Banking Exodus Drives PE Hiring Spree: ‘I’ll earn more in private equity’

A burnout crisis in investment banking is giving an unexpected boost to private equity — a flood of junior dealmakers vying to jump to the buyside.

That has led to a recruitment spree. Private equity firms in the City have seen a surge in interest, with applications up by 20% for associate level positions in the first three months of the year, said Gail McManus, founder of Private Equity Recruitment. These roles already attracted more than 300 candidates for each available position, she said.

“Inbound applications have surged during the pandemic — more than doubled,” added Edmund Thomson Jones, a partner at True Search, who specialises in private equity hires. “A lot of people in banking have been very unhappy.”

Private equity has long been a landing spot for junior bankers looking for their next move, typically after two years in the sector. However, a crisis among younger dealmakers, who have warned of looming burnout amid a surge in deals over the past six months, has led to an explosion in its popularity, according to recruiters and junior bankers contacted by Financial News.

Junior banker workload was thrust into the spotlight after a group of 13 Goldman Sachs analysts leaked an internal presentation in March detailing 100-hour weeks and declining mental health throughout the pandemic. An already demanding job has been exacerbated by record deal flow and work-from-home setups, meaning that juniors are expected to be on call at all hours.

JPMorgan kicked off a hiring spree of 190 analysts and associates, joining banks including Goldman Sachs, Bank of America, HSBC and UBS that are recruiting more to alleviate workloads. Most banks have also rolled out pay rises and special bonuses — everything from one-off $40,000 payments at UBS to all-expenses-paid vacations at independent investment bank Houlihan Lokey.

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