Sept. 23, 2008
UI institute continues preparing students for Wall Street careers
Investment banks are struggling, collapsing, merging themselves out of existence. But good jobs will still be available in the field, says a former investment banker who now runs a University of Iowa program that readies students for careers on Wall Street.
"Certainly, it's a challenging environment, and there will be fewer employment opportunities in the short to medium term," said Brian Richman, director of the Hawkinson Institute of Business Finance in the Tippie College of Business. He points out that three soon-to-be UI graduates had outstanding job offers from Lehman Bros. at the time of the firm's bankruptcy.
"But what investment bankers do is raise money for businesses, and when you look past the current downturn, businesses are still going to need money," he said.
Now in its tenth year, the Hawkinson Institute of Business Finance takes some of the Tippie College's top students and rigorously prepares them for careers in investment banking as Hawkinson Scholars. The program accepts students after a competitive application process, and those who are accepted have an average GPA of 3.9.
About 20-25 students graduate from the center each year and student demand is still strong. In its ten years, the center has graduated more than 120 scholars with a 100 percent employment rate.
Richman recognizes that the perfect placement rate might be at risk now. Investment banks and other financial institutions holding large amounts of bad subprime mortgages are struggling with investor uncertainty and an inability to raise capital. Two of the biggest in the industry -- Lehman Bros. and Bear Stearns -- are gone, while Merrill Lynch was bought by Bank of America last week.
As a result, tens of thousands of financial managers -- many of them in the New York City area -- are now looking for work.
"The graduates of the Class of '09 are going to find competition for jobs from the Class of '08 who've been laid off," Richman said.
That doesn't mean there won't be opportunities, he said, just that the opportunities will be shifting. He said the typical career path in investment banking starts after a student's junior year, when they work as a summer intern for a financial institution. If they perform well, they are usually offered full-time work for after they graduate.
"Most firms will still hire interns because it's not a big investment for them, and if an intern performs at a high level, the firm will still lock them up with a full-time offer," he noted.
On top of that, many of the top tier firms that engage in investment banking -- such as Goldman Sachs, UBS or Credit Suisse -- are still in good shape and looking for junior-level talent, he said.
Hawkinson Scholars can also find career opportunities at smaller firms, especially those outside New York City, in places like Chicago or San Francisco. Those firms often work with smaller clients and provide advisory or consultancy services as well, but are good places for careers.
And Hawkinson Scholars also have the added benefit of a solid reputation among investment bankers.
"When one of our students is hired for a position, they perform very well and that gets noticed," Richman said. For instance, he said, those three students who lost job offers when Lehman Bros. went under? They're now being considered by the British-based Barclay's Bank.
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