Is MBA the right path for Global Macro?

Question

Will an MBA provide access to global macro hedge funds?

My experience is more suited for private equity right now, but my undergrad was in economics and I think that is really my passion and my strength. If I get into B school, I would like to focus on economics and statistics.

So will an MBA help me achieve this goal or should I be thinking more about an MS in economics or something along those lines?

eminent · Answer

I think Wharton, Columbia, Chicago, Harvard, Stanford, maybe MIT will be the programs that open doors for you. Wharton/Columbia/Chicago will open the most. NYU Stern may also help due to location.

I really would stay away from the GM programs (i.e. Tuck, Yale, Darden, Kellogg, Ross, Haas) if you are looking at hedge funds. They get near zero recruiting from HFs.

I would try to drop your resume to HFs and network right now. See if you can land something without an MBA.

pearljam · Answer

Hey I appreciate that. I do plan on trying my luck with some funds once I officialy get the CFA charter, and I think I can network my way to meeting some of them, but I doubt much will turn up. I suspect global macro funds recruit guys with a stronger mathematics and economics background that just a BS/CFA combo.

eminent · Answer

I'm not too familiar with the different strategies and hiring needs at each of them. However, I suspect you're right - making bets on macro trends would probably benefit more from an advanced economics background than an MBA. I would also assume that value-oriented HFs, activist investors (i.e. Third Point, Pershing Square) would definitely benefit from MBAs.

One thing is for sure: It's not easy at all to break into that industry. You're going to have to seriously hustle for it and know your stuff cold.

One thing is for sure: It's not easy at all to break into that industry. You're going to have to seriously hustle for it and know your stuff cold.

pearljam · Answer

NYU has a masters of economics program that looks like it hits the right areas curriculum-wise.

It's hard to get a good picture of what the opportunities would be after that program. It was difficult to break into IB as an undergrad not going to a target school. I know "impossible is nothing," but I'd like to set myself up for a more fruitful recruiting process if I'm going to invest this kind of time and money in graduate school.

eminent · Answer

I would try to reach out to alums and current students at both programs and see what their thoughts are. Sorry, but I'm just not too familiar with MS Economics programs.

Stern vs. MS Econ at NYU may be a tough choice... but if you're looking at Wharton, Chicago, or Columbia MBAs vs. an MS Econ at NYU -- it should be a no brainer.

bsd_lover · Answer

Look at it this way - there are 2 HF centres in the world - Greenwich, Connecticut and Mayfair, London. Most funds will NOT recruit at school, you will have to do most of the work yourself. All talk of which door is opened by which school is moot point for Hedge funds. Its all about you / your experiences and how you pitch yourself. Maybe a school close to these centres of HFs (Columbia/NYU/Harvard/MIT/Wharton) will help. Chicago might help because of its superb reputation in finance. I'm at LBS and I'll be looking at funds around London. But, its not easy and be prepared to do it all on your own. Even within funds, you will need to figure out which are the good global-macro funds on your own. Then you will need to go to them and show them what you offer.

pearljam · Answer

I get it. This was what I had to do coming out of undergrad at a state school and applying to investment banking. I was hoping the post-MBA path would be a little easier if I went to the right school, but I guess nothing worth getting in life is that easy!

eminent · Answer

If you want to apply to Columbia, I'd highly recommend ED. RD is very difficult to gain admission during (comparable difficulty to H/S/W).

pearljam · Answer

Thanks for the tip.

