Is it just me or are PE Associates garbage these days?
Typing this up from the office on a Friday night because I'm covering for two separate incompetent juniors right now. It's especially a problem with the last two classes. It's comical how little I can trust them with - even basic analyses or admin work are riddled with errors (let alone important things like models). Plus, no responsiveness, no initiative, no drive to succeed, or even a basic motivation to get better at their jobs. All of which is fine - we all have dud associates now and again - but it's accompanied by this aggressive, borderline hostile attitude and entitlement that gives me zero faith that they'll get any better. Friends at other MFs have had the exact same experience and we're all at a loss.
Please go into more detail?
Sounds like nobody cared to train them well, including you.
These aren’t kids out of college though.. how much training do you need to check your work ? It’s not like they aren’t super smart… it’s just laziness
None of the juniors seem to give a shit anymore. It's really a problem for our group as well, despite hours of training. The only feedback is they want higher comp, better hours and more exposure. They don't really seem to understand how the world works.
Not a ton of helpful advice, but you're not alone.
cry about it. not everyone wants to throw their life away like you did.
.
Then why do it? If it's not for you, don't waste your life.
I don't understand this perspective.
I mean, the buck has to stop somewhere. I've seen colleagues put in bare minimum effort in their IB analyst years, knowing they have PE offer in hand. Then PE hits, and they learn very quickly that it's tough to build a career when you're only ever putting in 50%.
Hire me
There's a corporate culture shift going on, and Gen Z is driving it. Things like job-hopping and preferring salary to experience used to be frowned upon, but when an entire generation does it, it's kind of hard to ignore. Broadly speaking, everyone's goal has always been to produce more output from less work, but it seems that the newer generations are leaning towards the latter half of that goal (in all industries, not just finance).
There are basically two ways to think about this behavior. The first way is to conclude that Gen Z is lazy and entitled, unwilling to do the kind of work required to be successful. The second way is to conclude that Gen Z is the first generation that actually understands their self-worth in the marketplace and won't put up with the old ways of rampant employer abuse. In my experience, both views are pretty common, and the dividing line is usually age / seniority. Of course, seniors and management are upset that juniors aren't putting in the same effort. On the other hand, juniors don't really see work as anything more than a means to earn a paycheck, so they couldn't care less either way.
If the culture shift continues, then maybe we really will see reduced hours and better comp. But if employers can hold out long enough, maybe Gen Z will be brought back down to Earth. Personally I think the juniors will win, at least in finance. Finance simply doesn't have the same appeal it used to, and most of us see it as "waste a few years of your life doing mind-numbing soulless work in exchange for the ability to quit and move to a better job later on".
A large portion of my peers choose to avoid finance entirely, due to its nonsensical culture that is hyper-fixated on wearing fancy watches and acting subservient to your boss, and its poor work-life balance ("what life?"). The result is a dwindling talent pool where employers have to make more and more concessions, since there is no alternative. It's not like my generation is dumb, it's just that the smart ones are actually smart enough to know that they will be properly valued and respected elsewhere.
Thats because even when you chase consistent comp increases and are in the 95th percentile for your age, you still really dont make that much. If you arent in the top 2% for your age you should absolutely continue to chase higher salaries. Look at what the 90-95th percentile makes at age 30 now relative to those in the same bucket in 1980. This isnt Gen Z shit this is basic human logic
Have you tried giving them higher comp, better hours and more exposure? Lol
They're at the high end of comp, probably better than most of their peers. Hours-wise, nothing I can do to change that, I don't have them run around putting pitchbooks and other bullshit together, I push on the client as much as possible without fucking up the entire deal. Exposure-wise, you're just not going to present to the CEO or board as an associate.
In summary, they've got it pretty good.
And have them stick around instead of leaving to become someone else’s problem?
Just wanted to know, are these all target kids?
It's a mix - as I've said in my post history, we're a small boutique -- on paper, they're not bottom of the barrel and a fair amount have come from ivies (either undergrad or graduate) - I think it's just a work ethic issue.
What entitles you to have beast juniors who basically do your job for you and make your life easy? Are your skills sharp enough for the juniors to respect? Do you give them opportunities to shine and go to bat for them? Or are you giving them admin b*tchwork that you don’t want to do, taking credit for their work, are not that smart yourself, then making surprised pikachu face when they want nothing to do with you?
Usually it goes around, comes around with these things in my experience.
surprised pikachu face was good. thank you for brightening my day
This feels like you’re projecting hard.
Projecting about what? i’m not even in this world anymore. I work at a HF and eat what I kill, not deal with some corporate bs managing up and down.
