Wharton vs Stanford GSB for Private Equity Recruiting

I'm an associate at a megafund in one of their Asia offices. Applying to MBA programs this year with a plan to continue in private equity post MBA in the US. Not focused exclusively on megafunds.

Wanted the community's thoughts on how to rank Harvard, Wharton, and Stanford in terms of post MBA private equity recruiting in the US. I've heard that Harvard and Stanford are slightly higher than Wharton on the 'prestige' spectrum which leads to some firms (especially VCs) hiring exclusively at these schools. However, is that the same for buyout-focused funds like BX / KKR / Carlyle / TPG / Bain Cap and the like? How does Wharton stack up against Stanford when it comes to these roles?

 

I’m also at a MF (US). H/S definitely carry a premium for post-mba PE spots. At my firm, we usually bring on the same amount of H/S Mba’s - which tells you that, statistically, your odds of placing at a top firm are much higher at S given the smaller class size. Neither name, however, gives you a leg up over the other if you’re competing for the same spot.

We do see Wharton hires every now and then, but it’s definitely more of a battle for them to get in.

 

Can someone please tell me why an MBA student from Wharton, one of the top three most prestigious business schools in probably the world, would have a “hard time” getting in at one of the “best” PE funds?

I’m not saying that I would assume it would be a slam dunk… But why is the Wharton student substantially disadvantaged when applying for a job versus a Harvard/ Stanford student? 

 

I suppose it just boils down the extremely limited number of post-MBA spots available in any given year. Realistically, the differences in terms of quality of students, alumni network or any other objective metric of value, between HBS/GSB and Wharton is marginal at best. The limited number of spots available however, allow for PE firms to be extremely selective even to the point of using any arbitrary quality they see fit even though they likely do not directly result in a more effective hiring mechanism.

 

Okay, I guess I understand... but I imagine there’s dozens of incredibly impressive candidates coming out of Wharton MBA — just don’t see why if you know he/she was good enough to get into Wharton and he/she crushes the interview, why would u take the less impressive H/S kid over the Penn person. Unless you’re saying almost all H/S kids are demonstrably better than almost all Wharton kids.

 

They are not disadvantaged. Speaking from direct experience- firms will bring in ~10 from each H/S/W for first round interviews and whittle down from there. Pre-MBA experience is what really matters, so as long as you're in the top portion of your class in terms of relevant experience, you'll get looks. Some East Coast shops will only look at H/W, some West Coast shops only H/S. Some may only look at HBS depending on the firm's relationship with HBS. Blackstone PE Sr Associate hires from MBA (that's their VP position) have actually been almost exclusively Wharton the past few years.

 

I went to Wharton undergrad, and for a graduate degree, Wharton doesn’t compare to H/S. Could be a dilution of the brand name due to the undergraduate school or just because H/S is on another stratosphere, but that’s the fact.

 

Rest of the MBA business schools">m7. Columbia, Booth, MIT, Kellogg.

Drop off is pretty steep (strictly talking about post-mba opportunities with top firms). For example, I know Carlyle and Bain cap explicitly target only H/S MBA’s, only step outside of those under certain circumstances.

There are MM/LMM firms that aren’t as stringent. Rest of the MBA business schools">M7 still places at those, just not to the same degree as H/S (I.e. GSB places about 16% of its class in PE, not including VC, whereas Kellogg places maybe 5%)

 
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Recently, I personally hired 4 post-MBAs. 1 Harvard, 1 Wharton, 2 Columbia. 1 person from Stanford made it to the middle part of the process but not further - that person landed at another MF (Carlyle / KKR / TPG).

My firm does not participate in on-campus recruiting. When students reach out to us for internships or post-MBA roles, we will spend time to review the resume and take a closer look if student has Harvard/Stanford/Wharton/Columbia on it. Whether a person gets a phone interview depends on pre-MBA experiences (PE, Merchant Banking, IB, MBB, etc.), MBA coursework (finance, PE/VC), MBA student club activities (PE/VC club, investment club), other MBA experiences (e.g., PE internship, authored a PE paper/study in one class, worked part-time for a couple of weeks for a PE firm while in school, etc.) and previous industry vertical experiences (i.e., is this person a good match with our industry verticals/investment focus areas?). If person can articulate in phone interviews (with HR and other Senior Associates) how the background/education fits with our firm's philosophy, why our firm is first choice and can articulate PE, Corporate Finance and investment decision criteria (industry trends, target's competitive position, cash flow generation ability, etc.) we most likely will start in-person interviews, our LBO financial modeling test and investment thesis presentation to recruiting committee. That said, once a person makes it to the phone screening stage it is a level playing field and it purely depends on the person's performance throughout the recruiting process and not at all from where the person received its MBA.

