Morning Coffee: The two year course that will earn you an average salary of $228k. Hedge fund manager sleeps in a hostel
The MBA course is dead!l Long live the MBA! For all the claims that generalist Masters in Business Administration (MBA) courses are dying in today's more technologically-focused world, there's nothing quite like a fancy MBA course for inflating your salary to levels usually associated with top sports people and senior(ish) investment bankers.
The Financial Times' latest MBA ranking for 2019 confirms MBAs' alchemical properties. Thirty two of the courses in the top 100 produce graduates who, on average, earn salaries alone in excess of $150k within three years of graduating. Five MBA courses (at University of Chicago: Booth, Indian Institute of Management Ahmedabad, MIT Sloan, University of California at Berkeley: Haas, University of Pennsylvania: Wharton) produce students who earn between $185k and $200k. And two courses (Harvard Business School and Stanford Graduate School of Business) produce students who earn $205k and $228k respectively.
If you want a course that will maximize your salary, you therefore want to get yourself to California and study an MBA at Stanford. If anything, the FT's figures understate Stanford graduates' earning potential. The school's own employment report for 2018 puts the mean salary for its MBAs going into finance at $167k, plus a bonus of $135k. Last year, the most lavishly remunerated Stanford MBA graduate went a into hedge fund where he (or she) got a salary of $300k plus a bonus of the same amount. You won't get that from taking a few coding courses.
Of course, a Stanford MBA isn't easy to get onto. Last year, 8,116 people applied and 417 were accepted (which is, at least, a higher acceptance rate than for a first job in an investment bank). Nor is a Stanford MBA cheap. When tuition and living costs are taken into account, Stanford says its students need to budget $115k a year for the two year course. You'll have to pay for the privilege of being privileged.
If you want something a little cheaper, you could always attend the Indian Institute of Management Ahmedabad. Although tuition there will set you back around $70k, living costs are likely to be far cheaper, and the FT says you'll still earn an average of $186k three years after graduating. IIMA's own placement report for last year says its students found jobs at Goldman Sachs, JPMorgan, Citi, Barclays, Deutsche Bank. Most recent IIMA graduates are working in Bangalore, but a handful can be found in Hong Kong and even in Germany.
Separately, Bloomberg has got a sorry tale that will puncture the dreams of anyone who thought that getting a hedge fund job necessarily meant earning $600k and travelling the world in private jets. It's not always like that any more. It's definitely not like that for 39 year-old Brant Rubin, who started a hedge fund last year after raising $50m from family and friends and now finds himself using budget airlines, taking subways and staying in hostels. “It’s not as lucrative anymore,” says Rubin of hedge fund careers. "Burning money is uncomfortable, particularly as we don’t have unlimited money to burn."
It's become punitively expensive to set up your own hedge fund. "It used to be a Bloomberg terminal and a garage, but now you need a chief operating officer, compliance staff and an investor relations department. The costs are high.” (Financial Times)
Goldman Sachs hired MiFID II expert Eleanor Beasley from Morgan Stanley as European head of market structure and regulatory strategy. (Financial News)
Banks will leave London even if Brexit is cancelled. “Everything is timetabled, and once the plane is on the runway, it’s not going to be called back"....“London would have been the natural choice to hire new bankers. Now, after the investment we’ve made in Europe, if someone leaves in the UK or we want to recruit someone, we’re just as likely to base them in Frankfurt or Paris.” (Financial News)
Citadel's Ken Griffin has spent $700m on real estate and $700m on art. He's also given away $700m. “The key thing is that he’s decided to be generous now. Ken is a role model for the next generation of hedge fund managers.” (NY Times)
Hedge fund managers are being catty about John Paulson (who's setting up a family fund). (Financial Times)
John Empson, head of capital markets for Europe is leaving private equity firm KKR. Marc Ciancimino, a KKR partner in the European private credit division, left already. It's all very unusual, particularly as other senior people have left KKR too. The fund isn't commenting and Empson isn't gone yet. Ciancimino is believed to be setting up his own fund. (Financial Times)
Several of the senior Barclays executives who are in court on fraud charges, said seemingly incriminating things during calls relating to the deal that raised money from Qatar. One spoke of being“rumbled.” Another said that it was, “a bit dodgy." Someone said, “I’m very surprised that John Varley, given his ethics, is doing this.” And another agreed: “I think it’s amazing”. (Varley is now in court too). (The Times)
And, from another telephone call between the Barclays execs at the time of the "dodgy" deal: "None of us want to go to jail here. . . The food sucks and the sex is worse.” (The Times)
If you read music at the University of Cambridge, you'll earn around £25k ($33k) aged 26. If you study economics at Hull (a far less high ranking university), you'll make the same. This is why students who study the arts at Oxbridge tend to have rich parents. (Economist)
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