I’m at a fund known for really strong MBA exits, and to be blunt, the last 2 years have been brutal (e.g., 1-2 out of 10 placing into H/S). Not feel great about my chances as I’ll be applying next cycle, which is a bummer because it’s a big reason I came here. A bunch of “perfect” candidates (great stats, top group, top PE fund) were rejected.
I’m curious what things were like 20years ago: was it really that much of a shoe in? On LinkedIn, I still see older people that went from very brand name funds to Wharton 15+ years ago, so surely it wasn’t a given?
20 years ago all the top MBAs were considerably easier to get into in general, not just for PE folks.
Isn’t this at odds with the idea that MBAs are losing value and the many people choose to forgo them? Genuine q
Not at all. They were more scarce back then, the applicant pools were considerably smaller (less people in general even thought about MBAs), the cost was much lower, and the applicable value of what the programs were teaching was higher. Just from the formula of the first and last pieces (scarcity + realized value) it makes sense why they were more valuable then vs now. The same thing frankly has happened to all of higher education - the scarcity of degrees doesn't exist anymore and the value of what they actually teach (barring of course things like hard STEM) is laughable.
Think about just the sheer amount of knowledge related to business that has become democratized thanks to the internet and easily available to people. 20+ years ago you were hiring these top MBA grads because there was a general consensus that they had learned from the best of the best and had an education that gave them an edge. It's not dissimilar from what has happened to management consulting - 20+ years ago firms like BCG & McKinsey had a genuine edge and brought knowledge to business-leaders that many executives lacked due to their verticalized area of expertise. Now any mid or C-level member of management can pick up one of half a dozen or more books for most of the issues they're facing and the consultants have become more of a check the box exercise for confirming what management either already wants to do or be there to lay the blame on if something went wrong - "you can't blame me, this was BCG's idea".
Today the MBA is more of a signaling tool than anything. You'll hear constant jokes alongside truthful anecdotes that a good chunk of grads from even the top schools are virtually useless when they hit the desk and actually start working. The degree is more a sign of prestige that can be used for markets (e.g. we only hire the best grads from HBS or Wharton to manage your money) and while a large number of the grads are still going to be top performers because of the hyper competitive admissions process, today you will more often than before see the absolute top performers forgo an MBA all-together (this isn't quite as true for things like MF PE or certain corporate paths where the MBA is effectively required, but in HFs for example none of the most successful people I've met under the age of 40 have MBAs). The opportunity cost of losing those 2 years of professional advancement + $200k+ price tag for some folks just isn't worth it - they see that time and money as something they could be much more efficient with on their own.
Non-traditional applicants like myself had much lower barriers of entry. That being said, one of my classmates was an ex-PE but worked in a passion industry pre-MBA. A lot of the finance / traditional backgrounds had much better careers than me pre-MBA in terms of stereotypical corporate experience + comp.
Rarely had to navigate office politics pre-MBA and now struggling a lot with it at my first post MBA job in consulting =/.
That being said, the above post is likely right. 20 years ago, I think schools preferred safer bets (traditional applicants).
Purely anecdotal but agree seems like last ~3-5 years it has become significantly harder for traditional PE candidate. And mor in favor of very random non traditional backgrounds. Not sure if a strategic adcom shift or just a supply/demand thing.
Do not go to business school. It is insanely expensive and your classmates will be 50% as smart / motivated / intelligent.
I was at a good PE shop and left to go to business school. I had the time of life but my career massively suffered. Do not recommend unless you are already wealthy and your family will support you during & after.
Thank you. Yes, I don’t think I’ll get in anyway. Could I ask what school you went to?
The demographics for PE were always tough in light of affirmative action but it honestly used to not be that tough. People would walk into HBS from EB or even mainline BB banks after their Analyst years with good enough recs.
The bigger shift is that in the last 15 or so years the AdCom's simply just don't like you that much when you're in this industry. A few HBS Admissions Heads prior, one of the AdCom's philosophies was rumored to me "literally just give me the resume, I should never have to read an essay." Nowadays you almost have to apologize if you're coming from PE--if you're a healthcare investor, you have to talk about how you actually are preparing for a career to start or enable the next Obamacare or had a family member die of some disease you want to cure. If you're an industrials investor, you have to talk about how your real passion is to build a water well in Kenya one day. It's almost obligatory to join a junior board of some charity, and AdCom's will sneer at that too because they think you'll just donated your way in (true).
Plenty of us will still get in because of firm relationships and test scores, but tbh even in the broad view of private capital the b-schools would prefer impact investing, cleantech infra bullshit, or founder-backing growth equity people aesthetically. They're slightly souring on consultants too but view them as far more involved in "actual business" as opposed to financial engineering, plus consultants have accelerated same-firm promotions and a caseful of useless internal "performance awards" they hand out like trinkets, which b-schools love.