But juniors doing grunt work for their superiors is how the world operates.
last thing anyone wants is not leaving office at decent time because you’re checking that low-level munchkins aren’t fucking up.
You're confused as to how the world actually operates vs. how you wish it would operate. The world operates on supply & demand and incentives. Juniors take a deal to eat shit sandwiches for a few years in exchange for establishing their careers, earn some cash, and, most relevant to you, to learn valuable skills from their seniors. If you can't get juniors to your satisfaction, either one of two things are happening - (1) you're not delivering on your end of the bargain, so you can't get worthwhile people to do the work for you or (2) your expectation is skewed unrealistically on what a junior brings to the table vs. what you are offering to them.
Finance jobs are some of the freest forms of labor markets there are out there. The market is efficient and shit employers get shit employees and vice versa. This is the equilibrium you can either accept and work with, or find ways to improve upon the status quo by offering a better bargain to the market.
IME guys like that (always at the VP / SVP level and never making it beyond - I wonder why) really aren't sharp.
But they'd like to think they are.
They aren't good with people.
But they'd like to think they are.
They aren't even good at corporate finance
But they'd like to think they are. And they get real mad when you catch their mistakes and tell them privately.
Sure bro, keep presenting to the IC with the wrong equity cheque because you don't even understand how equity roll works (true story of a man similar to OP).
Ask whoever’s running your recruiting because if you wanted to pack your associate class with hardos, you definitely could
Maybe offer appropriate pay and you’ll get the level of talent you want…fucking twat
dudes at a MF, pay isn't an issue here lmao.
When you’re selling your soul for someone else’s dream/carry, pay should always be an issue
I can tell you haven't worked with analysts pre and post covid.
I get that as an analyst, this probably isn't what people want to hear, but the last few years of analyst classes have been terrible across the board. Think it's a combination of a few things:
- Not having real internships in 2020 made it harder for firms to filter out people who had no interest in the job and similarly people who would have realized this wasn't the job for them didn't have the summer to figure it out
- increased volume in 2020 and 2021 led to firms taking analysts who never would have met the minimum threshold at any other point and people with obvious flaws / attitude problems
- second years (and junior associates) got burned out in 2020 given extraordinary volume and reduced staffing leading them to have less interest in recruiting and less interest in developing the next generation
- WFH made it harder to ramp up and learn
You saw a bunch of posts over the last few years complaining about an overall deterioration in quality among analysts.
Now the lower quality analysts have moved on to PE. It will all normalize over the next few years as the job market gets more competitive and deal flow normalizes.
May be it will normalise. I do think it's more nuanced than that though.
IB / PE have low acceptance rates even in normal / good times. The lack of apprenticeship model may have made things worse over the last two years or so (with the effects now being felt in these industries) but I don't think things will go back to being the same across the corporate world (IB / PE may just about be fine).
I say this because I do think WFH / Covid has allowed a variety of different perspectives to creep in to the working routine. Most of all the hybrid work routine, a need to create a well defined boundary between working hours and personal ones etc. I think that now that the veil has been lifted, and that most juniors have witnessed this first-hand, I think this will never go out of equation in terms of being a factor of consideration in choice of careers and also in terms of how much loyalty any corporate role garners from this generation.
If you ask me, I think they have it right. If I were to do it again, I would much rather keep my physical and mental health in check, care about learning the important stuff (not working group lists but PF synergy adjustments on bolt-on platform etc.), fully capitalise on upwards reviews and legal / professional mechanics to ensure I do not get exploited (yes, with seniority comes greater accountability and responsibility)... the list goes on.
I do think though, IB / PE may be OK. They may not go back to the old times (thank god!) but due to the small number of spots and attrition / replacement rate, they may be OK. A down market may allow seniors to wrest some of the employee momentum but what happens when things pick up? Sure, not 2021 levels but even if they pick up reasonably the likelihood is that juniors will be back to expecting (demanding) what they had / or heard their peers had in normal times.
I just feel like the cat is out of the bag. Personally, I am quite happy. Also cannot wait for automation to ease up the job (that's a whole another discussion for another thread and boy is that going to be fun).
For what it's worth, I just made Associate 2 (A2A track) so not my first time around the block :)
I mostly attribute this problem to the headhunters / interview process, in which the characteristics of motivation and drive are lower priority than they should be. Headhunters used to be able to trust GS/MS/etc. to funnel in the best candidates, but over the past 5 or so years the over-focus on things that don't matter such as diversity stats and what school someone went to has led to the analyst classes being lower quality, and therefore the PE associate candidates being lower quality.
You want kids who are responsive, have drive, a hunger to get better? Hire the 4.0 finance major from Penn State who is at WB Chicago instead of the political science major from Brown who is at a BB. Hunger can't be taught - modeling can.
