“Shanghai aims to be a global financial centre, compatible with the economic strength of the country and the international status of the RMB by 2020,” he explained, before adding: “If we view SAIF’s development as creating an epic journey, we may have just finished the first chapter.”
The praise was not undue. It was the Friday of April 11, and Tu and co had been summoned to bear witness to the business school’s remarkable rise. Delegates had just toasted five years of financial education success. To date, the school has propelled more than 1,700 graduates into promising careers.
It doesn’t share the prestigious, 106-year history of Harvard. Yet in just five years SAIF has ballooned from a post-economic crisis start-up school to a financial education hub. It has become one of the most internationally renowned finance providers of recent times.
On the other side of the world, Western ambitions have come tumbling down. Some MBA graduates do not see finance as an attractive career anymore. It is not as sexy as technology or big pharma.
It has done little to assuage the male-dominated reputation of some top banks. Gender diversity is worst felt in the financial sector. “A lot of my girlfriends didn’t want to deal with finance; they would rather take marketing classes,” says Sarah Feagles, an MBA at the Fuqua School of Business. “I just don’t think that they find it as sexy as working at Google or Deloitte.”
Europe has been hit hardest by the post-crisis gloom. A declining interest in finance careers has divided business schools. Some say their MBAs have a healthy appetite for banking, others are less optimistic.
“The financial sector is not the easiest brand to sell these days because we are facing a big reputational challenge. The sector is less attractive,” says Roberto Rossi, HR Manager of EMEA (non-UK) at Morgan Stanley.
Banks in the UK have been hit by a barrage of public criticism from regulators, the media and politicians. A recent survey by Deloitte, of 18,000 b-school students, revealed that the popularity of working in banking had fallen five places to 35 out of 100 potential employers.
At the same time, pay has taken a dive. PwC research reveals that average pay per head in some European and US investment banks fell from about 9 times the private sector average to nearly 6 times between 2006 and 2012.
Yet not a week goes by without an investment bank hitting the headlines for its bonus scheme. The EU has stepped in to cap bankers’ bonuses.
Meanwhile, business schools have sounded the alarm. “As was to be expected, many of those who had worked in finance before INSEAD went on to pursue a career in a different sector,” says a recent career report from the leading European school. About 40% of their MBAs returned to finance, a fall from 57% in 2011.
Just 14% of their graduates had gone into finance overall, half the figure of 2008 and potentially the lowest figure INSEAD has ever seen. “The fall was particularly steep in investment banking, which accounted for 46% of finance recruits in 2011 but only 32% in 2012,” the report continues.
European business schools, though, can console themselves with impressive employment statistics. When MBAs do decide to go into finance, they are seemingly successful.
In the autumn of 2012, the banking sector was gathering a head of steam. Lise Birikundavyi was determined to make her mark. And she did.
Innocap Investment Management, which is part-owned by French investment bank BNP Paribas, had been her home for the past three years. But she flew from Canada to China to join one of Shanghai's premier institutions.
SAIF had only been established for three years. No matter: Lise only had eyes for Shanghai. “I had to be in Shanghai – it’s a hub,” she says. “I knew at SAIF I could create a very good finance network and when they initially contacted me… I knew I had to go.”
Lise hinted at her ambition when she joined a venture capital and private equity firm in June last year. She banked the internship through a b-school event. She will graduate from the MBA program this year.
“SAIF was definitely beneficial,” she says. “I’m passionate about impact investment and the private sector in emerging markets – and SAIF is trying to bring awareness to other options in finance.”
There is no doubt, however, what the focus of SAIFs' career officers is. The school claims 100% of their 2013 MBAs had signed job offers by August last year.
While Europe has seen sluggish entry into finance, China has seen rapid growth. About 17% of SAIFs’ MBAs came from financial services – yet 93% went into the financial sector once graduating. The biggest chunk went into private equity and VC – about 27%.
All 52 of the schools’ Master of Finance graduates were snapped up by Chinese or Asia-pacific financial firms. Most went into commercial banking.
For years, SAIF has been churning out successful financiers. The majority are hired in Shanghai or Beijing. But the former is clearly the gem. The schools' top employers include Shanghai Equity Exchange, Deutsche Bank China and Goldman Sachs.
Commentators point to the city’s free trade zone as a building block to further fiscal dominance. The financial markets are heavily regulated by the Chinese government. But restrictions on foreign investment were eased inside the area and interest rates are now set by markets.
China's heavily-regulated currency, the yuan, has also been allowed to be swapped freely for other currencies.
“With the establishment of [the] Free Trade Zone, which is expected to increase the demand on financial talents, service and innovation, SAIF will surely play a more and more important role in Shanghai’s future financial development,” enthuses Tu.
The school was established with the backing of the Shanghai Municipal Government. “Shanghai is the centre of China’s financial development. Thus, it provides a good opportunity to satisfy the needs of the government’s strategic development,” says Prof Wang Jiang, Chair of SAIF’s academic council.
During its official launch, SAIF rolled out a bevy of finance-focused programs. The Masters of Finance and Finance MBA, both taught in English, are run alongside Chinese-speaking programs Finance EMBA and a PhD in Finance.
SAIF aims extremely high. It wants to be a driving force behind Shanghai’s global financial development. It is little wonder that they have drawn such international candidates – although the majority of the MBA class are from China.
In 2010 the school opened its financial trading lab, to rival North American schools. Up to 80 students work on 40 trading terminals. The lab uses Bloomberg and Wind systems, among others.
“To be an international financial hub in 2020 is just a short-term goal and there still will be a more ambitious goal after 2020,” says Tu.
Meanwhile, European banks have been leaking employees. In Eastern Europe, demand among MBA finance employers dropped 8%. In the Middle East, however, there was 29% more demand for MBA hires at financial services companies, according to a recruiter survey by QS.
SAIF has been ramping-up its international standing. But school insiders admit more needs to be done.
“With the strategic support from [the] Shanghai Municipal Government… we need to make good use of this platform to promote its faculty and research, education philosophy as well as operation management,” says Tu.
Prof Wang agrees: “In order to build SAIF into a world-class business school, there is still a lot of work to do. The top priority is to enhance senior faculty strength and promote young faculty recruitment.”
But while Europe experiences a slump, the SAIF finance juggernaut will keep chugging on.
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