MBA Class of 2023 / 2024 - do you regret it?

For some background I have a lateral senior associate offer and have applied to mba (expect to get into a couple). For the HSW class of 2023 / 2024 - do you regret going? The market has been really slow and the advice i have gotten is to take the lateral offer since the post mba market has dried up completely (esp for non diverse candidates) but want to make sure I am not missing out on a great experience since most senior people in the industry mention the mba was very helpful for them

 

Didn't do MBA but have many colleagues who went to HSW - my 2c from their experience is that most of the seniors went during a time when everyone went for an MBA, so the experience and networking was very worth it given how strong a class like HBS would be. These days it is mostly people who "have" to go - career switchers, entrepreneurs, and consultants. Does kind of dilute the networking side since so many are forgoing MBA.

 

I am at H/S/W and I am very happy with my choice. Came from a UMM PE role and have succesfully (1) had a ton of fun and travelling I otherwise would not have been able to do (2) transitioned to a hybrid / HF investing role with expected cash comp ~2x my PE role (~800k+)

Look, the job market is tough, but people that from pedigreed backgrounds, put time into recruiting, and have a moderately high EQ have all been able to secured good finance roles. Yes, some consultants are struggling to transition over to PE but this was always the case. Yes, tech focused PE firms overhired and have now slowed, but that is reflected in the lateral market too

Maybe I am rationalizing my decision to do the MBA but overall I am very happy I did it

 
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My thoughts only are related to PE. Went a couple years ago, so not a direct answer to your question. Did the standard cookie cutter (Ivy, banking, PE, HSW, PE). Short answer - found MBA does expand your network, helps you make a lot of friends, and keeps you "young". Compared to direct promotes, the MBAs I know are far more willing to go on weekend trips, try and leave the office early on a Friday to see friends, and use their vacation time - on average, they all seem much more "well-rounded", happy, and less focused on work. If you want a long-term life in NYC or SF, going to MBA cements you with a large nexus of long-term city-dwelling friends. All these are soft reasons to attend, but given PE is really an attrition game, happiness/mental health = LTV of your cash comp.

With that said, some critical downsides that have impacted the classes of 2022-2024 (and will continue).

1) I would say it's survivorship bias that "people that from pedigreed backgrounds, put time into recruiting, and have a moderately high EQ have all been able to secured good finance roles", or that "as long as you keep working at it things will work out." For a reasonable portion of non-diversity candidates with PE backgrounds across HSW, either they got kicked out of PE entirely or moved to a geography/fund size they are very unhappy with. I know a decent number of people (particularly at H/W) who recruited without telling people, and when they eventually had to pivot told everyone they always wanted to be an entrepreneur / tech PM.

2) The (small) number of post-MBA roles has stayed largely the same, but there are even fewer MBA seats driven by direct promote popularity and diversity. FWIW i think both are good things to an extent, just explaining what's driving the competition). My thoughts below if you care.

2A) a lot of firms prefer the direct promote option - this often looks like an associate doing 3 years, and then 3 years as junior VP/SA, before given the reigns as a proper VP. Less risk, more time to mature.

2B) Furthermore, PE firms are trying to address their diversity issue with post-MBAs. While associate classes might look somewhat diverse from the onset, by the time the group self-selects 2-3 years into the program, they are what you'd expect demographics-wise. Funds (KKR, Apollo come to mind) use the MBA pool to re-inject diversity (this usually doesn't work and the VP/Principal levels are once again where you'd expect them to be, but I digress). 

3) The obvious one - funds are down across the board. More importantly, though, there are very few new deals entering the fray, especially in the $1-5B TEV size that drives a lot of dealmaking. New deals are where post-MBA midlevels cut their teeth, and there simply are almost no opportunities; funds don't want to carry an extra body for 1yr+ to wait for the market to turn. PE is a very myopic talent industry and funds believe they can hire talent quickly once things re-open.

If you really want to work in PE and you're not a diversity candidate, I would suggest taking a very realistic approach to your post-MBA odds at the type of fund you want to join. If you're a LMM generalist trying to move to UMM, and you got into CBS, I would suggest you're fighting an uphill battle. On the flip-side, if you're at a MF, got into HBS, and are ok with anything from high-quality MM to MF, I would 100% suggest going. 

