How Is Ph.D in Economics Treated In Investment Banking?

One of my Princeton friend told me that, in investment banking, your undergrad degree is the most important regardless of your grad degree. He also says since most of the demands are for undergrads, it is extremely difficult for grad students enter this field.

Is it true? What about Ph.D? Are people with grad degree mostly ignored like he says?

 

From a M&A standpont and two equal individuals, one who has been in IB since obtaining an undergrad degree and the other individual spent his time getting a PhD; I can see how a PhD would be helpful for the job, but not necessarily beneficial.

Investment banking is much more of a trade than an academic discipline such as economics. If I was the client, I'd put much less weight on someone with a PhD in econ than someone who had spent their time in the IB field, moving up the ranks and getting actual deal experience. The PhD most likely wouldn't have as many relationships due to the time spent in academia vs working. The list goes on and on. Overall, there's just better ways to spend your time and efforts to break into IB.

My undergrad degree is in economics.

 
Best Response

It's more a function of the entry point and expectation of Ph.Ds (or grad students in general). The issue is that banks value actual work experience, but not degrees so they won't give you any credit for having been through grad school and a Ph.D grad would have to start as a first year analyst (ie. at the same level as 22-year old undergrad). Banks want analysts that are motivated, eager to learn and won't complain about working 100+ hours in a week doing mostly bitch work. Hence why 22-year old with no FT work experience are preferred. Ph.Ds on the other end tend to be insufferable know-it-all and have an over-inflated view of their knowledge (which is mostly irrelevant to a career in IB) and abilities so they really don't fit the mold. As a results, banks tend not to hire Ph.Ds for IBD.

On the other hand, they are other areas where the degree can be very valuable. Macro research and assets allocation are the most common and tend to be staffed by people with econ grad degrees and quant trading is a possibility depending on your area of focus and coding skills. BTW, I am not trying to shit on Ph.Ds (my gf is an econ Ph.D and does macro and FX strategy at a bank), just saying it as it is.

 

I have one (well, a PhD in finance, but close enough...) and nobody cares beyond making fun of me for being over-educated. I don't include "PhD" in my email signature, I don't tell people I have one, it just is a non-issue at this point. It did help with the entry into an associate IBD position, but beyond that, the skills are not transferable, it takes forever to actually earn the degree, and all my fake-doctor friends think I am wasting my education. But, sunk costs and all that...

 

I am by no means an expert on PhDs...but I doubt that one would help you to transition to a HF. It's also quite time intensive...

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. See my Blog & AMA
 

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