Would be really interested to hear people who are farther along in their career give their opinion on how important prestige is.
Very few of us join investment banking to be career bankers. I constantly hear about the 2-2-2 plan (2 years of IB, 2 years of PE, 2 year MBA) as the best way to start a career and accomplish big things, and the prestige of each stop along the way is emphasized to the nth degree.
Does the prestige matter that much? It’s obviously a factor in business success, but not the 100% deciding factor. Have you seen people effectively boxed out of industries and opportunities because they were an analyst at a boutique vs a MM vs a BB / EB? If you aren’t at an EB / BB, are you viewed as competitive to them? Do you have a lot more to prove from an interviewer’s perspective?
Curious to how you all think about this
Outside of WSO in the real world, no one gives a shit about which bank you worked at. For the majority of exit opportunities (PE/HF/VC/Corp) employers care if you were at a "good bank" where you got a solid learning experience. Any bank talked about on this website (every EB/BB/top MM like JEF/WB) will warrant you a look. A lot of exit opps come with self selection, as your priorities change after getting the shit kicked out of you for two years in IB. As a college kid, you may want to go a MF after 2 years in IB, but that's because you've never been hit with multiple 100 hour weeks in just a month.
Currently an analyst at a top MM and I get the majority of looks that any BB/EB would get. As stated before a lot of exit opps are derived from personal interests and how well you prepare/do in the interviews. Regardless of where you are, if you eat shit for at least a year, get a great learning experience, dive on some less desirable deals that can be a grind, you can prepare yourself for just about any exit. Focus on getting quality reps and you can position yourself very well for whatever you want to do after IB (assuming you want to leave). If you stay in IB, you can become a quality A2A which is a very valuable commodity. From my personal experience and at my bank, A2As tend to place in higher bonus buckets and are more relied upon than MBA associates. My bottom line is that by working in IB, and assuming you are at a recognized bank, you can set yourself up for a lot of opportunities. A lot of rankings on this website are done by insecure interns who base their entire identity on where they got an offer. We all gotta break out of the WSO bubble.
I disagree with the above. There are just way too many banks / groups to not do some sort of filtering when it comes to buyside recruiting. Even if you look at the between "good" and "bad" groups at the same bank, you can start seeing differences in placement. Its not the end of the world if you don't end up at GS TMT like the above poster said, but its a pretty big exaggeration to say it doesn't matter to a certain extent lol
I think this is true for a few MFs but I think you’d be surprised. Take a look at Oaktree and everyone’s backgrounds. I think you’ll be a little surprised to see some non traditional backgrounds of investment professionals. And by non traditional I mean non target undergrad + small MM/boutique no name banks
Agreed. It definitely matters. People on here like to pretend it doesn’t, but there’s a reason people want the best brand/name/prestige
More important early in your career rather than later. Why does Blackstone have an easier time raising money than a LMM firm trying to raise its second $250m fund while its first fund is returning 25%+ returns? Because nobody gets fired for investing with Blackstone. It is the same with recruiting - much less risk for anyone who signs off on hiring the guy from Goldman versus the no-name bank in a tertiary city. Also, many people don't like to spend a ton of time on recruiting so it is easier to go for the main stats. As you get more senior, you should have enough of a network and shown enough of a track record (either from things you've done in your career or "prestigious" firms signing off on you) that the prestige factor alone becomes less important
What you said completely makes sense, but this is not what I was arguing. I'm not comparing GS to a no name boutique, but rather the main BB/EB/top MM firms that dominate the street. For most exit opps, employers are not going to split hairs over JPM versus Citi, or BofA versus JEF for example. It's merely a check in the box to get the interview. The people who get the jobs after getting through the screen is mainly based on self-performance and how well you prepared.
If someone’s at a regular well known MM, is sticking around for A2A and beyond a smart play? Or you think it’s worth lateraling up to have a good career trajectory? All of our best MDs come from better banks so I’m not so sure.
important to the point that if you didnt go to oxbridge/lse/wharton/harvard/yale, youre never getting past a glass ceiling
I think all of the above commenters have pretty solid points here. I think prestige on this site is significantly overplayed and oversimplified. The idea that I could suggest an IB analyst from WF went to Blackstone might sound blasphemous, but I think that some people overstate the importance of access to specific opportunities by working at specific investment banks.
That's not to say that some opportunities may be easier to attain from a specific place. Very honestly, for some positions at my company, we only hire people from a set of five business schools, no kidding. I don't think that means you can't get a really great job overall, though. You don't need to work at Goldman Sachs to work at KKR or Blackstone for PE. To work at Optiver or Two Sigma, you don't need to win a gold medal at IMO. That said, many positions require hard work, determination, and focus, and a lot of people who have those things try to get the most prestigious positions out there. I think there's some self-selection there because of that at a minimum.
