Our continued work with Master’s and MBA students at top universities revealed an interesting trend when it comes to top talents’ choices when entering the financial industry. Whilst M&A in investment banks has long been the favourite entry point into finance, we are seeing more students keen to secure a position in private equity (PE) and venture capital (VC) straight away.
One MBA student from INSEAD recently expressed during a mock interview conducted by Denny Ellison that ‘In Private Equity, I will be more able to leverage my operational and business strategy skills than if I join a purely advisory role in the M&A department of an investment bank’. This is because private equity firms typically take a controlling stake in the company they invest in, and work close with management to improve the business operation over a few years’.
A new position in Private Equity firms include so called ‘Value Creation’ associates. This team, also known as portfolio operations or portfolio resources team, aims to make the companies more valuable by improving their fundamentals (revenue growth, margins and returns). Most MBA candidates interested in these positions were those with less finance and more operations background.
Another interesting trend is the continued appetite for sustainable and infrastructure funds. These invest in sectors such as transportation (airports, roads, rail, bridges), energy (power plants, pipelines and renewables) and utilities (oil, gas, water). These are typically driven by the need for funding to reach sustainability goals.
Finally, Teach savvy students with an entrepreneurial spirits were often looking at entering the world VC, after having experienced the importance of fund raising and strategic support from VC firms themselves. This was particularly the case in countries such as India, where tech start-ups are proliferating and in dire need of top talents.
As PE funded M&A deals dominate the market for the last 10 years, as opposed to hostile bids from conglomerates in the 80’s and 90’s, the exodus of talents towards P/E and VC to the detriment of traditional M&A in Investment Banks is likely set to continue.
Some of the top universities we are working with over the years include London Business School, INSEAD, ESCP, Yale and Columbia. For more information on our asset management workshops and finance mock interviews to Master’s and MBA students please contact us.