Recruiters are pushing the private-equity hiring cycle back to late summer 2021, potentially pitting two classes of investment-banking analysts in a head-to-head competition for lucrative PE jobs

  • Private-equity recruiters are delaying the recruiting cycle until late summer, at the earliest.
  • Previously, PE recruiters had delayed their annual hiring process because of the pandemic.
  • It’s unclear whether junior bankers from 2020 and 2021 will compete head-to-head for PE jobs.
  • See more stories on Insider’s business page.

This year’s private-equity recruiting cycle is once again moving later, after recruiters first delayed the kickoff of the process in the fall of 2020 in light of the coronavirus pandemic.

A group of influential headhunters representing leading private-equity firms have elected to delay the kick-off of the traditional on-cycle recruiting process until no earlier than late summer or early fall 2021, two sources told Insider.

The sources requested anonymity to speak freely about the group’s thinking.

Private-equity firms, with the help of headhunters, typically recruit from investment banks to fill associate roles. As the race for young talent has increased, the timeline has continued to creep up, with recruiters beginning to court junior bankers who are just a few weeks on the job for potential roles that won’t start for another two years. 

Headhunters had already pushed off the start of their on-cycle recruiting process from fall 2020 into sometime in 2021, Insider previously reported.  At the time, it was unclear when the headhunters would aim to commence their cycle.

One of the primary reasons underpinning their decision was a shared concern that analysts who had started their investment-banking jobs in the summer of 2020 had too little in-person experience to properly train many of them to face the steep demands of a job in private equity, let alone its grueling recruiting cycle.

Initially, not all recruiting firms involved in that consensus abided by the rules. Recruiter Sheri Gellman’s SG Partners began conducting outreach to candidates in August and September before HR personnel at several top private-equity firms learned of her firm’s efforts and decided to crack down, Insider reported in early October.

But the decision to delay the start of the private-equity recruiting cycle until late summer or early fall of 2021 would mean that an entire year of recruiting for PE jobs has bypassed the freshmen investment-banking analysts who started their jobs in the summer of 2020.

It’s unclear at this stage how this will impact associate recruiting at private-equity firms. With a new incoming class of junior bankers starting this summer, that could mean increased competition for analysts who started working at investment banks in the summer of 2020 and are eager to make a move to private equity. 

How the private-equity recruiting cycle works

For context, here’s how private-equity recruiting conventionally has worked, and what “on-cycle” recruiting entails.

In past years, the private-equity recruiting “cycle” has begun on a carefully-coordinated date agreed upon by headhunters.

However, if one firm kicks off the process ahead of the others, it can trigger a frenzy of competition among the recruiters, people familiar with the process have previously described to Insider.

In many cases, the talent these firms are pursuing are first-year analysts at investment banks who are fresh out of college, often with just a few weeks of on-the-job experience under their belts.

When the headhunters reach out, they generally make the initial approach to junior bankers via email, and then court them more formally with in-person coffee chats and networking events to incentivize them to apply for jobs at their clients’ firms.

The coronavirus pandemic has made those kinds of networking opportunities impossible. It has also deprived many young analysts of in-person face-time with managers and colleagues, much to the chagrin of Wall Street executives like Goldman Sachs chief David Solomon and JPMorgan boss Jamie Dimon.

In December, James Cherubim, the head of talent acquisition at the Carlyle Group, told Insider in a live private-equity recruiting-focused panel event that he believes pushing back the start of on-cycle associate recruiting would be a benefit to young analysts.

“Some might have dipped their toe in but ultimately pulled out,” Cherubim said in December of junior investment-bankers who might have demurred from partaking in the process because they felt underprepared.

“Frankly, what I see is first-year analysts coming in and realizing how ill-prepared they are,” he added, “having just been on the desk for one month in the case of last year, and getting discouraged by that.”

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