What happened to farley? That guy could flat out add value to a thread.
Thanks for bringing back this post – it’s interesting how certain things have changed and other things have not. When I posted on this thread last July, I wrote, “I haven’t done much in the way of MBA preparation aside from just reading up on the application process through a couple of books I bought on Amazon.com, and also studying for my GMAT’s in my spare time. It’s been a pretty loose commitment so far, though.” That part hasn’t changed yet – in fact, I still haven’t taken my GMAT’s, but I’m making a real push to get them done by April even if it means just isolating myself for a while and putting my social life on hold until then. In terms of what has changed, I guess I’ve become more committed to wanting to go back to business school, so I’ve spent even more time trying to figure out my “story.” In other news, farley013, VOBA, tobias, bromion, and Etienne had interesting things to contribute on this thread, but none of them seem to post with much regularity anymore (if at all). Where are they now?!
numi, are you in private equity? Why do you want to get an mba? You are already in the biz that all these mba types are getting into. or is it that important to have it to advance further?
yeah, i’ve been doing PE/LBO for a year now. i definitely feel fortunate about having a PE job…as you mentioned, it seems like a lot of people are going to get their MBA in order to get into PE…but, i do think it’s pretty important to have an MBA in order to advance further in the PE field. there are definitely people that can move up without the MBA, but with the MBA, it’s more of a sure thing, and i also am curious about maybe doing some earlier stage investing and expanding my knowledge of strategy/operations. i’ve learned a lot at my current job but i’m sort of an excel jock, whereas the expectation is that when you move up in PE, you spend less time buried in the spreadsheets and more time thinking about the finance and strategy at a higher level. i can see how an MBA might help with that. what about you? what field are you in now? are you interested in PE as well?
numi, when quitting the job to start an MBA, bear in mind, that a successful return to PE post-MBA is not guaranteed (especially if the crisis develops further). It would be pretty ironic to have this job without an MBA and become unemployed after graduation. Ironic and damn expensive 
Neud Wrote: ------------------------------------------------------- > It would be pretty ironic to > have this job without an MBA and become unemployed > after graduation. Ironic and damn expensive Ironic indeed.
True…will definitely keep the gates of communication open with my firm if I decide to head to business school. It would be a real shame if the job market in a few years is as bad as it is now. Hopefully that won’t happen and I can get a post-MBA position in PE that will pay even more than what I’m getting now.
I’ll also add that moving onto something more entrepreneurial isn’t out of the question for me, so that would be another reason for me to want to go back to school
numi Wrote: ------------------------------------------------------- > In terms of what has changed, I guess I’ve become > more committed to wanting to go back to business > school, so I’ve spent even more time trying to > figure out my “story.” In other news, farley013, > VOBA, tobias, bromion, and Etienne had interesting > things to contribute on this thread, but none of > them seem to post with much regularity anymore (if > at all). Where are they now?! hi numi, i have been away from this board for at least the last six months. i took a job at a long-short hedge fund weeks before the market crash, and the job has kept me exceedingly busy since that time. i randomly decided to browse AF tonight and remembered this thread from before, so i guess that’s good timing. i don’t have a lot to add about your personal situation except to say “good luck” on the GMAT. also, i would ask what your thoughts / expectations are about the feasibility of a return to PE post-MBA. it seems almost certain that the economy will be much improved several years from now when you would be graduating, but it’s not clear that PE will be able to claim the same. i’m not implying the death of the asset class or anything that dramatic, but it seems that a lot of high finance jobs are going to go away “permanently” – in other words, as far as finance is concerned, this seems like a secular down turn rather than just a cyclical turn. besides the abolishment of cheap credit needed to fund LBOs, it seems pretty clear to me that too many financiers were chasing too few opportunities in recent years, and i don’t believe we “needed” the number of PE funds, hedge funds, etc. that existed prior to the crash. i don’t have any idea what the “optimal” number of funds within, nor the “optimal” amount