DrSatisfaction · Answer

hey pearljam, are you applying for 2010? i'm interested in global macro too...that's pretty much all i want to do coming out of an MBA, although i know it'll be pretty tough to get into the sector.

anyways, anyone else have any suggestions on how to go about this? i have pretty good background in banks, good understanding of how to trade various products and risk hedging, and also experience in wealth/asset management. i'm also just naturally attracted to trading a macro strategy (since my background in undergrad was economics).

i also have pretty much zero interest in doing pure IB work after an MBA. neither am i interested in PE or VC. i really hate analyzing individual companies and poring over their financial statements or doing corporate valuations. and finding takeover targets and such nonsense.

ideally i'd want to get into a HF or do investment management on the buy side. as an alternative i'd like to trade on a prop desk for a big IB. a further fallback is S&T in general and then try to switch to the buy side later. what do you guys think about this game plan? is there any other way into the HF industry other than sheer luck?

also, for those of you that are in the field already, what do you guys think about working for a large sovereign fund like the CIC or Temasek? are those reputable enough on wall street or in london for career switches or other opportunities later?

thanks!

pearljam · Answer

redacted

3underscore · Answer

I feel like such a doom-monger on here sometimes.

The only school that truly makes a difference is Harvard, through its alum. Wharton maybe, but Harvard definitely works. Otherwise it is all on your own work and how you make it happen - people do, but they are in the minority, their methods vary, but they are certainly committed to what they are doing.

Cutting youself to a niche in HF is ridiculous - you are in no position to be anywhere near as picky, save for working on a sell-side prop desk or something similar.

As for background - there are hundreds, if not thousands, of people who have good risk management knowledge, investment background or knowledge of trading. DrSatisfaction - your fallback order is where you are likely to start as it is currently 2009 and there are tens of thousands of people who know way more, have contacts and experience, who are walking the streets of major financial centers. Even in global macro you are going to need to invest in firms and short firms - you aren't going to get anything investing in fixed income, it is all about some form of neutral play typically, so you need to look at firms. I can't see how you can be interested in HF world, but can't be bothered with the reading up on firms "nonsense". If it isn't a firm, it is a 200 page offer doc on a CDO, CLO, CMO, RMBS, CMBS, CDO^2, synthetic....

in other words, there is no glory job in making a crapload of money in the market simply doing fun stuff.

DrSatisfaction · Answer

I see what you're saying here, but personally my experience has been in FX, interest rates, commodities, and some credit derivatives. So as you can probably tell, I am really not interested in doing a financial analysis of an individual company. I would be a pretty bad candidate for pure IB or PE since I have no interest in it.

That being said, I have set my expectations realistically and I'm not saying I have to work for a HF. I'll aim for that but really I'll be okay working on the sell side for a few years before trying to switch over (or even *gasp* try to start my own HF). I think I have some edge in my experiences across all these macro related products. Of course since I also have experience as an Investment Advisor for high net worth private clients in China, I think can offer a lot to any HF that's seeking to sell to China. That's the angle I'm planning on selling myself to HF's anyways...we'll see how far it gets me. The economy's so bad right now I'm not sure how it will be by the time I'm done in 2011 or 2012. However, I'm okay to fall back to a S&T desk (probably sales, given my background and linguistic advantages, although I'd prefer trading), and I think all my experiences will still be applicable there.

Overall though, given the connections I've made in China while working there, the clients I've met, and the skills I've developed there, I think I'd be able to bring in quite a bit of money to HF's. I also think that if I can partner up with a few experienced traders then I'd be fine to set up my own fund with money from Chinese investors, so that's always a (riskier but higher reward) option.

I'd like to hear everyone else's thoughts on my plans. Criticism is definitely welcome and I'd like to get feedback from all you guys who have already been through (or are currently going through) the recruiting process. Thanks!

3underscore · Answer

The china angle should work pretty well.

I will be back (working all hours at the moment) but I don't intend to discourage at all, more forewarn. With more detail, I can see where you are coming from.

HBS2011 · Answer

I think I have a similar interests to you going forward. my background is in sovereign DCM so I do have that advantage. However, Im not sure how much Oxford is going to help you though - would have thought LBS would be te best option. Ps - with regards to approaching the funds, is it better to intern there over the summer or do you intern at a bank and join the fund straight after ?

Plus i also heard from a colleague that it makes sense to have some experience in flow trading before moving over to the HF/IM side if you hve no trading experience at all - ie do a few years first on sellside and then move to the buyiside. Is that really critical or can u just move there directly ?

Is MBA the right path for Global Macro?

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