One topic that I’ve never fully explained on this site is the investment banking target school.
There are countless references to “target schools” in the articles and interviews, and we assume everyone understands the term.
But that’s not always the case, and it gets confusing because target schools differ by region (U.S. vs. Europe vs. Asia) and level (undergraduate vs. Master’s vs. MBA).
Also, there are “semi-target” schools sitting in between non-target and target schools, and no one ever explains the precise difference.
I will provide a few lists and guidelines here, but I want to take a slightly different angle and explain the “why” and the “what next” parts.
In other words, what do you do differently in the recruiting process if you’re not at a target school?
And why do banks focus so heavily on a few schools?
Will they continue doing this, or will recruiting change in the future?
Definitions: What are “Investment Banking Target Schools”?
Investment Banking Target Schools Definition: “Target schools” send significant numbers of their students into investment banking each year and have broad alumni networks in the industry; large banks focus their recruiting efforts on these schools and often reserve spots for a fixed number of students at each target school.
There are no exact numerical criteria because this definition is based on relative numbers and banks’ recruiting efforts more than absolute numbers.
For example, if University A has sent 500 students into investment banking roles over the past 5 years, accounting for 10% of total IB hires in the country, and University B has only sent 50, University A is a “target school,” while University B is more of a “semi-target.”
And if University C has sent 1-10 students into IB roles over this same time frame, it’s in the “non-target” category.
Banks may also visit target schools in-person to hold events and information sessions (though less frequently than they used to).
Until the late 2010s, banks also conducted first-round interviews on campus at target schools; these are now done mostly via HireVue.
People have counted the number of working bankers by school and created lists based on that; you can find one from College Transitions here.
But there are a few problems with lists based strictly on the raw numbers:
- They don’t account for student interest and demand. For example, universities like Stanford and MIT are clearly targets in the U.S., and many students from these schools could get into IB if they wanted to. But they tend to be more interested in tech, startups, consulting, and other non-finance roles.
- They don’t differentiate between undergraduate, Master’s, and MBA-level recruiting, and the numbers differ at each level.
- They may not be adjusted for class size. But, on the other hand, you may not want to adjust 100% for class size because that leads to results like Washington and Lee outranking NYU in the list above.
- They don’t account for recent vs. longer-term trends. For example, if a school hasn’t placed well in the past 2-3 years but still has thousands of alumni in the finance industry, should it be a “target”? I would say, “yes,” but some would disagree.
It’s still useful to look at the numbers, but they should only be a starting point.
And any ranking should be viewed as an approximate guideline because of all these issues.
Investment Banking Target Schools by Region and Level
Here are my rough lists for the three main regions by level:
- United States (NY and regional offices):
- Undergrad: The Ivy League schools (HYP and UPenn (Wharton) more than the others), NYU (Stern), U Michigan (Ross), UC Berkeley (Haas), Notre Dame (Mendoza), Georgetown (McDonough), Northwestern, Duke, UVA (McIntire), Stanford, MIT, UChicago, and arguably the top liberal arts colleges (Williams, Amherst, etc.).
- Undergrad Semi-Targets: WashU (Olin), CMU (Tepper), UNC (Kenan-Flagler), USC (Marshall), UT Austin (McCombs), Vanderbilt, UCLA, Emory (Goizueta), Rice, IU (Kelley), Boston College (Carroll), and some liberal arts colleges like Middlebury and Claremont-McKenna.
- Master’s in Finance: MIT, Princeton (more of a quant program), UT Austin, UVA, Vanderbilt, WashU, Notre Dame, USC, Claremont-McKenna, and maybe a few others (best to look at employment reports here).
- MBA: The M7 schools, Yale, Stern, Haas, Ross, Tuck, Fuqua, and possibly a few others in the top ~20.
- London / Europe (MBA recruiting is far less developed):
- Undergrad: Oxford, Cambridge, LSE, UCL, Warwick, and Imperial (U.K.); names like HEC, ESSEC, ESCP, ICADE, ESADE, IE, Bocconi, St. Gallen, WHU, and Mannheim in the rest of Europe. See the London IB article for more.
