I-Banking may lower your odds of getting into Top MBA programs

Roller4Life's picture
Rank: Orangutan | 285

This may sound strange at first.

If you think about it, most analysts at BBs come from decent to very good schools and have stellar gpas along with high GMAT scores and 2-4 years of very good along with high paying i-Banking experience. We know these analyst positions are not easy to get.

So your thinking he has the grades from the great school, he has a high gmat and some great work experience so he should easily be able to get into a Top MBA program.

Unfortunately, there are a huge number of people that are also analysts at BB banks that have the same high gpas from good schools along with high gmat scores and the same analyst experience.

This makes it tougher for an i-Banking analyst to differentiate him/her self from the rest of the other analysts from BBs.

On the other hand, if one were to go into industry and have the same high gpa, high gmat score and 4 or so years of work experience in an accelerated program they would be competing with a much smaller peer group (those from the same position and industry). This would make it easier for them to stand out when compared to their peers.

This would make it easier for someone with non-IB experience that happened to have the high gpa, gmat and solid work experience get into a Top MBA program.

Comments (35)

Jan 5, 2007

Look dude,

Anyone who's only goal for doing IB is getting into a top MBA program seems illogical to me. The MBA is supposed to help you achieve success, not the other way around.

If you look at it this way, the skill set you achieve is more important than the school you went to. After all, some very successful people didnt go to HBS.

I worked with this guy in my junior year that came from a no name background and got into HBS after being rejected by every other school. Alternatively, I worked someone this summer that did his analyst stint at a top tier bank/group, got to KKR then transitioned into a principal role at another mega fund --who would you rather be?

If you think the banking background will further your chances into the career of your choice then do it. If you just want a top MBA find a differentiated experience and go from there. There's a reason why so many MBAs want ibd jobs, and realisticaly as an analyst you have the inside track on those.

If you want IBD AND TOP TIER MBA you need to differentiate yourself after your analyst stint.

This is just my opinion, but to me the top MBA is supposed to improve your career goals, if it doesn't then what is the point in getting one in the first place. Even HBS doesnt have 100% placement after 3 months, think about that.

Jan 5, 2007

other things b-schools consider:

  1. ranking as an analyst(career progression)
  2. your job post-analyst (tier 1 PE is a typical path, but some interesting paths would add value as well)
  3. humanitarianism (sp)

You can differentiate yourself, a tier 1 analyst at MS M&A isn't the same as a tier 4 analyst who's jobless after two years from a shit bank's shit group.

Jan 5, 2007

Not sure where you are getting your information from but there have been plenty of people who have gone to b-school after a 2 or 3 year IB analyst stint. Two years in IB is equivalent (IMO) to 3 or 4 years in other industries based on pure number of hours worked and deal/business exposure. One of the reasons IB analysts move over to the buyside prior to b-school is bc getting a PE/HF job post b-school is significantly easier with pre-mba experience. Obviously, the average years of WE for b-schools varies (3-5 years on average with schools like HBS trending younger).

A top tier MBA after 2-3 years in IB is both common and feasible.

Jan 5, 2007

While it is common to go 2-3 years in IB, and then move to PE,buyside, etc, it is definitely not atypical for someone to go to B school after serving 2 years as an analyst. The key here will be to show how you've grown, the responsibilities you've taken on, the work you've put on, and a good reason for wanting to pursue an MBA at this stage of your career. Do well on the GMAT, get supportive letters of rec, and nail your essays. Additionally, if you've had some time to volunteer, or held leadership club positions during U Grad, mention all of that as well.

While some schools prefer older candidates, many schools prefer younger, fresher minds, and most have an average age of 25-26 or so. Focus less on your lack of experience in years and focus on your experience in terms of quality, and amount of work - as an banker, 2 years can very easily be the equivalent of 3+ years for a more...sensible...career.

Jan 5, 2007

Cool, thanks for clearing that up. It makes sense that more people choose to go to PE first because post-MBA PE recruiting is much easier with previous experience.
As a follow up question, how common is it for IB analysts to get an offer to return as an associate post-MBA? And if they are given that offer, can their MBA be sponsored?

Jan 5, 2007

Either way, you need 4-5 yrs of work experience before your top MBA. If you're going to give up on the networking, look into fldps or big 4 and try to switch over after some decent work experience. From a top 15 school, it is relatively easy to transition into IB as an associate. Key word: "relatively".

