The Economy

Question

Fellows, I just wanted to see what everyone is thinking about regarding the economy. I am applying to Chicago, Wharton, Harvard, Stanford, and Columbia to get myself into investment management when I graduate (2011). I have a good job managing environmental projects for a major oil company, but I enjoy IM more and would like to get into that field post-mba. But the recent events in the economy have got me thinking if my timing to pursue an MBA and change careers is a good one. I am not sure what the IM job market will be like and if its worth me leaving my decent paying job and take on the full time mba risk (and the associated debt). What do you guys think??

agold · Answer

It's a difficult field for career switchers to break into, regardless of the economy.

Have you been working towards a CFA and/or making contacts in the industry?

jigar34 · Answer

I have not been working towards a CFA, i figured since I don't have a propert business management and finance background from my undergrad and graudate studies, I should work towards my MBA first then worry about the CFA exam. I know people that know people in the industry, but I have not yet been touch with them. I am pretty motivated, not too dumb, and I really like IM....so I am hoping an MBA from one of the top programs, my drive and interest in the field, along with some investment stuff I have taught myself, can help me get into the field. Any thoughts?

ps. I am in so cal also, in Brea.

ps. I am in so cal also, in Brea.

agold · Answer

There is no absolute right or wrong answer here. You can make of your situation what you will.

If I was in your shoes, I would wait one year, wait for the market to settle down, and in the meantime begin studying for the CFA L1.

sonibubu · Answer

I've heard the CFA is very important for IM; if you can manage apps and getting at least CFA L1 by matriculation then go for it. Otherwise I like terp's idea.

cougarblue · Answer

IM is a difficult field and I think one that is relatively less open historically to outright career changers than IB or MC. However, there are a lot of different kinds of firms within IM, so if you went to a top b-school, chances are you would be able to find something. Without knowing exactly what you're looking for in IM, to say nothing of your current career prospects, I would encourage you to attend one of those schools if you get accepted, regardless of the economy/year.

jigar34 · Answer

Thank you all for your reply. I have always tried to make a career out of what I enjoy, and thats why i studied environmental engineering and now manage environmental clean up projects. But my interests have changed now and I enjoy investment analysis more. And there are many firms, mutual fund companies, hedge fund companies (yes, many still exists and thrive in this type of a market), even banking institutions that I can get into. I was just a bit worried since quitting a job, even for a top MBA program, has some risks. Plus, I figure if not IM, an MBA from a top program should land me a good job somewhere. Thanks again.

Anonymous · Answer

I think you should do what you want to do, regardless of the economy. Whether the economy is bad now, next year, or the year after, it will get better eventually. The ups and downs are normal, this year is especially difficult, but who is to say next year won't be worse? But in ten years from now, will you kick yourself for not getting that degree because of the state of the economy in 2008? Probably, so do what will make you happy!

refurb · Answer

I agree 100%. You need to think long-term. If it's something you love, go for it and make it work. You'll be much more satisfied than if you compromised.

RF

riverripper · Answer

With your background you would have a very good plan B if plan A doesnt work out at school. You can do banking recruiting and if you get no luck you can then go for big oil or something. I also suggest you talk to the energy clubs at various schools, people in ours come from tons of backgrounds and have tons of different goals...GM, Marketing, Financing, HF, PE, you name it someone wants to do it. I would say its more common for people in our club to do finance functions related to energy. Big bank energy funds, HF related to energy, and lots of PE and VC. I guess PE companies are looking for a lot of people with energy backgrounds and oil is popular with them these days, supposedly certain prior industry careers are sought after more than previous finance experience. As I was told its expected that you will understand finance coming out of an MBA program, maybe not the extent of a former banker but enough to function on the job. The firms value your specialized knowledge more than your ability to crunch numbers and figure the number stuff is easier to learn on the job.

Honestly I dont see there being huge improvements for banking jobs going forward for a while. So what you see today isnt going to be a lot different than what its going to be for the next few years. The government, mergers, and opinion of the banking industry are such that its going to hold back companies from their risky but potentially highly profitable practices. The jobs will be there but not super lucrative like before...its also going to be a while before people trust IM and HF with huge amounts of their money. There is going to be a lot of fear for a while and people will be playing it a lot safer. I dont think we will go back to people keeping their savings in cash in their houses but people will be buying a lot more bonds and things with sure 5% gains rather than run the risk of losing it all.

One thing to look at is competition for the jobs, yes a school like Columbia that draws a ton of former and wannabe bankers is going to have a lot but I can tell you at my school almost no one who wasnt already in banking wants to try their luck in it anymore (lots of maybe it doesnt sound like such a good career afterall feelings)...and there arent a ton of former bankers here wanting to return to the field. A classmate of mine was talking about how their former mid market banking company is trying to recruit MBA and thinks its going to be a hardtime to get a lot of people to apply even though they are hiring. I guess they dont have enough interest at Kellogg to even fill their closed list, not sure if it is holding at true at schools where more people want banking type jobs. So I suggest reaching out to clubs at schools and ask what they are seeing for recruiting and students interest. I suggest looking at schools where the recruiters are still showing up but the students arent showing much interest in the careers...while they may not be known as much as Columbia for finance you might have a better chance for the career coming out of MIT, Kellogg, Tuck, Haas, Darden, or some other school like that. Remember several of the huge players for bulge bracket banking are now gone, the job market for them is slim so you may end up looking more at small or mid market companies and in the past these companies didnt hire from the top finance schools because students wouldnt accept offers for them over the likes of Lehman or Merrill.

kwam · Answer

I'm in the Investment Management Group and Hedge Fund Group here at the GSB and I've met many career switchers to the IM field, some of them had never worked with something related to finance. What all of them told me is that it's not easy but not impossible and you really have to network.

For Hedge Funds, usually the equity related are the ones that go to the GSB, it's not very common for Macro ones to hire here, multi-strategy hire here though. I don't know how this year will be, but I know people who got Summer Internships at Fidelity, Wellington , QVT, Core Capital, Stark, Highland Capital, Sirious, and William Blair to name a few. Many of these people have offers for full time and as I said many are career changers.

The problem is that Lehman and Merrill hired around 10% of the class at GSB (I believe the same thing happened at CBS, Wharton and NYU) so competition to these places will increase, well, actually competition for everything will increase as there are fewer companies out there. The good thing is that many companies that usually didn't hire are coming here, especially international companies: PE, IM and Banks from Brazil for instance are going to hire on campus at the GSB.

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