A Q&A with London Business School's finance careers specialist
Last week we spoke to Lara Berkowitz, a former investment banker at Morgan Stanley and currently head of financial services careers at the London Business School. Here's what she told us.
Is banks' appetite for MBAs any higher now than it has been over the past few years?
A: Compared to last year - yes. We still don't have the full statistics, so it's difficult to provide a comprehensive picture, but from what we can see hiring is up on 2009. However, it's still not recovered to pre-2008 levels.
Which areas of financial services do most of your students go into?
Within investment banks, it's mostly IBD followed by sales & trading/capital markets; one bulge bracket bank brought back its sales and trading programme last year. A few banks are also hiring for private banking, sell-side research and/or asset management, but the intakes here tend to be a lot smaller.
The other thing that we're noticing is a bit more interest from a couple banks in hiring MBAs for strategy roles. These involve working in firm wide management, or in the COO's office for a particular department.
Which three banks took the highest number of your MBAs in 2009?
For permanent jobs, the top 3 hirers were Barclays Group, Credit Suisse and Bank of America Merrill Lynch. For summer internships, the top hirers were Credit Suisse, Deutsche Bank, Citi, Goldman and Nomura.
Are banks only interested in MBAs with prior banking experience?
It's definitely more difficult to get in if you don't have prior banking experience, but it's not a deal breaker by any means. If students are moving into finance from a non-finance background they need to be much more focused early on. From the moment they're on campus they need to capitalise on the activities on offer which will give them banking exposure.
Do many of your students go into private equity, asset management, or hedge funds?
Some of the larger asset managers have MBA programmes and internships. Hedge funds tend not to have recruitment programmes, so it's much more up to your own individual job search - hiring is less structured and you really need to get into the hedge fund community to find the opportunities. More private equity funds are on campus this year and we just had a private equity conference on campus. Our private equity club has been really active, with the result that lots of private equity funds are coming to us for interns and permanent hires.
What advice do you offer your MBA students who want to work in finance, but who don't succeed in getting a finance internship during the summer of their first year?
If you don't get an internship in finance for the summer, and you didn't work in investment banking before the MBA, it can be hard. Permanent MBA recruitment at a lot of banks is done by converting summer interns into fulltime hires. For some people who haven't succeeded in getting a summer internship, we have a pretty frank discussion around their expectations and the reality of the situation in terms of getting into an investment bank for full-time.
We do, however, have examples of students who've managed to leverage pretty deep sector experience to get into banking. For example, people may have worked in the energy sector and will spend their summer internship in an energy company. They may then be able to use that experience to move into an energy team within a bank. However, they will need to work hard at building the networks necessary for this to happen and it's pretty rare.
How do you see financial services companies' demand for MBAs evolving in future?
We are hopeful that demand for MBAs will continue to climb toward pre-crisis levels. We've already seen the upswing start this year. Banks will need people with external perspectives who have been outside the City fishbowl.
