Is getting an MBA a requirement for a long career in PE?
I am strongly considering a career in PE (ignore my title, I am actually in my second year as analyst at a BB in London) however the idea of being forced to do a 2-year MBA after 2 or 3 years as an Associate if I go to PE is discouraging me a lot.
So far I haven't had a typical career (3 years undergrad and analyst I at 22), in my case I did a 4 years undergrad + 2 years in the army + 1 year doing a Master in Management at a target uni in the UK + 6 months of unemployment during covid.
To sum up, I started my analyst stint at 27 (I am already 4 or 5 years behind my peers) so the idea of having to go back to Business School for 2 years when I am 32 or 33 if I go to PE is a massive turn off. Specially when I already have a MSc in Management which is basically a less prestigious and cheaper MBA.
I am at a point at which I just want to work, gain experience, learn by doing, and become senior at whatever I do. I want to spend my money buying a house and getting my gf a ring instead of having to pay 150k in tuition fees and having to live like a student for 2 years just to get a nice title and a network (I am a little introvert so probably I will not leverage the network anyway), I know I will learn much more about PE and IB in the office rather than at any Biz School.
However I still like PE, I find it a much more exciting career and in the long term it can be much more rewarding than IB, so if I can avoid an MBA I will definitely try to go for it.I know MBAs are a massive thing in the US, but since I am based in London I wonder if I can transition to a Mega fund or an UMM firm and then get a promotion to VP without having to go to a Business School.
I've seen a lot of people without MBAs in the biographies available at Mega fund websites, but since these pathways are becoming more and more structured I don't know if these people are the norm or just pure exceptions.
No one forces PE associates to do an MBA after three years. Majority of people who go to do an MBA is because they didn't perform well enough to get promoted to VP or Principal in their fund so they decide to do an MBA to have another shot at a different firm post-MBA.
As long as you're a top performer no one gives a crap whether you went to Wharton or not.
There are many, many different reasons why someone can choose to get an MBA after a few years in PE. Getting ousted by your firm is certainly one of them, but it is one of many and hardly the majority. You absolutely shouldn't assume that someone who leaves a PE firm to get an MBA was an under-performer.
Just to name a few:
1 - Change in geography.
2 - Time off from the grind where you can chill and do whatever you want for two years.
3 - Opportunity to explore other career opportunities (such as starting your own business) without falling "off track."
4 - Opportunity to meet new people and build your network.
5 - Build your academic credentials, particularly if you didn't go to an elite undergrad.
Lastly - the MBA application is due far in advance of matriculation. Round one applications for HBS are due in early September of the prior year. The applications require (1) taking the GMAT, (2) drafting essays + responding to question prompts, and (3) references from your current / past employers. Most people don't even know whether or not they will get promoted to VP by the time they need to apply - even their employers dont even know who they want to keep/reject at that point.
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Yeah man, the majority of PE folks going to HBS, GSB, and Wharton are clearly underperformers. It couldn't possibly have anything to do with some funds not having openings to rise up, recruitment pipelines/funds offering to pay for essentially a 2 year break, branding resets (coming from a non-target), alumni relationships, and network expansion opportunities. I'm amazed someone could be multiple years into IB and not grasp this.
Bro did the whole HSW and PE before/after this could not be further than the truth. At least in the U.S., the vast majority of funds still prefer MBA hires I'm talking about 80%+ and it's not because it's underperformance. More of a limited pipeline issue. Trust me when I say the founders and the partners also look out for MBA grads from their own schools too and it opens doors internally.
MBA is not a requirement at my firm. Most people (from VP to partner level) don't have it although prolly 20% do. You can do this!
The MBA is an American institution. No one in London will force you to do an MBA. Many people in London have never even heard of an MBA.
MBAs are barely a requirement in the US anymore. Funds requiring them have quickly become outliers - why spent $200k and 2 years when the firm next door will just promote you? You are 100% fine without one
Is this true for someone that went to an average school, not even Top-100. Seems like most Director's/Partners have an MBA.
If you can get the associate offer from x school, you can also get the VP promote from it.
Most seniors have MBAs because the norm hadn't shifted yet as they were rising up. Take a look at VPs/Principals/young partners at the fund you're at/going to.
20 or 30 years ago you had to get an MBA, was basically required by all firms. The last 10-15 years they have stopped that. Recommend looking at VPs as some funds have even stopped in the last few years.
Also "Is this career path?" is a very acceptable question to ask a headhunter. You don't need to anonymously sniff around, firms are pretty upfront if they do or do not require an MBA
Not needed, nowadays those who go for an MBA failed to hit the mark at their firm to make VP/Principal so get an MBA to have a second attempt at either their original shop or a new one.
Roll up your sleeves, commit to deals and showcase your value-add.
In our group it is a healthy mix of people with and without an MBA. Wouldn't say it is a requirement at all. we are international, so you may see North American colleagues with an MBA, but then we also have British colleagues with one.
I don't have an MBA and my career didn't suffer - although I wouldn't know which doors had opened back then if I decided to go for one.
As an example, I speak multiple languages and that is far more valuable to me and my firm than an MBA. I don't think having an MBA would be a problem - but it all depends on individual situations and life choices.
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I'd say that it's definitely no longer a requirement for advancing at most PE shops as the majority will identify and groom those who they want to keep as VPs post the Assoc. role. That being said, it certainly is still very common for PE Associates to have to get their MBA as either 1) they aren't pegged as getting straight up promoted 2) the shop still believes in needing an MBA in order to rise above associate or 3) the shop just straight up has a 2yr and out program still. All firms are not oblivious to the fact that an MBA is not really tangentially useful in the practical context and is more so a brand-booster which can elevate the pedigree of a shop by having them say they have MBA associates with degrees from Harvard/Stanford/Wharton etc. But I guess I'd impart that if you're a new PE associate at your firm, it should become pretty apparent to you within 6 months whether you'll be required to leave/get an MBA or whether you're being considered to continue into a more senior role.
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