of capital for, the PE / HF asset class is, but i am sure it is a finite number. at any rate, even looking beyond those issues, there is almost certainly going to be an increase in regulation, as i’m sure you know. so there are a lot of moving parts right now, and i would really carefully consider (as noted by neud) the assumption that you will be able to return to the field easily and/or that an MBA will be a benefit in such a scenario. it’s possible that there is going to be a paradigm shift in the sort of credentials needed to succeed in the industry – it’s possible, for example, that with a smaller number of PE firms around, two more years of experience will carry a lot more weight than an MBA. my approach to this is very unsentimental – what is going to maximize your NPV and personal stisfaction over the course of your career? have you considered a part-time or exec program? i believe you are in dallas, and i don’t know what programs are offered in that area, but it might be an option. as for myself, i am still on the fence, but i think i’m starting to lean toward “glad i wasn’t accepted into b-school last year.” i was wait listed at several of the top 5 programs and ended up getting dinged at all of them (i still maintain that i would have been accepted in a non-recession year, but whatever), but this seems to have worked out for the best. using the spread sheet i linked earlier in this thread, i believe that, even using conservative assumptions, my NPV of learning from an established / highly skilled investor (my current situation) is much, much higher than it would be if i went to b-school and missed the opportunity to work at the fund i currently work at. i still hold b-school in high regard, but for me, i don’t think it was a loss. looking forward, i am trying to determine what is going to maximize my NPV from here – doing more of what i am already doing or applying to an exec or part-time program? i’m in the bay area, so both wharton west and berkeley are appealing options. i don’t think i need the education, but i wonder whether having the degree would help me raise capital when i go out on my own (est. 3-5 years if things go well). i have a non-traditional background for finance, so the “stamp of approval” might be a big help in my case.
numi, what I understood from your (previous, not from this topic even) posts is that the main reason for you to go to the MBA would be an opportunity to climb really high up the ladder (when the time comes). While it might make sense (only in the US, though), what I really don’t understand is why you are not willing to pursue an executive MBA route (say, when you hit the VP level in a few years)? You will “qualify” for a future partner with an exec. MBA - it will still be an “MBA”, while you will keep your job during the crisis and postpone huge tuition expenses to a later date (when, presumably, those 100-150k won’t be an issue for you whatsoever). Also avoiding implicit costs of not earning income during full-time studies.
Bromion - I’m in the bay too, can I shoot you an e-mail? Cheers
fxguy, I’d rather not post my email in public, but I will email you if you provide yours.
bromion - why dont you just target stanford, as a prospective place in the next 3-5 yrs? its the hardest to get into, but has some serious pull on the west coast (and the nation/world) “i don’t think i need the education, but i wonder whether having the degree would help me raise capital when i go out on my own (est. 3-5 years if things go well). i have a non-traditional background for finance, so the “stamp of approval” might be a big help in my case.” I think you are going to run into this later in your career and might need the pedigree to move up to C-suites and/or pull in some classes of investors depending on what type of shop/fund you are running.
The MBA is like a stamp of approval true…it means you don’t have to really reprove yourself everytime you go to a new company or a new situation it just is expected you are at that higher level. If you don’t have it you could still get a promotion but it would take the extra time to rpove your worth at the new company. Having the MBA is like liability insurance protecting the person who made the decision to promote you. Sometimes money is important but it is not everything especially when you already earn a significant income (waite did I just say that out loud). The additional knowledge, contacts etc may turn into a higher salary but it could also provide qualitative things that may not be measurable totally in terms of money. If you make 100k the next 100k is signifcant but if you make 500k the next 100k is not as signifcant. Actuaries have realized this for years as they limit the percentage increase in disability insurance people are allowed to purchase as their incomes get higher. And when your old and washed up you can go to a college and teach some courses.
