Wall Street banks have recently adopted policies to curb private equity poaching of junior bankers.
Each bank has a different stance, from reassigning bankers to terminating their employment.
Business Insider broke down the current rules juniors should know at each of the five major banks.
Private equity recruiting on Wall Street has turned into a bit of a saga this summer.
It started in June when JPMorgan sent a memo to incoming junior bankers that it would fire those who accept future-dated jobs at buyout firms. Within days, three PE shops, starting with Apollo, began announcing that they’d stall recruiting until 2026. Since then, the other biggest banks have hopped on the train to roll out their own new policies for junior bankers interested in one day jumping to the buy-side.
Every week seems to bring a new twist, and it has undoubtedly been a whirlwind for recent grads starting their first investment banking jobs.
In the interest of clarifying all the disparate developments, Business Insider has compiled the policies on accepting pre-dated private equity jobs from the five largest banks — Bank of America, Citi, Goldman Sachs, JPMorgan, and Morgan Stanley — in one place.
The policies run the gamut. Some banks will terminate you immediately if they find out you’ve accepted a pre-dated job. Others won’t fire you so long as you tell them you have the job lined up, but may move you to another team. They’ve all said that their rules are directed at preventing potential conflicts of interest — since investment banks often seek to advise the very firms young bankers can agree to work for two or three years down the road.
Understanding the rules will help junior bankers navigate their careers. The stakes are high. Young bankers who lose their banking jobs, or are reassigned to a non-dealmaking job, risk losing the very private equity offers banks are now eager for them to disclose. These firms sign future candidates with the expectation that by the time they arrive at their own offices, they’ll have two years of experience under their belt in M&A.
Here’s how top investment banks are defending against private equity poaching of junior bankers, in alphabetical order by name:
Bank of America
Analysts will be asked to disclose whether they have offers for future-dated jobs, according to a person with knowledge of the matter. BofA juniors who accept future-dated job offers will not be terminated but rather reassigned to another area within the bank.
Citi
Citi sent out a memo to new junior bankers in July telling them they’ll have to “complete an attestation disclosing whether they have accepted any future employment offers from other employers.”
As for potential disciplinary action, the bank said each analyst will be assessed on “a case-by-case basis,” said the memo, a copy of which was obtained by Business Insider.
Goldman Sachs
Goldman Sachs said in a July memo to junior analysts that they’d be asked every quarter to attest whether they have another job lined up, according to a person with knowledge of the matter. If you disclose, you won’t be fired.
Goldman has also offered a potential alternative for young employees with buyside ambitions. Their new program, which was communicated to this summer’s interns, “will offer a select group of applicants a full-time offer to join Investment Banking, followed by mobility to Asset Management after two years,” according to a memo.
JPMorgan
JPMorgan junior bankers who accept another job before or within the first 18 months of employment will “be provided notice” and their “employment with the firm will end,” according to a June letter the bank sent to incoming analysts.
JPMorgan also said it would terminate junior bankers who skip job trainings and meetings to interview with private equity firms, as many did in 2023.
Morgan Stanley
Morgan Stanley formalized its policy on PE recruiting in May before all the hubbub, according to a person with knowledge of the matter. It requires analysts to attest to their status on a quarterly basis.
If you disclose a job, you won’t be fired. If you don’t disclose, you may face disciplinary action, including termination.
Read the original article on Business Insider
