Pre-MBA: Engineering vs. Finance... Does it matter?
First time poster here - Have read some good stuff on this forum, so figured I might be able to get some help on my particular scenario (and for anyone else in the same position). I'm yet another engineering guy pretty set on moving over to the finance side of my industry (energy), so any thoughts/comments are appreciated.
I'm currently coming up on my 2nd year working at a Mid-Large size E&P company in Houston, where I'll be moving in to a role as a Reservoir Engineer after completing 2 years of a new-hire rotation program (Drilling, Completions, etc.). I attended a target engineering school with a top rated petroleum engineering program (if that matters...) and had solid E&P internships throughout college. I enjoy the energy industry but like many before me have mentioned, I have come to realize that engineering does not offer the long-term opportunities & ambitious outlook that many paths in finance have to offer. I have family and friends on that side of the fence, so I understand that most/all paths into finance can be grueling and will be likely leaving behind the laid-back hours that most engineers work for good... With that being said, I think the long hours and shitty initial stepping stones will be worth it down the road.
As of now, my plan is MBA/IB -> PE. I've got a couple of questions that I've been thinking about...
Will leaving this early discredit my experience in industry since it is relatively short? If I go work in IB pre-MBA, am I bucketing myself into banking thus hurting my chances at getting in to a M7 program? Do I even need IB experience if I go Industry -> MBA -> PE? Any other thoughts on potential paths are also welcomed...
I know there is no golden rule on these kind of questions, but any insight can't hurt. Might even be someone who started in my same shoes that has been through a similar path and has some tips from their experience. Appreciate anyone taking some time to comment and look forward to reading them!
Bump
Engineering undergrad coupled with an MBA is extremely common in Houston IB for those coming in as post-MBA associates. Are you wanting to do oil & gas IB? You'll be ahead of the (type) curve, pun intended, and all else being equal your engineering background will put you ahead of other candidates. A lot of oil & gas IB work is highly technical with engineers and geologists on staff working alongside the finance folks. We love hiring petroleum engineer and often hire them directly out of undergrad and teach them finance, which is easy in comparison.
If you want to do generic IB in NYC, I wouldn't think the eng background would put you at a disadvantage, but can't say from experience for sure.
Yeah, I definitely would like to stay in the energ I ndustry post-MBA so am trying to figure out how to leverage my background to push me forward quicker in the transition over to finance than someone.... May be impossible to translate the two years 100% since I will be a step back in my understanding of finance compared to peers in IBD, but would hope to not be starting from ground zero. Thanks for the thoughts btw
If you do an MBA, you'll be on the same ground as everyone else as a post-MBA associate.
If you try to lateral now into an analyst role, you most likely would have to start as a 1st year analyst and it will be incredibly hard to actually land that lateral position.
So, if you're dead set on IB/finance, the MBA is your best bet in my opinion.
Rice and UT are the best business schools for Houston banking. MBA business schools">M7 places well too but it's harder than Rice/UT.
I'll give a few thoughts but I am no means an expert on this background:
1) Will leaving this early discredit my experience in industry since it is relatively short?
You have 2 years of experience? That is plenty to move into another role (assuming you can demonstrate your knowledge in interviews). It'll make for a good "story/pitch" for energy banking recruiting.
2) If I go work in IB pre-MBA, am I bucketing myself into banking thus hurting my chances at getting in to a MBA business schools">M7 program?
No - you will most likely be hired as an IB analyst and a lot of b-schoolers have analyst backgrounds (usually something after that like PE). I will also say from my b-school experience that PE is the toughest route to go recruiting wise and an MBA business schools">M7 degree isnt a golden ticket into PE.
3) Do I even need IB experience if I go Industry -> MBA -> PE?
Maybe - depends on the firm. Most MF PE do not really recruit associates out of MBA but it might work for a small PE firm. My guess is most PE firms prefer prior IB or PE experience when recruiting. Just to reiterate above, PE recruiting is one of the toughest routes to go in b-school and there's no guarantee you end up there. If you do go MBA, I would strongly consider recruiting for energy (or generic) investment banking associate roles.
All in all, I would try to get into an energy IBD and then recruit into PE if I were you. If your PE stint is a 2/3 year program or you want to switch into something else, then consider MBA.
Thanks for the response. Definitely some good stuff that I haven’t thought about/heard. One of my only hesitations with trying to move into an energy IBD analyst role pre-MBA is I feel like it may be taking a step back (what makes me different from the fresh grad starting in the same role with no work experience besides my technical knowledge I’ve gained)... not sure if that’s the correct way to look at it but is why I’m here looking for advice. In an ideal world, I’d like to move laterally/forward where my two years isn’t just something on the resume that helps me talk about the energy industry but can help knock a couple of bottom rungs off the hypothetical corporate ladder or use the industry experience to get into b-school, skipping the dues of being an analyst by going straight to an associate role... Thoughts?
Not sure if that makes any sense, just something that’s crossed my mind. Thanks again for taking the time to discuss
I wouldnt consider an analyst role to be a step back. You will probably make more and be set up for better exit opportunities (either IBD or PE associate) in the industry you want to be in long term. That's one of the best roles you can ask for for someone in their [early] 20's imo.
You can try to feel out if they will bring you in as an A2/3 or an associate but it might be tough enough just to network into an A1 role (and if you do A2/3 you will miss out on some/most PE recruiting if thats the end goal).
If you dont want be an analyst, then I recommend applying to b school and recruiting for an IBD associate role.
There aren't as many positions as IBD analyst/associate, but a decent amount of energy PE firms have staff engineers on their investment teams. Not sure what comp/hours/role is like, but that could be a way to get on the buyside without doing banking. Not sure if P.E. license is needed but just taking a look at places such as EIG/Kayne Anderson, there are a few guys with just pure engineering backgrounds (not necessarily having MBAs, but some do).
This is probably my most favorable route tbh, just haven’t seen a lot of people successfully doing it early on (in my limited exposure). The guys I’ve talked to/seen have 15-20 years of industry experience before getting brought on by a PE group as an “industry” expert, but that may not be the only way to get your foot in the door. Of the guys with pure engineering backgrounds you mentioned, are they typically longer term engineers or are there some that switch relatively fresh in their career?
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