Overall though, those top position are not necessary to be successful or to make the next successful step at all. And I think way more people drive themselves up a wall trying to get those ultra-prestigious positions rather than actually putting the work in to getting there. It drives a lot of them crazy.
Can it matter? Yes. Does it have to matter? No. Is it the main thing in life you should be focused on? Not at all. What should you be focused on? Working hard, doing your best at each step, and maintaining a strong pursuit of your own goals.
Edit: I noticed that I said all of the above commenters and then I saw bottombuckethardo's comment and I think his doesn't count in.
To work at Optiver or Two Sigma, you likely do have to qualify for AIME or even USAMO if its a more prestigious prop shop (which demonstrates a culmination of hard work, determination, and focus throughout your math education), or develop a similar level of math aptitude in college (extremely hard to do so at that point). This is not really comparable to working at GS to get to BX.
You make a very good point. At the same time, prestige doesn't alone mean that you do or do not have the things necessary for such a job. I'll agree that you need to have a cumulation of hard work, determination, and focus throughout your math education to work in prop trading at a top shop, just as you need to show determination to work at any top performing company. This may even require at a base line qualifying for AIME for most people to be realistically considered for the position, but I'm going to guess that getting a gold medal in the IMO is probably not necessary to work for one of those places. In fact, I can even name you people who never qualified for US AIME working for Two Sigma, Optiver, and Citadel.
Now, did each of those people have extremely impressive backgrounds? Yes. Did they all work extremely hard to get the position? Yes. Did they need to have the top awards in every area to get there? No.
I'll also agree with you that working as GS to get BX is totally different from this, and represents something totally separate from the kind of work needed to get an IMO gold. I included those both as top-of-mind examples of people with really "prestigious" backgrounds finding success in financial services, and being seen as the sort of "prestige models" that everyone on a forum like this idolizes. It's not comparable in the real world, but on a site like this one, both paths are the kind of thing that people pay attention to. It's the things people strive to earn. (Ok. Maybe not everyone here strives to earn an IMO gold, but I bet a lot of people visiting this site might want to work for Two Sigma or Optiver, since they are talked about a bit here.)
My overall point is that you don't need to have the most prestigious award or job in the world to make it to the next step. Maintaining strong pursuit of your goals and putting the work in will always be necessary. Winning an IMO gold medal isn't.
It's hilarious how so many people in finance idolize quants as geniuses with medal-winning backgrounds...that's not the case. A college roommate of mine took AB calc his senior year of high school and is now (still) a quant at one of the funds you mentioned. There are far more quant jobs than medalists.
It means everything
You shouldn’t….
Compensation > prestige
While the 2 are often correlated, prestige is too often used by firms to get you to work harder for less.
I’m working at a growth equity firm next year and will make notably more than my peers in traditional PE/BB banking/MBB (in line with high end of EB comp). Better expensing policy too. I know a lot of people at my target who didn’t even apply because it wasn’t “real PE.”
Guessing this is Insight Partners?
Congrats on the offer but noone cares
Prestige matters in that it buys you optionality. If there's ever a point that my "dream" role comes up, I would want to make sure that I don't get automatically dinged from a credentials standpoint. For better or for worse, if you've followed a more "prestigious path", people assume that you are more competent, and now more than ever, people are getting roles for many reasons other than competence (ie. nepotism, diversity recruiting which was unbelievably strong during on-cycle this year).
I see the general hierarchy as broad reflections of competence, but oftentimes there is a fair amount of dislocation especially in the short term. For instance, a top candidate at a top target might get a CS offer instead of an EVR offer, and a less competent candidate at a random school might get an offer at a top group, but in the long term, people tend to (mostly) get what they deserve. A more digestible analogy is with schools - if someone went to Harvard, it's relatively likely that they're smart. Sure, you'll have folks who get in for other reasons, but no one is going to doubt you right off the hook if you say you went to Harvard, even though I'm sure Harvard has its fair share of dumb folks. I'm sure there are many top candidates at state schools that are significantly better than the aforementioned students at Harvard. That said, the Harvard person doesn't need to prove that they are smart, because the assumption is already that they are, whereas someone from a less "prestigious" school doesn't have that same presupposition (at least for recruiting for jobs immediately after college). People in general tend to group things and oftentimes over-infer patterns, but in the case that someone has a prestigious track record / background, then it's fairly easy to infer that they are also competent.
