The Myth of the "Target School"
**Disclaimer: Semi-target Alumni**
Now that training is finishing up at my bank (GS/MS), I wanted to share with WSO how radically different the analyst class make up is compared to the pre-conceived notion of it being filled with mostly target schools.
Sure, once again Wharton put the most kids at my bank compared to any other school, but after that, there is a huge moat between the multitude of schools that make up 90% of the class. I was shocked to meet multiple people from UGA (You guess what school that is) and there was a strong representation from middle-tier big 10 schools. I met more than 3 kids from each Wisconsin, Indiana, and Penn State. Not too mention all the one off kids from schools like Colgate, Tufts, Rutgers, and Arizona State (yea, thats right). And you can count out the host of analysts from the LAC's like Williams & Mary.
It got me thinking, is the myth of the "Target School" something we make up, or is it that the Investment Banking landscape is shifting to get away from the pretentiousness of the H/W/Dartmouth WASP-ness. Target schools will no doubt continue to be a major feeder, but is their role diminishing?
Wanted to see WSO's thoughts and share my genuine surprise about the diverse representation of schools in my analyst class.
Don't know if I agree with you entirely. Yes, there are a lot of schools represented - but there seem to be 8-10 schools that dominate and the rest are just one- or two-offs (as you said). The most common schools (in no particular order) at my summer: Wharton, Princeton, Yale, Cornell, Harvard, Dartmouth, Columbia, Ross, Stern, Georgetown, Stanford. Schools that tend to be represented repeatedly (but only have a few kids in each class) - Williams, LACs, Amherst, Morehouse, Texas, Indiana, Penn State, Tufts, Baruch, Notre Dame. Granted, this is for NYC, so I'm sure this general trend doesn't necessarily apply elsewhere.
All that being said, I still think target schools are overrepresented (but perhaps not vastly so), especially in top groups. I was at one of the groups that most monkeys here masturbate to (think GS TMT/FIG, MS M&A, BX R&R), and only two kids were not from the first group of schools listed above.
Purely anecdotal, I know, but thought I'd throw in my two cents.
What about Devry?
Its a super - target. Kids from there go directly to MD
Deepest alumni base on the street.
I always thought "target schools" were schools that the BB banks targeted, i.e. held on campus recruitment on.
Sure you can be the best, most well connected, kid at Penn State one year and get in to Goldman, but for a random highschool kid to think "oh wow, this one guy got in from PSU, so can I!" it is ridiculous because they are outliers and the PSU grad might have been his fraternity president, student government president, finance club president, and have a 3.95 GPA while his dad is the executive vice president of a F500 company.
I don't know why people are surprised by Big 10 representation. They are mostly state flagships, so you always have a few in-state rockstars that turned down HYS for a full ride. The smartest guy I know did that. And don't forget, they are HUGE schools, so they have pure volume on their side. In IB, you typically have:
Michigan at the top, which is obviously a school of extremely high quality that speaks for itself.
Indiana, which has made waves recently, and most people who have worked an SA gig know has a hardcore workshop program designed around IB (look at your Rosenbaum and Pearl "about the authors")
Wisconsin, which is well-known around the country, a great value school, and always has a few kids place into high-end careers whether it be in Medicine, Law, Business, etc. Wisconsin has always been highly regarded, so I don't get the shock and awe here either.
Can always count on a Michigan kid, in any social setting (including WSO), to let everyone know how great Michigan is. Never fails. Nice try hiding it within a defense of the broader Big 10, but we know what's up.
I don't understand all the hype UVA gets. Sure, in terms of raw placement, the school might put out decent numbers, but people forget that the school is twice the size as the true targets (Duke, Georgetown, ...)
It's also still a state school, so you still get a lot of people who could have gotten into a better school, but went to UVA because of the lower tuition.
You just answered your own question. Fact that UVA's low cost attract some kids away from clear-cut targets is a good thing for UVA in terms of where it stacks up, You kind of make it sound like a bad thing.
I didn't go to McIntire but I'll tell you why I think those kids are up there with the strongest analysts I've seen over the years. I personally think there's a huge advantage to having a program where you have to compete for entry after you already got to college, instead of getting accepted out of high school. There are no duds (or far fewer) at a place like McIntire because everyone had to get to college first, compete for 2-3 semesters in the college arena and then apply. Much better measure of how people perform as adults on a level playing field. Compared to Wharton/Stern/McCombs/others where kids get admitted based on their accomplishments as teenagers living with their parents.
Arizona State is an outlier, they've always had weirdly high placement. I've worked in both banking and AM and in both cases there was the one-off ASU kid or two every summer class. I think it's because of a couple finance professors there that are aggressive about using their connections to help out their smarter students. So if you're considering ASU that's good news, but don't use it as a proxy for any random state school being a good option.
In my honest opinion target schools exists and they are not a myth. They are target because banks aim to recruit people from there, which does not mean that they feed an entire IB group with kids that go to target schools. Basically, no investment bank did OCR at my university because it is a non-targets but many people from non-targets get into top IBs
What I think is that a target makes it much more easier for a student to break into IB but I personally think that non-target students put more effort in breaking into IB when they realise how unfair their situation is compared to target school student
As a person who spent a year at a decent UC (not UCLA or UCB) and transferred to a target school, I think I can offer a credible perspective.