The schools would much rather on the margins hire the best-scoring or box-checking marketing / product girlie at P&G or the high-grades Exxon FP&A guy who secretly wants to make the company more green or whatever. It's all a bunch of posturing bullshit if you ask me. Stanford's motto and essays are all high and mighty like they accept 200 kids who are actually going to "change the world." But do we hear of 200 GSB kids actually changing the world every year, or is that just a branding thing? Does it really change the world to give 1000 bonus points to having a failed startup for a year before you apply because it shows your ostensible courage, or is that just as one-track-minded as IB -> PE? Doesn't a third of the class come from Bain, get sponsored to travel in foreign countries for two years, and then return to Bain?
End rant.
Sorry but this is kind of cope. I’m at HBS and there are lots of traditional PE, white, male, etc (I am too). The common denominator IMO is that they all crushed it in their roles and had great stats as a baseline, plus a good story. It’s hard to get in, but not because adcoms autoreject PE candidates
Eh sort of agree. While I’ve seen candidates as you’ve described, I’ve seen plenty of subpar candidates get in (below average test scores, middling to below average associates). Well over half the HBS admits from my old fund were female / diversity (this is from a fund with a historically good track record). Even the 2 ORM candidates (strong on paper, good associates) had sub-730 GMAT scores. I have no doubts there are still many strong PE folks at these top schools but an increasing number of top performers are staying with their existing funds / lateraling instead too. Know countless MBAs with prior PE experience who have been struggling to get jobs, with some even graduating jobless.
I don't think you're quite grasping how percentages work. Yes, of course PE is massively overrepresented (just like consulting) in the b-school pool, but it's also true that the share of that population as a percent of the overall class is either declining topline or has a mix shift to more "stylish" roles than big bad buyout. These are marginal changes; obviously your average PE bro at Kelso has a better shot at HBS than your average product marketing girlie.
And don't get me wrong, I like the idea of professional diversity in business school! I don't think the class should just be filled with the PEI 300's VP's to be. But it's also true that when you have BX and even Carlyle and Bain applicants batting like 30% on H+S, the pendulum has swung too far into skepticism.
I'm not going to do tricks on it regarding whether PE applicants really all have "good stories." Oh, you've seen the financial side of business but now an MBA education will help you think like an operator? Is that story supposed to make Jack Welch's dick hard in the grave? Some of the contortions and fake extracurriculars I've seen from PE applicants are honestly kinda silly. Grown men and women pretending their dream is to launch social justice initiatives while applying from One Rock. But that's where the incentives are these days.
you seem to miss that the B-School is a business as any other higher education institution, the fact that you get the MBA and become a successful MD in PE will not do much in reputation because everyone already knows those institutions and the community is just a small in the grand scheme of business worldwide, meanwhile if you end up developing some eco-friendly infrastructure in Kenya, this carries more publicity for the university in newspapers + worldwide + some political circles = higher prestige and social points
even a 0.01% chance of one those fake stories ending up making whatever they sold themselves to the B-School is better than a +20 future PE / HF / buy-and-build guy even if their CVs are better
some marketing girl as well might get more publicity in their life and end up doing something more unique than simple financial engineering or doing something financially innovative - recognized only by the finance community - in 2040/2050s.
I would advocate more towards having finance-focused MBAs such the Wharton and other B-Schools recruit more operators/people from remote fields that have higher chances of doing something more close to what truly business/innovation means instead of climbing another corporate ladder. Consultants also widely limited, they cream for IB/didn't made it in IB, no true business interest, so it's a useless fill of spot.
To add also on why I thin finance people shouldn't be in MBA - unless they are 100% considering a career shift - is because there is a difference in businesses that play in a zero-sum game i.e., my win is your less in terms of market share, on a commodity-based product, that has no room for improvement or creativity (what any fund does) vs. businesses that actually can introduce innovation (any F500 company) in terms of products, novel approaches to corporate governance, interesting partnerships, social impact (expanding into needed areas, etc.). So no reasons to do MBA, and no reasons for an MBA to take you if you plan to stay in fiannce afterwards as well
I'm sorry, if the goal is betting on random long-shot bids at publicity, then big bad boring PE has produced a Utah Senator / Massachusetts governor / presidential nominee, a Virginia governor, bundles of sports franchise owners, the heads of the largest philanthropic and historical initiatives in the world, etc. Of all the reasons why you'd want diversity of profession (and I can think of a good number), the long-term "legacy play" odds maximization is close to the bottom of the list.
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