 

I feel for you and hope its much improved by 2025, as it should be. My brother recently graduated from a top MBA (h/s) after a LMM PE stint and said the up-market move to a larger MM or UMM sponsor seemed near impossible for him. Everyone’s experience is different but his is a large reason why I’m leaving heavily against b-school. He’s returning to the same fund he was at, which isn’t a bad exit by any means, but he certainly had different expectations about the ease of exits prior to going. A lot of it is the market but I’m not sure how soon we go back to the post-Covid / pre-recession period where anyone with a pulse was raising and deploying capital. I’m curious if others think differently.

 

What firms are on a 6 year timeline to for “junior VP?” Maybe certain megafunds? That seems pretty unheard of from what I’ve observed.

Also, I agree that maximizing lifetime earnings is a function of avoiding burnout, but anecdotally, the types of people going to get an MBA are the types of people who “need a break” whereas the lifers have a much higher pain tolerance and frankly are the ones I’d put my money on to last in the industry… it’s kind of cynical but I feel like the MBA experience gives people a taste of what freedom looks like and as a result makes them less likely to commit to the PE grind. It's a bit of a generalization, but the types of people getting the MBA these days are generally less sure of themselves and have less conviction that PE long-term is right for them. 

 

I would qualify this by saying it (maybe? actually not sure) applies to people who were already in PE before the MBA. I had a significantly more chill job pre-MBA but went for the MBA specifically to move into PE, knowing full well the hours will be worse.

6 years out of the MBA, the decision to go for it was one of the best of my career, but admittedly I graduated when the world wasn't ending. It's quite possible that the M&A market might turn by the time the 2026 cohort graduates btw, so now might not be a bad time to consider it. 

 

Hey - it's a good point, I didn't mean 6 years to junior VP, more like 4-6 years to senior VP/junior principal or whatever you want to call it. 

On the pain tolerance thing. I don't think a lot of funds across large cap and middle market are looking for pain tolerance. I do agree that a lot of MBAs are "softer", but on the flip side, the ones that get the few offers are usually just as gritty as direct promotes but were able to prove themselves through another recruiting gauntlet. Realistically they're pretty equal in most things, just one is much wealthier at 29 and the other is likely more happy and well rounded. No shade to either path.

 

I really liked this comment above and will add to this from the perspective of a current HSW MBA (1st year). Prior to my MBA I worked at an UMM PE firm in NYC. I 100% agree on the author's comment above that the MBA has value in helping you expand your network, make lots of friends, and keeps you "young" (especially this latter part). During my final 12-14 months I was on a couple grueling deals followed by grueling PortCo work, as the deal market dried up. During this time, I felt I lost part of my "joie de vivre" - simple things like meeting up with friends when I wanted, not having to stress about working every weekend, playing basketball on weekday nights in a rec league, and even READING books! In some ways I'm rediscovering these same things in my life that made me really happy before.

I will also add to the author's original comment that another added benefit through the MBA is that you meet really interesting people, which shouldn't be discounted by any means. People from usually many different walks of life, different cultural perspectives, many of whom are brilliant beyond measure and have never heard of an LBO before but will be successful in their own ways. This has really been a unique part of the experience so far. Now, on some of the things the author originally stated - 

1) Survivorship bias - I suspect this is partially true yes, but I'm not sure if this would have been less true 3,5,10 years ago? Perhaps a few years prior there were many former PE individuals more actively self-selecting into tech / entrepreneurship when that market was blazing hot prior to the recent crash. 

2) A) Direct promote option is more in fashion today - true and has been for a few years now . B) PE firms trying to address their diversity issue - also true. Apollo in particular has been known to do this for many cycles now and I can name a few others off hand.

I will add one more point C) Shift of MBA PE recruiting - One thing that's been really highlighted to us in our first year is the importance of internships. Oddly enough, our school set a 5-year high in internships posted / available for 1Y students, in which we had a large number of MF / UMM / MM firms post summer associate / VP opportunities as well recruit on campus / offer info sessions. This has really changed from before in which most of the Post-MBA PE recruiting happened in the 2nd year of your program, but what's really prevalent now is that many of these firms are hiring for VP seats straight through their internship programs. Also from my many conversations with the recruiting firms - the post-MBA PE recruiting landscape has turned more so into a "just-in-time" market in which firms will post roles on an as needed basis (significantly breaking patten from prior years in which it was mostly standardized around late summer / early Fall). 

