Finance is Turning Away from High-Society Jocks
For years, investment banks and financial institutions have been known to hire elite upper-class athletes who played sports such as lacrosse, squash, and golf in college. Various studies have suggested that candidates who play these sports – especially at elite universities – are more likely to be favored in the investment banking recruiting process because they are better "cultural fits" and can bring skills such as leadership and teamwork to the workplace.
Recent research, however, indicates that times may have changed. Douglas Coate, professor of economics at Rutgers University, analyzed the LinkedIn profiles of thousands of bulge bracket employees hired between 2007-2014, as well as the new analysts taken on this year-with surprising results.
For every 100 investment banking analysts hired in New York, the average proportion of people who participate in varsity sports is just 6.4%, he says. The proportion is slightly higher for those hired from Ivy League schools (15%), but still – a history of varsity-level sports isn’t going to swing it.
Coate’s research supports the proposition that financial institutions and investment banks no longer need ex-athletes on the trading floors as markets become electronic and Wall Street firms seek out candidates with more cerebral knowledge in order to compete in a rapidly changing industry. There’s also the fact that investment banks are no longer hiring from the same small group of universities.
Coate’s research concluded that “the majority of analysts come from undergraduate colleges outside the top five or 15 undergraduate colleges and universities”. . . Of every 100 analysts from top investment banks, there were 60 different universities.
What do you all think? Will the rapidly evolving nature of the industry revolutionize the types of candidates that investment banks seek out? Will changing hiring practices make it easier for applicants from non-target schools to break into investment banking?
From efinancialcareers
I do foresee an evolutionary change, with an increased emphasis on strong data-driven thinking and numerical intuition in the candidates sought by investment banks.
The Rosenbaum textbook said it in the introduction back in 2008 to the extent of: WS needed to retool its hiring to refocus on people that exhibit the fundamental training and understanding about how to do the job and not just people they liked, keeping the same circle jerk boys' club. WS went nuts during the lead up to the crisis in the late 80s and then again up to 08. It makes sense that a shift was happening at least for the time being.
And I don't really know why the text said that and whether it was just lucky in terms of what the industry needed to respond to the changes. But, it has clearly come true looking back since 2009. The book may have also been a catalyst to this trend, along with sites like WSO, M&I, and programs like WSP, etc. Either the training resources were created because WS would've suffered without them, or, in response to the surge in WS training the banks adapted.
Somewhat agree. Make no mistake about it but this accelerated recruiting is screwing non-targets hard af. I think this site oversimplifies how to get in IB though. If all you did was read on this site you would think ivy kids are slam dunks for banking and non-targets just have to network. The problem is you very seldom see people from extreme non-targets get in ibd. Non-targets who get in are from like big10, big12, etc. schools, you don't see too many kids breaking into banking from say no-name state schools.
Or how PE is so common to get in from ib. There are a decent amount of people who strike out.
Just like any job (but perhaps more apparent in IB) going to the right school with a large alumni base or past record of success is key. You're screwed automatically if you don't go to a target school or one that is well-represented in IB.
I'm not saying its impossible but it sure as hell easier going to a UPenn, UT Austin, Texas A&M, Michigan, Harvard, etc.
It's harder than ever for non-targets. But, I do think everyone knows of the "path" and I've seen kids from very non-target schools come in FS year ready to swing and just knock it out. Mind you, though, this is 1 out of 10-15k undergrad students.
Really great point. There are oftentimes kids at target schools who operate on the assumption that getting into investment banking will be a slam dunk given their strong school name but then realize what's involved once recruiting comes around.
Let's all hold a moment of silence for high society jocks, I weep at their plight.
"A toast for the douchebags. A toast for the asshooooooooles"-Kanye West
One of them just whipped you with a wet towel while you were weeping...
One of the fundamental assumptions is that all people want to go to banks, which is not the case these days. Maybe the change in "elite candidate" career path has changed such that banks no longer even have the opportunity to choose from them...
Yeah, but since banking, in general, still has the highest pay, the trend definitely shifted because people don't like WS--and it isn't because of pay. I suspect banking hasn't changed other than being more in the spotlight since recent financial crashes. Tech, I'm sure, now has a better rep for the elite to find their a playground once they're done with school.
You guys are weird. Do you really think the vast majority of the lacrosse team at Princeton or Football team at Yale dreams of putting together project plans for FOB Indians who barely speak a word of English?
Finding someone to articulate problems in a stressful enviornment will always be more valuable in my opinion. Usually these types are slightly above average in technical skills. I rarely see managers where the managet has the super technical pedigree. Those whi jave both obviously kill it.
I highly doubt this. I would look at the breakdown of privileged vs non-privileged background at the MD level (for IBD and PE positions). From my personal experience, as you move further down in your career, it will be much harder for make it (if you are not from the inner circle). In the end, people want to deal with people who are similar to them. And ultra rich clients want to talk to someone who is from the same background as them.
Probably true in a lot of countries but less so in the US.
My parents, couple aunts/uncles, parent's friends, all emigrated from Bosnia and wound up in different developed countries. The ones in America say that they've been accepted into the inner circle while the ones in Europe/Australia are still outsiders.
Asian here. I don't see Asian MDs while I was in New York. In Asia, most of the senior management came from affluent families (esp in China). The only place that may be a bit different is Hong Kong (i.e. expats and locals from ordinary backgrounds); but even then, that is changing a lot these days.
Asian American from an immigrant background here. Look harder idiot.
