How unhappy 25-year-olds pursuing private equity careers ruined the MBA
What’s the point of leaving your job and spending a small mortgage to study an MBA now? If you heed the words of Bill Winters, chief executive of Standard, none at all. Winters, who studied an MBA at Wharton in 1988, said last month that his MBA was “a waste of time”.
Get Morning Coffee ☕ in your inbox. Sign up here.
Winters isn't the only one holding this opinion. The worthlessness of an MBA has become a trope.
Writing in both January 2024 and again in January 2025, the Wall Street Journal noted that more and more MBA students – even at top schools – were struggling to find jobs. Last January, students at Harvard told the WSJ they were applying for 1,000s of jobs and burning through their savings in the process. “Going to Harvard is not going to be a differentiator,” admitted Kirsten Fitzpatrick, who runs Harvard’s careers service. “You have to have the skills.”
The problem, increasingly, is that MBA graduates don’t have the skills. Speaking to the All Else Equal podcast earlier this year, Madhav Rajan, dean of the Booth School of Business and a former faculty member at Stanford and Wharton, said MBA programs have been fatally dumbed down. 15 years ago, the MBA was a far more analytical and technically rigorous qualification, said Rajan. Now the course has become an exercise in helping people change careers.
"The MBA today compared to the MBA 15 years ago has more and more become a degree for students who are trying to transition into something else," said Rajan. "When we ask students, 'How many of you are here to change careers?,' everyone puts their hand up."
The principal career that everyone wants to transition into, is private equity. Junior bankers go into private equity jobs in their droves, but the private equity industry hires MBA students too. 8% of London Business School's MBA class went into private equity (PE) last year, compared to just 6% who went into banking; nearly 9% of Harvard's 2024 MBA class went into PE. "Private equity firms tend to hire MBAs as senior associates or VPs," says Anthony Keizner at Odyssey Search Partners in the US.
MBA administrators are forced to pander to these students. Rajan said they're changing the content of their courses as a result. - People in their mid-20s, who are unhappy in their previous careers and using the MBA as a springboard to something else, don't want to get deep in the weeds of technicalities.
"People want to know, 'What do I need to know to get a job in private equity or venture capital?' as opposed to, 'What do I need to learn about options and option pricing?',” Rajan said.
As MBA courses adapt to the demands of their customers, technical content has therefore been dumbed down. There's now more on what it's like to do particular jobs like private equity; less deep analysis. Rajan said MBA students want to manage technical people rather than actually learning how to do the technical work themselves. If you want to understand technical concepts, he says you'll do a Masters in Financial Engineering instead.
This might be why MBA graduates who join hedge funds appear in jobs like business development instead of portfolio management, or why MBAs who join banks in associate roles are notoriously incompetent. The course is arguably a shallow interview preparation tool.
Students who've spent money on MBAs disagree with this. "I've a learned a lot", says one ex-trader using the course to pivot into fintech and data analysis. "I've done a lot of statistics and data analysis alongside economic history," he adds. "It's given me the tools to better understand what comes next."
Some current students tell us that the value of the MBA was never really analytical teaching anyway. One junior banker at a US bank in London, who used his MBA to go from a support role to a role in M&A, says the course is about building a network and shifting your career. There's no guarantee that you'll do this, though: "50 people in my year applied to banking, but only 10 got offers," he says. You're more likely to succeed if you've worked in financial services already.
This makes an MBA an expensive punt on a potential career shift, particularly when the opportunity cost of taking two years off work to study one is factored-in. Winters argues that empathetic thinking that you really need to manage people is better learned on the job. Rajan says that MBAs need to become more like modular courses that people return to throughout their careers.
This might be easy to say if you're already the CEO of an investment bank or doing fine as the dean of a business school, though. If currently you're doing a job you don't like and want to swap into a new front office career, the $100k MBA might be your only option. Just don't expect to learn much.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Signal: sarahbutcher.22 Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)
