By Peter Walker for CNN
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LONDON, England (CNN) -- Every generation of MBA students has its dream job.
In the 1980s, it was the paneled boardrooms of Wall Street, while in the fever of the dot-com boom, those that actually stayed on to complete their course generally left carrying a portfolio of planned Internet start-ups.
Now, according to a series of reports, private equity is the sector that has MBA students salivating over their lecture notes. It is fashionable, booming and - most importantly - it can be fantastically well paid.
However, one business school is warning that some of the shine could come off the sector, meaning newly-minted MBAs who manage to get a position in private equity might have missed the peak of the party.
Private equity, in the strict sense, refers to investment in a company or other asset in which the cash injected is not from a publicly traded source.
In recent years, a series of private equity funds - stars include the likes of the Blackstone Group and the Carlyle Group - have created headlines with the scale of their purchases, often taking companies listed on the stock market back into private hands and parachuting in a new management team focused on boosting value.
According to Business Week, the very best newly-minted MBAs can command salaries and bonuses totaling more than $400,000 in private equity, meaning the competition for spaces is fierce, even if many funds are expanding.
Students seek to stand out by joining private equity clubs on their MBA course, and in some cases going even further: some students at the Tuck School of Business passed up the chance to go on vacation this winter break to fly to India and work for free from private equity firms there.
But could all this effort be in vain?
A new report by the University of Pennsylvania's highly-rated Wharton business school warns that while private financing looks set to remain strong this year, some are worried.
The school cited the reaction of one investor when a private hedge fund grabbed all the $10 million second-round financing of a life sciences start-up he owns: "A warning flag went up in my head. I hope we're not in for a repeat of the (dot-com) bubble era."
The caution was echoed by Wharton finance professor Pavel Savor, although he said the good times were not about to end straight away.
"Everything is very peachy now, and maybe the only way to go is down, but I would say that nothing is imminent," he said.
"Last year was the best on record by size, and 2007 in all likelihood will be even better in terms of activity. Whether it will be a good year for investors is an open question."
Saikat Chaudhuri, a management professor at Wharton, noted that the rush into private equity means the quick profits might be harder to find soon.
Hedge funds, which once dealt mainly with public companies and had a short-term outlook, are now dealing with far bigger businesses that might need more patience for a good return.
Typically, buyout firms come into a new company and can quickly create value with a new financial structure, simple operational fixes or big cuts in the workforce.
"As you start to get into these large deals -- in the double-digit billions -- that's going to require management expertise in the field and probably also holding the company for a longer period of time," Chaudhuri said.
FACT BOXFT's Executive MBA Rankings
1. Wharton, U.S.
2. Hong Kong UST, China
3. London Business School, UK
4. Instituto de Empresa, Spain
5. Fuqua, Duke, U.S.
6. Chicago GSB, U.S.
7. Columbia, U.S.
8. Kellogg, U.S.
9. Stern, NY, U.S.
10. Cass, City University, UK
Source: Financial Times 2006
FACT BOXEMBA SNAPSHOT
Executives taking the top EMBA courses in the U.S., Europe and Asia have average salaries of around $130,000 to $200,000.
A typical EMBA student is likely to be aged in the early 30s, with 6-10 years of working experience.
A top EMBA course can cost $100,000. Customized courses start at a few thousand dollars.