Jan 5, 2007

@"Sosa_21" If you have a half decent head on your shoulders, it is easy to do IB from a top school. Top 9 or 10 is very doable and 10 - 15 is reasonably likely. But you got a few years ahead of you and who knows what the hiring/economy will be like by then.

Jan 5, 2007

Business schools want a diverse student body, and I think, they often ding strong candidates if there are too many similar candidates.

Jan 5, 2007
Ske7ch:

Business schools want a diverse student body, and I think, they often ding strong candidates if there are too many similar candidates.

Exactly, think of a common story. upper middle/wealthy family, went to private school, went to ivy league, work at a BB. It just sounds too simple and common, and as someone said similar. You just have to show your different through outside activities. Like i'm about to become the #2 guy in a charity organization started by a friend of mine that has become really successful (as an extra curricular of course), I do this not only to because its a good cause, but to add additional substance to my life.

Not saying every person in IB has the same story but i'm sure the ones that get expected have something special about themselves.

You give me a gift? BAM Thank you note! You invite me somewhere? POW RSVP! You do me a favor? WHAM Favor returned! Do not test my politeness.

Jan 5, 2007
Ske7ch:

Business schools want a diverse student body, and I think, they often ding strong candidates if there are too many similar candidates.

What are some good careers that allow weaker candidates to get in? Is working at startups one? (MBAs don't seem to big in the startup world, so I've wondered if very few people work for a startup and then hit up an MBA program.)

  • eyelikecheese
  •  Jan 5, 2007

I'm no pro at MBA admissions, but all the bankers/PE guys, it seems, would get grouped into one group. These top schools do value diversity; therefore, your compared against all the banker/financial types, so naturally the best-of-the-best of that group get selected for admissions. Whereas, someone in marketing/strat at F500 or NPO is grouped in a different cluster for admissions purposes.

Jan 5, 2007
eyelikecheese:

I'm no pro at MBA admissions, but all the bankers/PE guys, it seems, would get grouped into one group. These top schools do value diversity; therefore, your compared against all the banker/financial types, so naturally the best-of-the-best of that group get selected for admissions. Whereas, someone in marketing/strat at F500 or NPO is grouped in a different cluster for admissions purposes.

Right so essentially is it fair to say
If your sole goal is to get into a top Bschool then you probably should not go into ibanking ?

Jan 5, 2007

As cheeseman said, the problem for bankers is that they are compared to other bankers, who tend to be incredibly competitive. My guess is that B-Schools want to limit the amount of any one group (bankers, consultants, engineers) in their school, to avoid a homogenous group. Therefore, they can't take every banker that applies. After accepting the HYP grads who had 3.7+ GPA's and 750 GMATS and played NCAA sports before going on to Goldman or Morgan Stanley, there just isn't that much room for the UVA grad with a 3.5 GPA and 720 GMAT who worked at BAML.

I also can't help but wonder if the populist rage at investment banks hasn't seeped into the admissions committees. I am just throwing this out here, but investment bankers are probably the most hated people in America except for child molesters and terrorists. Seriously.

Jan 5, 2007
Buyside CFA:

I am just throwing this out here, but investment bankers are probably the most hated people in America except for child molesters and terrorists. Seriously.

Haha. Classic.

westcoaster:

Personally, I am glad the model is changing, the world needs more people who want to do more than make bills and move money.

Definitely. Top programs want people who genuinely do good.

Jan 5, 2007

I've been reading more and more about top MBA programs looking for socially responsible work being done beforehand. For instance, while I am pursuing an analyst stint at a BB, I am also becoming involved with a multinational non-profit opening up trade relations and investment into undeveloped regions internationally... Can't just be a banker/PE guy anymore and expect to have HBS handed to you on a platter.

Personally, I am glad the model is changing, the world needs more people who want to do more than make bills and move money.

Jan 5, 2007

Unless the schools can force who takes what jobs post graduation, this is a worthless exercise. Recently ran across a Top MBA student who did non profit before, now want to pursue for profit consulting. I am sure its the same across the board. Non profit (or similar do good jobs) will never pay $150K+ debt.

