has been at a boutique strategy consulting firm, and I'm debating whether to start my MBA next year or wait another year to try to break into finance. I will have most likely passed my CFA Level 2 before next fall and have a very high GMAT score, and I believe that I have strong interpersonal skills. Thanks!

IB = Investment banking
PE = Private equity
AM = Asset management, including hedge funds, mutual funds, etc.


The gateway into finance post-MBA for career switchers is investment banking. In fact, traditionally most folks getting hired directly into associate positions from MBA programs don't hae prior investment banking experience (since the ex-analysts who go to b-school do so precisely to get OUT of banking, not to return to it). You'll get a hodgepodge that runs the gamut. And it's from banking where folks transition into the buyside: usually while they're still associates, or much later when they're MDs.

Buyside jobs (PE, IM, HF, etc) tend to hire those with pre-MBA experience in investment banking or on the buyside. So yes these jobs are pretty much closed to career switchers (there's always exceptions but for the most part, if you're new to finance, then investment banking is the gateway).
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 07 Jul 2013, 05:17
Ok thanks very much for the information guys! It's all been very helpful.

Although I would still like to hear from people (or people who know of people) who have had recent experience trying to switch into finance via the MBA.
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 31 Aug 2013, 06:22
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I have no pre-MBA finance experience and am going to attempt to recruit for buyside asset management jobs. I'll let you know in 9 months if I've got a summer internship or not!
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 31 Aug 2013, 14:52
mappleby wrote:
I have no pre-MBA finance experience and am going to attempt to recruit for buyside asset management jobs. I'll let you know in 9 months if I've got a summer internship or not!


Good luck! Please keep us updated!
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 09 Dec 2013, 23:33
thank you so much
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Re: Breaking into IB/PE/AM without pre-MBA exp at top school? [#permalink] New post 10 Dec 2013, 19:13
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FYI, I found this on another website and I think it sums up the difficulties of the transition pretty well.

Quote:
Making the Leap: Do You Have What It Takes for Investment Management?

According to McKinsey & Co.’s report The Asset ManagementIndustry

In 2010, the top-ten asset management firms each average almost $1 trillon of assets under management (AUM). Consider, also, that McKinsey estimates that “as much as 25 to 30 percent of leading firms’ earnings will be derived from products that aren’t even offer(ed) today…” With asset management firms holding huge pools of capital seeking to find an investment advantage for clients, it is clear that there will be new demand for talented investment professionals who have the ability to deliver innovative products to market and capitalize on investment opportunities in a rapidly evolving industry.

Investment management (IM) as an MBA career MBA career is one of the most difficult to break into. Getting up to speed on the asset management industry alone presents a significant challenge to career switchers, not to mention having one’s own compelling investment ideas to share with skeptical portfolio managers. And career advancers will still find themselves facing plenty of stiff competition from market-savvy peers for the chance to work at the Fidelitys, Vanguards and Wellingtons of the world.

Whether one pursues equity research, fixed income or any one of several different investment vehicles in which to focus, an investment management career provides attractive salaries and performance bonuses, and perhaps most importantly, the opportunity to satisfy a personal passion for investing. And with a work/life balance ‘slightly’ better than that of their consulting and banking peers, it’s no wonder that MBA students MBA students make IM their career choice. Of course, the question is – can they make the leap?

Assess Your Pre-MBA Work Experience
Contrary to what many new MBA students may believe, there is no common denominator of pre-MBA work experience or education that makes a student successful in the IM job search. However, there is one consistent characteristic that is displayed by all students who do manage to land in the industry – a passion for investing.

That said, prominent asset managers do seem to heavily favor those with prior industry experience. This may give these students a distinct advantage for larger, well-known firms that actively recruit from their MBA programs. If you’re a career switcher, this isn’t reason to look at your Plan B quite yet. Your ability to show intellectual curiosity, communication skills, sound financial analysis, business acumen, and a ‘nose’ for identifying attractive investments will make you an interesting candidate to quite a few firms. Add to that any evidence of investing – managing a dummy (or actual) portfolio of equities and fixed income investments, real estate, or other types of investments – and you’ll begin to craft a pre-MBA story worth taking a look at.</p>

Prepare Yourself Through Your B-school Experience
Perhaps more so than other popular MBA careers such as consulting and investment banking, being a competitive candidate for IM requires many hours of self-study and research – developing an intelligent opinion on the markets and the macroeconomic environment, researching investment ideas (typically several stock pitches) and continuously refining those ideas as industries and markets change. It is a tremendous amount of work. Add to this the almost inevitable off-campus search that most IM-focused students will have to conduct, and you can quickly see why the barrier to entry is quite high. A successful IM job search will require a singular focus on landing a position, starting, quite literally, from the first day of your MBA program.</p>