I don't agree with this.
Banks have always focused on students from top schools, this isn't a new thing. PE firms (and LPs) also have put an increased emphasis on diversity - this isn't really unique to banks at all.
We are saying the same thing on your comment for the increasing emphasis on diversity - my point was, everyone is focusing on this which is resulting in hiring practices not focused on important traits. If banks are first filling their classes with people not qualified, and then PE funds are further choosing to want a diverse class vs. just the best available talent, the problem is on both ends. And models don't care what gender you are, they just get done correctly or not.
If you get a new job 5 mins into your first one, you don't have the same motivation to grind as much over your 2 years in banking relative to when you still cared about impressing people above you. Therefore, you have a group of people who aren't necessarily accustomed to managing up to an optimal level?
This 100x over
truth. the obsession with target schools and firms, nepotism, diversity, "networking" has what made this class what it is and i think it's going to get a bit worse.
you think Timmy who's uncle used to be a partner at GS will be open to being taught by a "lowly VP"? or Brenda who's told that "the future is female" and not to take "mansplaining" who got in through the diversity program? or Leticia who's dad's an entrepreneur and just wants her to get a job so she'll stay out of trouble and in better company?
Hire those who are hungry to learn, willing to put in the hours, willing to put their pride aside, and maybe you'll get better juniors.
Unfortunately, then more of the analysts will be asians or indians who wants to keep their visa and continue working in the US but still, they'll have better fundamentals and won't bitch quit after 2 weeks or months.
Taking someone who is from a tier 2 school and is hungry to succeed >>>>>>Harvard kid who has never had to worry or grind in his/her life. You can even see this in managers (public/private) where partners went to no name schools and had to prove they were worthy vs. being handed it.
This, all day every day.
I was the Penn State without the 4.0. I endorse this post wholly. Hunger cannot be taught.
If any of your MFs/UMMs are hiring to replace these incompetent juniors, I'd love to apply
Have you heard of diversity? Compresses returns when you hire people based on what they look like vs skill. Heard it from across the board IB, PE and even consulting
Yeah man, returns get compressed because of the 10% of juniors that are diverse instead of the 100% of seniors that are white males.
Lmao blaming it all on diversity when MF PE pages are still full of white men...
What about people who got hired because their dad knew someone? How dilutive are they to returns?
The people that blame minorities instead of the people whose dads run as an LP for the firm certainly love pushing down.
Some of you above probably haven't been in banking the last 2+ years, and holy shit the general competence / drive of analysts has fallen off a cliff, not painting a broad brush, still plenty of powerhouses/rockstars among the ranks but it just seems like the overall bar has fallen a lot - 2020 grad here so I'm talking about my peers / the interns and first years I worked with in banking (not some disgruntled associate/VP). My PE associate class somehow hired a kid who didn't know sumif() and another who didn't know how to populate or add parties to a first round VDR (both coming from strong banks). So yeah, OP isn't talking out of his ass. There is something to be said about the kids who will struggle and spend friday nights / weekends suffering through the steep learning curve IB/PE presents, I'm doing it right now and yeah it blows dick at times but I'll be better for it a year from now. I know that's not allowed to be said in 2023 but can't hide from the real world forever.
How is it bad if someone doesn't know how to add parties to a VDR? There are a large number of providers. Takes 30 seconds to show them.
In this particular instance, an experienced Associate spent an hour + over zoom walking through dataroom basics, that is something you do with a summer intern.
Well I figured out all of this shit myself in my analyst years in a toxic environment and still disagree hard with OP's opinion.
Yes, I get dud juniors / interns. You don't necessarily get them all the time. People may not be good but they can be hungry, so they can be trained. And they're usually not hostile.
Being hostile / aggressive as a junior is a last resort because it's not accepted, period. Most juniors aren't idiots - if you're an asshole but you're a competent asshole, they'll still work with you and show obeisance to get your backing and valuable experience (lord knows I've done that)
A hostile / aggressive junior is one who wants absolutely nothing to do with you and two of them doing so suggests that OP is a dick at work who probably isn't actually good at his job.
If that makes a weak analyst that is fucking insane... How do you glide by a 2-year program and not know what a SUMIF statement is or how to populate a fucking VDR?
OP, I hope this doesn't offend you, but the current crop of IB analysts and PE associates just dont really care about your "profession" like your generation did.
Working 90 hour weeks and missing weekends/holidays over deals where you are just throwing debt on boring businesses and laying off people to generate "synergies" isn't attractive to gen z. And why would it be?
Oh, but you gain valuable experience! So they can go do more boring deals at a corporate later on making half the pay?
