As trading has evolved from hands-on deals made by people who left college with business degrees to electronic-based dealmaking, so too have the majors from top trading schools. The days of graduating from business school with an M.B.A. and gliding into a top-notch investment banking job may not be over, but a new breed of trader is coming up. Buyside firms are now looking for recent graduates with first-rate programming and mathematical skills. A young trader’s desire and drive to make an outrageous fortune are helpful, but recruiters and asset managers want a candidate who knows his or her market structure, as well as Excel and how to whip up a smart algorithm. Think more The Social Network than Wall Street.
We asked our judges to pinpoint the schools whose graduates impress them each year, the level of those graduates’ knowledge and how well- prepared the students are for the trading world. There are universities on our list that will not surprise anyone-but there are a few that may convince you to look for candidates beyond the Ivy League. Talent is, after all, what your buyside firm needs.
B.A. Economics, Mathematics, or Statistics Amherst, Mass.
APPLIED/ACCEPTED: 7,927 applied/1,132 accepted (14%)
PROGRAM TERM: Amherst is a four-year liberal arts college.
CLASS SIZE: 466 in each year
PROGRAM DESCRIPTION: Amherst College is regularly cited as one of the top five liberal arts colleges in the United States. Although it has no business program or finance major, the quality of its economics department and strength of its alumni network helped get it on make the list, the only undergraduate program to do so. There will be a new major in statistics in 2014.
PROGRAM HIGHLIGHTS: Amherst offers the bachelor of arts degree in 38 fields of study in the arts, sciences, social sciences and humanities. Students are not required to study a core curriculum or take distribution requirements. Instead, first-year students enroll in one of more than 20 first-year seminars aimed at the interdisciplinary environment of a liberal arts institution. Students may have more than one major, customize their own interdisciplinary major, or pursue independent scholarship. Many students opt for honors theses during their senior year, which are often the equivalent of graduate-level studies.
PROGRAM DIRECTORS: Professors Jessica Reyes, chair of the economics department, and David Cox, chair of mathematics and statistics.
PROFESSIONAL PLACEMENT: Along with the Ivies and other elite liberal arts schools, Amherst is a target recruiting school for many of finance’s top firms. Students can rely on the alumni mentoring system to help them set career goals and strategies. Amherst also offers assistance in applying to graduate schools.
Columbia Business School Master of Science in Financial Engineering (M.S.F.E.) New York, N.Y.
APPLIED/ACCEPTED: 1,200 applicant/ 75 to 85 enrolled (~6%)
PROGRAM TERM: 12 – 16 months
CLASS SIZE: 75 – 85 enrolled, 10 students in a seminar class, 20 – 85 in a lecture course
PROGRAM DESCRIPTION: Columbia’s financial engineering program falls under the university’s Department of Industrial Engineering and Operations Research. Students have a choice of four concentrations: asset management, computational finance/trading systems, dserivatives, and finance and economics. The program is divided into two halves: first, a deep dive into the tools of the trade and how to create financial market models and instruments. Courses focus on stochastic processes, optimization, numerical techniques, Monte Carlo simulation and data analysis. The second half focuses on in-depth classes that include the term structure of interest rates, market volatility and financial engineering programming.
PROGRAM HIGHLIGHTS: Columbia offers both part-time internships during the school year and full-time positions during summer months. Students have access to high-speed workstations and Bloomberg terminals in the class. The program hosts a Financial Engineering Practitioners Seminar on Monday nights where Wall Street and industry professionals share research, market insights and experience. Each student has access to a career-placement liaison to develop internship and job placement.
PROGRAM DIRECTOR: Emanuel Derman became director of Columbia’s financial engineering program in 2003. He is also head of risk management at Prisma Capital Partners and co-author of the Black-Derman-Toy interest rate model and the Derman-Kani local volatility model. Derman was a managing director at Goldman Sachs and is the author of “My Life as a Quant” and “Models. Behaving. Badly.”
PROFESSIONAL PLACEMENT: 100 percent of 2013 grads seeking employment were placed inside financial firms and earn base salaries ranging from $60,000 to $120,000. Hiring companies include AQR, AXA Equitable, Barclays Capital, Bloomberg, BlackRock, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Moody’s, Morgan Stanley, Nomura, Societe Societe Generale, UBS among others.
