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Investment Banking Shunned by Elite MBA Students

investment banking

Investment banking jobs are supposed to get MBAs’ pulses racing in excitement. Recent findings have, however, suggested that the banking profession is not quite as desirable as it once was.

Harvard Business School MBA graduates are some of the most sought-out in the world. Investment banks, in particular, have long hoovered up much of the best talent from top schools such as Harvard.

However, a recent report by Jennifer Surane for Bloomberg has found that only 4% of the Harvard MBA graduating class in 2015 say they want to work in investment banking jobs. Out of the 46 students in the top 5% of the class, only one expressed an interest in investment banking.

These findings were bought to mass media attention after a student graduating with the Harvard MBA 2015 class published internal data on his blog about his classmates’ future career plans and goals.

The author of the blog, Keima Ueno, says that many MBAs sympathize with people who go into the investment banking sector: "When we hear that our classmates managed to acquire a position with an investment bank, we say 'Congratulations. But we are really thinking, 'I'm sorry to hear that.'''

Silicon Valley more appealing than Wall St?

It would appear that the prospect of working 90-hour weeks in grueling, high-pressure investment banking jobs has lost its appeal to many students. In the past, working so many hours under such stressful circumstances was seen as a badge of honor for young men and women trying to ‘make it’ on the trading floor.

Now, however, glamorous startups and tech-savvy Silicon Valley jobs are gaining popularity with Harvard MBA graduates instead. The contracts are just as lucrative, the lifestyle more secure and the working hours are not quite as exhausting as investment banking jobs.

Technology companies have been attracting an increasing number of top graduates each year. Last year, about 17% of Harvard Business School graduates poured into the industry, up from 7% in 2007. Banks, on the other hand, lost more recruits than any other employer.

Active investment on the rise

However, this does not mean that MBA graduates wish to move away from finance jobs altogether. Many young financers are now interested in joining the ‘buy side’ of finance and are favoring hedge funds or private equity firms after graduation.

According to the Wall Street Journal, the appeal of becoming active investors is on the increase in a market that was previously seen to be money-grabbing and ruthless.

Activist investors like William Ackman and Daniel Loeb are being idolized by graduates of top business school instead of previous traditional favorites such as Warren Buffett. This shift in interest is likely here to stay for the long-term too – with statistics recently published in the Business Insider revealing that activist campaigns have risen a staggering 63% since 2009.

The findings by Keima Ueno also back up an article published by Sujeet Indap in the Financial Times last week, in which he revealed where his banking analyst class of 2000 are working. He found that more than 40% of the analysis class now work in private equity or hedge fund industries, but less than 20% still work at investment banks.

Helen Vaudrey
Written by Helen Vaudrey

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