NESCACs and similar LACs overrepresented on buyside vs sellside
I am a NESCAC grad who has worked at two highly respected SM HFs. I have encountered many fellow LAC grads at both my firms and other buyside firms.
I would say at many investment firms there is a sizeable minority of people who graduated from T10 LACs. Yet, I have also noticed the proportion of LAC graduates represented in IB/sell-side ER is much smaller than what I see on the buyside.
I am curious what explains this. A few possibilities:
1) Sampling bias. My anecdotal observations might not reflect reality. My firm & others I am familiar with might be especially NESCAC/LAC-friendly in their hiring processes (very possible, as I was hired here of course).
2) LAC grads overperform in processes (interviewing, modeling, case studies, writing pitches) relative to the general sellside population, leading to better buyside recruiting outcomes.
3) LAC students have better access to buyside recruiting out of undergrad, allowing more of them to skip the sellside.
Has anyone else noticed this disparity, and if so which explanation seems most likely? I admittedly am too lazy to look at the hard numbers so am basing this purely on a few minutes of LinkedIn browsing and my general impressions having worked in the industry for a few years.
Interesting observation! While I can't provide hard data, I can certainly share some insights based on the context provided and my knowledge base.
1) Sampling Bias: This could indeed be a factor. It's possible that your firms and others you're familiar with have a preference for NESCAC/LAC grads. This could be due to a variety of reasons, such as the firm's culture, the skills they value, or even the personal backgrounds of the hiring managers.
2) Overperformance in Processes: LAC grads might indeed excel in the interviewing, modeling, case studies, and writing pitches processes. The liberal arts education often emphasizes critical thinking, problem-solving, and communication skills, which are all crucial in these processes.
3) Access to Buy-side Recruiting: Some buy-side firms do recruit directly from undergrad, and it's possible that LAC students have better access to these opportunities. This could be due to strong alumni networks, career services, or other factors.
However, it's also important to note that the buy-side and sell-side have different demands and work cultures. The buy-side often requires more independent thinking and deep-dive analysis, which might align better with the skills and preferences of LAC grads. On the other hand, the sell-side might attract more grads from larger universities due to the emphasis on sales skills and broader coverage.
Again, these are just some possible explanations based on the context and my knowledge base. The actual reasons could be a combination of these and other factors.
Top LAC alums (Williams, Midd, Amherst, Bowdoin) help other top LAC alums out. Monkeys together strong ;)
what about carleton college, oberlin, franklin and marshall, and bates?
Carleton really does not have any presence because its pretty much a Phd farm in the middle of a Minnesota cornfield.
Oberlin has been going down the drain with its scandals and interest in IB was never that strong regardless.
Franklin and Marshall just isn't really a top LAC.
Bates does ok but falls FAR behind the rest of the NESCAC in terms of endowment.
also LAC grad here (not NESCAC but similar academic level) and I'm currently working on the buyside out of undergrad (large AM) - looking at my firms recruiting pipeline it does seem as if there is an active effort to pull more candidates from LAC's (albeit we are still outnumbered by Finance majors from Ivy's/State Schools). NESCAC bias is strong (particularly Williams/Amherst/Bowdoin/ somewhat Bates) but others in the Midwest and Mid-Atlantic region are represented!
I believe it partially has to do with the desire to have great communicators and writers in the roles we're hiring for - we can pick up the financial skills along the way and there's a lot of training resources at our disposal. LAC's do a great job of producing "researchers", regardless of what field of study is your interest. This translates very well to research and analyst roles on the buyside IMO.
What firms do NESCACers usually end up in
On the buyside, many LO AM shops & hedge funds, especially in the Northeast. Have seen a lot of growth equity also.
Fidelity, GSAM, Pimco, Wellington, TRowe
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