Cornell Financial Engineering Manhattan / M.F.E. Degree Ithaca, N.Y. and New York City
APPLIED/ACCEPTED: 600-700 applications vs. / 40-48 enrolled (~7%)
PROGRAM TERM: 1.5 years
CLASS SIZE: 35 to 45 students
PROGRAM DESCRIPTION: Cornell’s financial engineering program is offered by the university’s School of Operations Research and Information Engineering (ORIE) at its College of Engineering in Ithaca, N.Y. The program’s final semester goes under the banner of Cornell Financial Engineering Manhattan (CFEM) and takes place on Broad Street in New York’s financial district. Cornell highlights the program’s proximity to Wall Street as a key for networking and finding internships.
PROGRAM HIGHLIGHTS: CFEM boasts a video system that broadcasts lectures and seminars between the main upstate college and the Manhattan campus. The lecturers hail from Wall Street firms, and the college claims that it “enhances the practitioner-taught curriculum, which is updated every year to respond to the changing demands of the financial services industry.” Classes are centered around project teams sponsored by leading financial firms, and these projects range from building high-frequency trading and hedging strategies to trading and predictive models. Students are strongly urged to participate in a summer internship before the third semester. M.F.E. students have free access to Cornell’s Center for Advanced Computing grid network.
PROGRAM DIRECTOR: Victoria Averbukh Kulikov’s courses emphasize practical and transaction-oriented approach to valuation and pricing of interest-rate securities. In addition, her courses include presentation and independent project components to encourage students to learn the relevant issues in the financial markets and practice their ability to present technical content to a wide audience. She has worked at Salomon Brothers and UBS.
PROFESSIONAL PLACEMENT: Cornell aims for 100 percent placement of its graduates. The program includes a career boot camp held in August one week before the start of the fall semester.
Harvard Business School Cambridge, Mass.
APPLIED/ACCEPTED: 9,315 applied/932 accepted (120%)
PROGRAM TERM: Traditional 2 two-year MBA program.
CLASS SIZE: Not available
PROGRAM DESCRIPTION: Harvard Business School consists of case-method learning and a hands-on Field Immersion Experiences for Leadership Development (FIELD) course that aims to put leadership into practice via teamwork, personal reflection, global immersions, and hands-on experience in designing and launching a microbusiness. After a first semester of required courses, the second semester includes launching a mircrobusiness; the third is composed of electives that allow students the flexibility to concentrate their MBA in a particular interest; and the fourth semester, students can cross-register at MIT Sloan and other graduate schools at Harvard.
PROGRAM HIGHLIGHTS: Harvard Business School claims to have “unparalleled” resources and alumni networking possibilities. The Finance unit within HBS, along with access to MIT’s curriculum, offers the chance to focus on mathematical finance within the business program.
PROGRAM DIRECTOR: Benjamin C. Esty heads the finance unit. Nitin Nohria is the dean of the business school and the author of 16 books, including “In Their Time: The Greatest Business Leaders of the 20thth Century.”
PROFESSIONAL PLACEMENT: In the last three years, hiring within three months of graduation has wavered between 87 and 93 percent. Graduates seeking finance positions make up 35 percent of the graduating class, and the median starting salary for finance practitioners is $125,000.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
MIT/Sloan School of Business Cambridge, Mass.
PROGRAM TERM: One year
APPLIED/ACCEPTED: 1,583 applied /127 enrolled (8%)
CLASS SIZE: 127
PROGRAM DESCRIPTION: The Master’s in Finance is a single-year program that begins with a summer intensive in finance theory and corporate accounting, and is followed by collaborative projects that focus on solving real-world problems. The MIT/Sloan program prides itself on allowing students to pursue their own interests within its academic environment.
PROGRAM HIGHLIGHTS: MIT prides itself as a pioneer in the field of finance and quant trading. The precursor to the program, the MIT Sloan Finance Group, was founded in the late 1960s, and its professors and graduates are a who’s of financial giants: Fischer Black, John Cox, Robert Merton, Franco Modigliani, Stewart Myers, and Myron Scholes. The program boasts such financial economic innovations as the Black-Scholes/Merton option-pricing model; the Modigliani-Miller theorems; continuous-time models of consumption and portfolio choice; applications of option-pricing theory to real investments, corporate finance, and other real options; equilibrium models of the term structure of interest rates; binomial option-pricing; and the risk-neutral pricing kernel for pricing derivative securities.
PROGRAM DIRECTOR: Heidi Pickett. She notes that last year’s class included students interested in “non-traditional roles” in the public sector and in entrepreneurial organizations, where they will leverage their foundation in finance. “What is interesting about our class is that five central banks and two sovereign wealth funds are sponsoring their top talent for our program,” she said.