- Master’s in Finance: LSE, LBS, Imperial, Oxford, Cambridge, Bocconi, HEC, SSE, WHU, RSM, IE, CBS, ESCP, St. Gallen, ESADE, and a few others if you count S&T/AM recruiting (EDHEC, ESSEC, Dauphine, etc.).
- MBA: LBS, HEC, INSEAD, Oxford, Cambridge, IESE, Imperial, IE, ESADE, Bocconi, and possibly a few others in the list above.
- Hong Kong / Asia (MBA recruiting is far less developed):
- Undergrad: Everything on the U.S. and European lists, plus HKU, CUHK, HKUST, and Chinese universities like Peking University, Tsinghua, Fudan, Shanghai Jiaotong, Nankai, Nanjing, and Zhejiang.
- Master’s in Finance: Many of these names will be from the U.S. and European lists, but you can add any HK/Chinese ones from above with programs.
- MBA: Everything on the U.S. and European lists, plus HKU, CUHK, and HKUST.
Look at the investment banking in Canada article for a discussion of schools there.
In the U.S., many schools are in the “grey zone.”
For example, where do liberal arts colleges such as Williams, Claremont McKenna, Amherst, and Bowdoin fit in?
Or what about universities like Vanderbilt and Emory that are not “the top of the top” but still in the top 20-30 nationwide?
Some of these could go in the “target” category (e.g., Williams and Amherst), but I’ve placed most of the others in the “semi-target” list.
In some cases, they are targets for locations such as Houston but not for NY-based roles (many Texas schools fall into this category).
If a school is a target for one or two locations but not the “main hub,” it is more of a semi-target because these regional offices hire many fewer Analysts and Associates.
Finally, note that there are also schools in the “non-target but still recognizable” category, such as Rutgers, Fordham, and UW Madison.
If you go to a school in this category, you won’t get “I’ve never heard of your school”-type rejections from bankers.
But you’ll still have to be more proactive and network more aggressively than students at target and semi-target schools.
We could argue endlessly about the exact lists, but the key point is that you must approach recruiting differently based on your current or planned school.
You might not know if you’re at a “lower-tier target” or “semi-target,” but you should always know if you’re at a school that is unknown to bankers or one they’ve heard of.
How Do Investment Banking Target Schools Affect Recruiting?
First, you will have a very tough time recruiting for IB roles from a non-target MBA program.
There are many fewer Associate positions, and most of these spots are reserved for students from the top MBA programs.
You can still network aggressively and win Associate roles at boutiques and smaller/regional firms, but these roles tend to pay highly variable compensation, and your daily routine might be quite different (“sales” more than “execute deals”).
It may be slightly easier from a non-target Master’s in Finance, but it’s still an uphill battle.
The bottom line is that if you cannot get into a top MSF or MBA program, it’s not worth enrolling in a lower-tier program if your main goal is investment banking.
If you’re interested in other careers, such as corporate finance at a normal company or quant finance roles, these lists differ, and “non-target” programs might be fine.
At the undergraduate level, the main differences if you’re at a non-target include:
- GPA – To be competitive, you need perfect or near-perfect grades (3.8+ GPA). If this means taking easier classes or picking an easier major, do it!
- Major / Classes – A student at Harvard could major in Literature, History, or Gender Studies and still win an IB role, but you cannot. You need an accounting/finance major or something very close to it – or bankers might dismiss you.
- Work Experience – You need to have solid internships from early in university (ideally, Year 1 or the summer after Year 1) because recruiting starts so early. It starts a bit later in Europe and Asia, so the dates might be slightly delayed there.
- Networking – You’ll have to be more proactive in contacting alumni, setting up informational interviews, and conducting weekend trips.
- Targeted Firms – You will have a higher chance of breaking in if you target middle-market banks, “In-Between-a-Banks,” and boutiques.
Let’s say that Student A is at an Ivy League university but decides on investment banking late in the process (in the middle of Year 2).
