Hi all,
Happy new year to everyone!
During the holiday season I got to thinking about an issue that people in the IB/HF track might have faced - to do or not to do the MBA. Looking for further opinion/thoughts on this
Let me lay out my background and my though process
Background
- double degree in engineering and economics from a Tier 1 US university w excellent GPA
- 2yrs at a BB (across US and HK) specializing in M&A (Oil and Gas, Power)
- Recently started at a special sits fund
My thoughts
- Since I just started, not planning to leave for another 2-3 years at least. That said, I like to plan and start early
- There is no mandatory requirement for MBA here, so I can stay on w/o MBA as long as I want
- I feel there is a lot to learn in the HF space and the longer you stay the more you absorb
- If I do go to B-school it would have to be top 5 for the risk/reward to be worth it
- Finance knowledge: Don't need to go to a B-school to get finance knowledge - 2yrs rigorous BB experience/training + my current position has ensured that
- Networking: isn't it better to network as a market player rather than a student?
- Time: Is a 2yr break worth it? - especially at a time I would have picked up the necessary skills and be up to speed - i.e. is it better to stay on and keep learning the tricks of the HF trade
- Future opps: What if I get bored w the money management space say 10-15 yrs down the line and I want to switch lines but there is a requirement to have a MBA degree?. That said I will face the uncertainty of finding a good job post the MBA again
- Cost: c.US$250K (all in) at a top university + c.US$250K pa (Base case) of lost income for 2 yrs = US$750k total. I plan to fund my MBA with my own finances (no external support) so I will essentially be starting from 0 post the MBA with no certainty of a job - not to mention losing US$500K in income. Coming out of the MBA I would be looking at a similar salary level in the US I'm assuming?
is the right way to think about this? - My Main concern is regarding the future opps - and what if I want to leave this space after X yrs. Appreciate thoughts from the community as well as MBA grads on the above
Guess you actually don't want to be a "B4nker4lyfe" huh?
Haha, its an ironic moniker from my first year in banking. Already in a HF
If it's about the money, don't do the MBA.
Thanks! But money is not an issue. Its just a consideration I have stated to help me think more clearly
What's the point of getting the MBA? Maybe I'm just blind, but you didn't say why. You said if you "get bored 10-15 yrs down the line", but you need a plan for directly AFTER the MBA. It doesn't work as a fail-safe for a career in finance-- you get the MBA as a means to springboard your career to some "end" that you already have in mind. Sounds like you shouldn't do it unless you realize that you don't like the Asset Management space or want to move to one of the "premier" funds that recruit at exclusively at CBS and the likes. That's just my two cents.
Very helpful. Thanks.
You're right, I didn't really mention why I need the MBA - its partly due to family pressure and partly because I'm not sure whether I will NEED it in the future.
In case I do end up requiring an MBA, its better to do it now - when I have lesser responsibilities on hand, as opposed to later
If you already work in top tier shop, I don't see any reason for MBA. Who knows what you gonna miss during that two years? I know a couple of people became star analyst during 08-10 downturn at their 20s (once in decades chance to invest in almost everything) and now are portfolio manager or head of the group. People joined the same firm in 2012 may take much longer to reach the same level. It is probably the extreme case but you get my point.
However, if you are in a no name fund (yes prestige still matters in hf) and have little hope to interview at top shops , you can use schools like H/W/C/B to switch.
I'm not in the HF space but have a few close friends who are or were and I don't have an mba so take this with a grain of salt but if you want to stay in HF's for 10-15 more yrs, you're relatively satisfied with your fund (size, strat, comp, future career progression, etc.) or similar funds that you could jump to at some point if you become dissatisfied, I'd hesitate going the mba route.
From my knowledge, and correct me if I'm wrong because it's second hand knowledge but from close friends (at big and medium sized shops), an mba isn't necessary at a large number of HF's (my friends are also in the 40 yr old range so maybe it was different 15 yrs ago when they entered the space) so I don't think you'd need an mba to bounce around the HF world if that's what you want. It becomes about performance and reputation.
