Getting an entry level job in private equity is notoriously competitive. Most firms hire junior investment bankers after a couple of years’ experience, and even then they only want the cream of the crop. But what if there was a qualification that could get you in through the back door?
Say hello to the Masters in Management. These courses typically cost around half that of an MBA, are open to students immediately upon graduation and appear to be an increasingly happy hunting ground for private equity firms.
London Business School is one of the few universities to break out exactly where its MiM graduates are finding employment. This year, 6% of the 152 graduates who paid £27.5k for the course went into private equity. This isn’t huge, but it’s roughly equal to the proportion of graduates with either an MBA (7%) or Masters in Finance (8%) going into the sector from LBS and these courses both cost significantly more.
Even better, the number of MiM students being hired by private equity firms is on the rise. In 2013, 4% of students from LBS’s MiM went into private equity, while in 2012 this figure was 2%. Meanwhile, the total proportion of students going into finance is on the decline – in 2013 39% of MiM graduates went into finance, whereas 34% of the class of 2014 went in the financial sector.
Private equity’s popularity among those with MiM qualifications is reflected in our own figures. Just over 6% of those with a MiM qualification registered on the efc CV database now work in private equity – the third most popular sector behind investment banking and consulting.
So, why are more private equity firms hiring students with a Masters in Management? Part of it could be down to degree discipline – most MiM students have studied business, economics, engineering, finance or maths at undergraduate level. But it’s also because of a skills shortage at the junior level, says Gail McManus, managing director of Private Equity Recruitment.
“There are nearly three times as many jobs available to recent graduates in private equity - usually with some investment banking or leveraged finance experience - than there are for MBA graduates,” she says. “What’s more, private equity firms are struggling to find the numbers at the junior end, so it makes sense that they’re trying out alternative avenues of recruitment.”
While there are no figures on exactly what MiM graduates going into private equity are paid, generally those going into finance roles are being taken on relatively cheaply. Average salaries for students entering finance were £38.7k – most investment banking analyst roles pay £45k+ - while total bonus payments averaged at around £10k.