Hedge Funds and Private Equity: MBA?

Hedge Funds and Private Equity: MBA?

Sep, 18, 2007

Anyone interested in working at a hedge fund or in private equity, should most certainly read Hedge Funds and Private Equity Alter Career Calculus, a recent article in The New York Times. According to many of the industry insiders sited in the article, if you are already working in a hedge fund or private equity and thinking about an MBA, you may want to think again because the value of the MBA may be negligible or worse. On the other hand, if you are international (non-US applicant) or a career changer an MBA may be ideal:

Recruiters at banks say a large number of the students that they are hiring from business schools are from an international background or are changing careers. These students are valuable, they say, but they come in with a different background from someone who has been in finance since age 22.

One thing that is also interesting about this article is that the views of Thomas Caleel, Wharton’s director of admissions, are directly contradicted by the other sources cited in the article:

Eventually, these young people may want to raise money and start their own fund, suggests Thomas Caleel, director of admissions at Wharton, and that’s where an M.B.A. and the connections that come with it could help. “If you are trying to raise money for a hedge fund, you will need that network,” he says.

Mr. Talpins of Element said he had no trouble raising money for his hedge fund without an M.B.A. After all, he had a track record from Citi and Goldman Sachs to show to potential investors. In his corner of the world, where math equations are likely to be scrawled on white boards around the office and young people hold the purse strings to millions of dollars in investor money, it seems there is no point in going to business school just to punch a ticket.

Talpins is not the only one who contradicts Caleel. Just read the entire article. Caleel comes across as selling something that at least one particular segment of potential customers does not appear to need.

I have seen numerous clients make the jump into banking post-MBA, so the value for both international and career changers is clear enough to me. As to those already well on their way to making the very large salaries the article cites, unless they are looking for a career change, I don’t see the ROI.

Questions? Write comments or contact me directly at adammarkus@gmail.com.
-Adam Markus
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