Value of MBA in Private Credit
Currently a first-year analyst in PC at BX/Ares/Apollo thinking about getting an MBA after gaining 4-5 years of experience. Based on my conversations, private equity seems to greatly value the MBA for its general management curriculum and network. Does the same hold for private credit? Do most MDs and Partners at your PC shop have MBAs?
The half-million price tag of going back to school is something that I'm concerned about. However, given how fast the alternative/private credit industry is growing I definitely want to climb the ladder in the shortest amount of time possible.
Would sincerely appreciate any insight.
Interested
Minimal value of getting an MBA while at a credit fund. Perhaps an opportunity to network and build relationships with contacts at future Sponsors, bankers, lawyers, etc. But even then those relationships can be gained without the need for an MBA. Would recommend against it and continue on with your credit fund - 2 additional years in a credit investing role >>>>> MBA if you plan on staying in credit.
Interested
Only reason to do an MBA is if you think you might want to start your own fund one day and you didn't go to a name brand undergrad. If I were you I would wait a few years and try and get an executive MBA and/or be sponsored by your firm.
Have heard MBA is a good option but am unsure if necessary in PC
One of the reasons why I chose Private Credit, was so I don't have to waste my time, money, and effort getting an MBA. You're a debt investor - you gain your acumen and reputation on the job.
The value of an MBA degree is dwindling rapidly… and it is quickly becoming somewhat of a generational bifurcation (especially in segments such as Private Credit where there is no traditional pre/post MBA channels). Do most MDs in 2021 have MBAs…? Yes. Will the great majority of MDs in 2035 have MBAs? …Highly unlikely.
Following
Optional at this point for investing roles outside of specific funds but just consider if it's something you want to do for yourself anyway...not everything is dollars and cents. I got very hung up on the cost aspect and skipped it but as the years go by ended up regretting it. If you are interested enough to ask this question, it's worth real consideration if the intangibles are worth it to you regardless of career impact.
If you are on the fence for cost reasons and decide you want the degree/signal but less/no expense, you could also consider pushing for sponsored FT (doesn't solve the opp cost at all but does preserve the fun and max networking) or sponsored PT or exec options (solves opp cost and debt but isn't fun and provides lower-value networking). These latter options historically have been looked down upon in our snobby bubble but I think are becoming / will become more accepted for solving the above issues of opp cost/career progression and anecdotally I am seeing folks in Chicago PE do the Booth PT route for that reason and I'm sure it's the same for Columbia PT/exec. for people in NYC. It's hard to actually know because you can't tell from a LinkedIn profile or website bio...and that's the point.
I agree with a lot in this post. Unless you plan to retire early, you're going to be working for 2-3 decades, potentially even 4 in some capacity. If you stick it out in PC the $500K saving and 2 years progression will make a small difference overall in terms of outturn in wealth as you'll have 2-3 decades after this point of earning $500K+ per year.
I didn't do an MBA and in hindsight would have liked to. 2 years out while still young, single and surrounded by group of accomplished and ambitious people sounds like it would have been a great time. Once you cut through the bullshit, it looks like it's mostly parties and travel. The money saved has helped me bring forward purchase of a house and some other big expenses, but they would have happened anyway. If I could go back now I'd spend the $500K and take the 2 years.
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