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Morning Coffee: Graduates joining banks on $120k salaries chased by firms paying $320k before they start. Moelis cancels Jonathan Kaye

A few years ago, private equity firms collectively agreed to give recent graduates a bit of breathing space before they tried to hire them from their jobs in banks. That agreement seems to have lapsed.

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Graduates joining this year's analyst class don't arrive in banks until July, but Business Insider reports that private equity firms like Apollo, KKR and Clayton Dubulier & Rice are already trying to hire them. Recruitment reportedly started Monday evening. The firms concerned didn't confirm this. 

In previous years, recruitment by top private equity firms has involved interviewing between 1am and 8am and has meant that junior bankers, who also had day jobs, were expected to stay up all night being quizzed about leveraged buyouts. This year, they're not actually doing their day jobs, so presumably it's more sedate. However, Business Insider says there's some chaos because incoming junior bankers invited to private equity interviews in New York aren't necessarily in the city already. 

Moving from banking to private equity can be advantageous. Private equity jobs are seen as being more interesting than banking because you're a buyer and not an adviser and once you get carried interest, the pay can be huge. Heidrick and Struggles says the biggest private equity funds pay their associates $320k in America, or $375k plus carry (although not all juniors get carried interest). First year banking analysts get salaries of around $120k and total packages of $200k or less. 

There's growing realization, though, that working in private equity may not be all that. The hours aren't necessarily better than banking, and private equity firms like Apollo have a reputation for being gruelling (although this may be changing). One junior banker told Business Insider he'd been turned off private equity by the sudden recruitment frenzy:  "Honestly, it has been making me think that private equity especially is just such an abusive industry. It's not worth it. It's not worth my life."

Separately, Moelis & Co. has cancelled Jonathan Kaye, the banker filmed punching a woman during the Brooklyn Pride march earlier this month. Kaye's profile page at the boutique bank has been deleted. 

Bloomberg reports that Kaye resigned and quotes a representative for Kaye who says that since the incident he's received "countless death threats," and been part of "a campaign of personal destruction" that "has been traumatic and devastating.” Kaye reportedly intends to clear his name. His representative stated that Kaye, "could not identify any of these individuals and was left bloodied from the attack. Given the sharp rise in antisemitic incidents, any Jewish person in this situation would naturally feel threatened and feel the need to defend themselves and return safely to their family.”

 The woman punched by Kaye told police that she suffered a broken nose, lacerations and a black eye and that she lost consciousness when she fell to the ground. 

The Financial Times notes that Moelis previously praised Kaye for being a "recognized global leader." It's giving his work to Rick Polhemus, who joined from Morgan Stanley in 2022. 

Meanwhile...

Bobby Jain gathered $5.3bn in commitments for his new multistrategy hedge fund. It employs 215 people, including 42 portfolio managers. Jain Global has seven businesses that will go live on July 1, including an Asia-Pacific unit that will essentially act as a multimanager platform and trade six strategies, with the profits feeding into the Jain fund. (Bloomberg) 

The top 12 investment banks cut another 100 front-line dealmaker jobs during the first quarter of 2024. (Financial News) 

Balyasny pulled $250m from Sparta Capital Management after it made an 8% loss. (Bloomberg) 

Kostas Bintas, the former co-head of Metals at Trafigura, is joining Mercuria as it builds a 40-strong team. (Bloomberg) 

Goldman Sachs appointed oil tycoon John Hess to its board after advising on his firm's $53bn takeover by Chevron. ESG is so over. (Financial Times) 

"I am experiencing significant anxiety over losing another co-worker. I am happy for her, but I’m also sad because all her responsibilities will again be dumped on me." (New York Post) 

The narrowing of the gender pay gap is partly because it's become harder to get promoted as a young man, especially in high paying jobs, which younger men are leaving at higher rates as older well paid men hug the vacancies. (NBER) 

When you break up with a resentful work spouse. "After years of working side-by-side, I asked her to work with me on a project for a major client. Within weeks, our lively and relaxed conversations had been replaced with terse exchanges in which the weight of held-back comments hung heavy in the air." (WSJ) 

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AUTHORSarah Butcher Global Editor
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    25 June 2024

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