How do business schools view applicants from hedge funds?

I also posted this in the business school forum, but no one replied.

It seems like fewer hedge fund analysts consider going to business school. How do admissions officers view hedge fund analysts who have also completed a two year investment banking stint?

 

I wish I knew the answer, but here are some thoughts:

Leaving a HF for B school is a relatively uncommon path, which is worth something in the admissions process. Having said that, you will still be lumped in with the finance fold, which doesn't seem to be getting as much love as other areas these days. I've spoken with former admissions people and they seem to suggest that the HF you come from isn't quite as relevant as the applicant may believe. For example, it's unlikely they will understand the difference between working at Baupost and a no-name fund in Colorado (that's an exaggeration, but you get the idea). It's more important to be able to talk about your impact, what you learned, and where it's going to take you.

I also get the sense that you can't be "just a finance guy." You really need to show that you have other interests and motivations (other than money). Also, I think that some schools may be more accepting of a candidate like you. You'll likely have a much better shot at Columbia than Tuck.

 

I don't know anyone that worked at a hedge fund at my school. Other than that one anecdote, I don't have much to offer.

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I know of 2 or 3 in my class but that's a pretty small percent of the student body. It's really hard to say though how much of that is selection bias and how much is being filtered by admissions staff. If you're already at a hedge fund why would you give that up for 2 years of lost income, $150,000 in expenses and no guarantee you'll get back into a hedge fund when you graduate? If you want to switch careers entirely then I can understand but if you're on the buyside and want to stay there an MBA doesn't make a lot of sense so there probably aren't that many HF applicants in the first place.

 

Generally MBA programs look favorably on people who work in an industry / job function that MBA programs are placing their students into. Hedge funds and buyside finance in general are pretty hot right now for MBA students -- your work experience will definitely be a plus on your application.

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i'm in the same spot, except i work in a different industry (commericial real estate). fyi, i'm 25. i eventually decided against it for now, but i am prepping for the gmat just to keep the option open.

what's holding me back is:

*mba-level recruiting is still atrocious; a recruiter i work with told me that i am competing with t20 mba's for entry-level jobs. *cost, both the sticker price and lost salary. *debt. this is a big one. i dont want to be encumbered with debt, especially when i am young.
*i already have an undergrad biz degree from a school with a good network, so its not like i am going to learn anything new or benefit much from different network.
*mba's are starting to get a reputation for being over-valued.
*i would only seriously consider t10 schools or a t20 school that paid for my tuition (unfortunately, this is unlikely). *part-time is out of the picture since there are no t10 part-time programs in LA (where i work). *i like socal and i want to stay here. *i dont like my job, but i am learning a lot more than i would in a classroom and i get paid to to do it.
*my industry overall doesn't really value mba's much more than ugrads.

with the only upside being:

*higher potential salary...maybe. *option to swittch careers. *prestige, which is so gay, but it is what it is.

if i were you, i would hold off for another yr and reassess the situation. you're young, but i think 27 yrs old is the upper-limit for t10 programs (google: mba apply blog; for some stupid ass reason, t10 schools strongly prefer younger guys). prep and take the gmat if you haven't already. take a peek at some mba application essays, they tend to be annoyingly tedious. basically, just prep for it for either this yr or next.

either way, it's on you. good luck.

--- man made the money, money never made the man
 

Why leave a decent paying job and go for a MBA without specific career goals? I agree that CFA is more beneficial for now, even CAIA would be cool. Stay put unless you are leaving your job with very clearly defined goals of what you want post-MBA.

 

gettin an MBA (like all other paper certs) just makes you more employable. Ppl who want career changes or intend to increase their salary (from ~40k to possibly ~90k and more in general, not pertaining to finance only) pursue MBAs... you have a enviable job that seems pretty stable... i would definitely discourage it, as MBAs don't teach you anything practical about finance, it's more about the critical thinking and problem solving skills, and "soft" skills and the working in teams stuff. You learn real finance on the job

 

If you're at a fund I don't understand why you would leave to go get an MBA. I also don't understand why there isn't room to move up in your fund if you perform. The latter tells me there is something wrong with either you or the fund. I would try to move to a new fund and during the interview process make sure you explain you expect opportunities (i.e. your own capital to invest) to move up as you prove yourself. There is no reason to add letter after your name once you are already in a front office seat at a HF. Spend the time you'd be using to get your CFA to generate actionable trade ideas and monitor the P&L of these ideas if you don't already have a book. This will do a lot more to keep you in the industry and moving up then a few letters that have little-to-nothing to do with an investment role at a HF.

