Top MBAs completely shifting away from investment banking?

skylinegtr94's picture
Rank: Gorilla | 532

Well, according to Bloomberg, that's true, though likely not as big a surprise to the forums here. What is a bit surprising to me is seeing the complete shift in banking v. technology that is charted in the article and the subsequent breakdown by schools shortly thereafter.

For those in graduate school or simply looking to break into the sell side, how does this sit with you? Is the lure really wearing off or does this mean more opportunity for those previously excluded from the recruiting process? If the latter, what does that say about the industry in general?

Bloomberg Link

Comments (18)

Aug 7, 2015

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Aug 7, 2015

ughhhhh

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Aug 7, 2015

Does that mean a lot more assholes are moving to the West Coast?

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Aug 7, 2015

No matter how much people talk about culture, wanting to learn, or whatever the latest "why banking?" answer is, the allure of banking has and always will be money. Considering that there are now other career fields that pay as much or more than banking, this was bound to happen at HSW-level programs.

Best Response
Aug 7, 2015
Sil:

No matter how much people talk about culture, wanting to learn, or whatever the latest "why banking?" answer is, the allure of banking has and always will be money. Considering that there are now other career fields that pay as much or more than banking, this was bound to happen at HSW-level programs.

Banking still pays more for the average joe, especially after 3-4 years when tech dudes start being capped.
Not everyone is an early employee of Google/Facebook and alike.

What attracts in tech is the combination of good pay (even if lower than finance) AND more "fulfilling" (or at least people think that way) projects, better culture etc, + the "cool factor" that followed the horrendous press finance got after the crisis which is far more important than people want to admit.

Saying that you work with some fancy title for some hotshot startup that raised 100m funding is "cooler" than being Drone12553 at BulgeBankingGroup plc

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Aug 7, 2015

It seems like what people really like about tech is the compensation structure, ie stock options, which investment banking can't offer to the same degree.

Aug 7, 2015

I really don't think its about pay or mission - its simply enjoying waking up and going to work, day-in-day-out.

Tech is a way for people to pro-long adulthood so to speak. Free food, happy hours, ping pong/pool, jeans and hoodies, hip work spaces, everyone is young, etc. Not hating at all, frankly jealous. In tech you get to "play" work so to speak. Huge draw for obvious reasons.

Finance by comparison is filled with sterile / stuffy work spaces, douche bag / arrogant / old bosses, business formal, no free food (hell some BBs charge for soda/coffee - and obviously not counting dinner because that isn't "free", your soul paid for that), etc.

Aug 7, 2015

Three words: work / life balance.

"My dear, descended from the apes! Let us hope it is not true, but if it is, let us pray that it will not become generally known."

Aug 7, 2015

That is a great post pic. Haha, hilarious

"same day, different shit"

Aug 7, 2015

When were top MBAs going into investment banking?

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Aug 8, 2015

...

Aug 8, 2015

Things move in cycles, in 2007 people were saying the same about finance / IB. If you think objectively, if there is a mass exodus of talent to Tech, then the money is to be made elsewhere - just like finance in 2007.

As for why MBA students are exiting to tech companies it seems pretty obvious. Awesome, trendy offices in hip parts of SF and NYC, free food / drinks, top talent, media hype, good lifestyle, increased responsibility, equity, everybody being under 35, insane growth. Compared to finance with full suit, old bosses, stiff offices, little perks, and where nobody gives a fuck about your social life.

Aug 10, 2015

The way the story reads, the interviewees were very focused on image and how they could "humblebrag". Right now, there is a triumphalist vibe to what is happening at technology companies of all stripes because the PE world is being very generous with "valuation" (if you can still call it that) and isn't being very mindful of earnings. Lots of play, some work, beaches, and potential unicorn valuation is appealing to many, but to me the question has always been sustainability.

The tide already appears to be ebbing/reversing. Once Google's new CFO Ruth Porat said "expense management" on her latest conference call, Google's stock jumped 14% or so (that's $56B at the time). The largess is unappealing to investors and it doesn't seem absolutely necessary for employee retention.