Would disagree with the current top comment that "no one gives a shit about which bank you worked at". I think every PE / HF will care if you worked at PJT RX vs say a Chicago based MM firm. If you are looking purely at the most competitive roles during on-cycle, which are MFPE roles, the bank / group you're in will matter substantially. Same thing with top hedge funds (ie Tiger Cubs). As per the previous comments, you certainly will see the occasional person from some MM firm end up at KKR NY PE, but that doesn't mean that if you want to land a MF, the best path is to go to William Blair. Most of the time, a person like that has some extremely extenuating circumstances that allowed them to get that offer (ie. father was a partner at the firm, or firm had to hire one more diversity candidate) and that doesn't mean that if you want to achieve the same result, you should try to do the same thing, because odds are, it's going to be pretty hard to replicate. It's much easier to achieve that from say, EVR M&A than a random MM, but that doesn't mean that it's impossible out of a MM, it's just incredibly hard and there are dozens of factors that affect the binary outcome of getting an offer that are outside of your control. If you ignore private equity and hedge funds, then yes - perhaps other roles such as corp dev might care less, but the bottom line is that you'll get much more visibility in a more "prestigious" platform not only for your next role, but it will even help (slightly) for MBA applications, as well as post-MBA roles. To be frank, I don't think your experience at a top group at GS / MS will be very different from your experience at a MM, but if you view banking as a stepping stone, then there is some value to be had when future employers assume you are competent just by way of the team that you were previously on (though this can be disproved if you are not actually). The best people tend to go to the most competitive jobs in general, and most of the time, people generally go to a place that they deserve, plus or minus a standard deviation or two.
My main thing with the 222 plan is what do you do after the MBA? I get it if you are supposedly increasing your value or trying to get into higher paying fields but a lot of people do the MBA to either go back to PE (granted they get promoted, but its becoming more common for PE to not require the MBA anymore), or they exit out of the rat race and go for corp dev / a less stressful job, in which case you never needed that path anyway. People are so concerned whether they work at bank number 3 vs number 10 but its all about where you want to go?
Maybe I am missing something with the MBA but any sort of "dream job" that people have outside the buyside vs sellside situation is all networking (i.e. sports management like doing finance for a pro team, being a CEO/CFO somewhere, etc), and even the best roles in that system seem to be more of the same and/or you could have gotten a bigger benefit from networking and going to a smaller fund to be promoted
I agree that networking is the main thing that helps folks get jobs. Totally agreed. A decent candidate at a mid BB who networks extensively can easily get a far better offer / PE gig than a top BB candidate with lackluster networking. Same thing applied for post-MBA roles. That said, a candidate at a top BB who networks very hard will, on average, beat a comparable candidate that networks an equivalent amount and is similar from a profile perspective from a mid BB.
The way I think about it is - all else equal, what exactly improves your candidacy and improves your expected outcome? If you've learned your technicals, know your story, and networked sufficiently, why not try to upgrade platforms so that you can put your best foot forward? Being at say, JPM vs DB can have a very significant effect on your recruiting efforts. I think in the case that you have exhausted all possible avenues of improving your candidacy, and assuming you have a chance to lateral / leave, only in that case does it make more sense to think about prestige. Ie, if you're still in college with a subpar GPA, poor test scores, little relevant experience, and minimal networking, then it doesn't make sense to obsess over the difference between MS and UBS. However, if you're a generally strong candidate at a MM firm, who has strong test scores from a target school, good deal experience, and a good understanding of private equity, why not try to lateral to a GS / MS / EVR to give yourself a shot at MFPE? The question really is about the opportunity cost of trying to leave / lateral, in terms of both starting your reputation over and a time perspective, as compared to staying at your current gig and doing a great job. It's not always worth it, but I certainly believe that in many circumstances it certainly is.
oh 100%. I agree fully with that and I never said prestige did not matter, as it clearly does. You're right in that all else equal why not try to upgrade. Only push back I would have is I find a lot of top BB/EB kids do not network as hard as they assume they do not have to, but besides that you're right.
My comment was more on the after of the 222 plan. Your response is completely correct within the realm of getting to the next stages of the 222, but I am more concerned with after that. Yes, you can upgrade and go to HBS vs the number 8 MBA by lateraling, but my bigger point was what does it all matter if you are going to return to the same place even if one rung higher? The networking point was not aimed as say becoming an associate at a MF vs UMM, as yes the bank name matters in that case, but above and beyond the finance world. Like I said above, things like working for a pro sports team in finance or even working toward an actual managerial role there, becoming a CFO/CEO in a company, or even in becoming part of the upper echelon of a fund/bank. My larger idea is more that even if you did GS->Top MF->HBS that will not grant you immediate access to becoming CFO of a FAANG one day or even close. Will it give you a better chance? Sure, but for roles like that its the difference between a 5% chance and a 1% chance. Yes you are improving the odds, but its still playing the lottery, and one could argue the compounded odds of doing all of that in the right steps (say 4% chance of getting GS, 3% of getting top MF, etc) vs not being as aggressive would compound out to the same overall odds of making it there.
TLDR: You are right within getting to a better PE outcome or higher MBA program, but beyond the 222 plan it starts to breakdown into more networking
It's access, but otherwise, it's bullshit.
Get stuff done. Ask good questions.
Be your own brand. However I did go to the best damn school in the country-- UIUC.
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