The Sharpening Process
What allows MBA students to make dramatic career switches is what we term ‘The Sharpening Process,’ that occurs during both the first and second year of a full-time program. Through carefully chosen academic work, experiential opportunities and a steady acquisition of industry knowledge you can hone your candidacy for an IM job throughout the first year of school. This is critical, particularly for career switchers, for who the valuable experience gained in an IM internship is absolutely essential to be considered for a full-time position. Those first-year students who are able to methodically go through this sharpening process while starting to cultivate their ever-growing network of IM professionals, will greatly increase their chances of finding themselves in IM for the summer. Some key elements of this sharpening process are below:

Classes – The fundamental accounting and finance skills used to evaluate companies are indispensible for most IM positions, particularly those in equity research. A solid understanding of accounting and finance will help you assess the overall health of a company’s core business and whether or not that company’s stock would make a good investment. For accounting, courses in basic accounting, footnote accounting and financial statement analysis should serve you well. Complement these with finance courses focused on investments and corporate finance. In addition, courses in competitive strategy and marketing will provide useful frameworks for company analysis and understanding key drivers of value.

Student Groups – Your school’s investment management club will be an indispensible part of your preparation, providing you with invaluable resources – second-year mentors, interview prep guides, resume reviews and mock interviews, not to mention much needed encouragement. The importance of supportive classmates and peers cannot be overstated. The club may also give you opportunities to test your investing skills through a student-run investment fund. For example, the Wharton Investment Management Fund allows students to deliver stock pitches to club members for feedback, and for a few exceptional students to have direct decision-making responsibility for an $800k small-cap value portfolio as a ‘Fund Fellow’.

Experiential Learning – In addition to having your own portfolio of active investments and participating in a student-run portfolio, other opportunities are available to hone your investing skills and show your demonstrated interest in IM. Various schools have stock pitch competitions, which are either individual or team-based, and that allow you to test the strength of your investment ideas against other students and schools. IM-focused conferences such as the Annual Columbia Investment Management Conference held by Columbia Business School provide forums for you to learn about the industry while networking with experienced professionals who just might be hiring.

Networking – Early commitment to the off-campus search process should be a key part of any IM job search strategy. The hyper-competitive recruiting process for a handful of IM opportunities on campus will likely require you to network heavily with off-campus firms that you will find through your own research. Mentally prepare yourself to reach out to dozens, if not hundreds of firms, as you’ll find that the further you go off campus, the more likely you’ll find firms that would be open to taking an intern for the summer (or for the second year, a full-time analyst).

Knowledge Building – While you will learn a lot about the industry through your classes, the school’s IM student group and experiential learning opportunities, you will still need to bone up on your own market knowledge outside of school in order to be ready for an IM career. Consider seriously taking the CFA exam (Levels I, II and III), optimally in June, when you’ll hopefully have more time to study with your internship search already wrapped up. Also, become a regular reader of the Wall Street Journal, Barron’s and The Economist, all of which will help you develop an informed opinion on the markets and the overall economy. Several must-read books to put on your list – Security Analysis and Business Valuation on Wall Street (Jeffery Hooke), Valuation: Measuring and Managing the Value of Companies (Tim Koller, Marc Goedhart and David Wessels), Competitive Strategy (Michael Porter) – round out the set.</p>

Interview Preparation – In addition to juggling classes, keeping up with the markets and doing recruiting, expect to add one more ball to the juggling mix – the stock (or other investment) pitch. As a general rule of thumb, if you are a career changer you should expect to develop 1-2 stock pitches and touch on 1-2 other stocks in your portfolio. Each pitch will take you about 20 to 40 hours to prepare. Career advancers will be expected to have 2 good pitches, possibly of stocks they have previously covered. Still, the career advancer can expect to spend between 10 to 20 hours preparing his or her pitches for interviews. Add on top of this the fit portion of the interview (i.e. why you want to do IM, why you would be a great candidate, why do you want to work at our firm, etc.) and you are looking at several hundred hours of preparation for the serious candidate.

Most students use business school to make a change of career and switching careers into investment management is no exception. While it does take a tremendous amount of work to successfully land that IM job, it’s also very possible if you’re willing to do the work and stick out your search until you find what you’re looking for. While the leap to IM may be a long one, focusing on the sharpening process above will ensure you’ve got a running start.

Re: Breaking into IB/PE/AM without pre-MBA exp at top school?   [#permalink] 10 Dec 2013, 19:13
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