Core Schools
How do banks determine what their core schools are?
I was on an info session webinar for an EB and the HR rep said they interview students from core schools before interviewing kids from non-core schools.
But I’m honestly confused as to why firms have such strong preferences for certain schools. Technically speaking, if the aforementioned EB could fill their entire analyst class with kids from core schools who interview well, they would. But in doing so they would miss out on non-core-school kids who could have been more technically strong/more well-liked.
Banks determine their core schools based on a combination of historical success, perceived prestige, and efficiency in recruiting. Here's a breakdown based on the most helpful WSO content:
Historical Success: Banks often stick to schools where they've consistently found strong candidates in the past. If alumni from a particular school have performed well, banks are more likely to continue recruiting there.
Prestige and Signaling: Hiring from Ivy League or other top-tier schools is often seen as a "safer" choice. As one WSO thread mentions, it's a bit like the saying, "No one ever got fired for buying IBM." These schools signal a certain level of intelligence, work ethic, and capability, even if it's not always a perfect indicator.
Efficiency in Recruiting: Core schools often have established pipelines, making it easier for banks to recruit efficiently. They can attend career fairs, host info sessions, and conduct interviews all in one place, saving time and resources.
Alumni Networks: Alumni from core schools often play a significant role in recruiting. They may advocate for their alma mater, ensuring that their school remains a priority for the bank.
Volume and Acceptance Rates: As noted in WSO threads, some banks focus heavily on core schools because they can fill their analyst classes with candidates from these institutions. For example, if early rounds of recruiting at core schools go well, banks may not even need to look at non-core schools.
While this approach may overlook strong candidates from non-core schools, banks prioritize efficiency and perceived safety in their hiring decisions. However, motivated candidates from non-core schools can still break in through networking, strong technical skills, and exceptional interview performance.
Sources: Why so much focus on prestige in IB?, What WSO get's wrong about "target" vs. "non-target" - Employer View, Barclays SA 2020, Why don't banks target many state schools?, Comprehensive List of Target Schools for Investment Banking
I think it’s reasonable to assume the top 5% of students at most top 50 schools are as “smart” as each other. The variance in the capability to do the job is not significantly different between the average Dartmouth kid and the average Berkeley kid. So you might as well take the kid who grew up more like you and your clients (i.e. the Dartmouth kid)—there’s a sense of trust that comes with going to one of their core schools.
Very simple. Typically three ways they come about:
1: traditional prestige, cant go wrong with hiring them
2: Hired someone from the school and they are i) top performer and ii) pulled a shit ton of kids into the firm
3: MD went to that school
These are all to reduce the burden of recruiting. Its a huge pain for the recruiting team if each spot is a free for all. The job is not some rocket science where you need the absolute best of the best (although ideally it would be great) just need to be good enough. The returns you get from trying to uncover every diamonds in the rough (who will leave in 2 years) is not worth the effort.
Wanted to follow up here. I should clarify that this EB was Moelis and their 4 core schools are UPenn, Indiana, UT, and Michigan. So not sure prestige was a significant driving force. But I think your 3rd point is spot on. Whenever an MD goes to a certain school, a bank always seems to recruit out of that school
Yes and I work here. Prestige is still a significant driving force of how we hire. We give a higher budget for Wharton recruiting than IU fwiw.
Honestly at age 19 there's not some wunderkind who is better than everyone else in the context of IB recruiting. And even if they are, it's not like they will drive any additional revenue to the firm - the bar for banking is really "good enough", not "the best ever".
The only filters you have available at this point are GPA, school, not being a total weirdo, and having maybe one prior internship. EBs are pretty lean HR-wise and can be more prestige-focused than BBs (often have higher GPA cutoffs too) so it's not at all surprising they focus on the target schools first.
Everyone in contention will know technicals, so that is more checking the box than standing out.
I think you underrate the resourcefulness of the kid that goes to Harvard et al. Either this individual was (i) the smartest kid in his or her high school (ii) has wealthy parents that did everything in their power to ensure that their kid gets into Harvard et al. As an analyst that is not bringing in business, you would probably prefer (i), but at the more senior level you'd prefer (ii). Person (i) will get the job done and cause you no headaches for the most part, but person (ii) will be well-connected and have actual relationships that will help the bank bring in business. I met someone from Harvard that was unimpressive, but the client is unlikely to pick up on that from their brief interactions.
In what way was the Harvard person unimpressive?
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