The recruiting frenzy for private equity stars is heating up, but not for top executives pulling in multi-million dollar paychecks. Instead, the world’s top private equity firms are pulling out all the stops to recruit the best and brightest young analysts from leading investment banks.
And instead of beginning their annual recruitment drive in the fall of analysts’ first year, firms are getting more aggressive and making offers now as early as March, reports DealBook online. These offers are for private equity jobs that won’t even start until the fall of 2012.
“There is a shortage of stars, and that gives a strong incentive for a given firm to be the first,” says Adam Zoia, chief executive of Glocap Search.
Top private equity firms like Kohlberg Kravis Roberts, the Blackstone Group, TPG Capital and others traditionally hold their cocktail hours, meet-and-greets with executives and marathon interview days known as “Super Saturdays” in the summer, or late spring. But this year Bain Capital, a $65 billion private equity firm with headquarters in Boston, began holding interviews and making offers in early March. It set off a chain reaction of catch-up events among competitors.
But some feel this early recruiting process has limitations. These analysts typically graduated from college last summer, spent six months in their bank’s training program, and have only recently begun their actual full-time job. They’ve had little real-world experience or time to master key skills such as building complex financial models. Nor have they even had their annual performance reviews. So firms are betting on unproven talent.
The process is stressful on the analysts, as well, who have to prepare for rigorous interviews on top of the long hours they work at their bank. Banks discourage their analysts from participating in outside recruiting. So many analysts have to feign doctors’ appointments or sick relatives to make time for the process.
Nevertheless, insiders report that over 1,000 analysts will apply for the roughly 50 spots available at the top private equity firms. Those coming from Goldman Sachs’ technology, media and telecom group and from Morgan Stanley’s mergers and acquisition team are said to be favored.
What about you? Have you participated in one of these private equity recruiting drives? What do you think about recruiting analysts so early into their job? Add your comments below.
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