Speed-dating-style interviews that can drag on until 3 a.m. Job offers that require a response within a day. A fear that your current boss might find out what you’re doing. All for positions that don’t even start for two to three years.
Welcome to the frenzied world of private-equity recruiting, where recent college graduates who have barely started their first gigs as analysts at big banks vie to secure coveted positions at buyout firms.
The tactics reached a fever pitch
Speed-dating-style interviews that can drag on until 3 a.m. Job offers that require a response within a day. A fear that your current boss might find out what you’re doing. All for positions that don’t even start for two to three years.
Welcome to the frenzied world of private-equity recruiting, where recent college graduates who have barely started their first gigs as analysts at big banks vie to secure coveted positions at buyout firms.
The tactics reached a fever pitch in recent years, kicking off earlier and earlier, prompting a crackdown this summer at big banks fed up with the poaching of their young employees.
Morgan Stanley implemented a formal policy in May that requires analysts to promptly disclose if they have secured future employment elsewhere, according to a person familiar with the matter. Analysts who are found to be in violation of the rule are at risk of disciplinary action, including being fired.
Goldman Sachs also recently decided to ask analysts every three months if they have accepted a future job at another firm. In a memo to this year’s incoming hires, JPMorgan Chase said analysts would be fired if they accepted future-dated job offers in their first 18 months.
Young bankers aspiring to land a prestigious job in private-equity usually put in stints as investment banking analysts, often at big banks like JPMorgan, Goldman Sachs and Morgan Stanley. It’s a rite of passage that can be grueling, with workweeks of 100 hours or more.
“The idea of buying and selling companies and improving companies is a very attractive thing,” said Anthony Keizner of recruiting firm Odyssey Search Partners. “They’re thinking, ‘I don’t just want to give advice, I want to make decisions.’”
Private equity also offers the prospect of slightly less-demanding hours and a significantly higher ceiling for pay. Many aspire to earn carried interest, or a share of the profits from investment funds. That can bring millions of dollars in income a year.
Starting salaries for private-equity recruits can stretch to more than $300,000, compared with typical low-six-figure compensation for investment banking analysts, excluding bonuses.
The entry-level jobs at both banks and private-equity firms are often filled with mundane tasks, such as building financial models and filling out spreadsheets. For some analysts, the rise of artificial intelligence makes them question their future prospects.
For now, competition to fill the jobs is still red hot. Private-equity firms want to make sure they can get to the best talent first, and recruiting firms in recent years have been reaching out to young graduates before they start their jobs at the big banks.
Last year, “it started before people even got to the office, and that was bananas,” said Meridith Dennes, a recruiter at Prospect Rock Partners. “I don’t even know what metrics they were using to evaluate except the fact that they had offers from JPMorgan and Bank of America.”
JPMorgan Chief Executive Jamie Dimon called out the practice last year at a Georgetown University conference.
“I think that’s unethical. I don’t like it. I may eliminate it regardless of what the private-equity guys say, or the people in the company,” Dimon said. “I want patriots, not mercenaries.”
After JPMorgan said it would fire young bankers who accept jobs elsewhere, some of the largest buyout shops said they would push back recruiting. Apollo Global Management and General Atlantic are among the firms that have said they wouldn’t extend offers this year for their associate classes of 2027.
In interviews, private-equity firms at times have candidates wait in a big room and call them in one by one for quick meetings with executives.
In 2022, one candidate was called in for rapid-fire chats for a position at a major private-equity firm at 7 p.m., and found about 40 others waiting for interviews.
“I was there until 3 a.m., when I was told I’ll hear more in the morning. Never heard anything from them,” said the person, who now works for a different private-equity firm.
Banks see some benefit to having employees go on to private-equity firms, since it creates a connection with potential clients who might one day tap the bank for multibillion-dollar deals. But some executives say banks are essentially footing the bill to get analysts up and running, only for them to leave soon after.
At Goldman, one senior banker likened it to the bank becoming a factory churning out analysts for the private-equity industry.
In recent weeks, Goldman executives debated how they might handle the issue, with some pushing for open conversations with young bankers. At both Goldman and Morgan Stanley, those who disclose they have accepted future jobs won’t be fired, according to people familiar with the matter.
The moves are largely meant to help manage possible conflicts of interest in the work that employees are assigned, according to the people, such as keeping them off deals that involve their future employer.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com, Ben Glickman at ben.glickman@wsj.com and Alexander Saeedy at alexander.saeedy@wsj.com
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