LMM & MM PE: Double-down on or skip the MBA?

Hi there - as a second year pre-MBA associate who has always planned on going to get an MBA even though would not technically need one to get a direct promotion, I’m wondering how my fellow pre-MBA associates in the LMM and MM (or any firm where you aren’t booted out after 2 years) are changing or aren’t changing their decision calculus as it relates to applying for an MBA given the recent macroeconomic events.

On some level, there are boosted pros and cons for me. Pros - (1) eliminate some fund-level risk (I went from a larger fund to a debut fund that midway through fundraising for II); (2) odds are enrolling in 2021 gives enough cushion to graduate into a recovery; (3) it may be a non-recurring moment of lower competition (relatively) as candidates back out and MBAs hedge enrollment numbers by accepting more.

Cons - (1) more than ever the risk of having to re-recruit back into PE feels at large, especially if (I am) at a firm you already know you like and that you’d otherwise be happy staying at; (2) the opportunity cost begins to feel greater if you plan or planned on taking out savings from the market to fund school or any travel; (3) concerns over the qualitative aspects of an MBA being affected (international travel limitations, virtual classes and events, etc).

How is everybody feeling?

 
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In my opinion it depends on a few things. What are your long term goals, how good has your PE experience been, how much confidence do you have in your current fund, etc.

At the end of the day for most people in PE, if you aren't at a place where you're going to get 2 and outed, going back for an MBA doesn't make any financial sense. You're unlikely to move from the LMM/MM to an UMM shop after the MBA and it's competitive to get back into PE post-MBA, even though you'll have a better chance given pre-MBA experience. So if money and career trajectory are the most important factors, and you have an offer in hand to be a Senior Associate/VP then it probably doesn't make sense.

With that being said, I think there's plenty of reasons to go back for an MBA. It gives you some optionality in terms of careers, gives you a strong network, general de-risking in term of hireability, and a break from work either to party, relax, explore other opportunities, etc.

CompBanker posted an all time great post on his decision to get an MBA. Definetly worth a read if you haven't seen it.

If you aren't happy, don't have confidence in your current fund (or even confidence in a long-term career in PE, want to try something new, take sometime off, network, etc then it might be worth considering.

With regards to the Coronavirus and how it will impact things, it's too soon to tell in my opinion. It's probably not worth making a decision based on how people will be feeling in September or trying to figure out what the broader macro environemnt will be. Things could get worse which might push people back to school or they could hold steady. Maybe it's a down year for international applicants in general given Covid. It's too early to tell.

 

Thanks, this is a great perspective and I generally agree. The one concern that isn't something that I can realistically solve/know for certain is whether an MBA or not having one is a barrier not from senior associate to VP, but rather from Principal to Partner especially when most partners today do have MBAs given they were much more of a pre-requisite a decade ago. It feels like this is beginning to matter less and less especially in the LMM (and to LPs in this space), but it's such a structured industry that it's definitely a consideration for me.

 

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