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PE firms rush to recruit young bankers

They finished college last spring and now count off the days spent toiling as junior investment bankers – while dreaming about landing a job at a private equity firm. Yet, they may be offered their fantasy PE job sooner than expected.

Currently, a mad scramble is taking place at well-known PE firms such as Apollo Global Management, Bain Capital, the Blackstone Group and the Carlyle Group to lure the young analysts. On a recent weekend, many went through multiple interviews and now are getting offers for jobs. One problem: the jobs will not start for 18 months.

The rush to recruit these recent grads has gotten more intense since the economic recovery, according to a report from The New York Times. That means interviews fall far earlier. Golden Gate Capital, a PE firm based in San Francisco, and Advent International, based in Boston, both held interviews earlier this year than their rivals. The better-known firms followed. Recruiters crammed interviews into the single weekend, and the applicants will likely respond to offers quickly.

No matter how unpleasant the process, they are drawn by an impressive salary. A PE associate may take home up to $300,000 a year, including salary and bonus, The Times reports. The lucrative amounts are getting noticed. Vettery reported in December that some 36% of junior bankers with two-year contracts in 2012 left for PE firms. On the other hand, 27.5% opted to remain in the same division where they likely began working out of college, Vettery adds. To prevent their early exit, investment banks are offering higher salaries or giving them more days off, The Times said.

But they are leaving. Long Ridge Partners shows in a recent survey of some 100 investment banking analysts that 39% want to be at a PE firm after leaving their current position. Some 37% want to work at a hedge fund. FinAlternatives reported that 27 were in their first year as an investment analyst; 51 were in their second year; and 22 were in their third year.

They clearly have ambition and drive, but one clear question is what do they know about Wall Street after just six months in a job?

The 12 Worst Pieces of Career Advice You’ll Read (eFinancialCareers)

Here are the types of things you’ll learn on your way to becoming a job hunting robot with little independent thought of your own.

Pitch Book Hell (eFinancialCareers)

Mess up a pitch book and you will mess up your career in investment banking. Here's how 20 year-old bankers most often die a death.

ETF Funds Booming (FinAlternatives)

Exchange-traded funds are apparently booming. Assets invested in ETFs are expected to double in the next five years to reach $5 trillion, according to PwC.

Political Megadonors Identified in Finance Sector (Business Insider)

Who are the top megadonors in the finance sector based on what they gave to politicians over the past two cycles? Based on data from Crowdpac, Business Insider identified the top three as: Thomas Steyer, co-founder of Farallon Capital Management; James Harris Simons, who founded Renaissance Technologies; and Robert Mercer, co-CEO of Renaissance.

BoA Subsidiary May Have Been Used to Finance Trades (WSJ)

Bank of America may have used a government-backed U.S. banking subsidiary to finance billions of dollars in trades, The Wall Street Journal reported. It helped hedge funds and other clients avoid taxes, and since then the practice has ended, sources claim.

Fewer Millennials Starting Own Businesses (CNBC)

Fewer millennials are starting their own businesses in part because of mounting student debt. The Kauffman Foundation said start-ups among Americans ages 20 to 34 peaked at 35% in 1996 and dropped to 23% in 2013.

Investors Return to Junk Bonds (Bloomberg)

Investors have placed $4.97 billion into U.S. high-yield mutual funds and exchange-traded funds since December, according to Lipper. Last year, there was anxiety over such investments, with investors pulling more than $16 billion, but BlackRock’s junk-bond ETF, for example, has seen inflows during each of the last 13 days.

Buzz Around the Office

JFK Airport Ranked Last for Mass Transit Travel (NY Post)

Getting to any of New York City’s airports may require using among the lowest-ranked mass transit options when compared to busy airports worldwide.

A Global Gateway Alliance survey showed that JFK tied with Denver’s airport for last place. Mass transit to Kennedy from NYC’s Penn Station takes 47 minutes.

LaGuardia and Newark came in second-to-last place. The pair was ranked the same as airports in Jakarta and Istanbul.

Quote of the Day

“Whatever you are, be a good one.” – Abraham Lincoln

AUTHOREd Silverstein Insider Comment

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