Oh, but the pay is so good compared to everyone else out of undergrad! (except inflation sucks, cost of living and housing is phucked, and tuition bills are out of control). Many have simply just stopped caring when everything seems so stacked against them.
Have you actually set foot on a college campus lately and asked the top students if they are interested in IB or PE? Most will laugh at you. All they have to do is google "IB/PE Culture"and the results are all about how terrible it is, How soulless the leadership is, how firms will just lay you off in a heartbeat before bonuses after working 100 hr weeks all year.
Another common thing you will hear is why work 80 to 100hr weeks just to make some boomer extremely rich. It's a fair statement. Perhaps if they spent 100 hours a week trying to do something for themselves the results could be interesting.
Or, why not just go to med school if you going to work so hard? People actually respect doctors, and they essentially work for themselves, aren't at risk of layoffs, and can at least look themselves in the eye that they are helping people as public servants.
IB and PE is for people who fail to have better options now. You will disagree with me, but it's true. The bar has been lowered. And the ones who you ARE getting in understand how crappy it is, and frankly don't care either.
The only people who reach out to me to get into finance now (Im at a top BB) are all internationals that barely speak english and have visa issues, kids from non targets, and people who were grabbed by the diversity council to interview and don't even know what IB is (and frankly dont care about it once I tell them). I'm not making this up.
Whether you contributed to PE having a horrible culture is not apparent to me, but you need to understand that recent grads simply don't respect the profession like you did. You can either work on fixing the culture so they do care, or continue to enjoy flaky kids from The Ohio State University and Wuhan University as your future employees.
Definitely agree with most of your comment, but I would not say that IB/PE is only for those who don’t have other options. I’m someone who chose PE over getting my physics PhD at a top three program or joining a high potential startup. If you play it the right way, finance can provide an extremely stable career path with high earnings and intellectual stimulation. Definitely a lot of attractive aspects still.
If you’re making such strong assertions, what are some actual examples of jobs which have a risk adjusted same earnings potential as finance? Not talking about ‘lbe Facebook’s next savant and you’ll work 40 hours per week and a BJ at lunch’. Talking about real world programs with significant hiring needs on a yearly basis
any job in tech. Software engineer, data science, product management.
higher pay, less risk, less hours, better culture
there are signficant hiring needs for this. if you can prove you are highly technical (no...not stupid IB/PE "technical"...im talking really engineering), you will always be in demand.
try and tell a software engineer or data science guy to work an all nighter (wont go over well).
Agree with a lot of your points, will counter the logic medical graduates work for themselves. Very rare, private practice is down and most doctors aren't entrepreneurial at least earlier in their career, most of them are drowning in debt. But still can find a decent job working for someone else with a good WLB. The downside is most people I know who went that route in medicine either love it or hate it / bored with their career.
All supply and demand driven, as long as there is a favorable seats to butts ratio there will be more tolerance for push-back. The moment that changes (and ratio was worse when dry powder was lower), then shops can filter for the attitude they want (and / or force it down) on top of the technicals
Sad but true, don’t forget SMU and TCU either.
You clearly don’t know much about medical field. Private practices are barely a thing, therefore meaning you don’t make your own schedule. General practitioner field is dying. Many fields in medicine you are on call or working night shift well into your 30s/40s. The best WLB fields in medicine are the most competitive in education. Dentist might be the exception- they have somehow manage to charge insurance companies out the ass while working 3 days a week.
Dentistry is also a McJob. Good luck finding a nice town to setup practice in. They are cranking out dentists and they are working for corporations making $115k a year with a shitload of debt. If you aren’t taking over family practice lookout, shit is bad. Orthodontics similar, it’s not a pretty picture.
Ironically private equity has a major role to play in why practicing medicine or dentistry sucks today
I am sure right now you think you're smart and what you wrote makes perfect sense but in due time, you will hopefully realise how immature you were.
A bit like how I was in school when I didnt want to "memorize stuff" because I thought I was above it.
Obviously you are proving OP's point.
To OP: personally, I try to hire smart, mature, hungry and hard working young people, even if they tick fewer boxes based on CV. That would be my advice to you: try to push that inside your organization.
Sorry Sir, but Wuhan University is actually a decent school in China
This class was never "in the office" in banking. They just simply don't have the skills that come with apprenticeship learning in finance.
1. Smartest people no longer going into finance due to hours, compensation, lifestyle, etc.
2. Prioritizing hiring based on characteristics that don't improve your ability to do the job - race, sex, sexual orientation.
3. Goodhart's Law regarding recruiting; process is so structured you can have people who are functionally retardid just rote memorize stuff to get the role.
