• C++ Programming for Financial Engineering
    Highly recommended by thousands of MFE students. Covers essential C++ topics with applications to financial engineering. Learn more Join!
    Python for Finance with Intro to Data Science
    Gain practical understanding of Python to read, understand, and write professional Python code for your first day on the job. Learn more Join!
    An Intuition-Based Options Primer for FE
    Ideal for entry level positions interviews and graduate studies, specializing in options trading arbitrage and options valuation models. Learn more Join!

MFE vs MS in Finance

Hello,

I am having doubts about the career roles for an MFE graduate. My priority is working for a PE/Hedge Fund and it seems like MFE graduates are mainly assigned quant intensive roles. This is not something I am looking for. I have a couple of questions:

1) What is the fundamental difference between MFE and MSF, does MSF have good career opportunities?
2) Can I still get a job at PE/Hedge Fund in a non-quant role after completing MFE?
 
Hi youknowhoo,

I thought I’d take a stab at answering your questions, although I’ll caveat that I have not been involved with the subject for a while (since ~2012 when I myself was looking into pursuing a graduate degree), so I’m sure others may have more updated views. I'm also not sure how much detail you're looking for, so here's a pretty long post.

MFE and MSF are obviously both finance degrees but the approach each takes is vastly different. Also, they each target different prospective students so think about what suits you better. In a nutshell, MSF will have a strong focus on corporate finance and financial management (three statement analysis, ratios, accounting to some degree), while MFE will mainly deal with the more complex mathematical theory that aims to understand how public markets operate (probability, statistics, pricing theory).

MSF programs are tailored to people who don’t have a finance background (and likely not a quant background either) and are looking to land a corporate job. Most of the MSF programs I’ve seen are pretty equivalent to an undergrad degree in finance (both in content and difficulty), although some have flexible curriculums that will allow you to tailor your education. Think of these programs to be well-suited for someone who majored in say, marketing and is looking to break into finance. I've also seen a lot of industrial engineers that go for MSF programs.

As for MFE, in my experience, it will not turn you into a rigorous quant, but rather teach you enough math to understand what real quants are talking about and working on – so the ideal role for a typical MFE grad would be to provide a link between management and the quant teams that develop a lot of the tools in a bank or a trading shop (which is why Risk Management is a good fit). Also, MFE programs don’t seem to be very standardized (at least they weren’t back in 2012), so some have a greater focus on math, while others tend to teach more traditional finance or computer science or any mix of the three.

In terms of career opps, candidly speaking, the school you go to will be the most crucial factor. An MSF from the University of Utah won’t get as many recruiting / interview calls than an MSF from Princeton or MIT. That said, the scope is broader for MSF than for MFE – you could land a job in both the financial industry (banks, HF, PE, VC), and outside of it (corporate roles in any company in any industry). MFE career opps will be usually limited to certain roles within the financial industry.

Can you get a non-quant role after an MFE? Yes! That's actually what I ended up doing, although I majored in finance as an undergrad, so I was never an actual quant.

Now, not part of your two questions but you mentioned your priority is to work for either a PE shop or a Hedge Fund. I’d note that these roles would be very different from one another and will require pretty different skillsets. Both are incredibly competitive so my point on selecting a target school is even more critical (I’ve actually seen HF recruiters take people’s resumes and immediately give them back to the candidate because it does not say “Harvard”).
  • PE shops recruit their juniors exclusively from Investment Banks (at least MM and mega funds do), so you’d need to recruit for IB beforehand and learn as much as you can about M&A, LevFin and ECM. In fact, that’s a very usual career path for IB analysts. PE shops tend to hire from a few IB groups but will focus on the M&A and LF teams. Also, note that if you’re already at the graduate degree level, you’d come into IB as an Associate, not as an Analyst and PE firms are less likely to hire Associates than Analysts – just something to consider
  • HFs deal directly with the public markets, so a lot of the operations have become quant-oriented. However, more fundamentalist shops still do a lot of research that deals with “traditional” finance (going through filings, press releases, dialing into investor calls, etc), but also have to prove that you can think outside the box to conduct research and find good investment opportunities. For instance, I heard the story about a HF that used to take weekly pictures of a retailer’s parking lots across a bunch of different store locations to determine how sales were going to pan out the next quarter. Or there’s the urban legend of a HF manager who used to buy one muffin from a coffee shop chain every day to see the ticket number and get a sense of how many tickets (sales) they were issuing. I’ve seen HFs hire from Industry Coverage IB groups because of their industry-specific expertise. I defer to others to opine on how likely it’d be to get a decent HF job straight from graduate school, but they will obviously prefer someone with actual experience and proven motivation / desire / capacity to prioritize their job above everything else
 
If you're looking at a non-quant role, wallstreetoasis forum might be a better place for your questions.

Have you considered going for a top MBA, like Harvard/Wharton/Stanford/Chicago and such? I heard they place well in IB, but I'm not too familiar with the topic.
 
