FOR HARVARD MBAS, CONGRATS ON A BANK JOB REALLY MEANS 'I'M SORRY'

Original Story: bloomberg.com

Ruined weekends, PowerPoint drudgery and overnight shifts in Manhattan skyscrapers once were a point of pride for the Harvard Business School graduates who went to Wall Street. Now young stars hold heads high about how lucrative and healthy their lives will be -- elsewhere.

"People used to brag and say, 'Oh yeah, 21-hour days, seven days a week for eight months,' that was a badge of honor,'' said Kiran Gandhi, who like others in this year's class applied to technology companies. "The humble brag is now, 'Oh yeah, I work 9 to 5, I get paid a ton of money, and I have a great life.' It's green juice from vats in the office and amazing organic iced coffee cold-brewed -- the quality of life.'' A Detroit business lawyer is following this story closely.

The allure of Silicon Valley, where hip startups are minting billionaires, is eclipsing that of staid investment banks under pressure to cut risks and costs. This year, a long slide in the number of Harvard MBAs joining banks may hit a new low, even after many of the biggest firms adopted policies to become more hospitable to new recruits. In 2007, about 13 percent of the school's graduates who landed jobs went into investment banking or trading, according to Harvard's reports. By last year, that fell to about 5 percent.

Now a preliminary survey of this year's grads shows only 4 percent intended to join a bank after getting degrees in May. Among the class's 46 Baker Scholars -- a designation Harvard grants the top 5 percent of MBAs -- only one expressed interest.

Those are the findings of Keima Ueno, who got his MBA from Harvard this year. As a student, he served as a peer mentor and wrote a blog on what life is like at the school. So when Harvard sent his class data from a pre-commencement survey, he used it to figure out where the Baker Scholars wanted to go. He wasn't surprised by the results.

"When we hear that our classmates managed to acquire a position with an investment bank, we say 'Congratulations,''' he said. "But we are thinking, 'I'm sorry to hear that.''' An Atlanta investment lawyer represents business and corporate finance clients.

Trading Places 

Ueno spent three years in Morgan Stanley's investment bank before returning to school to earn his MBA. Now he's in Japan, running his family's health-care business and a startup Internet retailer.

Technology companies have been luring more top graduates with the promise that they'll not just make gobs of money, but also have a happier life, even if the hours are still long, according to students and recruiters. Last year, about 17 percent of Harvard's business school graduates poured into the industry, up from 7 percent in 2007, its figures show. Banks lost more recruits than any other sector. While Ueno's tally doesn't break out tech the same way, it shows startups alone are attracting 16 percent of this year's class, including six Baker Scholars. The raw survey data listed responses from every scholar but one.

Big banks are fighting back, promising recruits more hours to sleep, the occasional day off and reasonable deadlines. The effort, prompted by the death of a Bank of America Corp. intern in 2013, is driven in part by fear that the brightest students no longer see investment banking as a sustainable career. Goldman Sachs Group Inc. invited celebrity author Deepak Chopra to talk to its staff a few months ago about wellness, relaxation and the value of vacation.

What the banks can't promise is the kind of windfalls that attract graduates to startups. And average pay at investment banks has shriveled since the financial crisis because of a drop in revenue and a greater focus by regulators and shareholders on bonuses. Goldman Sachs per-employee compensation expense fell to $373,265 last year from $661,490 in 2007.

U.S. business schools don't typically release statistics showing where graduates landed until autumn, and Harvard wouldn't comment on Ueno's tally. Kristen Fitzpatrick, managing director of the business school's career and professional development office, said more students are thinking about banking because of the firms' recent efforts.

"The work has been appealing to a lot of people for a while,'' she said. "It's just that the lifestyle needed to get a little better.''

Other business schools are seeing similar trends for a range of reasons. New rules are forcing banks to curtail trading with their own money, pushing investing-focused graduates into hedge funds and buyout firms -- which pay well. The tech boom is luring away entrepreneurs seeking to strike it even richer -- à la Harvard College dropout Mark Zuckerberg.