1. Stop the stupid recruiting timeline. PE has done this to themselves.
2. Do you comp them well or hit them where it hurts to they learn? If they are getting paid will regardless what's the incentive.
Yea at the point these kids will just fuck off for their 2 years. Probably better to hire them straight away so they can form the right habits, and have some accountability without having the "who cares - I have a job lined up" mentality....
One of the most amusing things I find is that when MFs complain that the candidates from the traditional recruiting pipeline are underperforming, they never even once consider going non-traditional. Like it doesn't even compute into their reality as a possibility.
It's a pride thing. I'm from the traditional track, but I've suggested hiring from the non-traditional track before, ie. from Big 4 accounting / corp dev, especially if they're willing to take a few years back.
Response from a SVP (who was himself from a Big 4 accounting firm): bUt I dOn'T tHiNk wE'lL gEt ThE sAmE TaLeNt.
This was a good shop but not a MF and they were wondering why no one would take a low-ball role in the hottest job market ever. They basically thought that top bucket AN3 / ASO1 kids from GS/JP/MS would be lining up to take an AN1 role in our firm. Joke.
Response from an MD complaining about difficult ASO recruiting: but but but I only want candidates who have been vetted by BBs and other MFs.
k cool then.
Like a few others have mentioned, remote work, lack of interest in finance, and receiving a buyside offer 4-5 months into your analyst stint with minimal reps reduces the motivation, all of which carries over when you move to PE. As far as people saying diversity, let's be real a lot of these firms hire 1 diverse candidate every other year lol. i just went and looked at the firms my friends work at and I hate to say it, there isn't really much diversity there lol. I've realized the diverse candidates i've worked with have all been super impressive, whether it be the hardo girls (sorry a lot of them can be hardos lol) or the Hispanic/Black (who usually come form targets) have been sharp. I've certainly worked with some well polished non diverse kids who just were not good. They studied the guides but could not really form independent opinions. I think a lot of it comes down to covid/remote work, lack of interest in finance, and just not as motivated
not sure why my text is discolored
your post looks diverse
Classic prisoner's dilemma. PE funds instead of taking time to vet candidates carefully like they should for any investments, they FOMO themselves over banking analysts that are a few weeks into the job. I agree with the sentiment that PE firms did this to themselves and I think this will result in recruiting timeslines being pushed back and longer recruiting / screening cycles a la Silverlake.
I wish there wasn’t such an aversion to firing. Not trying to be a dick, but sometimes letting people go is in both parties’ interests.
Also, it would make every employee feel more entrepreneurial: “I’m running a business that has one employee and my product is my work output”. Otherwise there is zero skin in the game.
Show me the incentives and I will show you the behavior.
Said by analyst 1
Haha yes an analyst 1 that thinks it would help me be more entrepreneurial
I've definitely noticed IB analysts, IB associates, and new PE associates these days have a much wider range in their competence / incompetence in the post-COVID / WFH era. Have had to deal with a terrible associate(s) as well.
On the flip side, as we complain about the new crop of juniors, it's probably fair to do some self reflection for us newer VPs/Directors and figure out how COVID and WFH stunted / changed the way we developed our soft skills, leadership and communication styles just as we were ascending into these new roles that require more people management.
Given the increasing amount of digital distraction, it is not easy to get high quality, very focused and committed pool of talented resources. Also, since lot of the info is available on the internet freely, they don't want to put too much efforts to learn these concepts in depth. It is increasingly important now to have a strong screening, filtering and vetting process to get quality talent and also have structured & continuous learning and training sessions to upgrade their skills. Have timely mentoring session to provide them career guidance and how this strong foundation will help them later in their careers. You can use evaluate outsourcing options for low-end work so that the team is only focusing on high-value work. Need to work on finding long-term solution rather than looking for short-term fix.
1) IB nowadays is seen as college 2.0: 1) People have no clue what to do with their lives; 2) So they might as well do something that keeps options open. Therefore, many current analysts don't have the same hungriness and attachment to their job as people who went into banking in the 90s. Also, meaning > money (=less ambition in becoming rich, so less dedication to their work).
2) Nowadays IB classes are built in the following way:
- 1/3 best merits from the entire application pool
- 1/3 women (best merits from its pool)
- 1/3 diversity (best merits from its pool)
Mainly, only 1/3 are considered for their grind and I would say that those are the ones who perform. From the rest 2/3, a maximum of 20% may be at the same level as the performers. So you have ~ 50% of people who shouldn't even be in IB (and afterward in PE) when considering better candidates from the entire application pool left out because the corporate governance report to stakeholders needs to reflect that "we empower" / "we advocate for equal treatment" / "we offer equal opportunities".