Student A has a 3.5 GPA in a challenging degree program, and she has one previous finance-related internship at a tech company.
If she is motivated enough, Student A could put a good effort into networking and interview prep and walk away with an IB summer internship offer for the next year.
On the other hand, if Student B has similar stats but is at a non-target university, such as something outside the top 100 in the U.S., she would have a much harder time winning an internship offer.
To be more competitive, Student B would have to:
- Start Much Earlier – This means internships starting in Year 1 or the summer after and networking from around the same time (the start of Year 2).
- Earn a Higher GPA – Bankers might be skeptical of a 3.5 GPA from a lesser-known school, even in a challenging major such as math or engineering.
- Get Better Work Experience – Ideally, this means 1-2 internships directly in finance, such as at a boutique bank or venture capital firm. You don’t want to rely on “loosely related experience” if you’re at a non-target.
You might look at this list and say, “OK, but how could anyone know their plans so early in university? Should I transfer to a better school if I get a late start?”
Unfortunately, transferring to a better university has become less feasible because recruiting starts so early.
If you’re already in Year 2 at a non-target, it’s probably not worth it.
But if you figure out your plans early, and you can transfer right after Year 1, it’s worthwhile because you can immediately tap into a better alumni network at the start of Year 2.
Do Investment Banking Target Schools Matter in Real Life?
The best answer I can give is “yes, but less than bankers think they do.”
There is a difference between the average student at Harvard or Oxford and the average student at Unknown Community College X.
The student at the elite university is more likely to burn the midnight oil, pay attention to small details, and understand the required accounting/finance/technical skills.
That said, there’s a much smaller difference, if any, between the average student at an elite university and one at a good state school or “semi-target.”
Like organic chemistry for medical school admissions, target schools function as a filtering mechanism for banks.
It lets them reduce 50,000 applicants to 500 interviews rather than 5,000 interviews.
Will banks continue to recruit so heavily from target schools in the future?
Students at the top schools have become more interested in fields like consulting and tech over time, so banks might change their focus a bit.
Also, newer elements of the recruiting process, such as HireVues, online tests, etc., allegedly level the playing field since everyone must complete them, regardless of their university.
But let’s be real: At places like Wharton, a plurality of the students, if not an outright majority, still wants to work in finance.
As long as that’s true, banks have no reason to spend time and money recruiting at lower-tier schools.
For this system to change, something dramatic would have to happen, such as:
- Banks go from hiring ~2,000 IB Analysts per year in the U.S. to ~4,000, so they need to go beyond the top schools to find enough candidates.
- Interest in finance at the top schools wanes, and a new industry rises to take its place (Biotech? Space exploration? I don’t know). So, banks need to expand their set of target schools.
- The university system is displaced by another credentialing mechanism, online training/certificates, or trade schools.
These changes are possible, but I don’t think they’ll happen anytime soon.
And the current system is engrained with the “lock-in” effect from all the bankers who attended target schools.
Target School Takeaways
You most likely found this article and skipped to the lists of investment banking target schools to check if yours appeared there.
I get it; it’s fun to look up rankings and debate the S tier vs. A tier vs. B tier vs. C tier.
But the main takeaway is that you need to consider your school in relation to your region and career goals.
For example, if you attend a university like Texas A&M or Rice, and you want to stay in Texas and work in IB in Houston, you’re completely fine.
And if you’re more interested in other careers, such as corporate finance, the Big 4 firms, or even business valuation, you don’t “need” an elite university.
Attending a target school makes the biggest difference if you want to work in investment banking or private equity at one of the largest firms (bulge bracket banks or PE mega-funds) in a major financial center.
Outside of that, a better university still helps, but more so for your first job and less for future jobs.
If you’re at a non-target school, transferring to a target or semi-target could work, but only if you do so early (after Year 1).
If it’s too late to do that, and you’re also late for the normal recruiting cycle, a more realistic path is to win roles in related industries, such as commercial/corporate banking, valuation, corporate finance, etc., and use those to move into IB via lateral hiring.
It’s a more roundabout path, but it might also let you hit your target.
