PE firms' eagerness to recruit junior bankers is blowing up in their faces. Here's why they need to change.
Almost Friday! Dan DeFrancesco in a still-snowless NYC.
On tap, we've got stories on more bad bonuses for bankers (don't kill the messenger), aggressive growth plans for a firm tied to an iconic American family, and why the end might be near for all of us.
But first, PE firms have to chill.
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1. Premature recruiting.
The early bird does not always get the worm, it turns out.
In the ongoing battle to recruit top talent, some private-equity firms' decisions to court first-year analysts just a few weeks into their new gig has backfired. As Insider's Emmalyse Brownstein reports, some PE firms are scrambling to fill positions that, in years past, would have been locked up for months.
Some context on PE recruiting: Firms recruit, interview, and make offers to junior bankers well ahead of their actual start dates. The process has continued to creep up, with most firms locking up their future class of associates nearly two years ahead of their actual start date. (For a complete rundown of the process, along with some tips, click here.)
This year marked the earliest start to recruiting, with some of the top firms interviewing candidates in August and issuing offers before Labor Day.
But, as Emmalyse's reporting has uncovered, that eagerness to fill positions hasn't paid off. Some junior bankers didn't feel comfortable interviewing for a new role when they had barely settled into their current ones. As a result, many top PE firms are conducting another wave of recruiting.
I've shared my disdain with the recruitment cycle for young investment bankers, and private equity is just as bad, if not worse.
Recruiting someone for a job nearly two years before their start date makes zero sense. Now factor in these candidates' ages — typically in their early 20s, a time when people go through a lot of personal growth — and you start to realize how silly this whole process is.
My first three years out of college I went from coaching lacrosse in Europe (be more of a bro, you literally can't), to writing about sports for a daily newspaper, to covering trading tech. While I realize I wouldn't be a PE recruiters first (or last) pick to fill a position, the point remains that young people change their minds a lot. So why are we trying to box them in?
The fact PE firms need to go back to the well to fill open seats should be a wake-up call. But, in reality, it won't change anything. Perhaps next year they'll cool it, but it'll be short lived. Then, before you know it, one firm will jump the gun, and we'll be right back to where we started.
Click here to read more about how PE firms' early recruitment of junior bankers backfired.
In other news:
2. Big plans at Rockefeller Capital. The $98 billion wealth firm that was built out of the Rockefeller family office wants to double its assets under management and hire at least 150 advisors over the next five years. CEO Greg Fleming details how he plans to do it.
3. Bank of America bonus bummer. BofA bankers saw their bonuses cut by 30% after a dreadful year in dealmaking, the Financial News reports. The bright side? Just about everybody got some stock awards, Reuters writes.
4. One of SBF's biggest investments went to a firm cofounded by someone he dated. Crypto-trading firm Modulo Capital received a total of $400 million from the disgraced FTX founder. Modulo also happened to be cofounded by Xiaoyun "Lily" Zhang, a former Jane Street trader who reportedly had a romantic history with SBF. More on that here.
5. Mr. Musk would like some more money, please. The billionaire is looking to raise as much as $3 billion to pay off some of the $13 billion debt package he took on to acquire Twitter, according to The Wall Street Journal. Musk, for his part, denied the report... on Twitter, of course. For more on Musk's Twitter activity, check out some of his top replies on the social-media site.
6. According to an imaginary clock managed by some scientists, we're all going to die soon. The Doomsday Clock is now 90 seconds away from midnight, which is meant to signify the apocalypse. Here's why they're bearish on the human race.
7. Meanwhile, with enough money you can become a real-life Benjamin Button. Bryan Johnson, a multimillionaire software entrepreneur who founded payment player Braintree, has spent $2 million a year to reverse the aging process. More on the mission to stay forever young.
8. The dark side of everyone's new favorite wonder drug. The use of Ketamine to treat depression has become en vogue in recent years. But some users have reported developing a crippling addiction that has upended their lives. Why K might not be all it's cracked up to be.
9. If you're a WFH-lifer, these are the gigs for you. A new list from job website Indeed maps out the jobs that pay at least $100,000 and don't require you in the office full time. Hint: You should brush up on your coding skills. Check out the 10 jobs that'll let you stay in your sweatpants.
10. We've got a new addition to the certified diamond club. Only 98 songs have gone platinum 10 times, earning them diamond status from the RIAA. "Fireflies" by Owl City is the latest to join the exclusive club. Here's the entire list, along with a Spotify playlist you can jam out to.
Curated by Dan DeFrancesco in New York. Feedback or tips? Email firstname.lastname@example.org, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.
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