This isn't just isolated to PE, the bankers here will tell you we're seeing the same. Garbage is a strong word, I would characterize it politely as unfocused.
The candidate pool is now a solid chunk of exit opps kids who have an eye out the door before they even start. There is no focus, there is no grit, there is no real desire to learn anything beyond the bare minimum required for buyside / corpdev / tech interviews or whatever the cool kids are doing these days.
The flip side of the conversation is that the job is soul crushing, the hours suck and kids want to be doing something else. That's fine, people don't want to do the whole "put in their dues" bit anymore because there are easier paths, it is what it is. No judgment. As an A1, you really miss the forest for the trees and are not a part of any of what I think are the fun and fulfilling parts of the job.
Banking / PE really really REALLY aren't for everyone and the days of informally expecting at least a year or two commitment for A1s are long gone. We switched up our recruiting to (a) accommodate that and (b) filter out kids who have an eye to leaving for PE before they even start. Have no issues whatsoever with anyone who has ambitions and plans for their career path, I have an issue with hiring kids who come in with a plan to exit.
There aren’t enough seats for VP promo for everyone and most funds flaunt their “b school placement” as a way to sell the role.
Okay boomer
The honest answer?
Roughly 73 trillion in wealth is about to be transferred. Smart parents have smart children. Smart children realize that they will inherit smart parents money. They realize that they don't want to kill themselves and seek jobs with better WLB.
https://www.bloomberg.com/news/articles/2022-02-02/what-the-73-trillion…
Professional services also don't pay as well as they used to anymore. It's not just in the finance profession, but our generations lawyers/doctors are crap compared to the previous generation's.
Could this have smtg to do with the associates who did their IB analyst stint and even IB SA over Covid and thus have shit skills
Guy who spends his days saying that the target co he's working on is a "succesful player in a growing, resilient industry with high barriers to entry" and thinks that "tHe MoDeL iS ImpOrTanT" complains about the work ethic of kids 4 years younger than him.
Spare us.
Totally agree
I tend to think the finance industry kind of brought this upon itself. Prioritizing cost savings / profit during COVID rather than being quicker to properly staff burnt a lot of top candidates out by the time they started their PE gigs. Not saying all those kids left, but definitely shortened their longevity and hurt their willingness to buy into the grind culture once they got out of banking and into PE.
The COVID banking analysts... I tend to agree that due to remote work they had a much different learning curve and appreciation for the job. A lot of our top kids (class of 2021) were burnt out 6 months in and left for the buyside before their first years ended. I bet their superiors felt they were similarly untrained, but can you blame them if they only have a year of experience and are now working at top PE / HF shops? They weren't adequately trained and were so understaffed that they couldn't possibly make up for their lack of experience.
That brings me to my next point --> recruiting pretty much right out of college. Not saying I was in the same boat, but once kids get PE offers in hand they are a lot less motivated to keep learning as much as possible. I personally remained checked into my banking job most of the way, but because of that, really needed my PE job to be less intense (newsflash: it wasn't). Left after my associate stint, but frankly that was always my plan (though I thought I'd last one year longer).
So to sum it all, a combo of bad recruiting trends and bad HR processes lead to talented kids leaving finance earlier than expected which certainly contributes to the industry-wide brain drain. All of which is occurring hand-in-hand with a generation who is more focused on life than money hitting their working age (and that isn't a negative at all in my mind).
PE firms supposedly conducting intense DD on their investment to generate superior returns somehow conduct extremely little diligence on the people they hire to run the DD processes
Interesting thread. Lots of great comments on here.
Could any of this be due to how early PE recruits for oncycle now? I get that interviews are pretty intensive, but if someone gets an offer before they even start working on any deals then the motivation to learn and actually get better throughout the analyst stint gets reduced significantly. Sure, this is no way to build a career, but it makes sense given the general Gen Z attribution of self-worth within the job market. If I know that my performance isn't going to change any outcome for my career in my analyst stint, why bother?
It's not just an issue of PE, either. Recruiting for IB programs keeps getting pushed earlier and earlier as well, pushing people who have no idea if they want to do finance into these roles. I get that there's a war for talent, but I think the early recruiting cycles are counterintuitive in terms of finding talent that is actually hungry, wants to do the job and is willing to learn. When someone has such a short time to decide where they want to go, they'll look to maximize comp and optionality, which IB offers vs going somewhere that they will actually be motivated.
I know that this isn't as relevant for the COVID cohort in PE (that has its own issues), but it may play a part. Curious to see what others think about this.