Most of this is rant but I wonder if there is any weight in this article: RIP, MBA The economic crisis has exposed the myth of business-school expertise. http://tbm.thebigmoney.com/articles/judgments/2009/03/25/rip-mba
philip.platt Wrote: ------------------------------------------------------- > bromion - why dont you just target stanford, as a > prospective place in the next 3-5 yrs? its the > hardest to get into, but has some serious pull on > the west coast (and the nation/world) Because the opportunity cost is too high now. I applied to Stanford last year and was on the very short wait list for admission (like within 25 or 50 spots). I don’t know what the stats are since I never checked, but I’m pretty sure they let like 7% of applicants in or some similarly ridiculously low number last year, and I was in the top 7.25-7.50% or whatever the math worked out to. So I couldn’t really have been any closer without actually getting in, but unforutunately close doesn’t count. I’m blaming the recession for sending the number of applicants through the roof (congrats to anyone who did get in But anyway, the point is that the cost in lost wages, and more importantly, “lost” experience is too expensive now and will only get more expensive in a couple of years. Unless I lose my job for some reason, I wouldn’t even consider a full time program at this point since I already have the sort of job I would have coming out of Stanford GSB. Hence, I am considering Exec and PT programs but don’t know how much those are actually worth, besides costing an arm and a leg.
^agree with the part about opportunity cost of lost experience in this market. I think 5-10 years from now when a lot of the members of this forum would be looking for senior-level jobs, the people who hire for these jobs will be looking for someone with experience working through the economic/credit crisis, not someone who was in school at the time. It’s like when technology sector hedge fund managers are hired these days people assign a premium to those who were managing money or working as an analyst during the tech crash in 2000-2002.
Hi, sorry about the delayed response here – there were some thoughtful comments from Neud and bromion and I took some time to reflect on them. Bromion – congratulations on the new job – glad to hear things have been working out there. Must be nice to have gotten out of the sell-side at that time, right? I think your comments about consolidation in the PE industry are quite valid, and I definitely see that happening. Smaller and less competitive shop will be squeezed out or acquired by more dominant players. You’ll see a similar type of consolidation with hedge funds, as well as companies in other industries. It is a time when the weaker firms will be taken out by the larger ones, or simply vanish into obscurity or implode due to the economic downswing. I think of everyone looking to get into private equity out of business school, those that had PE experience before business school are the best positioned to get those jobs. From speaking with people more experienced than me, I think this has always been the case, but more so now than ever with so many people wanting to get into PE. Even in spite of the economic downswing, there are a lot of people that are trying to transition into PE – so much so that business schools often use PE as an example of a potential “exit opportunity” – yet they are also encouraging applicants to thoughtfully consider their “story” when they’re applying to business school and see if their post-MBA goals are really realistic or feasible. For the reasons you pointed out, it will still be hard to get into PE out of business school without prior transactional experience, and it also remains to be seen whether PE will even be a desirable career a few years from now. I personally think that it will still be desirable, and even if the structure and terms of deals change due to the economic or political climate, I know at the moment that PE is a field that I’d like to build my career in. And in determining what my career course will look like, I can only go with what I know today, as well as my best expectations of what will happen in the future. As for economic considerations, I recognize that business school is an expensive experience, but I’m looking forward to getting back into a learning environment and hopefully enjoying all the social and networking opportunities that business school has to offer. I also know that my earnings potential with an MBA will be considerably higher than it is now. As I stated earlier, while I’ve done well at my job, it’s unclear what my career progression at this firm or some other firm will look like without an MBA. Most PE firms are also set up such that pre-MBA’s personnel are encouraged to go back to school, though this is more the case at larger firms (like mine) rather than smaller ones that perhaps afford more career flexibility. I’m also only considering returning to business school full-time (as opposed to part-time), because none of the schools I’m considering are nearby and I’d also like to take advantage of all the recruiting and networking opportunities. I suppose it’s anyone’s guess how tight the job market will be after business school and I recognize how competitive things are going to be this upcoming year. Even for current MBA candidates, they have noted that the job market is very stiff right now – and, like you guys suggested, it’s possible that getting a good job out of business school recruiting will be tough. But I’ve considered all the variables and think it’s a good time for me to plan on going to business school soon. Life’s full of unknowns, but sometimes you have to take your chances with uncertainty if you hope to win at life. You gotta compete if you want to win.
BTW, the smart thing for people to do (which I’ll also try to do myself) is to find a way to secure a position with your existing employer in the future if you end up going to business school. I don’t know how often finance firms did this, but good performers at the major consulting firms are often given offers to return to the firm following business school. I’ll definitely try to do the same thing since it would not be a good situation to have dropped a ton of money at business school only to find out that the job market is still incredibly tough.