Many famous universities are known as springboards into finance careers. But when it comes to landing jobs at elite hedge funds, there are some surprise standouts.
The top-ranked undergraduate programs for getting an investment-management job at a hedge fund, mutual fund or private equity fund include the usual suspects. Coming in first is the University of Pennsylvania, followed by Harvard University, Stanford University, Cornell University and Princeton University. That's according to a new study by SumZero, a private network for "buy side" analysts.
However, some schools seem to have a knack for sending alumni on to careers at the very best hedge funds—even if they don't rank as high in terms of alumni count at all funds. Standouts include the Massachusetts Institute of Technology, which ranks 18th for all funds but 10th for top funds. Similarly, Colgate comes in at 34th for all funds but 18th for elite hedge funds. Johns Hopkins ranks 30th for all funds and 15th for top funds. Yale ranks seventh for overall funds but third for top funds.
The rankings are based on the percentage of SumZero's roughly 11,000 members who attended various schools for their undergraduate degrees. SumZero estimates the entire "buy side" community of investment professionals is approximately 100,000 to 110,000 people, suggesting the sample size is large enough to be representative.
To create the "top fund" category, SumZero used a combination of rankings from several third-party sources. "We compiled a list of top hedge funds, according to both total assets under management as well as fund performance, from multiple independent entities, including Barron's, Bloomberg, Pensions & Investments and Institutional Investor," said Luke Schiefelbein, who runs data science at SumZero.
"The most highly represented schools on SumZero are similar in order to those you might find on a U.S. News ranking, but the schools with alumni that are most successful at getting jobs at top hedge funds show a much different order," Schiefelbein said. "This suggests that top funds might be much more comprehensive in their selection process above and beyond simply identifying those that went to the 'top schools.'"
Stated another way, some colleges tend to send a higher percentage of their own future "buy side" analysts to elite hedge funds. Such a "batting average" can help adjust for smaller undergraduate classes that just don't have as many alumni. Colgate tops the list, with 18 percent of its "buy side" alumni at top funds. MIT comes in at 15 percent, with Johns Hopkins just under 15 percent.
In terms of total alumni working at funds, the University of Pennsylvania and Harvard still have the most impressive numbers. They have the top two spots in terms of alumni at all funds as well as top funds.