How much essential is an undergraduate degree in economics to break in the world of Investment Banking / Asset Management?
How much essential is an undergraduate degree in economics to break in the world of Investment Banking / Asset Management?
Do you think that the possibilities of getting a job there in IB/AM (long term: HF/PE) will increase if I get an US/UK MBA after MSc in Finance in my home country?
Also, I’m not sure if the MSc (+ the MBA) will replace the lack of an undergraduate degree in economics... considering the competitiveness of the world of Finance (PE/HF/BB/EB) and my only legal background, I’m starting to believe that I won’t get any chance if I don’t start studying economics... What are your opinions about that?
What you study matters far less than what school you attend. There are plenty of people in finance who did not study Econ.
You cannot just do an MBA with no work experience, you won't get into any worthwhile program (T15) which means you will not get into IB.
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Maybe. You'd be better off going to the US if you're targeting MBA. However PE opps as a post-MBA associate are reduced compared to coming in as an analyst. Same with HF opps.
Great! I understand. Honestly, that “maybe” is a hopeful word. I was starting to think that switching my career in that way was going to be impossible. However, I understand that it won’t be easy.
I’ll also take into account your advise about the MBA 👍.
One last question: I know that PE/HF immediately after the MBA will be very very difficult. But breaking in there after some years in IB/AM? I’ve read that their recruiting process is much more selective.
Understood that it may depend a lot on networking, interviewes preparation... but I ask in order to broaden my perspective.
Not essential at all tbh, half of the people breaking in these days study something irrelevant.
I studied econ because I went to a smaller LAC that did not have a finance program, so I wanted to strengthen my quantitative skills. I thought especially macroeconomics was interesting / useful, since we learned a lot about the Federal Reserve and it's impact on the economy.
That being said, the vast majority of the skills I have acquired during my stint in banking have been learned on the job. I have several friends who studied political science, history, English, etc. who have all successfully broken into banking and are doing well at their jobs. Ultimately, it's up to you to network, put yourself out there, and study your behaviorals / technicals for you interview. I agree with the above that it definitely doesn't matter as much what you study.
Great! I understand. Honestly, that "maybe" is a hopeful word. I was starting to think that switching my career in that way was going to be impossible. However, I understand that it won't be easy.
I'll also take into account your advise about the MBA 👍.
One last question: I know that PE/HF immediately after the MBA will be very very difficult. But breaking in there after some years in IB/AM? I've read that their recruiting process is much more selective.
Understood that it may depend a lot on networking, interviewes preparation... but I ask in order to broaden my perspective
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Not necessarily. For example, my mentor during my summer internship last year had a JD and was a lawyer for many years before he switched to banking. Now he's an MD and runs one of the top product groups at our BB. One thing that stuck with me is how many transferrable skills there are between law and banking. Both are client-facing, both require very strong interpersonal and analytical skills. You have to think on your feet and convey info effectively.
I think english is more essential
Hah, well... I’m still studying english and trying to use what I’ve learned till now...
Law student here. Despite all the negativity thrown to law, I don't see much difference from working in banking and law. In both you will need to grind and stay in the office 14 hours a day, kissing ass, not sleeping, etc. But maybe I could make you consider another route. Look at all those who work in IB, 80% would prefer to be entrepreneurs or live from investments. So why would you take another field from 0 to get into another corporate job where of course, the pay may be higher, to end it hating in the same way as law? I also wanted to go from law to banking but all those things faded after I put foot into the corporate world.
The salary of an average law firm owner is 200k per year in US, so considering you're ambitious enough to get into IB, I would say that you can easily go a little upper than 200k if you open your firm and put the same work which you would put into banking. You will have some dignity as no client will come with the same ego as any CEO in IB to tell you how things are done in the business world because they know it better. The average citizen cannot even read a fine, so I would gladly sacrifice the cut in potential salary to get some respect.
Also keep in mind that lawyers have a monopoly on the legal professions which is already a barrier for competition and despite the numbers that there are too many lawyers, this is said since 1970 but guess what there is always place for the good ones which is like 5% of all those who graduate (just take a look at your colleagues, do you think that a sociologist with a thesis in sex genders will really fucking grind in the legal profession?). Just get into the Bar, pass it, put a table and a computer, network in the same way as you would network to get an IB offer and you will afford a middle-class lifestyle with the potential of getting into mid-high.
I think that in the Millionaire Next Door it is also mentioned that one of the top 3 professions to be a millionaire is being a lawyer due to the fact that they have a monopoly over a profession and is purely intellectual where there is no need of high expenses to get an income which would not be the case of those who want to open their Private Equity or Hedge Fund where they need immense capital from outside. The critique that you need to bill hours as a lawyer even at your own law firm happens only when you start. After a while if you do well you start to recruit paralegals and the extra income from their work goes to you.
And I will not start with the social perceptions of being a lawyer and a banker and who can solve more easily issues in their communities, help someone in need (where money would be corruption) or discuss policy/politics at a higher level. The perception which people have about high-finance finished in 2008.
But at the end, are you 100% decided that you don't want to practice law and wanna get into finance?
Survivorship bias, the predisposition to evaluate a data set by focusing on the “survivors” rather than also examining the record of non-survivors, is important to understand for peer groups, which tend to have a relatively large number of constituents that disappear.
Deducing any probabilistic correlation between 'econ degree' and 'capacity to break into IB' is dangerous.
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