Hi youknowhoo,

I thought I’d take a stab at answering your questions, although I’ll caveat that I have not been involved with the subject for a while (since ~2012 when I myself was looking into pursuing a graduate degree), so I’m sure others may have more updated views. I'm also not sure how much detail you're looking for, so here's a pretty long post.

MFE and MSF are obviously both finance degrees but the approach each takes is vastly different. Also, they each target different prospective students so think about what suits you better. In a nutshell, MSF will have a strong focus on corporate finance and financial management (three statement analysis, ratios, accounting to some degree), while MFE will mainly deal with the more complex mathematical theory that aims to understand how public markets operate (probability, statistics, pricing theory).

MSF programs are tailored to people who don’t have a finance background (and likely not a quant background either) and are looking to land a corporate job. Most of the MSF programs I’ve seen are pretty equivalent to an undergrad degree in finance (both in content and difficulty), although some have flexible curriculums that will allow you to tailor your education. Think of these programs to be well-suited for someone who majored in say, marketing and is looking to break into finance. I've also seen a lot of industrial engineers that go for MSF programs.

As for MFE, in my experience, it will not turn you into a rigorous quant, but rather teach you enough math to understand what real quants are talking about and working on – so the ideal role for a typical MFE grad would be to provide a link between management and the quant teams that develop a lot of the tools in a bank or a trading shop (which is why Risk Management is a good fit). Also, MFE programs don’t seem to be very standardized (at least they weren’t back in 2012), so some have a greater focus on math, while others tend to teach more traditional finance or computer science or any mix of the three.

In terms of career opps, candidly speaking, the school you go to will be the most crucial factor. An MSF from the University of Utah won’t get as many recruiting / interview calls than an MSF from Princeton or MIT. That said, the scope is broader for MSF than for MFE – you could land a job in both the financial industry (banks, HF, PE, VC), and outside of it (corporate roles in any company in any industry). MFE career opps will be usually limited to certain roles within the financial industry.

Can you get a non-quant role after an MFE? Yes! That's actually what I ended up doing, although I majored in finance as an undergrad, so I was never an actual quant.

Now, not part of your two questions but you mentioned your priority is to work for either a PE shop or a Hedge Fund. I’d note that these roles would be very different from one another and will require pretty different skillsets. Both are incredibly competitive so my point on selecting a target school is even more critical (I’ve actually seen HF recruiters take people’s resumes and immediately give them back to the candidate because it does not say “Harvard”).
  • PE shops recruit their juniors exclusively from Investment Banks (at least MM and mega funds do), so you’d need to recruit for IB beforehand and learn as much as you can about M&A, LevFin and ECM. In fact, that’s a very usual career path for IB analysts. PE shops tend to hire from a few IB groups but will focus on the M&A and LF teams. Also, note that if you’re already at the graduate degree level, you’d come into IB as an Associate, not as an Analyst and PE firms are less likely to hire Associates than Analysts – just something to consider
  • HFs deal directly with the public markets, so a lot of the operations have become quant-oriented. However, more fundamentalist shops still do a lot of research that deals with “traditional” finance (going through filings, press releases, dialing into investor calls, etc), but also have to prove that you can think outside the box to conduct research and find good investment opportunities. For instance, I heard the story about a HF that used to take weekly pictures of a retailer’s parking lots across a bunch of different store locations to determine how sales were going to pan out the next quarter. Or there’s the urban legend of a HF manager who used to buy one muffin from a coffee shop chain every day to see the ticket number and get a sense of how many tickets (sales) they were issuing. I’ve seen HFs hire from Industry Coverage IB groups because of their industry-specific expertise. I defer to others to opine on how likely it’d be to get a decent HF job straight from graduate school, but they will obviously prefer someone with actual experience and proven motivation / desire / capacity to prioritize their job above everything else
Thank you so much for taking the time to answer my questions. As far as I have gathered from you response, the school I attend is of importance. I think according to what I have learned recently, PE firms do recruit from the IB pool, but HFs have shifted to hiring from MS programs. Landing an internship at an HF is a possibility, I am not really sure about this but recent recruitment statements from universities do state some hedge funds as sources of employment. Again, thank you for providing so much insight into the industry.
 
If you're looking at a non-quant role, wallstreetoasis forum might be a better place for your questions.

Have you considered going for a top MBA, like Harvard/Wharton/Stanford/Chicago and such? I heard they place well in IB, but I'm not too familiar with the topic.
I do not have enough experience to opt for an MBA. But, I do get your point.
 
1) MFEs dive deeper to quantitative and math. MSF is more general finance, jack of all trades. You can take quant-electives, but it is not the degree's focus. Consequently, pre-req are different: you must be strong at math and programming to get in MFEs, not the case for MSF.

2) You definitely can. Also vice versa, an MSF grad can definitely compete for quant role. In your case, it would be a waste/ poor fit in my opinion, unless you are content. Why learn all that Black Scholes pricing, probability theory to be an Excel, Power Point jockey?
 
Top