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Even More Harvard Business School Students Ruining Wall Street

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The post-graduate plans of business school graduates are sometimes taken to be contrary indicators. In fact, as we pointed out a little over a year ago, a system for measuring market sell signals based on the plans of Harvard Business School grads had been designed by Ray Soifer, a retired executive from Brown Brothers Harriman. By his metric, when 10% or less of a graduating class take Wall Street jobs, it's a long-term buy signal. When 30% or more take market sensitive Wall Street jobs, it's a big flashing sell signal.
When we noted first this story, 37% of the class of 2006 had gone to market sensitive Wall Street positions. This year's number was even higher--40%. Meanwhile, following the trend of recent years, the average number of months of work experience of HBS grads slipped from 52 to 50.
And the big money is still where it was last year: private equity and other buyout firms. According to a recent Financial Times article, graduates who go to private-equity firms "stand to earn more than $400,000 in salary and bonus in 2007-08, plus up to $5 million over several years depending on the fund's performance."
"By contrast, first-year associates with MBA degrees at big, publicly traded investment banks can expect to make $70,000 to $80,000 in base salary plus bonuses of $60,000 to $80,000, according to Eric Moskowitz of the Options Group," Francesco Guerrera and Ben White of the Financial Times write.
(Updated Note: Those numbers seem a bit low to us. In fact, they seem to jive with what we've heard Moskowitz say about first-year Wall Street analyst pay. We've contacted the Options Group to ask about that number. Certainly, the information from top tier graduates schools--prime recruiting ground for investment banks--indicates higher numbers.)
Those numbers struck us as low, even given the current damage to bonuses most expect from the credit crunch. Indeed, the information provided by Harvard Business School itself discloses much higher base salaries
Interestingly, however, we can report that the percentage of HBS grads headed to buyout land is down a tick from last year. Thirteen percent of the class of 2006 went to buyout firms. Only 12% of the class of 2007 followed that road. We have no idea whether that means that private equity is already over or headed for a comeback.
Private equity gains ground in talent war [Financial Times]