Top U.S. Hedge Fund Feeder Schools

from http://hfobserver.com/news/top-u-s-hedge-fund-feeder-schools/

Graduates of The Wharton School are the most likely to end up in top-paid investing jobs in the hedge fund/alternatives industry, according to a jobs survey by HFObserver.

An investing job in the hedge fund industry can create generational wealth in just a few years of strong performance, but how can you break into the club?

To find out, HFObserver decided to look at the academic degrees held by more than 450 experienced professionals hired by hedge fund/alternative investment firms between January and July of 2011. Schools are ranked based on how many senior-level 2011 hires were alumni of each institution.

Hedge Fund Top 5: Undergraduate Programs

1. University of Pennsylvania (including The Wharton School)
2. Cornell University*
3. New York University (including The Leonard N. Stern School of Business)*
4. Duke University
5. Stanford University

Runners Up: Princeton University, Harvard University, Yale University, Syracuse University
* denotes a tie

In our survey of undergraduate degrees, University of Pennsylvania and its Wharton business program–already recognized as the most influential undergraduate business program in the country and ranked #1 by US News and World Report in 2011–ranked as the top feeder school for hedge funds with its alums accounting for the largest number of hedge fund hires in the first part of 2011. Cornell and NYU tied for second place, beating out names like Harvard, Yale and Princeton, which in our survey tied for sixth place with Syracuse.

The conventional wisdom in the hedge fund industry is that you won't get hired unless you are from one of the top schools. HFObserver found that the conventional wisdom is not true. Of more than 400 experienced hedge fund/alternative investment firm hires tracked by HFObserver in the first half of 2011, only 20% held undergraduate degree from one of our top-5 ranked feeder schools.

But a school could determine what kind of hedge fund job you end up in, HFObserver data shows. A closer look at 2011 senior hires found that 75% of those with Penn/Wharton, Yale, and Harvard undergraduate degrees are working as investment professionals (analyst and portfolio manager), the highest-payed jobs in the industry. About 60% of experienced hires with Princeton, Stanford and Duke degrees are actively investing, as are about half those with degrees from NYU. From there, the numbers drop off steeply in investing roles for graduates of Cornell (25%) and Syracuse (20%), as well as for Brown (33%) and Fordham (5%), which tied for tenth place in our survey.

HFObserver found that Syracuse and Fordham still rank highly in overall hires because graduates of the two New York state schools are feeding the ever-growing need by hedge funds for operations/infrastructure/compliance professionals. And their proximity to the hedge fund capital helps as well.

Hedge Fund Top 5: MBA Programs

1. New York University (Stern)
2. University of Pennsylvania (Wharton)
3. University of Chicago (Booth School of Business)
4. Harvard University (HBS)
5. Stanford University (GSB), Northwestern (Kellogg School of Management), Fordham University (Gabelli School of Business)*

* denotes a tie

When HFObserver looked at what MBA programs were most successful in turning out hedge-fund pros, we found that graduates of NYU's Stern School of Business were most in demand, accounting for the largest number of 2011 hires into senior roles.

Despite NYU's overall leadership, the MBA data show that to become an investment pro your chances may be higher if you stick to the Ivy League. HFObserver found that nearly all the graduates of second-ranked Wharton and fourth-place HBS hired into senior hedge fund/alternatives jobs in 2011 were hired into investment roles. For grads of other programs, the roles chosen were more diverse. About 60% of University of Chicago business grads hired in 2011 were working as investment professionals. NYU and Fordham grads were more evenly split between roles in marketing/IR, management/operations, and investing.

Meanwhile, the MBA is not as prevalent as some might think in the hedge fund/alternatives world: only one third of all hedge fund/alternatives professionals in our survey of recent hires held an MBA degree. Among investment professionals, the figure rose to 37.0%. These MBA stats are low compared to other financial services sectors, including banking, asset management and private equity, where the majority of investment professionals nab an MBA on their road to senior brass.

About 44.7% of those surveyed had a graduate degree of some kind, with a law degree the most common degree after an MBA, followed by engineering and technology-related degrees.