Morning Coffee: Junior bankers squabble about the spreading private equity recruitment pause. Deutsche Bank's fixed income traders are it

You've been preparing for months, contemplating case studies and meeting senior private equity executives for coffee chats ahead of anticipated interviews. Now it's over. There won't be any private equity interviews after all: not this year. 

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How does it feel?

Bad, according to some of the juniors on Wall Street Oasis who are bemoaning all their wasted time. Bad, too, according to a junior banker who told the Financial Times that when big private equity funds do finally resume interviewing in 2027 it will be doubly exhausting because by then he'll be working in a demanding junior banking job and will somehow need to combine interviewing with working 14 hour days. Good, though say others who claim the junior private equity recruiting cycle had got out of control: funds were interviewing students two years ahead of their hiring dates and making them offers before they'd even started working for banks. Everyone was suffering, including funds - which were hiring untested juniors straight from university and finding they were no good after all.

JPMorgan put a stop to the parade last week by telling its junior bankers it would fire them if they accept private equity offers within 18 months of joining the bank.  And then Apollo, allegedly one of the worst perpetrators of the early interview culture, said it won't be interviewing juniors this year for 2027 jobs. Now, the FT says General Atlantic has done the same. 

While it's awkward news for everyone who's wasted time and money on the pre-interview private equity coffee chats that had allegedly already begun at the likes of Apollo, Bain, Carlyle and KKR, it's good news for anyone who wants a quiet few weeks, before gliding into an analyst job at a bank in July. 

Not all private equity funds have committed to the interview hiatus, though. The question now is whether other funds follow Apollo and General Atlantic, or try to steal a march on them by interviewing and hiring junior bankers outside of JPMorgan ASAP. The other question is what happens next year when Apollo and General Atlantic do start hiring for 2027 - there are fears that the pause in recruitment will provide time for funds to recalibrate, and will allow for the realisation that they don't need as many junior bankers as they thought, what with AI and investors demanding their money back. 

Separately, Deutsche Bank has hired a lot of new investment bankers, but it's still relying on its fixed income traders to drive revenues higher.

Financial News reports that Deutsche's investment bankers are expected to generate flat revenues in the second quarter, but its fixed income traders should generate revenues up in the "low single digits." 

“Of course, we will have a weaker Q2 than we initially thought at the start of the year,” said Deutsche Bank CEO Christian Sewing yesterday....“I can see now deals we are working on that will potentially not be accounted for in Q2, but slipping into Q3.”

Deutsche Bank's fixed income traders also did well in the first quarter, when revenues increased 91% year-on-year to a level not achieved for 13 years. It's a reminder that while banks might want to move away from erratic sales and trading revenues in favour of low-capital intensity banking revenues, that's not always easily done.

Meanwhile...

The new hot funds are "deequity funds" which combine private equity and credit. Ares, KKR and Neuberger Berman all have them. (Bloomberg)

Senior bankers all agree that M&A is picking up. “M&A continues to be super active. There’s a lot of dialogue, a lot of engagement. And I go back to the sponsor firepower because they are a big driver of that too in addition to corporate M&A,” says Vis Raghavan at Citi, for example. “It definitely feels better and better each day,” says new Moelis & Co. CEO Navid Mahmoodzadegan. (Financial News)  

Citadel Securities hired hired Mayank Narang from Millennium as its Asian COO. (Bloomberg) 

People are being summoned back to the office. Panmure Liberum, Deutsche Bank, UBS, Peel Hunt, Man Group and Santander all have demands. “We’re trying to avoid ‘TWaTs’ in the workforce,” said one banker, referring to people who come in Tuesdays, Wednesdays and Thursdays. (FT) 

How to get ahead in your internship. "We have what we call a 'coffee culture,' where it's totally normal and expected, frankly, for you to make that ask — all the way up to group heads. They're very willing to do that kind of thing. It's important for your development and I think it shows well as well." (Business Insider) 

Bank of America appointed Karim Movaghar and Adrien de Naurois as co-heads of EMEA investment grade capital markets. (Global Capital) 

Qube wants a crypto trader to work every other weekend alongside a standard four day shift. (Financial News) 

Virtu and Jump want weekend crypto traders too. (Cointelegraph) 

1 in 4 people will obey rules unconditionally, even in the absence of social pressure, punishment and personal gain. (New Scientist) 

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