I'd question the value of having an mba if you decide money management isn't what you want to do in 10-15 years. At that point you're near my age and I don't know if having a 10-15 yr old mba is going to give you much of an advantage over your experience and resume. By that point you'll have built a rep and network and having that MBA won't mean much. I suppose it depends what you'd want to do and your strategy (are you a quant? Fundamental sector focused?) but, assuming you were fundie sector focused, you aren't getting an operational job in that sector because you did an MBA >a decade before, you're getting it because of your knowledge of the industry/business, reputation and network. If you want to stay in finance but in a different focus its not going to be because of an MBA either-same thing, rep, performance, who you know, etc. Basically, if you've been in the HF (or IB/PE) space and you're in your early 40's you've had success or you haven't and if you want to do something else it's not going to be a tick the box exercise job hunt. You'll want to do something else because you found something else that interests you, you want to start/acquire a business or you'll quit and take some time to find something else and very little at that point will be about having an MBA or not. Coming from the HF space into an established co operational role would be tough because you'd take a massive paycut. It would be very odd to be hired from an HF into a high paying exec role at an established company because you wouldn't want to start at much less than an exec role and it would be exceptional to be hired from an HF into a CFO role for example. You'll make the opportunity because of who you are at that point.
The MBA won't hurt but I'd weigh the financial and opportunity costs versus sticking around, especially if you think you'd be interested in sticking around the space until you're ~40.
But that's just my opinion. I'd be interested to hear other's.
Thanks for the reply and a coherent argument. +1 SB
Agree that its not necessary and that sticking around in the space would give me the opportunity to network and build a rep. Also agree on the point that a 15yr old MBA degree wont be of much use
the "prestige" argument is very much a banking mindset. The main reason to want to start at a highly regarded fund is that it LIKELY has some very smart people that can teach you something. That being said your first couple years at a HF are all about learning as much as possible. I would rather be at a so called "tier 2/3 fund" with someone that helped teach me vs a "tier 1 fund" where I was trying to figure it out on my own. Once you have the initial skill set your first couple years, "prestige" is ENTIRELY irrelevant at a fundamental shop. Can you make money? Yes, good - someone will poach you and you will be compensated accordingly.
Anyway, OP, I don't understand your motivation. Family pressure(?) Make your own decision. Given the volatility at a HF, I personally would rather have an MBA as a fall-back / reset in the event I / my fund blows up, don't want to work at a HF anymore, career transition, etc.
For pure LS fund you are right. For special situation/event-driven/distressed/activist fund, the prestige (aka the size) DOES matter.
Thanks for your reply, yeah my motivation is also the latter part of your argument - as a fall back. Family - I can deal with, they have been very supportive so far
Not concerned too much with "additional" prestige as my fund and manager are well regarded, my number 1 aim is to learn as much as I can in these first few years
But as another poster commented - what is the value of a 10/15yr old degree especially if you haven't had relevant corporate experience? Or is it just the value of the paper at that point?
+1 SB for your thoughts though
Your thought process is not very good on this topic. From a purely financial standpoint, getting an MBA would be a total waste. You might not even get an equivalent job when you exit. I, for one, would question your decision making process if you left work for school only to apply for an equivalent job once you got there. I would not hire you solely for that reason if I was the person responsible for hiring. Your job is to produce value add through decision making, after all.
However, if you want to leave entirely, it's not nearly as crazy. If you think getting an MBA will help you move easily into another career path when you are 40 - 45 years old with no relevant experience, you are mistaken. Especially since you would likely be earning much more than some 40 - 45 year old guy who has twenty years of relevant experience. Seriously imagine that you decide you want to move into a large manufacturing company after working at a hedge fund for a decade or more out of business school. They would not understand your background or how it could remotely help them (except maybe in the treasury department which probably pays dogshit or maybe corporate development depending on what you actually do now). Apply that thought process to any other industry and you would arrive at a similar conclusion.
I would suggest that you think about how someone interviewing you would perceive your experiences and decision making process at various points in time depending on what path you choose. It will all become self-evident.
If you want a two year vacation, that's another story, but just realize you very well might derail your career.
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