Is the Need To Go to A Target School Going Away?

I'm not sure if it's just me, but I have seen less and less ivy league kids doing IB by the year. It feels like more and more state school kids are doing IB.

Is this because interest in IB is increasing or are banks just recruiting less at ivy's and looking into more state schools?

 

I would say that banks prefer recruiting from Ivys because the kids are generally just smarter. That’s not to say that state schools and other privates don’t have intelligent kids but if you’re going to randomly choose kids to work on x billion dollar deals you probably will take your chances with Ivy League schools. Not to mention, those kids are so much better connected.

That being said, some other schools (even state schools) have programs designed to put kids into these high finance careers. So banks are starting to get kids from non-targets with more applicable experience and better technical training. For a bank this means they can spend less time teaching the analyst to be useful and get more out of them. But this only applies to some students obviously.

And like what was said above, some Ivy kids are probably starting to have better opps anyway. So, I would say that there is a greater prevalence of non-target students breaking in, but if Ivy League students still have the upper hand if they want the job usually.

 

I think it depends on the firm. Some firms still primarily recruit from targets, others take from nontargets but their best groups are still dominated by targets. If you look at GS TMT, MS M&A, PJT RSSG, etc. All of the good groups are dominated by targets, while some of the weaker groups are more acceptable of nontargets. Then you have some firms (ugh and I hate to even mention it because of all of the trolls) like RBC where there are, at a junior level, more nontargets and semitargets than targets.

In the future I think banks will be populated with a lot more nontargets as it seems like they are being recruited at a greater frequency at the junior level and they are staying on longer. The more nontarget MDs the more they'll recruit from their schools.

I think this can be explained because of the lack of interest in IB. Another commenter said that more people are going into tech and I think that's true. I also think the people more interested in finance are taking PE analyst roles more seriously. If they know that's where they'll end up, they may get a MM analyst offer over a MF one, but at the end of the day they don't have to deal with two years of IB and recruiting for another industry all over again. And it seems like more and more PE firms are starting analyst programs and expanding them to take on more analysts as well.

I also mentioned that the top groups are still dominated by targets, and those groups seem to have a higher attrition rate to PE. And the vast majority of people in PE are targets. My nontarget school has sent 1-2 people to a top EB (PJT/Moelis/Lazard/Evercore) every year for the past decade and only 1 of those analysts moved on to a MF, the rest who went to PE were in the MM or even LMM space.But the majority didn't even get placed and went to Corp Dev

 

I think one reason that hasn't been mentioned yet is that these "ivy schools" may not as significant of a talent advantage as they used to. This is likely a result of a dozen reasons but I feel the biggest one is cost. In state tuition at a lot of these top state schools is sub 15k a year while top Ivy's can run 60k+. Why would I pay full tuition at Dartmouth/Penn when I can live with my parents and pay 15k at Berk/UMich/UVA/UT.

Also I don't want to start this conversation but its possible affirmative action is one of these causes as well. The finance wizard rice farmers for parents Asian immigrant who didn't get into Columbia despite interviewing well and having great stats, might choose to go to in state Michigan instead.

 

I go to an Ivy (HYP) and can provide some color. There isn't a lot of interest in IB. There are just a ton of alternatives with similar pay and more interesting and/or meaningful work.

I would say most people at Ivies would rather do: 1. medicine (most schools in the country have unlimited premeds, no exception here) 2. law / politics/ public policy ("I want to make a difference" people) 3. MBB consulting -> CEO (tried and true route to fame and fortune) 4. tech (people who are big on perks and work/life balance) 5. PE/HF/VC (pays well, more interesting than IB)

Top IB groups are still desired, but not more than the above five. I think banks still want to recruit from their target schools, but the pay isn't enough to make up for the lifestyle anymore. At some point, they're either going to have to up the pay, decrease the work hours, or settle for non-Ivy League students.

 

I think that as another poster said, interest in IB from top targets is decreasing in favor of tech or other finance fields such as direct PE or Hedge funds. However, the number of people and the competition of IB is still only going up because of the immense interest in non-targets across the country. The competition certainly isn't as intense per student because the quality of competition is likely lower, but maybe 5 less ivy kids compete and 15 Kelley kids take their spots in competition.

 

I think for at least the last 10 or so years in IB, the 'need' to go to an Ivy was just that it made things easier. This forum has been talking about networking for well over a decade, so that means you could have gotten an offer from Arizona ten years ago if you were sharp, well-prepared, and did the necessary legwork (then tripled it). I think banks try to pick the best candidates, and the fact that there is a more diverse class in terms of alma maters suggests they are doing a better job at accepting top talent regardless of what school they went to (note that IB recruiting hasn't exactly become easier from an Ivy). It still holds that going to an Ivy has tremendous career benefits at the very least.

 

There are so many more interesting people doing incredible things than slots available at targets, so I don’t think going to one of those schools is as important as it might have been, although it definitely is still impressive / important if you’re lucky enough to get in.

I think the real advantage that target kids have isn’t necessarily that it’s easier to land opportunities. It’s that they have access to great networks and better understand what opportunities are actually great in the first place. As a result, target school students are increasingly shying away from IB, because they can see what their large networks have done and are realizing that while IB is still a fine place to start, other things are probably much better in the long run

 

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