Private Equity vs PhD in Finance

Hi all,

I have spent the last two years working as an IB analyst at a bulge bracket (think JPM/GS/MS) in their coverage team. For the next step of my career, I'm considering two options - a fully funded PhD in Finance (focused on empirical asset pricing) at one of the M7 schools (think Stanford/Wharton/Booth) and an offer from a MF PE shop.

Wanted to get different points of views on this. Particularly wanted to understand what my options will look like if I want to go back to doing PE/fundamental equities at a hedge fund post the PhD. I'm almost certain I don't want to end up in academia, the PhD to me is for taking some time out to explore research and work on some topics that I personally find very interesting but I can't explore in an industrial setting.

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As folks have said, they are wildly different paths and I doubt many will be able to give you that much good guidance on the matter. What I will say is, if you think of yourself as being academic and the lifestyle of a PhD student doesn't intimidate/bore you, then it's something to consider. To me, you'd have to really love research and frankly academia, even if you don't want to be a Professor. From what I hear/observe, PhDs generally have a love for research and learning and are ok dedicating 5+ years of their life in order to make what is usually a fairly minuscule contribution to the academic literature on a certain topic. If that sounds like you and you want to explore that without really thinking about the pathways that it can open up for you, then I'd say go for it. PhDs are tough, but at the end of the day, if you're fully funded and have money saved up, you can spend a lot of time just goofing around, researching at your own pace, etc, which some people really love. Also, in my experience, fully funded doesn't mean you're living like a king, it typically means you get a basically living stipend, which in most large cities won't get you that far. 

Other the other hand, if you're looking at the PhD entirely as a means to an end, with the end being some type of high paying HF job, to me, that indicates that you're probably better off just doing a MF PE job and then trying to lateral into a top HF from there.

If you're going to a top finance school and you complete a PhD, I'd have to imagine that some good HF/Industry related jobs will be available to you. Exactly what they are is tough to say, but it would probably skew more towards HF/AM types of roles opposed to PE.  


Not sure if you meant it this way, but major red flag is "taking some time out to explore" re: PhD

These programs are brutal even for those who love the subject. The first to drop out are usually those who go in misunderstanding this.

Fundamental equities will prefer PE over PhD assuming you are not targeting working in the risk dept


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