Jan 5, 2007

It used to be a lot easier to get into HBS, but as population grows and the demand for MBAs grow more people apply. class sizes don't grow at the same rate, but the # of high-horsepower candidates are growing, and that is leading to top-3 school types going to top-10 MBA programs. I think this is only going to continue where H/S/W will become so selective that the process becomes more of a subjective adcom-led lottery than something really based off of merit. I think there will be an overflow of GS/MS KKR/BX wonderboys settling in the top-7 programs, and as a result getting into the top-7 will become so hard that eventually the MIT/Chicago/Kellogg/Columbia types of today will have to settle for the Duke/Darden/NYU type MBAs, and so on and so on. I think that as employers realize the little difference in candidate quality between HBS and the rest of the top-7, the schools will eventually be looked at with equal reverence, where today's top-7 will be the new top-3.

Jan 5, 2007
jc100021:

I think there will be an overflow of GS/MS KKR/BX wonderboys settling in the top-7 programs, and as a result getting into the top-7 will become so hard that eventually the MIT/Chicago/Kellogg/Columbia types of today will have to settle for the Duke/Darden/NYU type MBAs, and so on and so on.

That would only make sense if those elite firms were expanding hiring. The top banks and PE firms (and whatever else) hire pretty much the same number of people in every good year. You're never going to have 300 people leaving megafunds for an MBA in a given year.

Bankers think that working at GS instead of Citi is a huge difference, but that's only true within banking: obviously, GS is more like Citi than it is like McKinsey or the Peace Corps or GE. The difference between banks or PE firms or whatever is minuscule compared to the difference between industries themselves, and that's the point:.

Jan 5, 2007

hooray for coming from a poor background going to a state school and being a prop trader then huzzah

Jan 5, 2007

I still think its bullshit. If you really want to help society, you would give your $150K to poor people, not some fucking B-School. Most people realize that B-School is beneficial only in terms of helping your career - the MBA won't add a lot of value in terms of hard skills for managers and financial services professionals, let alone managers of charitable organizations.

Most of these grads are going into Financial Services and consulting - not exactly the landing places of people who truly want to help society. There is only one reason to go into investment banking - you want to get PAID.

Jan 5, 2007

I wonder how this dynamic will change in 5 years, once fingers crossed the economy picks back up and wall street starts roaring again

Jan 5, 2007

Military, Peace Corps, Start-up, etc. Non-traditional.

Jan 5, 2007

Banking is far from toxic. Sure, it's more competitive now - and not because adcoms view bankers "any less" per se. It's really a numbers game. More volume of finance (IB/PE) applicants, but the class sizes have remained relatively fixed over the last 3+ decades or so (+/- a handful of spots each year).

Some historical context:

In the 1980s, the IB analyst classes were TINY. They basically targeted the Ivys and Stanford/MIT, pretty much. Remember that back then, there were no global investment banks (as capital markets were hardly global, and cross-border M&A really was at ground zero -- with Joe Perella and Bruce Wasserstein at First Boston being one of the pioneers). You're talking literally a handful of folks, as back then it was super exclusive to get into investment banking right out of an Ivy League college. And it was a virtual guarantee of getting into an HBS, Stanford or Wharton after 2 years as an IB analyst.

Fast forward to the 1990s. The US investment banks expand overseas, there's cross-border mergers of banks. Except for Goldman, all the major investment banks go public (Goldman being the very last). They expand. Headcount expands because dealflow expands, as the whole financial sector expands (the beginnings of the asset/credit bubble began in the 1980s, and was hitting its stride in the 1990s -- cheap capital means it's easier for companies to raise money to expand and/or acquire, which means more biz for investment bankers). On top of that, banks go global.

So by the 1990s, the IB analyst classes expand, big time. Not only are we talking the NY office, but they're bringing in more analysts to be staffed in London, HK, Tokyo, etc. And on top of that, industry groups become actual groups (rather than just individual MDs with a client book, who then staffs analysts/associates out of a general pool). So MDs start building their own mini-empires to assert their ego and power, a natural human thing to do when you go from a cozy, chummy partnership in the 1980s to a faceless, publicly traded corporation in the 1990s.

So during this time with larger headcount needs at the analyst level, banks do expand their "target list" of colleges beyond just a small handful of Ivies. You'd see more Michigan BBAs, UCLA, etc. within the analyst ranks. And closer to the late 1990s, banking/finance wasn't the shiznit anymore at the Ivies, as the dot-com boom went into full force, so the banks had to expand beyond the Ivies.