PROFESSIONAL PLACEMENT: In the last two years, graduates have been placed at A.T. Kearney, Applied Predictive Technologies, Bank of America Merrill Lynch, BlackRock, Boston Consulting Group, CITI, Credit Suisse, Deloitte, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Oliver Wyman, State Street and UBS.
NEW YORK UNIVERSITY
Courant Institute of Mathematical Sciences/Master’s of Science of Mathematics in Finance (M.S.M.F.) New York, N.Y.
APPLIED/ACCEPTED: Only 10 percent of applicants from around the world are accepted.
PROGRAM TERM: The program consists of 12 courses (11 one-semester courses plus the master’s project), to be completed over three semesters or 1.5 years.
CLASS SIZE: 120 students; 35-40 full- time, with the remainder split between part-time and non-degreed students.
PROGRAM DESCRIPTION: The M.S.M.F is a professional master’s program with a strong pragmatic component, including courses rooted in practical applications and student mentoring by finance professionals. The curriculum has five hubs: computational training, financial theory and modeling, mathematical tools, financial applications, and real-world training. Classes drill down on risk, derivatives securities and portfolio management with econometrics. Electives include algorithmic trading and quantitative strategies, energy derivatives, foreign exchange, statistical arbitrage and more. NYU students are expected to find internships inside financial banking and investment firms during the summer break.
PROGRAM HIGHLIGHTS: A weekly seminar series features lecturers from leading Wall Street establishments. Evening classes are also available.
PROGRAM DIRECTOR: As a veteran of Goldman Sachs Asset Management’s quantitative strategies group, Peter Kolm used his knowledge from his Ph.D. in mathematics from Yale University, as well the degrees he earned from the Royal Institute of Technology in Stockholm and ETH Zurich. He entered NYU in 2007 as a clinical associate professor of mathematics and as the deputy director of the mathematics in finance M.S. program in 2007.
PROFESSIONAL PLACEMENT: Graduates have found careers in all aspects of the banking and investment arena, such as the fields of asset management, trading, research and risk management. Graduates have been hired inside such institutions as BlackRock, Goldman Sachs, JPMorgan Chase, Bank of America Merrill Lynch and moreothers. In 2010 and 2011, NYU claims the placement rate was nearly 99 percent, while in 2012, more than 85 percent of graduates found positions.
Institute for Computational and Mathematical Engineering MS in Mathematical and Computational Finance (formerly the Masters of Science in Financial Mathematics) Palo Alto, Calif.
APPLIED/ACCEPTED: Not available, as this program is new in this format
PROGRAM TERM: 15 months, including a summer internship. (The last quarter has a lighter course load to allow students time for job interviews.)
CLASS SIZE: 45
PROGRAM DESCRIPTION: This is the inaugural year for the program in this format, although financial mathematics has been offered by Stanford since 1999. A steering committee was tasked with creating a leading-edge program to adapt to the evolving field, by focusing on a more computational and data-oriented approach to mathematical finance, better use of information technology and data, and better models and strategies for investments, risk management and regulatory reforms.
PROGRAM HIGHLIGHTS: Stanford founded the Financial and Risk Modeling Institute (FARM) at Stanford in 2012. This was largely in response to the financial crisis, which Stanford faculty viewed as exposing weakness in traditional financial models, pricing and hedging theories, risk measures and management of derivative securities and structured products. The shift to the new degree will incorporate integration with FARM, by adopting a more computational and data-oriented approach.
PROGRAM DIRECTOR: Margot Gerritson is associate professor of energy resources engineering and director of the Institute for Computational and Mathematical Engineering. She completed her Ph.D at Stanford in 1997.
PROFESSIONAL PLACEMENT: Current statistics are not available for the new program.
UNIVERSITY OF CALIFORNIA AT BERKELEY
Haas School of Business Master’s in Financial Engineering Berkeley, Calif.
APPLIED/ACCEPTED: 463 applied/88 accepted (19%)
PROGRAM TERM: One year. All students must complete a 10-12 week internship or comparable off-campus project.
CLASS SIZE: 68
PROGRAM DESCRIPTION: Berkeley boasts that the Haas M.F.E. program is unique, thanks to being one of the nation’s engineering programs that is offered within a business school. The program focuses on computational finance within the context of business and economic principles. After students complete three-quarters of the M.F.E. program, they are expected to sign up for 12-week internship program from October to January.
