hedge funds the new m.b.a.?
a growing trend among twenty-something graduates looking to make it big is foregoing a graduate degree in business after a few years experience and cashing all of their chips into hedge fund practices at some of the world’s top firms. poised with tools of mathematical quickness and financial modeling, wall-street movers like gabriel hammond are co-founding firms managing assets in excess of $300 million at the age of 28. he attributes his success specifically to foregoing the m.b.a. program goldman sachs usually recommends and learning on ground level. in contrast, katie shaw, also 28, took time-off from her private equity job and is still vacillating the decision of whether it was ‘worth it’ to go.
the numbers, for those that actually survive the high-stakes game, are pretty astounding. analysts that research funds that hold assets of $1 billion to $3 billion can easily make $337,000 a year with a few years experience. those with 6+ years can easily top $800k / year. while it should be said that many ‘do not make the cut’ within 6 months in addition to the seemingly watered-down market of mba prospects each year, the question (and answer) is shifting towards ‘how talented are you’? many of the top firms are rewarding their mathematically inclined young minds with hefty bonuses and recommending, almost demanding, that they forego the atypical m.b.a. track. in fact, some are actually going after a ‘new’ masters degree like financial engineering and financial mathematics.
wall-street is where the money is and we often get into discussions at ybpguide about managing money, becoming successful, and advancing one’s career. as i notice that a lot of my friends are getting two and three degrees, coming out of school with mountains of debt and no experience, i can’t help but wonder will we get into this game?
will the talented crop of peers we have graduating today tap into this lucrative market and share the knowledge with the rest of us? more importantly, how do we pool our assets together and make this work?
i’m not a financial expert, but i seriously hope our readers who are financial guru’s chime in on this post. (via nytimes)
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Comment by Dash on 17 September 2007:
A couple of thoughts on this.
While I am not a fan of Hedge Funds for investors–I definitely think they hold great opportunities for careers. Where else can you go and make $300k/per a year at 28? Let’s say that in the worse case scenario you flame out after a couple of years—–so what, youv’e just banked several hundred thousand which puts you in the top 10 percent of American. We definitely need to have more representation in this area as blacks. Believe me if I were smart enuf to do it, that’s exactly where I would be. One thing to keep in mind is that these hedge funds are looking for the cream of the crop talent–specifically in math and science from top tier schools. If you fit that bill–then GO GET PAID.
Comment by ETS on 17 September 2007:
I’m not sure that most of “us” have the option of foregoing things that are often optional for our white counterparts. I still believe we have to be above average to be considered “equal” in many scenarios.
Plus, a lot of attention needs to be paid to the failure rate.
Comment by Fredric on 17 September 2007:
true, but the failure is present no matter what direction you choose. is it not risky to start your own business, try to make it in the music world, buy up some real estate, or go into acting in hollywood? many of ‘us’ dream and do that all the time.
the point i was emphasizing is that life has no ‘right way’. you can attain all of the degrees in the world, but it still won’t guarantee you a slice of the pie.
diligence, creativity, and talent separate those among us who may tend to live by the philosophy ‘the nail that sticks out, gets hammered down’.
here is a continuously emerging and competitive frontier that ‘we’ need to be aware of and something that young, black, talented professionals need not fear.
if anything, its a testament to the old adage that ‘math and science are the fundamental building blocks to everything’. this article is shedding light to an industry where that skill can lead to a hefty payout.
Comment by ETS on 17 September 2007:
You’re right. We need to be aware of alternative routes - especially when they prove to be fruitful.
I just think that when we’re talking about Wall Street in particular, most of us need to come to the table as “officially qualified” as possible to be given just some of the same chances that they get. But who knows, maybe things will or already have changed …