I think it’s marginal at best. PE recruiting has been comically early for a decade now (I was college class of 2013 and got my PE job Feb 2014) and analysts managed to finish their stints strong then — if anything, people worked harder after getting PE offers because they a) felt a big source of stress lifted; and b) wanted to learn so they could hit their jobs running. Obviously the cycle is even earlier now but 18 vs. 22 months shouldn’t really make a real difference. I really think it’s an attitude / social media hive mind thing that’s become really pervasive the last few years.
Been doing this longer than guy above and agree. Generational shift that is being accepted given the need for talent. Some habits are good (younger folks have less tolerance for BS) and some are bad. Some of this shit would not fly 12 years back - but that's likely good for the toxicity we had to deal with; bad for not taking a job for what it is and looking at it only as a spring board.
thanks chatgpt
Gen Z the absolute WOAT generation
Yea u right
This is very unhinged and incoherent.
I have the same issue.
I think we should start recruiting different profiles, maybe people that really values the opportunity..,
Many interesting comments.
My opinion (formed through personal experience) is that PE requires a lot of intellectual and emotional maturity and so Associates should ideally have 4-5 years experience in banking or consulting, rather than 18 months. Then there’s a higher likelihood they will know how the PE world works and why.
In Europe it is not uncommon to have 30-year olds entering PE as Associates; they often progress up quickly precisely because of their ability to understand situations, take ownership, and be introspective.
People nowadays, myself included, give the same energy back
I know everyone complains about their juniors and everyone is griping about the Gen-Z interns nowadays, but most people find a way to work with them and / or inspire them.
If the common denominator is you...
Like, look:
They hate you. Sorry to break it to you, but you're probably not the VP? of the year that you think you are. I've seen and heard of bad juniors across the board but never aggressive / borderline hostile. That attitude's generally still reserved for bad seniors.
So why didn't you pick this up when you hired them? You made them do a whole damn case study and model. People generally don't go from good to bad especially when they've spent at least 2 years grinding it out in IB.
Newly promoted VPs however, sometimes can't step up adequately and end up giving poor guidance / instruction / management and any assoc with half a brain will do their best to ringfence themselves away from all that drama, hence the lack of initiative you're seeing.
My current shop has a guy like you who complains about every single associate he works with. Same complaints. However, when we work directly with people more senior than him, *poof* great work results.
If someone flies better solo than with you, the deadweight / burden is you
Just gonna add that Associates by nature are not great at the Associate role starting out, no matter how many reps they get - there's just certain things that need to be learned on the job.
IMO, if you're seeing a lack of development from Associates, that's definitely a you problem, as you're their closest manager/mentor, so setting the tone of support is super important. Give them positive feedback on the things they did well, and on the negative feedback side, just make sure that they know that you're invested. It's easy to get snippy at juniors and simply send them a list of comments / fixes for them to crank out without a lot of context, but if this is the consistent way you're giving comments then obviously the kids are gonna just go down the list and assume you're gonna check every little thing.
To be honest, the VPs and Principals that helped me the most were the ones that were more high level and recognized when there were BIG issues, vs little issues, as well as those that would explicitly ask "what do you think of this?" What I mean is the following:
But maybe you're doing all the right things anyway, and this is a venting post, idk. I've just always found that people that take a slight step back, don't micromanage tiny details, and focus priorities on things that are needle movers are the ones that inspire juniors to take pride in their work.
Bruh in my experience so far, VPs like OP are the kind who scream at every small mistake (sometimes caused by them not giving context), but make the big ones themselves.
Which they try to cover up.
Blaming juniors in any culture will never get you respected. Unless there's a shortage of juniors, being a good VP / SVP will naturally draw assocs to you, and you can have your pick even in a pool with bad juniors.
If there's another VP / SVP that the assocs can work with and they're relatively better than you... no question who the assocs are going to flock to
This is a great post -- my best VPs weren't necessarily the 'nicest', but rather the one's that included me as part of the team.
One of my VPs was very demanding (and a genius) with high standards, but gave us a chance to prove ourselves. As you mentioned, this inspired us to want to do well. Before I left that firm, that same VP told me he really liked working with me. I had no idea at the time because of his high standards (and maybe in retrospect he could've given a bit more positive feedback), but it made me feel very confident in my work ability. Being part of the team really does matter and mean something.
Conversely, I had a bad VP (perhaps like OP) who would send bulleted comments on everything; even internal, non-client / non-partner / non-external third party facing stuff all the time. Like, this guy would tell me if my scratch work was color coded incorrectly. So many things we did were to just get to an answer and didn't need the banking VDR backup look (if that makes sense). Created a sense of laizze faire from me since I knew he was going to comment on everything and anything so why double check it. When you are working hard and just keep getting told you are wrong, it's uninspiring. Worst part was, if you looked at his backups / scratch work, it looked like my mom opening up Excel for the first time (love her, but she's a doctor so not well versed in PC world). He'd also repeatedly ask me to do things he didn't know how to do himself (he'd ask me to ask another associate). Yes, I'm sure second year associate who is also incredibly burnt out is willing to step in and teach me something because you as the VP can't. Maybe he should have your job since you are so value-add!