3) This is obvious, no one knows if/when/how the market is going to recover. Many PE firms are making layoffs in light of missed fundraising targets, weak dealflow, and/or pressure to cut costs (especially as many of these PE firms are now publicly traded).

In summary, its early for me and perhaps this view will change but an MBA (from HSW at least) has already made an early impact for me in creating a bigger, more interesting network, meeting unique people that are shaping / challenging my perspectives, giving me that feeling of being young and enjoying my life, and helping me become a more well-rounded professional for hopefully decades to come post-MBA.

Do I worry about the PE recruiting landscape and the number of seats at "X,Y, Z shops" that I want to work at post-MBA? Yes, but that doesn't mean I'm not holding back in my preparation to meet those opportunities as they might present themselves and at the same time continue to grow through the experience. Just my 2 cents, hopefully helpful in whichever decisions people may pursue. 

 

My thoughts only are related to PE. Went a couple years ago, so not a direct answer to your question. Did the standard cookie cutter (Ivy, banking, PE, HSW, PE). Short answer - found MBA does expand your network, helps you make a lot of friends, and keeps you "young". Compared to direct promotes, the MBAs I know are far more willing to go on weekend trips, try and leave the office early on a Friday to see friends, and use their vacation time - on average, they all seem much more "well-rounded", happy, and less focused on work. If you want a long-term life in NYC or SF, going to MBA cements you with a large nexus of long-term city-dwelling friends. All these are soft reasons to attend, but given PE is really an attrition game, happiness/mental health = LTV of your cash comp.

With that said, some critical downsides that have impacted the classes of 2022-2024 (and will continue).

1) I would say it's survivorship bias that "people that from pedigreed backgrounds, put time into recruiting, and have a moderately high EQ have all been able to secured good finance roles", or that "as long as you keep working at it things will work out." For a reasonable portion of non-diversity candidates with PE backgrounds across HSW, either they got kicked out of PE entirely or moved to a geography/fund size they are very unhappy with. I know a decent number of people (particularly at H/W) who recruited without telling people, and when they eventually had to pivot told everyone they always wanted to be an entrepreneur / tech PM.

2) The (small) number of post-MBA roles has stayed largely the same, but there are even fewer MBA seats driven by direct promote popularity and diversity. FWIW i think both are good things to an extent, just explaining what's driving the competition). My thoughts below if you care.

2A) a lot of firms prefer the direct promote option - this often looks like an associate doing 3 years, and then 3 years as junior VP/SA, before given the reigns as a proper VP. Less risk, more time to mature.

2B) Furthermore, PE firms are trying to address their diversity issue with post-MBAs. While associate classes might look somewhat diverse from the onset, by the time the group self-selects 2-3 years into the program, they are what you'd expect demographics-wise. Funds (KKR, Apollo come to mind) use the MBA pool to re-inject diversity (this usually doesn't work and the VP/Principal levels are once again where you'd expect them to be, but I digress). 

3) The obvious one - funds are down across the board. More importantly, though, there are very few new deals entering the fray, especially in the $1-5B TEV size that drives a lot of dealmaking. New deals are where post-MBA midlevels cut their teeth, and there simply are almost no opportunities; funds don't want to carry an extra body for 1yr+ to wait for the market to turn. PE is a very myopic talent industry and funds believe they can hire talent quickly once things re-open.

If you really want to work in PE and you're not a diversity candidate, I would suggest taking a very realistic approach to your post-MBA odds at the type of fund you want to join. If you're a LMM generalist trying to move to UMM, and you got into CBS, I would suggest you're fighting an uphill battle. On the flip-side, if you're at a MF, got into HBS, and are ok with anything from high-quality MM to MF, I would 100% suggest going. 

This is spot on and unfortunately my lived experience. Class of 2022. Had some good looks only to be rejected for factors mentioned above (got direct feedback from hiring teams that I had an in with). 

I’m in a corporate role at a high growth tech company rn, so hopefully VC / growth equity opens up down the line. 

 

Question: For those that struck it with PE, why did you decide to pivot entirely instead of going the HF/AM route?

 

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