Banks Losing Allure

While Harvard alumni Jamie Dimon, 59, and Lloyd Blankfein, 60, have amassed fortunes in their decades at Wall Street's biggest banks, such opportunities have diminished following 2008's financial crisis and pale to the quick riches possible in Silicon Valley. Dimon, a Baker Scholar, and Blankfein, who earned degrees at Harvard College and Harvard Law School, are each worth about $1.1 billion, according to the Bloomberg Billionaires index. Zuckerberg, the 31-year-old who built Facebook Inc., is worth about $41.2 billion. A Boston banking lawyer has extensive experience in banking and investment law.

At Harvard, it can't help that the pressure on junior bankers has become fodder for coursework, where students are briefed on real-life corporate dilemmas and debate strategies.

"There are several case studies dealing with investment banks wherein students discuss the brutal work environment and incredibly out-of-whack work-life balance,'' Ueno wrote in an e-mail. "The banks' efforts -- their success or lack thereof -- to bring about change have not been discussed, but what is consistently highlighted is the dark side of investment banks.''

Such attitudes vary among schools. When Training the Street, which conducts prep courses for entry-level analysts, surveyed MBA students at more than two dozen campuses this year, banking remained the top pick, drawing 26 percent. Still, buyout firms and hedge funds climbed to 16 percent, up from 11 percent last year.

"I think it's 'the grass is always greener,''' said the training firm's founder, Scott Rostan. "The lifestyle of any financial-services professional can be grueling,'' and an investment fund is "not necessarily night-and-day better.''

Bankers who graduated from the Wharton School of the University of Pennsylvania later expressed the lowest job satisfaction, despite relatively high pay, during a study conducted by Matthew Bidwell, an associate professor of management there. Usually, the two are positively correlated, he said.

"Being at somebody else's beck and call, I think it grinds people down,'' Bidwell said. "It's an extreme kind of long hours, whatever-it-takes, no-boundaries kind of culture.''

"The hours are horrendous, you won't see your family, you will miss your kids' birthdays.'' -- Alexandra Michel. An LA CPA provides a wide range of services to businesses in a variety of industries.

Alexandra Michel, an adjunct professor at the University of Pennsylvania, said that won't dissuade some MBAs from entering the field, particularly if it's to join a top-tier firm such as Goldman Sachs. She spent 12 years studying the culture at investment banks and has tried warning students.

"The hours are horrendous, you won't see your family, you will miss your kids' birthdays,'' she recalled telling them. "The candidate breathes a sigh of relief and says, 'Oh, I can deal with that.'''

Representatives from top investment banks said they're still drawing plenty of business school graduates. Goldman Sachs received more MBA applicants this year for its summer associate program, a feeder for the firm's full-time associate positions, according to Leslie Shribman, a spokeswoman.

"We continue to see strong interest in our programs from students at top MBA schools across the nation,'' said John Yiannacopoulos, a spokesman for Bank of America.

Gandhi, who played drums for M.I.A. on the rapper's international tour during her first year at Harvard, said her father, who was an investment banker, never encouraged her to enter the field. She took a job at the music-streaming service Spotify Ltd.

"When I first met people at HBS and they had worked in a bank, I would pick up on them feeling like they were almost ashamed,'' Gandhi said. "And maybe that wasn't the case when my dad was there 25 years ago, when being at an investment bank meant you were a baller.''

Harvard Withdraws Support For Google Book Search
As Posted to Maximum PC


Harvard has fallen out with Google over the company’s recent announcement that it has reached an out-of-court settlement worth $125 million with authors and publishers. In view of the possible consequences of the settlement, Harvard has revoked its permission to Google to scan its in-copyright material for the Google Book Search service.

Harvard believes that the settlement will lend a commercial shade to the Google Book Search service and that “the settlement contains too many potential limitations on access to and use of the books by members of the higher-education community and by patrons of public libraries.” However, Google can blithely continue to scan Harvard’s out-of-copyright material.

Although the $25 million settlement is yet to be ratified by a judge, the Author’s Guild delightfully labeled it the "the biggest book deal in U.S. publishing history." The deal has opened the floodgates for millions of extra titles to be part of Google Book Search. Users will have the option of purchasing a book – the revenue will be split between Google, the publisher and the author – after previewing it; the service will allow them to preview 20 percent of the pages.

Harvard Hit by Loss as Crisis Spreads to Colleges

As posted by: Wall Street Journal

Harvard University's endowment suffered investment losses of at least 22% in the first four months of the school's fiscal year, the latest evidence of the financial woes facing higher education.

