Friday, November 2, 2018

Private equity job offers to young investment bankers unravel earlier this year, while investment banks try to stem their own unraveling

Two stories from the WSJ about unraveling, at different parts of the financial industry.

1. The WSJ has publishes this year's unraveling story earlier than last year's...

No Experience? No Problem. Private Equity Lures Newbie Bankers With $300,000 Offers.
Annual recruitment drive starts earlier this year as firms try to get a jump on preferred candidates

"An industrywide scramble is under way this week to hire young investment bankers.

"The instigator was Thoma Bravo LLC, which extended its first job offers this past weekend, according to people familiar with the matter. Word spread quickly to rivals, and by Monday interviews were under way at nearly every big firm, including Blackstone Group LP, Apollo Global Management LLC, Carlyle Group LP and TPG.

"Welcome to private equity’s annual recruitment, the frenzied window of interviews and fast-expiring job offers that firms use to fill their junior ranks. The candidates graduated college as recently as last spring and landed at Wall Street investment-banking desks just weeks ago.

"Those lucky enough to get offers will finish their two-year bank analyst programs and start at private-equity firms in the summer of 2020...
"Recruiting used to take place during the summer, once applicants had at least a year of experience under their belts. But it has crept earlier as firms try to get a jump on preferred candidates. In 2014, interviews began in February. Last year, recruiting started before Christmas. Applicants describe a frantic period of interviews and “exploding” offers that can expire in 24 hours or less.

2. The investment banks also hire very early in students' college careers, and here's a story about an attempt to resist that urge (good luck with that):

 Goldman, JPMorgan Hit Pause on Intern Recruiting ‘Madness’
A push in recent years to move up application deadlines isn’t bringing in the kinds of candidates the banks need

"Two Wall Street investment banks are easing up in the race to hire their most junior employees.

"Goldman Sachs Group Inc.  and JPMorgan Chase & Co. won’t interview or extend summer internship offers to college sophomores this year and will go back to recruiting students in the fall of their junior year, executives said.

"It is a nod to a softer Wall Street, eager to cast off its sweatbox image to compete with perk-happy Silicon Valley. It is also an acknowledgment that a push in recent years to move up application deadlines isn’t bringing in the kinds of candidates banks need as they try to diversify their overwhelmingly white and male ranks.

“We were contributing to an environment that pressured students to choose rather than to explore,” said Dane Holmes, Goldman’s top human-resources executive. “I want people who want to be at Goldman Sachs, not people who felt they had to say yes to an offer.”

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