Do I need to take an MBA to get into or advance my career in Finance? The short answer is “NO…BUT…”

My graduation at Columbia in 2009

One recurring question the up-and-coming Finance professional asks oneself is whether doing an MBA is mandatory in order to progress in your Finance career. I went through the “MBA or no MBA dilemma” 15 years ago, in 2005; later on pursued my MBA at Columbia Business School and have been in touch with Columbia and other business school students in the US and in Europe.

So here goes my answer to the dilemma: you do not necessarily need an MBA to advance your career or come closer to your goals. However, if pursuing that MBA fits in well in your life plan, it will be a great boost and great contribution towards being a “well rounded” professional.

Why you should do it?

  • It greatly increases your chances of progressing or getting into finance, by plugging yourself into your MBA school’s student and alumni network and connecting you to more potential employers.
  • It is a great life experience: the reason why so many people get into formal MBA programs each year is not only an economic/professional one. A big part of it will be enriching your life with 1 or 2 years of social and professional experiences and building life-long friendships.
  • It will be a great social time, for single or married students. It will be unique point in your life when you are not a very young adult, you have some money in the pocket and you have a big group (depending on class size) of like-minded people with whom to socialize, travel, create companies, network, etc.
  • It is a good investment: education is, in general, a great investment (see Patience on the list of things to consider). In the case of doing an MBA, that investment can actually materialize in a multiplier to your revenues and the “terminal value” of your career.
  • It can be the pivotal change you are looking for: you may use your MBA for a geographical or career change. I did the former to move from Latin America to New York first, and to London later; and it is a very nice and orderly way to transition into your desired professional destination.
  • Anyone that is considering doing it SHOULD DO IT. Otherwise, you will find yourself 15 years from now asking why you didn’t do it when you had to

What things you should consider? (it’s not all rainbows and sunshine)

  • It is not the silver or magic bullet. It helps a lot, especially if you join a school that is strong at the specific sector you are aiming at; but it will still require effort on your side.
  • There is no “one size fits all” MBA. Two people in the same learning team, in the same cluster and in the same year in b-school can have dramatically different experiences. Because as with most things in life, the outcome will vary depending on your interest, the energy spent and the goals towards which you are using the time at school, its resources, its alumni network, etc.
  • Consider the cost: the direct tuition and living expenses, as well as the opportunity or foregone income cost.
  • Patience: the benefits can be relatively immediate, as it happens to someone coming from emerging markets and working full time in New York or London after school, with a 3-4x multiplier on pre and post school jobs. Or someone achieving the jump to the dream job right through the MBA. However, in many cases it might take you a longer journey to reap the career and economic goals. Just be patient! I can tell you that the effort finally pays off.
  • Social time: you will have a great time in any school you pick. But don’t fool yourself: go to the best school that is on your reach and your target, ie. The best brand that you can get on your CV.

A final consideration of online versus in person: due to the global lock-down, classes of 2020 and 2021 had the last three months of classes of the 2019/2020 year remotely. I see this as a convenient way to deal with an extraordinary situation. But the personal view of the author is that, same as the physical office will continue to generate “synergies” by having informal interactions other than in meetings, in person education will continue to add more than just taking an online course

To sum up, I would do an MBA in every future life I have. And I would do it a couple years earlier (I started at 29 years old). It helped me transition from Latin America into my dream of working in New York and London, developer a rich network in Europe, have a great time along the way, and the journey took me to Spain where, by the way, I found my soulmate.

In the meantime, contact us with any comments or questions you may have on this article, or visit our services to see our proposed Programs. We are looking forward in working together with you to achieve your recruiting and networking goals. Contact us!

Why developing a public or private investment pitch can increase your chances of getting a job

Develop an investment pitch to strengthen your candidacy

Whether you are applying to an asset management role or not, it is good use of your time to develop an investment idea, be it on listed debt or equity instruments, or an asset or company on Main Street (ie. In real life). I discussed it during my webinars over the past few weeks on how to better use your lock-down time (click to see video of the presentation at Columbia Business School), and even when Western countries start going back to normal, I still keep it as a very valid recommendation to strengthen your candidacy.

It has many benefits:

  • Potential economic profit if you invest and you are proved to be right
  • You practice your financial analysis and pitching skills in preparing to present it
  • It gives you more tools and depth as a candidate.

And relatively little or no downside:

  • The opportunity cost of the time spent developing the pitch
  • A monetary loss if you put your money where your mouth is, and it doesn’t turn out as expected (in any case, I am not suggesting you should bet the ranch on this)

All in all, it leaves you as a stronger candidate for the next interaction you will have with your target employers, be it formal or informal.

What is the pitch? What shall I prepare?

As in previous entries, let me start by stating what I am NOT suggesting here: I am not implying that you need to develop a super deep industry and company analysis, with a long presentation and a massive valuation model, as if you were a seasoned analyst at a big hedge fund. Also, because I made this mistake in the past: don’t try to overcomplicate the analysis. Do it with a lot of common sense, and very simple. Simple is beautiful when it comes down to investment discussions.

Instead, I am encouraging you, regardless of your previous experience and technical skillset, to use your financial-analysis muscle in an exercise that will be very similar to what you will be doing as a full-time employee in that desired job. And the resulting product of your effort, “your pitch” should be a clean explanation of what is the opportunity analyzed, the reasons for recommending it, the pros and cons of investing at the current price and a number of additional technicalities described below.

  • Gather the data set:
    • If listed: latest annual and latest quarterly report, plus COVID19 update and any sell-side Research you can get access to;
    • If a private opportunity: gather all the information at your disposal (qualitative and quantitative) to make a full assessment
  • Write down equity story (why you would invest in this);
  • Understand, and state clearly, the COVID19 impact in the short and long term for sector and company (or asset);
  • To the best of your possibilities, build a valuation model. If a modeling fan, build a full, all-financial-statements-and-sensitivity-tables kind of model. Otherwise, a good “back of the envelope” model, grasping the basis should suffice to sustain a meaningful conversation on the opportunity.
  • Set entry point (recommended acquisition price), catalysts, stop-losses and investment horizon. If a private transaction, replace “stop losses” for how you would think of the biggest risks to the investments, and how you would try and mitigate them.

An additional twist for those of you in the Private Equity track or that might be more senior than entry level, and that are entrepreneurial

If you fit in either the “no matter what the age but entrepreneurial” candidate; or if you are already more advanced in your career that people can start expecting you to “originate” deals (ie. Find new businesses that can bring fees to the firm), then you can use the above suggested check list to find and develop a real business opportunity such as buying out or funding/lending to a private business, which will go very well with networking and interviewing with entrepreneurial places to work where they value junior members capable of bringing in new businesses.  

To conclude, even when you are not intending to be the king of private or public investments, and you just want to be the proverbial investment banker, this exercise can:

  1. Provide you with a variety to your routine practice of networking and interviewing; and in the process of getting out of your comfort zone,
  2. Equip you with more tools and themes to discuss on your next meeting
  3. Open the doors to certain entrepreneurial shops that would otherwise be closed to recruiting
  4. Make you some money along the way

Remember to contact us with any comments you may have on this article, or to visit our services to see our proposed Programs. We are looking forward in working together with you to achieve your recruiting and networking goals. Contact us!