So by the 1990s, it wasn't quite the shoe-in for analysts. But still, so long as you worked at a bulge bracket (GS, MS, ML, JPM, Salomon, Lehman, CSFB, Bear, DLJ, or the boutiques like Lazard), you still had a pretty good shot - you weren't guaranteed at H/S/W, but still the overwhelming majority got in. Or another way to put it: if you worked at GS/MS, your chances were probably close to 90% at H/S/W. The rest of the bulge bracket, maybe around 60-75%. Also, in the 1990s, it was still pretty common to apply right after the 2-year mark while still an analyst, but there certainly were more folks doing a 1-year stint in corp dev, or working in the then-emerging area of PE/VC/HF (at least in terms of hiring junior staff - these asset classes have been around of course for a while, but they didn't really expand their headcount big time until the late 1990s and into the 2000s).

Now, fast forward to the 2000s. It's a feeding frenzy as the credit/capital markets are frothy globally (until 2008). During this time, banks are expanding like no tomorrow, boosting headcount, especially at the junior levels.

So they expand the list of target schools even further (both in the US and abroad). You're getting a more diverse group of analysts (not just by school, but nationality and gender - not just a bunch of upper crust white guys from Princeton). Most notably, the Asian Invasion happens (as an aside, when I was an analyst, I was one of maybe 5-6 Asian analysts globally in my year, which had a pool of about 60-70 -- and the rest were basically upper middle class white - and this was the mid- to late-90s).

Now, with a far, far larger group of IB analysts (but the class sizes at H/S/W not really changing since the 1980s, PLUS the fact that the b-schools have been pretty successful at boosting applications from a greater variety of folks), H/S/W is still possible, but it's not longer like the majority of folks get in anymore. Maybe half of the IB analyst alums (i.e. they worked in IB for one time or another, but also did PE or corp dev when they were applying) from the big banks.

Also, by now, most of the IB analysts didn't apply as analysts, but many did their 2 years, then either stayed a 3rd year or went into PE, HF, VC or corp dev or non-profit or something like that.

In any case, by the 2000s, the sheer volume of folks with IB backgrounds ballooned.

And that's where we're at right now. H/S/W is trying to go younger, so they are encouraging more folks to apply sooner than later, so that trend of "2 yrs IB + 1 yr PE" may not be as key as before.

But nonetheless -- being in IB certainly is far from being fatal. It's just not a shoe-in like it was decades earlier.

Same thing with PE -- it may have been a shoe-in in the 1990s when there were very, very, very few folks who could get PE jobs pre-MBA (also because there simply weren't as many funds out there, so less headcount). But now given how much the sector has grown, more headcount = more people competing for MBA spots.

Now I feel like an old man.

Jan 5, 2007

Alex, what do you think about the point I made that much the way IB expanded their targets, PE will eventually expand their targets to the M7? I feel this way about it--if those BX and KKR guys don't go to the magic top-3 schools, they will probably end up going in the top 7, and PE firms will start recruiting those guys with mega-PE firm experience.

Jan 5, 2007
jc100021:

Alex, what do you think about the point I made that much the way IB expanded their targets, PE will eventually expand their targets to the M7? I feel this way about it--if those BX and KKR guys don't go to the magic top-3 schools, they will probably end up going in the top 7, and PE firms will start recruiting those guys with mega-PE firm experience.

I don't know where you're getting your data points, but KKR, BX, etc are still sending their kids to the TOP schools. Even "lesser" firms are sending their kids to the top schools. Ie, Bain boasts a 100% acceptance rate to anyone who wants to go to Harvard/Stanford. Whether or not this is true, I can't confirm, but I can say for a fact that they say it.

Moreover, if the KKR guys aren't getting into HBS, who is? You realize these people have great GPAs from strong schools and worked at a top BB/boutique prior to their experiences? They're pretty much a shoe-in on paper...

Jan 5, 2007

what about international experience in a country other than your own, how is that viewed in the 2000's?

Jan 5, 2007

thanks Alex. I guess IB puts you in a competitive category. The key might be to differentiate yourself after two years of IB

Jan 5, 2007

There were a few posts on this board talking about how its been a bloodbath for even the top finance/PE guys at HBS this year. HBS seems to be going for more diversity and even admits that had they gone only by merit, the class would be very different this year.

http://poetsandquants.com/2010/12/17/pe-vs-pc-at-h...

Jan 5, 2007
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