If you find yourself out of work for an extended period of time go back and get your MBA or EMBA depending on how old you are at that point.

 

CS Arb I disagree for a few reasons, but again it depends on the circumstances.

One you could not like the people or the current strategy of your fund. As we all know it's quite difficult to move around once you're on the buyside. So let's see you're doing distressed debt and you want to move in equity long/short or vice versa - getting an MBA could be a way to switch strategies or move to a better fund. Again this isn't optimal, but it is an option.

Secondly and I think this may be the case for more people is wanting a 2 year break and not being sure if the hedge fund route is what you want to do for the rest of your life. It is a lot easier to be 35 and decide you want to switch careers with a Harvard MBA and 7 years of hedge fund experience vs. 10 years of HF experience. Also for some people after doing investment banking for a few years and working at a hedge fund for a few a break is something that could be priceless. Obviously it is extremely expensive from not just the cost of school, but the opportunity cost. These things all need to be weighed when deciding, but I don't think your blanket statement is completely fair.

 

having just gone through this process, i'll be glad to share my limited insight.

you won't have much of a shot at HBS. sorry, but they really prize the extracurricular leadership feel good stories like starting an organization to help with TB in South Asia in your spare time.

Wharton and Columbia are very similar schools, both emphasizing quant and being data-driven, and I'd say they are within your striking distance. I'd focus your efforts there. Take a look at Columbia's program, if you like it I'd apply early decision. It's binding, but definitely demonstrates a strong desire to their adcom and may prove to be an easier path. CBS is consciously trying to improve its brand to a top 5 school (and according to FT it is) and is always looking to improve its yield. Wharton also fits your profile but it's hard to say w/o more info.

Don't know much about Kellogg, but I don't see why not as it's an MBA business schools">M7 like CBS and Wharton.

 
keensetofpeepers:
you won't have much of a shot at HBS. sorry, but they really prize the extracurricular leadership feel good stories like starting an organization to help with TB in South Asia in your spare time. .
This is a little overblown. Every year there are stellar IB - > PE kids who get into HBS who didn't have time to save the world while they were doing cash flow projections at 3:00am. There are only so many ridiculous superstar entrepreneurs who also cured malaria and solved the Chinese Tibetan crisis before the age of 26. HBS is just like every other school in that they love to play up the salaries and positions of their alums - which means they have no choice but to take top notch but otherwise "normal" finance folks. They key is having a blue chip (or several) finance firms on your resume, a great GMAT, and a killer resume. IMO if you have a solid background (top 10 undergrad, blue chip IB, top PE fund) and a good GMAT then the HBS application is well worth the $250.
 

my initial post came out a little more negative than I intended. by all means apply, just know that HBS and Stanford are in a league of their own in terms of applicant pool and can afford to be very picky (so no, they are not just like any other school).

also, how old is the OP? age is a MAJOR factor at HBS.

 

I will be 27 years old when I apply. I worked at a top bank and now work at a small fund, but the work I've done there at my fund is pretty impressive for someone my age. The size of the team is quite small which results in significantly greater responsibility.

I understand HBS will be a stretch, but I might as well take my shot. Also I've been in NY for 5 years now and would love to move somewhere else, hence Columbia is not a top choice.

Thanks for the feedback.

 

HBS may be hard. They just don't take many AM/HF guys. Lots of PE, some bankers, and tons of consultants. I can think of one HF (giant), a pension guy, and maybe Bridgewater? And that's it. Out of 900.

Take it for what it's worth, but probably just a tough sell for a general management firm, especially now that they seem to be interested in refocusing on GM and manufacturing...

 

Madgames, you wrote "but the work I've done there at my fund is pretty impressive for someone my age. The size of the team is quite small which results in significantly greater responsibility. "

That is the key point for you to demonstrate in any application. Not everyone can say that, nor are they articulate enough to be able to demonstrate it to the admissions committee. Of course HBS is hard, but if you feel you are ready, why not apply? You are looking at other schools, and that's good risk management.

Stanford is hard too, and appears to like some cross-cultural experience, but other than recommender fatigue, what's the downside if you really want to try?

As for suggesting other schools, as someone else asked, what do you want to do with your "one wild and precious life.?" http://www.hbs.edu/mba/perspectives/PortraitProject/

Betsy

You didn't mention Booth, MIT,

Betsy Massar Come see me at my Q&A thread http://www.wallstreetoasis.com/forums/b-school-qa-w-betsy-massar-of-master-admissions Ask away!
 

There is a big difference between having gone to Duke (and Georgetown to a lesser extent) and having gone to wash u or usc. You should be more specific in the future.

 

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