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It used to be more than one in four Wharton grads took jobs at investment banks. That number plunged to 16 per cent in 2012. According to the Financial Times, greater job insecurity in an industry struggling to adapt to regulatory change is driving MBAs away from investment banks. Grads are seeing more promise in private equity right out of school instead of after spending two years at a bulge-bracket bank.
The turbulence is evident in Goldman Sachs’ decision to end its two-year graduate training program in September. The bank will use open-ended hiring for recent grads in hopes of securing a workforce that won’t defect to private equity after two years. Morgan Stanley remains committed to its training program but vows not to be “feeders like the hedge funds.”
Maryellen Lamb, director of MBA career management at Wharton told FT:
“The number of students going into financial services has remained steady but what’s changed has been the types of roles. We’ve seen more opportunity for students in private equity and hedge fund roles.
John Studzinski, head of Blackrock Advisory Partners, who talks regularly to MBA students, told FT more students were becoming entrepreneurs, but at Harvard Business School the proportion of grads going into consulting, at 29 per cent, was a nine-year high.
Salaries for recent grads at the bulge brackets are down slightly: $60,000-$70,000 for college grads and $90,000-$100,000 for MBAs. Those averages don’t include year-end bonuses, however.