Superstars Just Say “No” to MBAs
By BankersBall on Sep 16, 2007 in Exit Strategy, M.B.A.: means business, a**hole
Suddenly, that trend about Harvard providing a sort of early-admission program into B-school doesn’t look so stupid anymore.
At least not in the face of this latest story about more and more people forgoing b-school altogether in the face of fabulous wealth (or at least the possibility of). And what are the jobs that provide this potential for fabulous wealth at a young age? Say it together now, children: “hedge funds and private equity.”
And indeed, that is why the brightest stars think two years is too long. London-based trader Arjuna Rajasingham, 29, tells the NYT: “With the growth of hedge funds, you’re getting a lot of really smart people who are getting paid a lot very young … I know it’s a bit of a short-term view, but it’s hard to walk away from something that’s going really well.”
More specifically, the opportunity cost of b-school can now be considered very steep: ““The sales pitch of these private equity funds or these hedge funds is, ‘Come here, and you’ll make a million bucks in two years,’” Gregg R. Lemkau, 38, COO and an MD at Goldman Sachs, tells the Times.
Besides the sales pitch, feeding into this trend is the idea that B-school is still good for those trying to crack into a new field, but not for those already working in the area they plan on continuing in. Banks like Citigroup are also encouraging more and more of their analyst class to stay — 85 - 90 percent of their analyst class returned to B-school 15 years ago; now approximately 50 percent do.
But wait: it gets worse. Hedge funds reportedly don’t care too much for those three vaunted letters, and those with an MBA and credentials to boot are considered with suspicion. As 28-year old Gabriel Hammond (founder of his own hedge fund) puts it: “If he were looking at someone who went to Harvard Business School after the two-year analyst program at Goldman, ‘I’d be suspicious … I’d be saying, “What was it you were doing wrong that you couldn’t get a promotion at Goldman or did not pursue an opportunity with a private equity or hedge fund?”‘”
On Sep 17, 2007, Master said:
Hammond is one to talk. He spent years at GS in the ER dept. What was wrong with him that it took him so long to get out of equity research and finally on the buy-side???
On Jul 31, 2008, erasmus said:
He FOUNDED his own hedge fund…and is still only 28. Bloddy impressive if you asked me
On Aug 1, 2008, jones said:
Anyone can “found” their own hedge fund, it’s not that hard. The question is, are they any good, and do they have enough capital (i.e - other investors/institutions who have faith in them) to do anything?
Besides, “If he were looking at someone who was in a research division ‘I’d be suspicious…I’d be saying, “What was it you were doing wrong that you couldn’t get an investment banking job?”