Monday, July 27, 2009

MBAs Need Credit Training

The job market for recent MBA graduates has changed dramatically. A recent article in Business Week (MBA Jobs: For Some, a Waiting Game) described how some firms are delaying start dates for MBA hires. Job offers, and even interviews, are hard to get.

Shifting Job Prospects for Finance Majors
One of the hardest hit MBA majors has been finance. Business schools are good at teaching traditional corporate finance skills, mostly focused on valuation - cost of capital, discounted cash flow, optimal capital structure, etc. However, with the recession and pull back in capital market activity, not only has the number of finance jobs come down, but the skills needed for the remaining jobs have shifted. While traditional investment banking functions (think mergers and acquisitions, initial public offerings) have pulled back, the focus has shifted to the debt markets - analyzing, structuring, trading and investing in corporate bonds and loans.

Bringing the Credit Training Program to Campus
Most large commercial and investment banks have multi-week entry level training programs for their new MBA hires. These programs include credit training - how to analyze and quantify credit risk, and how to structure debt products that satisfy a borrower's financing needs. Some business schools are now bringing portions of this training to their finance students to help them prepare for the debt-focussed jobs in today's economy. For example, Financial Training Partners ( recently delivered a four-day "boot camp" on credit analysis, products and structuring at a top rated business school. Students were able to develop and hone their credit skills, and learned to speak the language of debt arrangers, issuers and investors - just what they need for interview season.


Anonymous said...

Formal credit analysis training is important to get a grounding in the basic tools of analysis but credit is also a case of gaining experience. Different industries have different credit risks and this is often difficult to convey in classes

Anonymous said...

Couldnt agree more. Credit is basically common sense but the type of common sense that sometimes only is evident if you have seen a similar situation before. FOllowing on from above, different industries have different KPIs, credit metrics, etc.