Hi, I am an international student who just get admitted into Wharton Full time MBA (2019 intake / Class of 2021) without any fellowship. To pay for the MBA, I need to take a loan of around 160k USD which is pretty hefty to me, especially considering the high interests rate in the states ("as low as 9%"). Before the offer arrives, i am fully convinced that an Wharton MBA will be worth it, but I am a bit shaky now after i realized all my other MBA friends are either self-financed or have received 100k+ fellowships.
I am currently 30 and earning around 80k USD after-tax in the Risk-Management function of a bb, and hoped to eventually move to a Chinese-tech focused PE / VC such as Sequoia / IDG / Hillhouse based in Mainland China / Hongkong / Singapore, but I am open to other career paths in other locations as well if opportunities present itself.
Any suggestions that if i should proceed with the loan? If I am able to secure a 160k job offer in the US after graduation, i will have 120k+ after tax and save around 50k+ per year. At that speed, i need around 3 or more years to repay the loan, and i will be 36+ when I fully clear the debt. The repayment timeline will be similar if i work in Hongkong / Singapore as the pay will be less but so will be the tax. By the time I have saved enough for the house down payment / marriage, i will be 40+, which sounds pretty scary.
Any suggestions ? if i shall take the offer and go for the MBA? or any career advise?
I have thought about making the IBD TMT --> PE path in the US, but I also understand that I will be a bit old for IBD by the time of graduation (i will be 33 by then) , while US PE firms prefer to recruit young IBD analyst at around 25 yo. The PE / VC circle is also fairly closed to Asians, not to mention international students. In Asia, a Wharton MBA "might" be able to help me leap into the PE industry directly without going through the IBD stage (that's a big "might", i know), but my odds of landing in the PE/VC industry still look higher in Asia than in the US.
I'm in the same boat as an international student going to a H/S/W MBA and will be taking on considerable debt. I think if you already went through the process of applying, you see the value of a MBA not just in the ROI but the life-long benefits from a brand like Wharton. The average student graduates from H/S/W with about $80K in debt after paying off a considerable portion from signing bonuses, summer jobs, second-year fellowships. I believe Wharton also provides a number of on-campus, paid positions for MBAs that can help offset some of those costs.
As well, I think a significant number of post-mba professionals have manager to get married, get a mortgage, while still slowly paying off their student loans.
Don't shut yourself out from other industries yet either, when you get to Wharton you will find a litany of other opportunities. I read a statistic that only 30% of mba grads end up doing what they expected to do pre-mba.
As for loans - see if you can borrow from family or friends ahead of a bank. I know it's not glamorous asking your parents for money at 30, but this truly is an investment in your future, and with Wharton you will be seeing dividends.
Best of luck!
It's a no-brainer from your salary level and with any high level finance aspiration. Consulting now pays $200k+ post MBA and expect IB/finance roles to adjust upwards from $250K+ to $300k+ to compete. Honestly the loans are a drop in the bucket compared to the long term earnings adjust. It will mean a few years of focusing on your loans after school at a better standard of living than as before; once they're paid off, your life will change dramatically.
IB at 33 is fine from Wharton. You won't hit any obstacles. 90%+ of people will land a role. Even if you totally bomb in recruiting and end up in corp fin or something, the long term doors the degree opens are worth it. I was in a similar position and also self financed; while the debt hurts now, it is steadily decreasing.
Hi HoggieT, thanks for your help! I am targeting PE firms with international genes like Sequoia (Headed by Yale SOM MBA Neil Shen) and Hillhouse Capital (Headed by another Yale SOM MBA Zhang Lei). But I don't know if they want MBA graduates without prior IBD / PE experiences. Do you know anything on this aspect?
Thanks!
Hi Hoggie T, thanks for the reminder on the macro condition. I had thought about it actually during my school application.
There are two kinds of PE in China, one is the PE we used to know in the west, while the other kind is more like hedge funds with legal subtleties desgined to exploit regulatory loopholes. Both of them are named PEs but they are quite different things. I think the recent crush-down is targeting the hedge-fund-in-disguise, but I may be wrong.
