COMPARE MFE from USA vs MBA from IIMs (India)

[Nanda Kishore]

Hi, For quite some time i have been struggling to decide between doing an MFE from the likes of Columbia, CMU and NYU and doing a 2 year MBA from IIM's.

Brief profile:
B.Tech Elec. Engg - IIT Madras (8.8/10) 2009
Morgan Stanley Prime brokerage - IT Analyst (31+ months)
Good Analytical skills and IT skills. Even though i was away from Math for 4 years now, I am very passionate about learning math. Was a topper in math at high school and a few math courses at IIT. Average soft skills.

I currently have an admit from Columbia MSFE,a wait list from MIT and was invited for an interview with CMU. I also had interview calls from all the IIM's and am very hopeful of converting one of IIMA/IIMB/IIMC. Lucky to have wonderful options, but a very confusing one too!

Based on the threads in the forums and talking to a few people currently studying in the above schools, i gather the following:

MFE programs in the US:
1. Proximity to all the happening things in the Finance industry.
2. Higher starting salary
3. 12 to 18 months course duration -- Lesser opportunity cost.
4. International exposure

MBA from IIM's
1. Cheaper in terms of fees. (30k USD for 2 years)
2. Very good career services. 100% placements irrespective of economic downturns
3. Very well recognized in India
4. Broader range of career options

Coming to my case, I do not have a first hand exposure to quant field. But my guess is that i will like it, given my skill sets and my interest in solving analytical puzzles. I would definitely want to have a career in Finance and a role that is *NOT* predominantly IT. Given the current market scenario and the fees that the MFE courses charge, I feel MFE is a significantly riskier option than MBA. I have to take a loan for pursuing my higher studies and that is why i ask myself is the risk worth taking? In case i go ahead joining the MFE, what are my chances of landing a quant job? I dread the worst: Going back to my country with a 100k debt!

I would love to hear more views, opinions and experiences from alumni and current students on which of the above options will help me in the longer term (10 years down the line)

 

[Byron]

They're both great options - I'm sure you'll do very well with either. An MBA from IIM is more likely to place you in a Trading/Structuring role in a bank in HK/Singapore/London...and an MFE from a top school here will probably place you in a Quant role in a bank/hedge fund here - but I've seen the reverse happen as well, depends on your interests and abilities. The only risk with an MFE is the economy might go bad, and you might have to take a not-so-great job here or a "good" job in India. In general, IITs have a good brand name in the US, and you'll get shortlisted for most companies with your background - the rest will be upto you.

Decide based on what you want to do - if you want to work in the US, and get an international education, do an MFE. If you want to get a good finance job without taking on a significant economy risk, go to IIM.

 

[TraderJoe]

With IIT-M and Columbia MSFE, your risk is really very low. Plus you have 3 years programming experience which essentially brings your risk down to zero. There are many students from low-ranked engineering schools in India who go to second-tier MFE programs and cannot get jobs. You should ignore those cases because that situation will not apply to you.

The IIM-A,B,C will also be a very good option. One of my PhD classmates was IIT-M Computer Science and IIM-A. He is now working at Amazon.com and is making more than $400 K. IIM-A,B,C will open doors to you worldwide and will obviously have much greater respect if you ever decide to return to India. But Columbia MSFE will definitely give you good opportunities in USA.

Also USA economy is finally beginning to pull out of recession. Probably within 2 years they will lift the H1-B visa restrictions.

 

[latency]

you will have a broader experience with a degree from the IIMs than from an MFE degree. Moreover, you will have the same kind of jobs open to you from the IIMs, namely sales and trading in London/Asia as well as light quant roles. Given that a lot of sales and trading roles are now in Asia, I would choose an IIM over Columbia.

 

[Nanda Kishore]

Thanks for your inputs guys. Really appreciate that.
Quite surprised to hear that the risk with an MFE, given my background is zero!
This year the number of finance jobs @ IIM's has drastically gone down (less than 10% of the class are into finance) because of the economic downturn. Not sure how the trend will be 2 years down the line though!
With the new laws that prohibit proprietary trading, do you guys feel the no of Sell side S&T jobs will continue to drop?

 

[latency]

i think an MFE is pretty risky given that you do not have any experience in finance and that you will be spending a hundred grand on it. Yes, new laws/regulations are definitely taking a toll on S&T jobs. On the other hand, private trading firms might get some advantages due to this. However, no one knows for certain. It is going to take a few years for these rules to be implemented and there is going to be uncertainty and low hiring by banks in trading until then.

 

[darth]

No one can say exactly which would be a better choice . Both of them lie on the efficient frontier and since there is no risk-free asset, you will have to select from the upper curve of Markowitz Bullet . It all depends on how much risk you want to assume and accordingly you will have your expected return. You can't go wrong either way .