Private equity, venture capital firms, and hedge funds are replacing more traditional investment banks as the most coveted destinations for Harvard Business School students this recruiting season.

“Almost 75% of HBS students want to do private equity or venture capital. Only about 10% get to do it,” a student in Harvard Business School’s class of 2006 and member of the student senate, Abhishek Agrawal, said in a telephone interview. Mr. Agrawal has taken a job in private equity for next year.

A professor at the business school, Felda Hardymon, told The New York Sun that about half of the class of 2006, which has 800 students, had signed up for his Venture Capital and Private Equity course, though there was room for only 192 students. Mr. Hardymon, who has been teaching the course since 1998, said that in the last five years the number of students who wanted to take the course has increased 50%.

The business school students, some say, are just doing what more-established financial industry professionals are doing when they leave jobs at Goldman Sachs or J.P. Morgan to start hedge funds or try their hand at private equity: They are following the money. The median base salary for members of the Harvard Business School class of 2005 who took jobs at private equity firms was $115,000 a year, compared to $95,000 a year for those working in investment banking. Bonuses can bring total compensation sharply higher.

Harvard Business School does not have data on students’ job placement for this year, according to a spokeswoman, Kerry Parke, who said most members of the class of 2006 have not yet decided on a job for next year. Ms. Parke added that the school does not comment on recruiting until the end of the school year.

In each of the last two years, 9% of the graduating class took jobs at private equity or leveraged buyout firms, and 2% at venture capital companies. The school does not track how many students take jobs at hedge funds. In 2005, 10% of the graduates took jobs in the investment management industry, which encompasses most hedge fund jobs, and in 2004 7% did.

Mr. Hardymon was quick to counter the claim that the students headed for private equity are simply going where the money is. “People are not flocking to the money,” he said of those who take jobs in private equity or venture capital. “It is the ability to influence that I think has attracted the students. … You’re not only making investment decisions. You’re also influencing the companies, either through board seats, or through the way the investments are structured, and so on.”

He added that hedge funds tend to attract more of those “only interested in making money.”

Another member of the Harvard Business School class of 2006 who has taken a job in private equity for next year, Gitanjali Swamy, said via e-mail that private equity was “a very preferred career of choice today; it involves all the activities of i-banking and consulting, while retaining a stronger element of ownership. We are more active-portfolio managers than transaction or service oriented.”

The trend is not limited to Harvard. The president of the private equity club at the University of Pennsylvania’s Wharton School of Business, David Pejcha, said his club had about 700 members comprising students from both years. Wharton has about 1,600 students in its MBA program.

At Columbia Business School, 4.7% of the class of 2005 took jobs in venture capital or private equity, as did 5.3% of the class of 2004. A co-president of Columbia’s private equity and venture capital club, J.J. Freitag, said often a student “may take a ‘bridge job’ as an equity analyst or banker with the hope of transitioning into private equity in a few years.” Of the almost 2,000 students at the school, close to 600 are members of the private equity club.

An associate professor at Columbia Business School who is an industry liaison for the private equity club, Laura Resnikoff, said she thought there was about equal interest in private equity and hedge funds among her students. She said that because so much money is being invested in hedge funds, it has become much harder to make giant, outsize profits.

A professor of entrepreneurial management at Harvard Business School, William Sahlman, predicted that the surge of interest in private equity and hedge funds would mark the beginning of their decline. He said the proportion of students going into investment banking peaked in 1987 just before the stock market crash that crippled the industry. The proportion going into real estate in the early 1970s peaked just before the crash, and more students than ever started their own Internet companies in 1999, not long before the dot-com bubble burst.

Mr. Sahlman said that interest in private equity had peaked in 2000, but in the last few years had begun to grow again, as had interest in hedge funds.

“Whatever is popular is – I won’t say it’s doomed – but it’s not a very encouraging sign,” Mr. Sahlman said.