<p>I'm reading some threads pertaining to a undergraduate engineering major going into investment banking. How exactly is this done? And how does engineering apply to investment banking?</p>
<p>It's done in the same way that anybody from any major can theoretically get into investment banking. You go to one of the schools that the banks recruit at, you do well in the interview, and you're in. Along the way, it behooves you to do lots of networking and reading about the industry so that you are prepared to talk about whatever it is the interviewer wants to talk about. It also helps for you to develop your interview and public speaking skills along the way. </p>
<p>Engineering doesn't apply to investment banking. Neither does English, history, biology, or many other fields from which I have seen people get hired into Ibanking. The banks aren't hiring you for what you learned in college. They are hiring you for your raw talent and your work ethic. They are going to train you on what you need to know. </p>
<p>You have to keep in mind that most people do not end up in jobs that are tightly linked to their undergraduate major. Most history majors do not become professional historians. Most poli-sci majors do not become professional political scientists. What matters is not the specific things that you learned within a major, but that you've developed the ability to think critically. In other words, you are learning how to learn. That is the real value of any sort of education.</p>
<p>I don't know if sakky's definition of IB includes Financial Engineering (aka Financial Math, Computational Finance) but I can tell you that an engineering grad is in a far better position than an english grad to solve partial differential equations underlying the Black-Scholes and other models. </p>
<p>Engineering applies to banking/finance due to the quantative nature of the training. Many risk-managers on Wall Street having backgrounds (Masters/Ph.D) in Electrical/computer engineering, Physics, Math and other quantative disciplines. </p>
<p>Just pick up a book on Financial Engineering and the underlying mathematics is very advanced and difficult to follow.</p>
<p>If you want to get into the field of quantative finance, I sugest taking EE with a master's in Financial Engineering (U of Chicago has traditionally the best program - since they basically started it).</p>
<p>i would argue that CMU and UC-Berkeley have much better financial math masters than U-Chicago, as they have a more practical curriculum and better job placement. But to each their own :).</p>
<p>in any case , BS Engineering -> MS Financial Engineering is definetely possible. However, this does not setup specifically i-banking. i-banking is selling stock, arranging mergers & acquisitions, etc. </p>
<p>Financial engineering gets into the quantitative side, including trading, risk management, and product structuring.</p>
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i would argue that CMU and UC-Berkeley have much better financial math masters than U-Chicago, as they have a more practical curriculum and better job placement. But to each their own
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<p>Personally, I think the best one of all is arguably Princeton's. </p>
<p><a href="http://www.princeton.edu/%7Ebcf/master.htm%5B/url%5D">http://www.princeton.edu/~bcf/master.htm</a></p>
<p>The major Wall Street firms(hedge funds and some private equity included) are now recruiting for engineers for two reasons: they can be recruited for a lot less than top MBAs, and second, they can do tons extremely tedious, yet difficult number crunching than most liberal arts and undergrad b-school could.</p>
<p>If a typical undergrad sales job at P&G, Oracle or Pfizer might pay 50-60k, Wall Street is paying 60-80K with bonuses that can be well into the mid 100s. Not bad for a 23 years old.</p>
<p>As you might imagine, the Street is now beseiged with job-seekers, so just like college admission, the bar to get in the door has been raised....and it is not only Americans; young people from foreign lands are also knocking around Manhattan.</p>
<p>The name schools are still favored: MIT, Harvard, Princeton, Williams, Amherst, Stanford, Duke etc. Occasionally, a Notre Dame, Cal, Michigan, UCLA gets in, but this tends to be the exception, not the rule.</p>
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The major Wall Street firms(hedge funds and some private equity included) are now recruiting for engineers
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<p>I actually wouldn't say that those firms are really recruiting "for engineers", at least, not specifically. Rather, they are recruiting for top talent and prestige, regardless of what they majored in, whether engineering or something else. </p>
<p>For example, I think we would agree that a guy who majored in humanities at Harvard is far more likely to get an investment banking job than, say, a guy who majored in engineering at, say, North Carolina State, even though the latter guy is probably far more qualified to do tedious and difficult numbers-crunching. The reasoning seems to be twofold - #1, the Harvard guy was at least good enough to get into Harvard, so he probably has the raw talent and ability to learn tasks quickly, and #2, the prestige of the Harvard brand name helps in picking up clients. It's easier to pick up new accounts, and charge high fees, when you can say that your team consists of a bunch of Harvard graduates (even if they are humanities majors) than if it consists of a bunch of NCState engineers. Fair or not fair, NC State does not have the brand name power that Harvard does. (Frankly, like it or not, no school has the brand name power that Harvard does).</p>
<p>Sakky:</p>
<p>Agree with you 100%. When I said that they are looking for engineers, I meant kids from the top 5 or 6 tech schools. And the group narrows even further in that they are looking for GPAs near 4.0, mostly in EE or math/physics.</p>
<p>Sakky:</p>
<p>Your comparison takes into account two rather extreme examples. What would you say of schools such as Johns Hopkins, etc, that has a strong prestige in terms of another field?</p>
<p>Each IB and MC have particular schools they like to recruit from. For example, Citigroup may go to Upenn Wharton to recruit UG's for a MA program. They will consider finance, accounting as well as other majors such as engineering/Liberal arts & science (Econ). So if you are a engineering major at Upenn you can also apply to Citigroup for acceptance into their MA program.</p>
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When I said that they are looking for engineers, I meant kids from the top 5 or 6 tech schools.