It's funny because not only did we go through this "euphoria" in the 1990s/2000 (technology) and 2007/08 (real estate), the shale oil industry is de-leveraging right now after everyone thought they were oil men and women.

The takeaway- don't get caught up in appearances and narratives. The cliche "the grass is always greener on the other side" is a cliche for a reason. That's not to deride people who work in tech in CA, it's just that anyone interested in heading there should have their eyes wide open, because the advertising budget of the world cannot viably sustain free lunches, gym memberships, dry cleaning, and doggie daycare for hundreds of thousands of people.

For the contrarian-minded people out there, this is a great time to be coming into finance as there is less competition, and by the time your colleague rotate back into the field, you'll have years of experience on them.

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Aug 18, 2015
rls:

The way the story reads, the interviewees were very focused on image and how they could "humblebrag". Right now, there is a triumphalist vibe to what is happening at technology companies of all stripes because the PE world is being very generous with "valuation" (if you can still call it that) and isn't being very mindful of earnings. Lots of play, some work, beaches, and potential unicorn valuation is appealing to many, but to me the question has always been sustainability.

The tide already appears to be ebbing/reversing. Once Google's new CFO Ruth Porat said "expense management" on her latest conference call, Google's stock jumped 14% or so (that's $56B at the time). The largess is unappealing to investors and it doesn't seem absolutely necessary for employee retention.

It's funny because not only did we go through this "euphoria" in the 1990s/2000 (technology) and 2007/08 (real estate), the shale oil industry is de-leveraging right now after everyone thought they were oil men and women.

The takeaway- don't get caught up in appearances and narratives. The cliche "the grass is always greener on the other side" is a cliche for a reason. That's not to deride people who work in tech in CA, it's just that anyone interested in heading there should have their eyes wide open, because the advertising budget of the world cannot viably sustain free lunches, gym memberships, dry cleaning, and doggie daycare for hundreds of thousands of people.

For the contrarian-minded people out there, this is a great time to be coming into finance as there is less competition, and by the time your colleague rotate back into the field, you'll have years of experience on them.

Thanks for the motivation. Time to get back to changing font in this PowerPoint..

Aug 18, 2015
rls:

the advertising budget of the world cannot viably sustain free lunches, gym memberships, dry cleaning, and doggie daycare for hundreds of thousands of people.

one of the wisest things I've ever read on WSO. slow clap...

Aug 18, 2015

It's interesting because the businesses themselves feel more sustainable this time around (vs. 1999). As much as I hate some of the valuations, I honestly don't see businesses like Uber, TWTR, Palantir etc. going away. They are too disruptive and they absolutely add a valuable service.

I guess I wonder more about is how much of this is driven by the VC's. To the extent VCs have just gotten too swollen with cash, and they can "afford" to take a swing at virtually any offer that crosses their desk, this will obviously have an impact on the number of startups that appear viable. But what happens when asset allocations to VC's again start to fall? All of a sudden the guys on Sand Hill have to be A LOT more selective in who they are financing and you're actually going to need a halfway decent idea to get funded. Fear will spread quickly... it'll only take a few cocktails at Madera before everyone realizes that things are drying up. Two weeks later the public tech firms will get cracked. Stock options will lose tons of value, and I'll finally be able to buy a house...

Maybe this never happens? Maybe there are enough pension funds and endowments and HNW individuals out there who are convinced that VC provides good upside at reasonable risk so they will continue to contribute fresh capital there. I don't know. But that's the part that feels unsustainable to me. Not the companies or technologies themselves, but the financial support for them. When that happens there are going to be a lot of MBA's with $4-$5k/month rentals in SF, chasing down a shrinking number of middle-management jobs at established tech firms (MSFT, ORCL, EA, GOOGL, etc.) No one will care anymore how many weeks of paternity leave you get, or who gets to bring their dogs to the office... people will just need a paycheck.

Aug 18, 2015

well said. good advice....

Progress is impossible without change...

Aug 19, 2015
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