With continuing financial scandals, profit warnings from the banking sector and general economic trepidation, it might seem surprising that those graduating with degrees designed for the banking industry are optimistic about their employment prospects.
But, says Linda Kreitzman, executive director of the Masters in Financial Engineering programme at the Haas school at UC Berkeley, this year’s graduates have reason to be relaxed. Just two months after graduation, 97 per cent of the graduating class have received job offers with an average salary of $159,141 (£81,708), plus an average first-year bonus of $55,484.
“Yes, some people are losing their jobs, but in spite of the market there is still a demand for fresh talent,” says Ms Kreitzman.
It is a similar story at London Business School. Sabine Vinck, associate dean of the LBS Masters in Finance programme says that although its students will not graduate until the beginning of July, the number of job offers on the table are in line with those of previous years. Banks are not about to make the same mistakes they made after the dotcom collapse, when they froze recruitment, she says. “What we are seeing is that institutional memory is strong after 2002.”
Although most investment banks are continuing to recruit at the associate level – the positions sought after by those with an MBA or post-experience masters in finance degree – Ms Vinck says LBS is prepared for a possible downturn in the market and the career services department has worked to diversify the types of financial organisation recruiting from LBS. This year students are accepting jobs in private equity and asset management companies as well as the traditional investment banks.
Of the LBS class that graduated in 2007, 53 per cent worked in the UK on graduation, even though only 13 per cent were UK-based before joining the programme. This year more graduates are likely to find their first job in Asia or the Middle East, says Ms Vinck. All the leading financial forces are setting up operations there and LBS’s centre in Dubai has enabled the business school to schedule networking events for current students.
In Hong Kong as well, there is still growth in the market, says Raymond So, associate finance professor at the Chinese University of Hong Kong.
Traditionally around half the students on the Berkeley programme are employed by Wall Street but increasingly Ms Kreitzman is looking to Asia and to London for internship places and jobs for students.
In general, schools are reporting an increase in applications this year for finance programmes – at LBS the number of applications has risen between 8 and 10 per cent. Although it is still not clear whether the growth in the applicant pool is related to redundancies in the City or on Wall Street, the past few years have seen a growth in the number of specialised masters programmes on offer.
Traditionally, European business schools have run these programmes – in the US financially-orientated MBAs have been the norm – and it is European schools that are leading the way in introducing new programmes. This year European business schools have launched, or will launch, nine specialised masters degrees in finance – schools such as Cass Business School and the London School of Economics in the UK and EM Lyon and Edhec in France. IE Business School in Spain and Strathclyde in Scotland are launching programmes in 2009.
In the US, Purdue, Pepperdine and Rochester are launching programmes this year and the Anderson school at UCLA will enter the fray with a degree in financial engineering in 2009. MIT’s Sloan school of management is expected to launch a masters in finance degree in the next year.
The growth in demand mirrors the growth in the financial services sector but also reflects a growing demand for technical knowledge, says Ms Vinck. “Finance is a specialist industry and it is more and more a technical industry.”
While professional training and qualifications teach managers how to use the available technical tools, there is also the need for practitioners to take an overview, she says. “What an academic qualification does is ...ask where these tools come from and what their limitations are.” This helps financial managers make better decisions, she says.
A cursory glance across the FT listing of masters degrees in finance might overlook the fact that there are strong differences between the types of programmes on offer. Two things differentiate masters in finance programmes.
First is the age and experience of the students. While most programmes would like their applicants to have some work experience before joining the programme, only a handful, such as London Business School, the Rotman School at the University of Toronto in Canada, and Boston College and the University of Illinois at Urbana-Champaign in the US, actually require it.
And while some programmes cover the whole gamut of financial education – Ms Vinck describes the LBS degree as a “generalist programme in a specialist field” – other programmes are more technical.
At the Tanaka school at Imperial College in London, for example, programmes are designed for those with a more quantitative bent, according to Lina El-Jahel, director of the MSc Finance programme. Applicants for the programme are often graduates from Imperial’s engineering and science programmes. One of the attractions of the programme is a potential job in the City of London on graduation, says Ms El-Jahel. “The pull of the City is huge.”
Tables compiled byWai K. Chan and Michael Jacobs