Currently China and US are the two leading PE / VC markets especially for Techs. China has already taken off US in terms of VC deal volumes in recent quarters. On the US side, i have talked to a Booth alumnus who worked for Blackrock upon graduation. According to him, there were only 2 Asians in the entire office including him, and the other one was in tech support. Unable to envision a future for himself, he quit the job after a year and joined Sequoia in Hong Kong. He told me that the PE / VC deal sourcing / closure requires very strong social bonding skills, and if I am not a true fan of US popular cultures (e.g. know all the crazy moves of each NBA stars; watch all the famous talk shows and movies and understand all the culture references), I can't blend in as an East Asian and I will suffer in the industry. If that's true, China is the only place left for me.
If China is going to do badly in the near future, all of Asia (and probably the rest of the world) will take a big hit. Hong Kong is all about China businesses and will take a full blow. Singapore is about currency trading which I am not interested in. IBD deal volumes in Singapore is quite small compared to HK, and the clients are often tied to China in one way or another. If there is no way for me to hedge the China risk, i rather embrace it and exploit the opportunities.
If I can stay in the US that will be a different story, but again there are uncertainties about H1B, glass ceiling in IBD / PE for east Asians.
Jumping into PE directly from Wharton, without any prior IB and PE background even in Asia, will still be incredibly difficult. The only time I’ve seen an example of this, was through a colleague who mentioned he worked with some entitled princeling who went to a H/S/W, and in his prior firm would go for 3 hour shopping lunch breaks and was absolutely untouchable. They worked at a BB, but it wasn’t IB. Said princeling then moved to post-MBA PE gig in HK/Shanghai at a large international shop.
The standard track is IB >> pre-MBA PE >> top MBA >> post-MBA PE. These days, some firms are ok with their stars continue as post-MBA associates / VPs without their MBA. But to jump to post-MBA PE without pre-MBA PE, or even pre-MBA IB or consulting, will be hard, and highly unusual. Why would they take someone without training, when there are PLENTY of other people from the same or similar school AND necessary background to chose from? Not trying to be mean, just laying it out there. If finance is your goal, your short term goal is to get the relevant summer internship experience to get your foot in the door.
Now on VC - that one is honestly anyone’s guess. In some ways VC is both harder and easier to get into. The “harder” part is because there’s no formal process or recruiting period - firms can hire on a very ad hoc basis. And because a lot of shops run very lean, chances are they are even less likely than PE shops to help sponsor work visas or take a chance on people because they are likely looking for someone that fits their team in a very particular way. How it could be “easier”, is that they don’t have a definitive path like the above mentioned one in PE. You (as in anyone in general) could very well have a very unique skill set and fit that they are looking for... and that person could come from IB, consulting, industry, startup founder, etc. However, back to the “harder” component - A VC looking for a very particular skill set that could be yours will not come to you, you’ll have to network 24/7 to find a VC that’s hiring and that’s a fit.
In Asia, the definitions between PE and VC are more blurred, with the latter often looking more like a late stage former. But Asia is also all about networks. And again, they'll have their pick of kids from IB/PE/consulting backgrounds from Wharton to choose from... so just know that unless you’re a princeling or some son or daughter of a conglomerate honcho, you’ll need to lay a lot of groundwork in while you’re at Wharton.
But between taking the loan and not taking it, if I were in your position I’d go.
Np, good luck.
I think IB (in Asia or US) is realistic, provided you prep for it appropriately. Post-MBA IB without prior relevant experience is a well worn path. And while switching to PE or VC after post-MBA IB is rare, it’s not impossible and have seen examples. I think it depends on the circumstances (what the forms are looking for) and the individual (their full profile, networking, efforts, etc).
Just one more point - you mentioned PE/VC a lot. Depending on the stage of VC, the roles are quite different and can look for different backgrounds and skill sets. I think you’ll need to do more reading about each to see which one is more interesting to you. As I said, in Asia, the lines are a bit more blurred, but only because their PE deals don’t look like traditional ones in the West. That said, earlier stage venture deals in Asia would still be like earlier stage VC deals anywhere. While the more mature a deal (like later stage growth equity plays), the more likely firms will have or want some ex-IB or ex-PE types... because it becomes more technical.
To get a sense of what you actually want to do, you should take a look through some of the different firms that interest you, and look at postings and bios. That will give you a better sense of people’s backgrounds and how they made it in.