Scramble for places on Masters in Finance courses
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Last year was a good time to be in full-time education — to gain new skills while avoiding an uncertain employment market. And the world’s leading providers of postgraduate finance degrees have not wasted a crisis.
This was particularly true for those offering the masters in finance degree, where the emphasis on data science, accounting, coding and business make graduates among the most sought-after by large multinational employers.
Two out of three specialist business masters programmes last year reported growth in applications, according to the Graduate Management Admissions Council (GMAC), the business school entrance exam administrator. And 78 per cent of schools worldwide, rising to 90 per cent of schools in Europe, reported growing demand for their masters in finance courses.
“Demand is particularly robust for masters in finance programmes because of the underlying fundamentals of these courses, which are clearly aligned with what is changing the economy, such as machine learning and fintech,” says Rahul Choudaha, director of industry insights and research communications at GMAC.
In the US, a big selling point for masters in finance courses is their status as science, technology, engineering and mathematics (Stem) qualifications. Schools that get their programmes Stem-designated can offer non-US students a special visa status. This enables them to remain and work in the country for three years after graduation on their student visa. “That is a big selling point for international students,” Choudaha explains.
But it is European schools that have traditionally dominated the market for students taking a masters in finance immediately after an undergraduate course. The Covid-19 pandemic has only exacerbated that trend, with many young people deciding it would be better to hold off for a year than to try starting a career during the economic turmoil, programme heads say.
At Belgium’s Vlerick Business School, 2021 was a record year for MSc finance applications. Demand was so strong and the quality of candidates so high that the school set up a waiting list — despite increasing its intake from 70 to 80 students.
Vlerick benefits from its reputation as a secure route to lucrative jobs in different sectors, but particularly in investment banking, venture capital and management consultancy, according to Wouter De Maeseneire, professor of corporate finance at the school.
“Masters of finance courses will always be strong given that they give students a good skillset for a variety of jobs,” he says — adding that almost all of this year’s class had job offers before graduation.
However, the coronavirus pandemic has reduced the proportion of applications from outside Belgium, De Maeseneire says. At the end of May 2020, barely a third of applicants were from outside the country. In the past, most candidates came from abroad. De Maeseneire is hopeful that this will be a temporary trend, though, adding that the proportion of non-Belgian applicants this year was 46 per cent of the total. “We are returning to a more normal situation,” he says.
HEC Paris received 2,523 applications for its MSc finance programme this year, up slightly on the 2,421 it had in 2020. This continued growth enabled the school to be more selective, enrolling just 4.28 per cent of those candidates versus 4.42 per cent the year before.
Olivier Bossard, professor of finance and executive director of the MSc Finance at HEC, says coronavirus has not affected demand in the same way as previous economic disruption, such as the 2008 banking industry crisis.
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“Although we are facing a huge crisis post-pandemic, this crisis is ‘only’ a crisis of the real economy,” he says. “It is not a crisis of the financial system like the one we faced in 2008-2011. The banks are in a much better shape: more liquidity, better capital adequacy, risks more under control. It’s almost a business-as-usual situation for our prospective employers.”
One challenge has been to maintain the quality of classroom teaching when lessons have had to be conducted online rather than in person due to campus closures. The trick has been to make a virtue of such restrictions, Bossard says.
“We have all embraced digital innovation through a variety of approaches: online teaching, flipped classroom experiments, and blended learning formats. And we can expect much more digital innovation to disrupt our programmes in the coming years.”
At Aalto University School of Business in Finland, demand for the masters programme in finance is at record levels, with 105 students starting this year, up from 80 in 2020. The course has been beneficial for the women who take it, helped by efforts by many employers to improve gender balance in finance roles, according to Elias Rantapuska, professor of finance and head of that department at Aalto. “All companies want to hire female finance graduates. We cannot meet the demand,” he says.
Locally, students have increasingly found work in private equity, as the sector has grown on the back of Finland’s tech start-up successes.
“Some years ago, only very elite students with several years of relevant experience post-graduation would enter PE funds,” Rantapuska says. “Now there is an increasing number of graduates offered a position at a PE fund straight after graduation.”
Despite all this demand for financial training, course providers still compete hard to attract the best students, says Sami Attaoui, head of the finance department at Neoma Business School in France. “The market for MScs in finance is vast and is quite competitive, [so] the challenge is twofold: to attract the best students and give them cutting-edge training that gives them skills for a range of roles,” he says.