There are over 1,300 universities, business schools and management colleges offering MBA programs. But investment banks typically recruit 70% or more of their MBA hires from just 10 to 15 top global institutions. If you attend one of the 1,285 not on their target list, your money could prove ill-spent.
'We have 10 or 12 schools that we visit proactively in the U.S.,' says one Wall Street recruiter in New York. 'They account for 60-70% of our hires.'
Wall Street banks hang back when it comes to going on the record with the schools they target. But in conversations with recruiters the same targets crop up again and again: Wharton (University of Pennsylvania), Columbia, Harvard, Chicago, MIT Sloan, Stanford, and to a lesser extent Michigan, Cornell, Kellogg, NYU Stern, Darden and UC Berkeley.
European investment banking recruiters are just as choosy. Most draw a proportion of MBA entrants from the top US schools, and in Europe they all visit the same haunts. Barclays Capital, Merrill Lynch, Morgan Stanley and Bank of America all favour the same three European business schools: London Business School, Insead and IESE. Only BarCap ventures further afield by targeting students at Manchester Business School, HEC in France and the Rotterdam School of Management.
MBA students at targeted schools have two main advantages: alumni and college visits. Former students of favoured schools encourage banks to continue hiring from their alma mater: 'We don't go to a school like Duke because we don't have a history of hiring there,' says Kristina Peters, regional head of campus recruiting for the Americas at Deutsche Bank.
Top schools are deluged with visits from banking recruiters. 'This year we've got Bank of America, Barclays Capital, Bear Stearns, Citigroup, Deutsche Bank, JPMorgan, Merrill Lynch, Morgan Stanley, Lehman Brothers and Royal Bank of Scotland attending our careers forum', says Kathleen Dolan, director of MBA career services at IESE.
The inevitable outcome of all this attention is that banks often hire multiple students from preferred schools. Take MIT Sloan, where 24% of the class of 2002 went into investment banking: ten students went to Merrill Lynch, nine to Goldman Sachs and six to Citigroup.
So what are the chances of becoming an investment banking associate if you are part way through an MBA at the University of Southern California or Lancaster University Management School? Not great. 'If you're not at a target school you should be in the top 5% of your class,' says one US recruiter.
But don't discount the possibility of getting hired entirely. Banks are opportunists: they will always consider applications from transparently talented candidates, no matter which school they've attended. Goldman Sachs has been known to employ alumni of the Cox Business School at the Southern Methodist University in Texas and the Carroll School of Management at Boston College.
Tom Wilson, director of campus recruiting for global markets and investment banking at Merrill Lynch, says the bank's strategy involves building long-term relationships with a diverse pool of high-caliber candidates. If you aren't at a top business school, it will help if you have someone to champion your cause: 'Great hires may come from the work of a single dedicated alum - or a referral from a professor or client,' says Wilson.
Nevertheless, recruiters admit in private that attending a targeted school can more than tip the scales. 'It's a big advantage,' says one. 'It's where we get most of our students.'