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Harvard, Penn, Chicago: Which School Opens the Fund Management Door?

If you want your children to get into fund management, their choice of educational establishment can help.

(May 30, 2014) – Despite thousands of students graduating each year in economics, maths and other financially useful topics, alumni from one US Ivy League university have dominated global fund management staff rosters since the 1960s, according to research from eVestment.

While Harvard has produced financial grandees such as Goldman Sachs CEO Lloyd Blankfein, JP Morgan Chairman and CEO Jamie Dimon, and Blackstone founder Steve Schwarzman— not to mention bestowing an MBA on hedge fund supremo Ray Dalio of Bridgewater—it does not take the top spot of feeder universities to fund management.

And Yale, with its model endowment portfolio and impressive alumni—also including Blackstone’s Schwarzman, this time for his BA—is remarkably mostly absent from even the top ten list.

In fact, when taking the total number of graduates to move into asset management—in various areas of the business—in any graduation year, the University of Pennsylvania has overwhelmingly taken the top spot over the past five decades.

Across a time frame of 1960 to 2014, eVestment bunched cohorts from four graduation years together and found that out of these 11 groups, seven of them were topped by Pennsylvania graduates who led the charge into fund management jobs.

Harvard graduates topped the pile in 1970-74, but were found in second place in six of the cohort groups, slipping down to the fourth spot in the 2010-2014 category.

Yale alumni topped the industry feeder list just once—1960-1964—then failed to appear in the top ten institutions again, save for a sixth place in 1970-74.

The University of Pennsylvania boasts a handful of former students who have become prominent in the financial world, including Donald Trump, Steven Cohen, founder of SAC Capital Advisors, and Robert Kapito, president of BlackRock. Perhaps most notably Warren Buffett, CEO of Berkshire Hathaway, attended for two years before quitting his studies for the University of Nebraska.

John Bogle, the founder and retired CEO of The Vanguard Group and C. Robert Henrikson, chairman, president, and CEO of MetLife, also all call Pennsylvania their alma mater.

Its endowment seems to be doing well, lately too: it rose 16.5% from $9.69 billion to $11.29 billion in the fiscal year 2012-2013, thanks to investment returns and donations, according to its annual report.

And this domination is not just a local phenomenon. Due to the size of the US—and its education system—the country’s graduates have moved around the world and run money for international asset managers. However, they do not control the whole system.

In terms of strategy, Pennsylvania alumni are the most common graduates running portfolios of US equities, US fixed income, and global and international equities.

Oxford University graduates dominate European and UK equity portfolios and Asia-Pacific strategies. European and UK fixed income teams are most often run by University of London graduates.

Australian universities make a good showing in Asia-Pacific fixed income, where graduates from New South Wales take the top spot.

The only non-Ivy League university to appear in any top spot of eVestment’s research is the University of Chicago, the alumni of which dominate in global fixed income.

Harvard does rule the roost of one set of investment teams, however: Hedge funds.

Related content: Yale: Alpha’s Not Dead, But Finding it is Hard 

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