|Economic MeltdownTakes Toll on AUC Schools|
|By W. Hassan Marsh -- Black College Wire|
The recent crisis in the U.S. economy is pushing the Morehouse community to follow the first rule of investment: diversify.
“A lot of guys are nervous about the instability,” Calvin Nash said, a senior accounting major from Hempstead, N.Y. “A few years ago, it seemed like investment banking was the way to go. Now, people are looking into other areas.”
Nash has firsthand knowledge of how macroeconomic occurrences can have micro-level effects. He interned at Lehman for two consecutive summers and had an offer to work there full-time upon his graduation in May 2009. “I worked really hard to get that offer and it’s a little disheartening to come back to school and it’s basically gone,” he said.
Morehouse is known as being a well-traveled avenue to Wall Street. Each year, recruiters from investment banking firms come in droves to attract top talent and interview students for summer and full-time positions.
“In a way investment banking is easy for us because so many banks come recruiting, it’s the default,” said Keith Hollingsworth, chairman of the Business Administration Department at Morehouse.
Reciprocally, students like the Street’s corporate courtship and eagerly suit-up to woo recruiters every fall. Students are attracted by the prospect of returning to campus after an internship that netted them several thousand dollars or starting their career with one of the highest paying entry-level jobs that one can get with only a Bachelor’s degree.
“People get lured by the hype, the money, and the sexiness of it,” Hollingsworth said. Approximately 30 percent of Morehouse Business students graduated and headed straight to Wall Street last year, according to departmental statistics.
Cooper pointed out that if a company has to cut costs, it would most likely cut middle management positions and not entry-level spots because of the higher salaries.
Furthermore, the department sees additional benefits. “In some ways it’s a good thing because it gets students to get out of the narrow mindset that investment banking is the only way to use your degree,” Hollingsworth said.
The department has used the occasion to accelerate the process of getting a more diverse group of corporate recruiters on campus, according to Hollingsworth. Students are expected to engage more with an increased presence of firms specializing in consulting, marketing and advertising, and even sports management.
Investment banks are major donors at Morehouse
Lehman’s absence will also be felt in the school’s bank accounts and operational activities. “The recruiting pipeline and the fundraising pipeline are tied,” said Phillip Howard, Vice President of Institutional Advancement, an administrator who is largely responsible for fundraising at Morehouse College.
Last year, Lehman contributed $7,500 in scholarships to Morehouse and sponsored the school’s investment club with a $10,000 contribution to the winner of the investment club’s stock pick challenge. Additionally, Lehman consistently sent speakers and devoted other resources to the department.
Across the street at Spelman, however, is where Lehman’s philanthropy is jeopardized the most. The two institutions announced the $10 million partnership in the fall of 2007 to create the Lehman Brothers Center for Global Finance and Economic Development. The commitment was the biggest kind that Lehman had ever made with a plan to have the contribution paid off over five years. The grant was to fund curriculum development, scholarships, the hiring of faculty, and various programmatic initiatives.
When contacted about the current status of the partnership, Spelman released a statement saying, “So far, we have been able to add Chinese to our curriculum, create new office space and video conferencing capability, and recruit a new leader for our global finance and economic development initiative.” It remains unclear whether or not Spelman will receive the full amount of the donation. However, Terrilyn Simmons, a Spelman spokesperson, did say that they expect to continue to develop the program.
But that comes with certain difficulties. “The burden on Spelman is that it is going to be a lot harder to maintain the momentum and keep going with their plans,” Hollingsworth said. “Even if they get the money there is just not as much of a driving force as there once was.”
Full service banks stronger in weak economy
Students still interested in the financial sector can look towards full service banks for greater stability.
Banks that have other sources of income from other types of banking activity have the means to soften the blows of the market and the available capital when there is not a lot of liquidity in the markets.
“There is a new paradigm shift in financial services,” said David Ferguson, class of '81 and Managing Director of Syndicated Finance-Sales for Bank of America. “People will need to finance transactions and people will need to raise capital,” he said. “It just so happened that those functions will be performed by institutions that don’t look like they use to look in years past.” Successful banks will be providing a wide range of services and reduction their specialization, according to Ferguson, who has worked in banking for 25 years.
As a stronger player in the financial services industry, Bank of America plans to expand its talent pool across the board into other areas of financial services. “For the first time this year we will be recruiting on the campus aggressively for areas other than investment banking,” Ferguson said.
However, he warned that the playing field will be more competitive as a result. “Only the top players will be able to participate because there are fewer seats.”
Students can claim a temporary seat, at the least, with Bank of America on Wednesday Sept. 24 in the leadership building’s Executive Conference Center.
Hollingsworth hopes that business students are following the developments closely and will apply the lessons of the market to their personal lives.
“You always have to diversify your investments, you always have to diversify your base,” Hollingsworth said. “If you get too focused, you are too susceptible to a change in the economy.”
W. Hassan Marsh is senior editor of The Maroon Tiger, the Morehouse College student newspaper, which originally published this article.
|Posted Sep. 22, 2008|
|< Prev||Next >|