In my opinion, the decision from where to get your MBA should be based on the following factors: - Teaching methodology (HBS almost exclusively uses the case-study method - can you sit through two years of business school with this teaching methodology?) - Offered coursework (H/S/W/CBS all offer finance, PE/VC, etc. courses but what is the quality of the courses? What are the chances that all your preferred PE/VC courses are offered? What is the quality of the professors? Will you be able to expand your existing PE/VC skill set with the courses offered?) - What type of exposure can you get to PE/VC while in school? Do PE/VC firms come on campus and offer field studies, 4-6 weeks long student projects, networking opportunities, etc.? - How easy is it to network with PE/VC firms while in business school? e.g., it is probably easier to network with PE/VC professionals if you go to school in NYC, Boston, Stanford vs. Philadelphia (for in-person coffee chats you would always need to commute to NYC, probably less important in post-COVID-19 world where virtual meetings might do it) - Strength of alumni network in your targeted PE shops (after researching this very extensively my conclusion is that Harvard, Stanford, Wharton, Columbia are significantly represented at all top PE shops) - Long-term international brand value. Harvard is known everywhere but how many people know Stanford, Wharton, Columbia in your countries/geographies where you intend to work in the next 20-30 years?

For disclosure: I hold an MBA from one of the H/S/W business schools.

 

Thanks for the insight.

What size of a fund are you at?

And I understand your rationale for choosing an mba, but would you really advise someone to take Wharton/Columbia over H/S in any circumstances? I understand fit is important, but sacrificing a spot at H/S seems irrational. Especially because there are some firms and companies that place tremendous value on the H/S brand relative to others.

 

You are welcome! Let us call it a large fund with HQ in the U.S.A. and operations on all continents except Antarctica.

I don't want to speak for the entire PE industry but in my mind we have a fiduciary duty towards our limited partners to hire the best people who can be trusted to manage the capital as best as possible and deliver the expected alpha returns. Whether this person has the MBA from Harvard/Stanford/Wharton/Columbia is second priority. You can have incredible talent from all these institutions (I personally believe there is zero difference between a top 10% student from any of these four institutions). Why do PE firms focus on certain target schools? I think it is a matter of (1) HR resource constraints and the top MBA schools do the pre-screening/pre-recruiting for you (in tandem with the head hunters) (2) people who attend these institutions are usually very driven and smart (3) alumni network/preferences in the firm. PE firms (pushed by their LPs for employee diversity) are re-considering their recruiting strategies and Blackstone already announced that they will increase their undergraduate target school pool from 9 to 44 (https://www.wsj.com/articles/blackstone-to-bypass-scramble-for-investme…). That said, PE firms that only recruit from certain schools will miss out on a lot of talent and I even don't understand what you mean with "place tremendous value on the H/S brand relative to others". Why would a head of Private Equity tell the HR department to focus on H/S and deprioritize other institutions (in particular W/CBS)? You want to have a broad candidate pool with the best possible talent and H/S/W/CBS should always be in the same category - imho. With a good screening filter and predetermined scoring systems HR and headhunters should be able to handle 4 institutions.

Would I advise someone to take Wharton/Columbia over H/S in any circumstances? I would never advise someone to pick one school over the other when it comes down to these 4 institutions. I would always advise the person to make the best-informed decision (with e.g., the considerations I pointed out) and choose the institution that is the best fit for personal and professional development. After all, you spend two years of your life in business school and you can only do it once. Each one of the schools has its advantages/disadvantages.

 

From my personal network/experience, few turn down HBS for another business school (maybe GSB if you're tech or VC focused), but I know some in my network who took Wharton over GSB, mostly due to geographic reasons (and GSB jobs tend to be on West Coast - obviously many exceptions though)

But especially as these schools limit intake of "traditional" candidates, few people of such backgrounds are getting into more than 1. Columbia is just much farther from the big 3 though so this doesn't really apply for them.

 

Anecdotally, I’ve seen more people from Kellogg than Booth in MM/UMM PE. Very small sample size and still way behind H/S but seems fairly consistent.

 

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