Long winded way of saying -- VPs who focus on the small minutiae and not the bigger picture don't foster growth -- they create turns and turns and while maybe that helps you become better at a certain formatting style, isn't helping you become a better investor. This is supposed to be an apprentice-like industry, after all.
You've really captured this so well. The way to avoid being neurotic at the mid level is to give chances to juniors to take ownership so they start becoming properly motivated and aligned.This was second nature pre-COVID when everyone was in person, but the quick list of fixes became easier and more "efficient" in light of dealflow being overwhelming vs. taking the time to explain and provide context and get people properly interested in the work. The result of that has been ridiculous levels of stress for mid level IB/PE professionals and increasingly disenchanted junior talent. The solution isn't even forcing everyone in the office anymore, because doing work this way has become normalized in the office too. Need to be super intentional in fixing this…it's a tough situation.
Many people have said different versions of this but you can’t change the talent pool. You are one person. You are one firm. The talent pool is effectively fixed for you. If you are having these problems, look within.
Are you recruiting IB analysts with only 6 months of work? Are you recruiting kids right out of school? How involved is your interview process? Are there only one or two 30 minute interviews where you ask generic questions? Do you actually get to know your applicants? Are you providing training for where these new associates are at or are you providing training based on the talent pool of yesteryear?
There are a lot of solutions to this. One can be to stop the hiring rat race. Don’t go looking for people with 6 months of experience for roles 18 months after the hiring decision. Run a normal hiring process. Or you can say screw IB analysts. Lets look at the associates.
Another thing you can do, and this was what my favorite corp dev role did, is to have the very first part of the interview process be a 24 hour case study. Sure. This will cut down on the number of applicants significantly but the ones who do this will show to you that they actually want to do this role. Very few people will do a case study like that (where the instructions say the expectation is a 2-300 row Excel model and a 5 page ppt presentation) that aren’t serious about the role. This also provides you with something substantive(-ish) to talk about in interviews. For example, the first interview I had was an hour where we spent a good chunk of the time taking about the case study (ie - why this target, why this financing, how do you see this fitting in with the larger corporate strategy, etc). The case study was used as a weeder tool but it also allowed for seeing whether the applicant can do the work (I am unaware of any applicant who did what we would consider perfect work but it was very easy to see who was good enough).
You can’t change the talent pool so if you don’t like the quality of the applicants then you have to change things on your side
I can safely say this is the case, even from a sellside view.
But its indicative of much of the juniors on both sides nowadays.
You are so frustrated you can't land buyside it's comical
There's so much short term focus in the comments which is proof why the majority of people don't make it the upper realms of society even though they might have top pedigree
The majority of people in PE are not passionate about their work. Passionate = being able to do something 24/7 without burning out. SWE is probably the worst offender of this, followed by finance. People grinding at FAANG so they can retire early is pretty pathetic, but the small minority of those true "nerds" who actually like it go on and do big things.
If you want to make it big and have fulfillment, you choose a career where you can end up as not an employee but as an owner: PE/HF top performer then spin out own fund, doctor creates their own practice, top real estate agent creates own brokerage, brick and mortar business owner spins out a bunch of franchises
There are a lot of smart people in non "prestigious" paths that are killing it. Finance happens to provide a platform which has a non-ambigious path but most people there are not meant to be there, even more so now I feel like
It’s fascinating how things change in a year. The PE labor market has once again tightened her iron grip. The weakest performers are being shown the door without a parachute post-Associate and recruiting is as competitive as ever. This is even true in Technology where companies like Meta, Amazon, etc. have been quick to crack the whip and take away the covid-era benefits we once enjoyed. Nature is healing.
I am seeing this in tech right now. They are hiring people with proper credentials and background for roles right now (as opposed to anyone with a BS/Bootcamp). I am headed back to school to aim to get MSCS or even a PhD to be competitive. Comps are getting higher, but the demand for talented engineers are there. A lot of the benefits that were provided are no longer available (free lunches/other services) with increased hours (not usual to see people work 8/9 am to 11pm/12am at senior/staff levels). It is not unheard of for Junior Devs/Engineers to start at 90-100k + 10-30% bonus at small to midsize companies.
OK boomer
Lol it was a joke. But seriously, what part of my comment was wrong? It’s a factual statement to say that we are in a difficult labor market in PE and across the board.
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