PROGRAM HIGHLIGHTS: The required internship at Berkeley’s M.F.E. creates a focus on career development. Early on, students conduct mock interviews with alumni and field professionals to prepare for the internship phase of their career. The school has ties to practitioners at Citibank, BlackRock and Goldman Sachs. At the program’s culmination, graduates are offered jobs as risk managers, investment bankers, derivative traders, designers of specialized securities, and financial engineers. Berkeley claims to have the highest starting salaries of among any similar programs.
PROGRAM DIRECTOR: Professors Linda Kreitzman, David Pyle and John O’Brien launched the program in 2000.
PROFESSIONAL PLACEMENT: Although Berkeley does not drop names, 100 percent of last year’s class of M.F.E. graduates was placed at firms in the world’s top financial markets in New York, London, and Tokyo.
UNIVERSITY OF CHICAGO
Master’s of Science of Financial Mathematics Chicago, Illinois and Singapore (Students can apply to the program in either location, and the course of study is the same in each program.)
APPLIED/ACCEPTED: Not available
PROGRAM TERM: Students must complete nine courses to graduate. Full-time students are given nine months to complete the course, while part-timers have up to three years. The program must be completed within four years, per UofC demands.
CLASS SIZE: 90 students.
PROGRAM DESCRIPTION: The M.S.F.M. program is part of the university’s Department of Financial Mathematics. It examines the relationship between theoretical and applied mathematics and its role in business and trading. The student’s syllabus includes portfolio and risk management and mitigation, stochastic calculus, regression analysis and quantitative trading.
PROGRAM HIGHLIGHTS: To simulate a real trading floor, students have access to live Bloomberg and Thomson Reuters Eikon screens. The University of Chicago is a member of Trading Technologies’ university program and they are trained how to use TT’s X_Trader program in on a suimulated trading floor. The school also has a campus in Stamford, Conn., but it is only accessible to UBS employees and clients of the Swiss bank.
PROGRAM DIRECTOR: William DeRonne heads the University of Chicago M.S.F.M. program. Prior to his tenure as executive director, he was president and chief compliance officer at Fox River Financial Resources. He has overseen traders at TradeLink, Market Liquidity Network and Chicago Research & Trading.
PROFESSIONAL PLACEMENT: Graduates of the M.S.F.M. program have found postings as traders, analysts, engineers , and quantitative researchers inside Goldman Sachs, J.P. Morgan, UBS and other leading institutions.
UNIVERSITY OF PENNSYLVANIA
Wharton School of Business M.B.A. with a major in Finance Philadelphia, Penn.
APPLIED/ACCEPTED: 6,036 applied, /1,000 accepted (17%)
PROGRAM TERM: Two years, beginning with a pre-term intensive program
CLASS SIZE: Not available
PROGRAM DESCRIPTION: This two-year program focuses on management and allows students to customize their curriculum. The program boasts 200 electives to choose from within the business school. The finance department has four areas of specialization: banking and financial institutions, corporate finance, financial instruments and portfolio management, and international finance. Compared with the other programs that made our list, Wharton is by far the most generalist. However, students at Wharton do have access to the hundreds of courses offered at the graduate level at the University of Pennsylvania, giving them the opportunity to customize their program to a more technical, analytical level.
PROGRAM HIGHLIGHTS: The nation’s first business school, founded in 1881, just opened a San Francisco campus at the base of the Bay Bridge in addition to its Philadelphia campus. Professional placements include firms all over the world, and students have opportunities to network and collaborate with colleagues immersed in projects involving dual degrees, international study, and foreign and domestic policy issues. Wharton places a high importance on student life and encourages networking by assigning each student to a cluster of 210 students and a cohort of 70. These groups participate in activities and competitions and create a foundation for each student’s graduate experience.
PROGRAM DIRECTOR: David K. Musto is a former programmer with Trout Trading Company and a systems consultant at Roll & Ross Asset Management. Interestingly, although the finance department is part of the more general MBA degree, the department chair is a professor with programming and systems experience.
PROFESSIONAL PLACEMENT: Wharton does not disclose placements for individual majors; however, in 2013, MBA grads were placed at many major firms including Blackstone Group, Citi, Credit Suisse, Goldman Sachs, Google, J.P. Morgan, Lazard, McKinsey, Morgan Stanley, UBS, Warburg Pincus and others.
MEET THE JUDGES
When assembling our judging panel, we looked for current buyside traders and industry veterans who have worked on the buyside. We also looked for insiders who have interviewed and hired their fair share of recent trading school graduates.
Bank of America Merrill Lynch
Michael J. Levas
Olympian Group of Investment Management Co.
Sapient Global Markets
Securities Traders Association
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