Why do IB firms recruit non-finance majors (both undergrad and postgrad) from Oxbridge, LSE, and LBS? I get that these schools are target, but if someone’s studying history or philosophy instead of econ/finance, what makes them just as attractive? Is it purely brand name and networking, or do firms actually see value in non-quant backgrounds?
Almost all my Global MiM seniors at LSE went to IB.
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It’s not limited to IB; law firms do the same.
I honestly don’t see an issue with that. University isn’t a training programme—it’s meant to be a time for expanding knowledge and horizons.
They’re all still smart, just not specifically trained in spreadsheets.
Besides, most IB and law firms have training programmes that allow them to catch up quickly. It’s not rocket science.
This isn’t just the UK but everywhere and the same applies to loads of “top” careers out of university
What you study is (almost) irrelevant for IB but aptitude is key, and so selecting from top schools ensure the bank increases its shots on goals. Most of what investment banks do, especially at the analyst level, can be taught and so these schools are naturally a great feeding ground for smart, hardworking and resourceful kids that can be easily moulded.
Well, here in Germany firms are very closely monitoring what you study. The only other people getting in is usually the actually smart people that did Maths for example.
Recruiting in the US also prefer philsophy majors from Harvard over finance majors from Michigan State. Also you might take your undergrad course a bit too srsly if you think it makes you a better candidate
This isn't unusual or a surprise.
The vast majority of what you learn in a Finance or Economics or even Accounting course is not that relevant. They can go deep into academic theories which, while underpinning *some* of the day-to-day work of, say, a banker, are not really used. Almost no one in the business knows what a multiple factor model is. Even if you bring a challenge during a live deal that "CAPM might not be a good tool to estimate cost of equity because the marginal investor isn't diversified", almost no one will know what you mean, and even if they do, CAPM is just accepted practice and what other industry participants are using (e.g. competitors in a deal process).
As a new entrant into IB, you're going to spend your first year building profiles, sending planners, updating the working group list, and spreading valuation comps. You may do some modelling, probably in a template. And even as you get more experience, a lot of what you learn and do will be process-oriented, and very practical. Nobody needs to know abot Brownian motion. That's the cold hard truth, and that's about as cold and as hard as it gets.
What IBs need is raw smarts (which isn't tied to any specific degree) and one hell of a work ethic. Going to a top university, achieving a high grade, and having great extra-curriculars are excellent proxies for these (see "signalling mechanism"). Oh, and IBs also need to be able to show the FCA (and clients) that they hired people who should reasonably be expected to act with due skill, care, and diligence when something goes wrong (and smart people who went to top universities with top grades can show that).
As with most jobs outside the hardcore voactational degrees (e.g. Medicine), you can learn on the job what you need to know. You can't learn how to play a flute by reading about how to play a flute. But if this candidate can play the trumpet really well and achieved great success with that, they might be a safe bet.
There isn’t an investment banking degree, every degree is vastly different to what’s on the job. It’s all about how well you absorb information and how effectively you apply it, that’s literally it. So many degrees have this element: maths, law, economics, history, philosophy, statistics, etc.
Doing an econ/finance degree simply demonstrates that you have an interest in IB just by the nature of your degree. Most people doing econ are doing it to pursue finance, so it’s effectively just to check a box and nothing more
as long as you are competent on your job ie know how the 3 financial statements, build DCF, etc. Who cares what you actually majored in. Banks just want smart people with potential
Can tell you for free that a History grad from Oxbridge is probably smarter than an Econ grad from most semi targets.
Del
bcos business students are all hardo retards who want the job too much
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