As the economic downturn bites, this preference for the elite colleges is likely to intensify.
The head of graduate recruitment at a US bank admits: "We look at applications from our targeted schools first. Only if there are insufficient candidates from targeted institutions, do we consider other applicants."
In the UK, the targeted universities include the London School of Economics, Oxford, Cambridge and Imperial College. Elsewhere in Europe they include Bocconi in Italy, Icade in Spain and WHU Koblenz in Germany.
At one US bank, some 50% of UK offers go to students at Oxford and Cambridge. At JP Morgan, only 5% of applicants come from non-targeted schools.
During the milk round, the favoured universities are awash with graduate recruiters and their ample entourages. In addition to its recruiting contingent, JP Morgan took 50 business representatives to its targeted universities in 2001.
Banks' visits to desirable universities are not restricted to big presentations. At Oxford University, both the Oxford Financial Society and the Oxford University Investment and Finance Society (OUIFS) received separate visits from Morgan Stanley in 2000.
OUIFS organized two investment banking events per week for its members during autumn 2001.
"All of our club members have demonstrated a positive interest in investment banking. Firms want to come to Oxford and let them know what they have to offer", said Anthony Man, the OUIFS chairman.
Club members benefit from the exposure. "People who attend our events are at a great advantage over those who don't," says Man. "They get an opportunity to listen to investment bankers speak in depth about the industry and are also able to discuss specific questions on a one-to-one basis over an informal buffet afterwards."
Recruiters agree that students gain from attending milk round events. Helen Bostock, at JP Morgan, says: "They get a feel for what the firm is like and they are able to explore which is the right part of the firm for them in greater detail."
Students at non-targeted universities must be single-minded if they want to get into investment banking. "Our students realize that they have to be realistic about recruitment practices," says Anne Collins, director of the careers service at Southampton University in the UK..
"Unless they have personal contacts, they are fighting an uphill battle. But for the really determined students, this provides the motivation to work hard to ensure success."
In fact, the so-called second tier universities are not entirely overlooked by recruiters.
When it comes to 'back office' staff, most banks are willing to consider them. During the 2001/2002 season, for example, Lehman Brothers is to visit 50 universities in total. Only 20 of these will receive presentations from the investment banking division.
The remaining 30, Manchester, Kent, Strathclyde, and York among them, are targeted by back office recruiters from technology and operations.
The recruitment net for back office staff is likely to continue to be spread widely. Finding high quality graduates to take these positions can be hard.
Jackie Moylan, in graduate recruitment at ING Barings, said: "Some organizations struggle to fill operations positions. Students need to be alerted to the fact that there is more to investment banking than just being an investment banker."
But two factors indicate that, in the UK at least, the net is likely to tighten for front office hires.
Firms such as JP Morgan now hire 70% of their graduate intake from continental Europe. Of the 30 schools currently visited by the firm, seventeen are on the Continent and the number is increasing, to reflect the increasing amount of non-UK related work.
Equally, the current downturn means that many banks have reduced their graduate intake and cut the number of milk round presentations. Some banks which made presentations at less well known universities, such as Bath and Nottingham, during the hiring spree of 2000 have now removed them from their lists.
From the banks' perspective, it makes sense to focus resources on a few universities. Milk round presentations are costly. Room hire, canapés for 100 people, and first class accommodation for the senior bankers eat up thousands of pounds.
When budgets are being slashed, targeted universities offer a clear return on this investment. As many as 70% of investment banking job offers go to individuals at selected institutions.
"We want to target high performing students at the top schools. It is unfortunate, but we can't go everywhere and spread ourselves too thinly," says one graduate recruiter.
Nevertheless, there is hope for students at institutions that are not targeted. Citigroup received 111 applications from untargeted City University, in London, in 2001. As a result, the bank is thinking of presenting there in 2002.