Olivier Bossard knows a bit about life in the securities industry. Like many exemplary young French financiers, he started his career on SocGen's Parisian trading floor before moving to London. In the City, he spent a decade rising through the ranks of Lehman Brothers, becoming head of structured products and exotics at the doomed bank before it went under. Then came his own consultancy. Then, a role as global head of derivatives trading ex-Asia at Macquarie.
Since 2015, however, Bossard has worked in academia, latterly at France's HEC Business School. Last month, he was made executive director of HEC's MSc in International Finance, which ranks third globally among Masters in Finance (MiF) courses in our estimation. We asked Bossard why students today should bother taking a Masters and what makes HEC's MiF special. This is what he said.
Bossard says a Masters in Finance is a differentiator. "Most of the graduates enrolled into investment banks already have an outstanding BS/MS degree from a top-tier university, where they learned the foundational concepts in maths, accounting and economics," he tells us. "However, they still lack an in-depth understanding of financial markets, asset pricing and corporate finance." A MiF will give you this.
If you take the time to study a Masters in Finance, you'll also interact with people who have genuine securities experience. Bossard isn't the only ex-banker involved with the course at HEC: "50% of our courses are offered by top-notch market practitioners, who take every year a few days off from their day job in banking or on the trading floor," he says. "They come to school to teach their current field of expertise as they live it on the ground."
Bossard himself teaches a course at HEC on 'Advanced Asset Pricing', which he says combines theory with practice, "such as the calibration of implied volatility surfaces or the design of complex products via Monte Carlo simulations".
Once upon a time, banks were all about chasing revenues. Now, they're all about preparing for Basel IV, implementing new data-driven systems and allocating collateral efficiently. Bossard says HEC's course is adapting to the new terrain: "The banks I talk to are all concerned about liquidity issues, leverage ratios, returns on assets and balance sheet. Therefore, they expect our students to fully integrate this new operating framework, as well as new products, new instruments, new technologies."
HEC's students spend time looking at the impact of regulations like Basel III and IV on banks, and at how MIFID II is impacting trading. "We integrate more and more real trading constraints, such as for instance the impact of illiquidity and the usage of dark pools for hedging purposes," Bossard says.
Students are also instructed on the geopolitical issues du jour: "...the eurozone problems and Brexit, the increasing role of Central Banks and the impact of regulatory frameworks which are considerably reshaping the nature of their businesses."
Lastly, Bossard argues that a MiF is the best qualification for an actual investment banking job.
"A MBA course is very expensive, but it remains the best choice to get into consulting," he tells us, confirming our finding that top banks, in Europe at least, rarely hire MBAs now: "Banks increasingly perceive MBA courses as lacking technical training, and they definitely prefer to hire 'juniors' at graduate level from a Master in Finance."
What about the CFA Charter? Even though CFA exams are reasonably popular in M&A (7% of M&A bankers have passed one), Bossard says CFA passes are more relevant to buy-side careers in asset management or research: "Over 40% of CFA charterholders end up in roles as portfolio managers or research analysts."
By comparison, Masters in Finance courses are actually banking-focused, says Bossard: "A Masters in Finance provides a solid combination of theoretical courses and practical applications, which currently appears to be the prefered route for banks to hire their graduates."
As executive director of a Masters in Finance course, you could argue that he would say that, but it's certainly the case that MiF students are becoming more popular.