Target schools benefit over non-targets from the following: Network, a proven playbook, and like-minded peers.
Network: A simple fact in life is that people like to help and work with others who are similar. The lack of a network in non-targets is IMO one of the biggest drawbacks, especially if you're like me and knew no one in finance. Yes, the few non-target alums will tend to be very supportive and understand the struggle but as a student, networking is more a numbers game than "real" adult networking and this limits the amount and range of people you can draw from the well.
Proven playbook: In target schools, there are processes you can follow that significantly increase your odds in landing a finance role. Keep up the grades, contact alums, take part in clubs, do OCR, etc. Both the school and the companies basically tell you the steps you need to take to land something. It's not guaranteed but its straightforward enough. Non-targets have no playbook and you need to figure out everything on your own. Forums like WSO help but every school's situation is a little different. I was able to land a finance internship while at the UC but I was so confused while job searching for 1/2 a year and required me to do 200+ cold calls.
Like-minded peers: Ever tried doing something that your friends have no interest in helping you figure out? That shit is frustrating and lonely. Even though having peers interested in finance ups the competition, it helps a TON to have people you can talk with about how recruiting works, prep interviews, etc.
Can you make it from a non-target? Absolutely. 5-6 kids who were 1-2 years older than me made it to BB IBD from the UC. The thing is that they figured it out together and formed an inner circle that I wasn't able to be a part of. I knew pretty early on the odds were against me trying to compete on my own against UCLA, Stanford, etc which is why I made the switch.
So, all of the schools you mentioned have specialized clubs that place ~20 people onto Wall Street a year, with the exception of Indiana which is probably more on par with Michigan/UVA in terms of placement. Boutiques recruit from these clubs just like BBs do, with examples such as UGA and Moelis, ASU and Perella, Wisconsin and Rothschild, BYU and Lazard, and more.
From what I understand, it really doesn't have anything to do with family connections or x student was accepted to ivy but chose in-state (especially when ivies will let you go for free if you can't afford it). Frankly, I personally would be pretty offended if people automatically assumed I got into x bank because of connections due to the school I went to. Rather, these clubs usually end up acting as very strong mentorship programs, where juniors and seniors pass on information on how to network and approach recruiting to the underclassmen.
That doesn't mean target schools are a myth or anything. The schools you mentioned will place 3-4 kids at 3-4 banks, where the alumni networks are concentrated at. Ohio State for example places with GS and Barclays regularly, while Rutgers is a huge target for Citi. Beyond that, recruiting will start becoming very one-off. A target school on the other hand will place 3-4 kids at 15+ banks. Whereas the kid from a non-target still has to network his/her butt off at banks with alumni, the kid from a target can just relax and resume drop during OCR. At the end of the day, there is still a huge difference in terms of opportunity set coming from a target versus non-target, though that gap has shrunk tremendously in recent years and continues to do so.
Hope that clears up some of the misconceptions being posted in this thread. The lack of placement from these schools really has less to do with people not being "rockstars" or whatever, but more to do with lack of interest and information. Most people in these schools don't come from the top 1% backgrounds you see in the Harvard social clubs. As such, they don't understand the benefits of going into investment banking/the career paths that open up as a result. Doesn't mean they work any less hard - they just never possessed the same information set, and as such don't feel the same pressure as students from targets.
Perhaps a subset of the topic, recruiting at "semi targets". I think this applies to several industries, not just banking (banking, consulting, tech, even FLDPs). Use banking as an example. A semi target may get a visit from GS, JPM, MS but:
This tends to be singular per yr vs. heavy OCR at targets. They may be looking for that diamond in the rough or just trying out a new pool. The kids think "wow, GS recruits at my school" because they do one info session but then GS goes to targets and does the whole deal (coffee hours, network sessions, info sessions, investment club presentations, etc.) Can't really compare the two.
They may visit a semi target, but they're not actually recruiting for the same jobs. In IB it may be limited to certain verticals or a specific product (DCM as an example) while the M&A guys /gals are coming from the pure targets. They may need to fill a role in a regional office near by vs. NYC.
It's better than no recruiting but it's not the same as being a target. Someone made the comment of "following the playbook". That is so on point. Get good grades, join and be active in the right clubs, attend the OCR and the target kids certainly have an advantage.
Doable form anywhere, just takes far more work.
It matters more for consulting.
Kind of irrelevant to the broader thread, but this is very true. Most BBs and MMs have found value in picking the top tier of good but not great schools. Consulting firms either don't need to do this for some reason, or haven't gotten that far in the recruiting lifecycle yet.
If you look at the Big 10, Michigan and Northwestern do awesome in both, but IU/Wisco/Penn State/UIUC place fairly well in banking, but miserably in consulting. What you have in these schools are mature IB preparation programs with plenty of alumni on the street. The IB workshop/IB Club/Nittany Lion Fund/IB Academy all have the process down to a science. As far as I'm aware, no similarly reputable organizations exist on the consulting side to facilitate the placement of their members into the industry.