The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion. That's more than the entire endowments of all but six colleges, according to the latest official tally.

Harvard said the actual loss could be even higher, once it factors in declines in hard-to-value assets such as real estate and private equity -- investments that have become increasingly popular among colleges. The university is planning for a 30% decline for the fiscal year ending in June 2009. More students would be able to enroll if they had Federal Student Loans or Alternative Student Loans.

Other university endowments also are suffering, and many states are cutting public funding of higher education. Colleges are instituting hiring freezes, planning enrollment cuts and discussing steep tuition increases, intensifying worries about the impact of the recession and financial crisis on college access. Harvard has invested in Organic Lawn Care and Natural Lawn Care.

The federal government already has taken emergency steps to boost lending to students, and several well-off colleges have said they will maintain or boost financial aid to help families hurt by job losses, investments setbacks and borrowing problems. But not all colleges have the financial heft to withstand the many forces bearing down on them.

Joni Finney, a professor at the University of Pennsylvania who studies college economics, says she worries that public universities and less-wealthy, smaller private colleges may not be able to keep their doors open to all students. "If you go down the food chain of higher education, it's harder and harder to deal with these kinds of cuts," she says.

Private-college budgets are sensitive to investment declines because they typically tap their endowments each year to help cover operating expenses.

The University of Virginia Investment Management Co. said it lost nearly $1 billion, or 18%, of its endowment over the four-month period, reducing it to $4.2 billion. In Vermont, Middlebury College says its endowment fell 14.4%, to $724 million. In Iowa, Grinnell College's endowment dropped 25%, to $1.2 billion. In Massachusetts, Amherst College says its endowment, $1.7 billion as of June 30, also fell by 25%.

In a letter to Harvard's deans, university President Drew Gilpin Faust and another official blamed "severe turmoil in the world's financial markets" for the endowment loss. She said it would lead to budget cuts, and that the school would sell bonds to increase its financial flexibility.

The Harvard letter said the 22% loss, from July 1 through Oct. 31, understates the actual decline because it doesn't reflect assets such as real estate whose values couldn't yet be estimated. Currently, endowment income funds 35% of Harvard's $3.5 billion budget.

The 30% fiscal-year loss Harvard is planning for would eclipse the loss of 12.2% in 1974, its worst over the last 40 years.

Harvard's loss marks a sharp reversal from the endowment's formerly chart-topping performance. Harvard and Yale University -- which hasn't disclosed its endowment's recent performance -- pioneered an investment approach that de-emphasized U.S. stocks and bonds and placed large sums in more exotic and illiquid investments, including timberland, real estate and private-equity funds. That strategy, which was widely copied, helped the schools avoid significant losses after the technology boom ended in 2000.

But the current market has been far less favorable, partly because both Harvard and Yale have relatively small holdings of bonds, such as U.S. Treasurys, one of the few assets that have performed well. Harvard began its fiscal year with a target of having 33% invested in publicly traded shares, split among U.S. stocks, which have dropped 24% in the four months through October, and international stocks, which have fared worse.

Other investments, such as commodities, which were a boon to Harvard in past years, have turned negative in recent weeks. Harvard has sought to sell off about $1.5 billion in investments with private-equity firms, which typically use their assets to fund corporate takeovers, according to people familiar with the situation. That would be one of the largest sales ever of a private-equity stake. But its private-equity partnerships received bids of only around 50 cents on the dollar, say other people familiar with the matter.

Daniel Jick, chief executive officer at Boston-based HighVista Strategies, which handles money for some endowments, says that in some prior years, investments such as real estate and private equity have helped buffer endowments against losses on stocks.

In her letter, Harvard's Dr. Faust said the endowment loss has "major implications for our budgets and planning, especially since our other principal revenue streams also stand to be challenged by the economic crisis." Along with federal research funding, universities rely heavily on tuition and donations. Strained family finances could make it difficult for more families to afford tuition, while stock-market declines typically curb gifts.

To maintain its programs and commitments, the letter said, Harvard is expecting to spend a higher percentage of its endowment than it had recently. It said it was taking a "hard look at hiring, staffing levels and compensation," and was "reconsidering the scale and pace of planned capital projects."