- Analysts are stressing over rumors that private equity interviews could happen any day now.
- Some first-year bankers, who have barely begun their jobs, are skipping new-hire training to study.
- “You just walk out like you’re going to the bathroom,” one analyst in training told Insider.
Panic is setting in at investment banks across Wall Street as junior bankers are thrust into the whirlwind of private equity recruiting.
This year, the frenzy is happening earlier than before, and it’s causing a major disruption for the firms where barely wet-behind-the-ears bankers are currently employed (including people who are still in training or haven’t officially started work).
“I’m literally freaking out,” said one first-year analyst, who just started a boutique banking job. “I’m not ready. No one is ready.”
Private equity recruiting is an annual Wall Street ritual, albeit an unwelcome one for some investment banks. Just as their newest hires start figuring out their new jobs, private equity firms (and their third-party recruiters) start sniffing around to poach talent for jobs that won’t start for one to two years down the road. The process can be intense, forcing junior bankers to call in sick or interview with firms in the middle of the night so they won’t lose their day jobs.
This year, the process has started early enough that it’s disrupting investment banks’ training of their first-year analysts, many of whom just started this month. Recruiter emails requesting “intro” calls and the private equity firms themselves scheduling “coffee chats” have some newbies so worked up they are leaving their training sessions early — or ditching them entirely — to brush up on interview questions, according to employees of two different investment banks.
“Everyone is skipping,” said one of the employees, who is an analyst in training. “You just walk out like you’re going to the bathroom.”
Other trainees are canceling their social plans or playing hooky from offsite trips to study. Evercore had a Volunteer Day in upstate New York on Thursday and a “noticeable amount” of analysts called in “sick” or didn’t show up, said a person familiar with the event, who attributed the attendance to private-equity recruiting angst. A spokesperson for Evercore declined to comment.
Coffee chats vs on-cycle
Which private equity firms are recruiting and when is somewhat murky — for good reason. The minute one private equity firm sends an official interview invite, the rest of the industry will be forced to follow suit in a frenzy for fear of missing out on top candidates.
What’s clear is that some headhunters and private equity firms have begun reaching out to junior bankers for introductory calls and “coffee chats” — catching some of this year’s first-year investment bankers off guard and sending them into a tailspin.
While “coffee chats” are not formal interviews, they act as pre-screenings for the official process and often contain interview-esque questions. So junior bankers are under pressure to study up and sound smart. Plus, it means the official recruiting process, known as “on-cycle” could start any day now. There’s talk that official interviews are imminent and could start this weekend or early next week, which stands to set off an avalanche.
Such rumors — which are swirling amongst analysts, on internet forums like Wall Street Oasis, and even between recruiting firms — only add to the frenzied environment.
The tension and anguish amongst juniors have been palpable for days, said the banking analyst. During work breaks, junior bankers have been gathering in groups to check their emails, talk hushedly about their top choice firms, and share who has what chats lined up where, this person said.
Many banks, especially big bulge brackets, aren’t supportive of the recruiting process and see it as a culling of their own future stars. For analysts to participate, it can mean missing work — or interviewing after work and late into the night. Getting caught can lead to severe consequences at certain firms, including being shown the door, said Asif Rahman, co-founder of recruiting coaching platform OfficeHours in a January interview with Insider.
“Analysts can get kind of crafty about it,” he said. Some get their junior coworkers to cover for them, but sometimes other tactics are necessary. “Another thing you see is a lot of people start to have doctor’s appointments or dentist appointments.”
The rumor mill
Starting last week, headhunting firms like Henkel Search, CarterPierce, and Ratio Advisors began reaching out to first-year investment banking analysts to schedule introductory calls or prompting them to send their resumes, according to outreach emails seen by Insider. Private equity firms have also begun hosting events, including an invite-only networking social with KKR Thursday night and online information sessions hosted by Hellman & Friedman Wednesday.
Industry experts said it’s typical for headhunters to begin sussing out the best talent for their PE firm clients early as due diligence ahead of on-cycle interviews.
But on Wednesday and Thursday, according to people familiar with the matter, employees at some private equity firms like Permira and Apax began directly scheduling “coffee chats” with analysts — which some have taken as a key indicator that on-cycle is about to kick off.
Now, analysts and industry insiders say they are hearing a mix of rumors, including through online forums, that headhunters have moved up their informal chats with candidates and that on-cycle could start any day now.
KKR, Permira, and Hellman & Friedman declined to comment, while Apax and the headhunting firms did not immediately respond to requests for comment.
All the gossip can be stressful, said the analyst.
“The problem with the finance industry is that nothing is public. So everything is like unconfirmed rumor,” said the analyst. “So you kind of just believe what you hear because it’s like, there’s nothing else to believe.”
Even if no firms started out with the intention to kick off on-cycle so early, the rumors could cause one firm to get paranoid, be the first out of the gate to start interviewing, and subsequently cause other firms to do the same.
“It’s a self-fulfilling prophecy,” this analyst said, and it can have a real impact on career paths because some bankers will feel pressure to take the first job that’s offered rather than risk waiting for the one they really want.
“The fact of the matter is that during the interviews, if I’m not ready, I’m just gonna have to wing it. Or choose not to participate,” this analyst said. “So now my strategy has changed to go to my second choice first instead of my first choice first.”
Get ahead of the process
Matt Ting has witnessed the frenzy firsthand this past week through increased inbounds and sales on his recruiting coaching platform Peak Frameworks.
“It’s getting to a point where it’s extremely absurd for everyone involved,” said Ting about the early start. “I wouldn’t be surprised if we see a much larger proportion of firms just holding off on on-cycle recruiting.”
“Recruiting is not designed to be fair. As a candidate, you can’t really interview at several firms because of the short timelines and exploding offers,” he said. “But I think if you zoom out a bit, it’s not just a private equity thing, it happens in every facet of finance. So it’s hard to hold anyone truly accountable.”
How can anyone expect a 22-year-old to prove they’re a good candidate for a private equity role that starts in two years when they don’t have any job experience at their current gig to talk about? The answer isn’t clear, said Ting.
Sometimes preparedness can be less important than intellectual aptitude. Some firms are so confident in their interviewing abilities, Ting said, that they believe they’ll be able to pick out the brightest stars, even if the candidates have no deal experience.
“I think they realize that sometimes they can use the process to their advantage,” Ting said. “Especially if you’re not a top name in private equity, you sometimes have to be a little bit more aggressive to get the best candidates.” Many firms, he said, will make offers that expire after a few hours “so that candidates can’t make informed decisions.”
Ting’s warning and advice: The moment that you start taking headhunter calls and you start going toward the process, you can’t undo it. So make up your mind now.
“I know it’s crazy, but it’s in your best interest to decide upfront whether you want to pursue private equity,” he said. “The reason I say that is because headhunters will remember coffee chats. The feedback they write about you is going to be permanent. So if you decide in a few weeks that you don’t want to actually do on-cycle, that negative feedback could stay with you when you recruit in the future.”
With reporting by Reed Alexander
Are you a junior banker at a Wall Street firm? Contact this reporter to share your experience. Emmalyse Brownstein can be reached via email at [email protected], or the encrypted app Signal at (305) 857-5516.
Read the full article here