The fact that I have look harder just proved my point that Asians or Asian Americans don't make it to MD in US. I actually did a quick survey among all my peers who started analyst class at BB. Even though during the analyst class, Asian accounts for close to 50% of the population, once they get to MD level, it accounts for less than 10%. Admin, Tech, Back Office roles (at an investment bank) don't count.
less than 10% of the overall analysts make to the MD level overall. so if 10% of asians makes it to MD, that is still pretty good rate
That is perhaps not the right way to look at it.
If what you were saying is true, it would be only 10% of all the people (both Asian and non-Asian) would become MDs.
What I am trying to say is that with the analyst class of 100 people (50 Asians + 50 Non Asians). By the end of the day, even assuming that only 10% of the analyst make it to MD level - total population is 10 MD. Among 10 MDs, only 1 is Asian vs 9 non-Asians. So in another word, from 50 Asian analysts, only 1 become MD (1/50 = 2%); whereas among 50 Non-Asian analysts, 9 become MD (9/50 = 18%).
During my time in New York, while I was looking for a job - I tried calling close to 1,000 people for career advice. I can count that less than 10 of them are Asian MDs/Directors/Partners/Principals.
You are probably some disgruntled worker who hasn't succeeded in your goals and blame it on being Asian. You're probably a PC Liberal/ Democrat as well.
Of course this is not our "home" continent of Asia, but speaking to my cousins in Canada, Australia, UK - America is by far the best place to succeed based on one's merit.
I apologize if I offended you.
I was in New York for 10 years and worked in banking industry for 6 years at UBS and BAML. The last job was an Associate position fundraising for tech companies (i.e. LinkedIn, Facebook). So it fair to say that I probably had seen enough.
About 2012, a few Asian mentors (IBD Leveraged Finance at MS/JPMorgan, PE at Pride Capital/CIFC) advised me to move back to Asia and which I did. I end up working for a family office/ family owned conglomerate with assets under management of US$20 Billions (i.e. Lippo Group/ Charoen Pokphand Group). So looking back, it was the best decision that I made.
Once again, I apologize if I offended you or crashed your belief that being Asian you can succeed in US. Most of my peers who were in banking has now moved to 1) fintech, 2) set up their own investment firms, or 3) move to major tech companies [Uber/Apple]. None of them had moved up to MD positions.
*I am Republican and has always hold a traditional conservative views. Definitely not liberal/ democrat in any sense of the word at all.
Jesi li iz Bosna ili Hercegovina
Two separate thoughts here as someone who is not a college athlete by any means:
Are 15% of applicants college athletes? Probably not even close....1 in 7 people are not college athletes so clearly there is still a huge advantage to being an athlete. That's not even getting into a discussion of GPA differences between athletes and non-athletes
I'm not an athlete, but I would certainly hire one in a second, not because they're a "cultural fit" but because they have the sort of ambitious drive needed for banking. Most people their whole lives are never really challenged. If you show up to your college classes, do your homework, study a few days before finals, and drink 4 to 5 days a week, your GPA will be 3.0 or higher. Now try balancing your academics while competing at a high level in a college sport and it does get a little more challenging. To play a college sport, you need greater self-drive and motivation than your average person. Furthermore, you've already reached a level of play that most people cannot achieve ever. Lots of people can make a 4.0...not a lot can play quarterback at Harvard. If that person's other characteristics check the boxes, would hire an athlete without hesitation
Long story short....I would rather hire the college athlete with a 3.5 than a nerd with a 4.0....because the college athlete worked harder for it and is pretty smart too.
Lol you've got this so wrong. The athletes at my school were all retarded and struggled academically despite significant institutional assistance. Sure, they had to balance school and athletics, but taking layup classes with free-tutoring and academic advisors, they spent a fraction of the time on school than a normal high-GPA narp. So much less, actually, that their bullshit academics + sports probably took maybe as much time as a normal kid would spend on harder classes without assistance and some normal extracurricular activities or clubs. The time commitment wasn't as much as you might think.
Note, this applies to 90% of the athletes I encountered. Yes, there were some smart ones and those ones I would hire in a second. But even at a top Ivy, these were far and few between. I was a TA and I read the football and lax kids' work, and it was like a 3rd grader's writing. The prof actually told me that I should curve them all up a whole letter grade or more so that none of them would get below a B whatever the quality of their work. Just because they were athletes.
In my post, I specifically mention students that have pretty decent grades and are also athletes. So, I think we're on the same page??? No one is going to get an IB job just because they played sports, agreed on that.
Just because someone can't physically reach a level of play like the college athlete, doesn't mean they automatically have less drive. Not everyone is built like a football player haha. From what you're describing, athletes are great for jobs in which they have to dominate others and compete. However, they can compete as hard as they want, but the average college athlete isn't going to build you a complex financial instrument or create an algorithm like the cerebral ivy nerd would.
have to agree with TrackBack
funnily enough kid from my high school got recruited to play qb at harvard. actually kind of a weird dude and not all that bright (from what I hear).
idk where you went to college, but i'd doubt you'd want to hire the vast majority of ncaa athletes. even the ones with good grades took easy af classes (in irrelevant majors) despite all the institutional support they get. most of them don't "translate" their athletic skill into the classroom and I can't imagine they would in the workplace.
I'm not talking about college.....every person in IB that I have worked with that has a sports background has been pretty smart and in the top 50% of bankers, hedge fund analyst, private equity guys, etc.
I'm talking about the sort of sports guy that actually get an IB job, not those who don't get it.
Question for you guys, have you ever met someone in IB with a sports background that was
Good riddance
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