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<p>Not to pick on hairs, but, again, I would say that the overall school prestige (as opposed to engineering-specific prestige) matters more. For example, an engineer from Harvard or Yale (yes, Harvard and Yale have engineering) is going to be far better positioned to get into investment banking than, say, an engineer from Purdue, even though Purdue is a significantly higher ranked engineering school than is Harvard or Yale. That's because, like I said, they're not really hiring you for the engineering degree. They're hiring you for the Harvard/Yale brand name, which means that you were good enough to get into such a school in the first place. Furthermore, it also means that they can use that brand name to garner more clientele. It's easier to gain clients when you can boast of all the Harvard/Yale graduates you will make available to clients, as opposed to a bunch of Purdue engineers. Fair or not fair, that's how the business of banking works. </p>
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And the group narrows even further in that they are looking for GPAs near 4.0, mostly in EE or math/physics.
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<p>Like I've been saying on other threads, actually, I think it's much more complicated than that. Personality seems to matter far more than does academics. To give you a poignant example, a Harvard student with only middling grades, but who is a star player on the football team is in a far better position to get into banking than is, say, an MIT engineer with straight A's but who doesn't have a record of extracurricular achievement. Not that this is an off-the-wall example. Clifton Dawson, the star Harvard running back, is highly likely to become a banker if he doesn't make it to the NFL. He doesn't have superstar grades. But he has not only broken almost every single Harvard football rushing record in existence, he also broke both the all-time Ivy League rushing record and the Ivy scoring record this season. And the truth of the matter is, a lot of former Harvard football players now occupy high positions in the banking world, so Dawson is going to get plenty of banking interviews just on the strength of his football alumni ties. </p>
<p>The same could be said, but perhaps even more so, about Stanford football players, as Stanford (unlike the Ivy League) is actually a Division 1-A football team. Hence, becoming a football star at Stanford is arguably even more impressive than becoming one in the Ivy League. Those Stanford players who don't make it to the NFL (or do, but wash out) also strongly tend to head to banking, leveraging their network of former players. </p>
<p>Note, that's not to say that everybody should just go out and play football if they want to become bankers. Of course not. That's not the point. What I am saying is that hiring decisions in banking (as in any other industry) is still largely based on who you know and personal characteristics, as opposed to pure academic ability. You can have stellar grades from the top schools, and not get a single offer (you might get plenty of interviews, but no offers), only to watch your school's quarterback who has only middling grades get the offer you want.</p>
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Your comparison takes into account two rather extreme examples. What would you say of schools such as Johns Hopkins, etc, that has a strong prestige in terms of another field?
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<p>The question is, what are you comparing it to? Let's face it. All other schools lose to HYPSM + Wharton when it comes to getting students into banking. When I say 'lose', that's not to say that other schools can't get offers. Of course they can. But they are running at a 'prestige-disadvantage' relative to those former schools. </p>
<p>It doesn't even matter what you major in. Yale is not an elite school in engineering. MIT is not an elite school in literature. But that doesn't matter to the banks. They want a student who is good enough to get admitted to those schools in the first place, regardless of what they end up majoring in.</p>