Private equity firms are currently hiring fewer investment bankers. A recent article on eFinancialCareers characterised early 2022 as the optimal moment for being a junior investment banker, with plentiful deals and booming pay.
The article states that the recent slowing of hiring in private equity firms is "partly the fault of junior bankers themselves".
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What points does the article make to substantiate this claim? A quote from Anthony Keizner, a partner at New York-based Odyssey Search, suggests that diversity quotas have reduced rates of hiring because firms are holding out for female or ethnic minority recruits. Charlie Hunt, our Director of UK, argues that firms have been focused on diversity hiring for a while, so this doesn’t explain recent trends. What may be more relevant is the fact that hiring has slowed in proportion to fundraising, which has become more difficult.
If fund sizes are staying the same or shrinking, fewer hires are needed. Factor in the greater difficulties in securing debt and completing deals, and it’s clear why funds are taking more time to secure their ideal hires through assessments that test competencies. As Charlie states in the article, “The bar is as high as ever and not everyone has the skills or intellect to pass it”. If there are, as the article postulates, problems with juniors failing tests, Charlie makes the point that this happens because "more bankers are working off modelling templates so they are likely to struggle when building their own models as part of a case study".
An anonymous comment at the end of the article claims that junior bankers are missing out on private equity roles because of a “change in attitude to work” with banks having “over-pampered” employees. Charlie acknowledges that young people’s priorities have changed: money and career progression are now weighed up against work-life balance, with the latter sometimes taking priority.
However, Charlie isn't entirely convinced by this argument, and indeed questions the original premise that junior bankers are missing out. He points out that there are more jobs than before and a smaller pool from which to select. Most will make it, and those who don’t may simply be lacking the skills, intellect or emotional intelligence to thrive in the industry.
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