Third Year Analyst
What are the benefits of doing a third year? Is it easier to get into top PE after doing this?
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I would like to know as well.
How about being super lucky and being promoted to associate without a MBA, will this be good at PE too?
You don't actually have to be "super lucky" to be promoted to associate without an MBA. Most people don't leave after the analyst program because they're kicked out. Most people leave simply because they're sick of banking and want to do something else / take a vacation (=MBA). If you're among the few that aren't sick of banking, are good at your job, and express your desire to stay in the bank, your chances of being promoted to associate are not bad at all. If the economy is doing well and your group is getting a lot of deals, then your chances are pretty high. So at the end it doesn't just depend on your "luck"... it really depends much on whether you become sick of banking and want to leave.
most pe funds interview over the summer. after the third year when you become an associate it becomes slightly more difficult.
i've accepted an offer as an associate at my firm and am still getting PE/HF interviews; albeit its through my network and its all off cycle recruiting.
i'm not exactly sure how buy side firms view analysts turned associates though..possibly get labeled as career bankers.
Recruiting during your third year is normal and most people are getting a lot of interviews. Once you are an associate though you really are not a part of the analyst recruiting cycle and get looped in with MBA students.
So basically it seems like most people want to jump to PE after 2 years as a banking analyst.
The 3rd year doesn't really give someone an advantage for PE recruiting; it's just another shot at the recruiting process if you couldn't get someting good the year before.
Is this accurate?
That's correct.
That being said, being a 3rd year analyst isn't so bad. I know some that are literally working 40 hours a week (and obviously given that they are paid more than 2nd years at least, it's a pretty high $ / hour).
^You have no idea wtf you're talking about. 3rd years work 40 hours a week? ROFLMAO sign my ass up!
I know them personally. How do you plan on contesting that exactly? Unless you know every single 3rd analyst working in the investment banking industry?
They basically have 1st years working underneath them. And as endlessrain stated, it does very much depend on group culture.
Keep in mind I did not say the average hours for a 3rd year analyst is 40 hours a week. Doing so would be an erroneous statement (for me or anyone else) without supporting data. I merely gave an anecdotal example.
The idiots on here sometimes that just love to jump at people's throats...
Yeah I dont know about 40 hours a week, 60-70 sounds more fair.
It depends on group culture, some groups slaughter their 1st years while letting the senior analysts take it easy, while others have a more equal work distribution. Still, 40hrs a week is quite an exaggeration.
Well then please state "this is not the norm.". I have plenty of people upstairs who are 3rd year analysts and DO NOT work 40 hour weeks. 80 is more the norm.
I hate when people state things like "oh my friend got into harvard with a 2.5" and fail to mention he's 1 out of a million who is URM and his dad donated 5 million last year. It misleads all the readers into believing that, for example, 3rd years get huge six figure salaries working 40 hours. This is simply not true.
LOL... why do you even take killscallion seriously! An analyst working 40 hours a week would need to get to the office at 9 am and leave at 5 pm, and only work Monday to Friday. Not even the secretaries do that... LOL
I have known third years who work those kind of hours. They either had other offers post third year, were told they weren't getting associate offers, or just abused the other analysts and associates like hell. They started working these sorts of hours after Xmas once all those sorts of decisions had been made.
Also, they knew they were gonna get a piss off bonus at year end anyway (usually like bottom of the barrel 1st years). And it was more like 50 hours (so they could get seamless at night), with at least a few hours a day spent in the gym or at various interviews.
Most firms the secretaries are 9-5(or 6)pm with a rotation of late night support unless their executive likes to work them harder. Of course the standard year end bonus paid to an executive assistant is a few % of the executive's comp. I knew assistants who in banner years banked in line with VPs (obviously becuase the MDs were nice guys though).
More analysts staying on for third year, why? (Originally Posted: 12/22/2013)
Was doing some thinking today, particularly around the issue of analyst retention with the new Goldman policy (and other firms having different policies- some hiring fewer analysts and more post MBA associates). Now I'm not sure if this applies to all the banks on the street, but at my firm 90% (a made up number) of analysts continuing onto a 3rd year do so because they were unable to get a top-notch buyside gig. They aren't the best of the best in their analyst class, nor do they necessarily love banking and have aspirations to be a career banker more than anyone else. The banks make an attempt to convey the message that being able to stay on for a 3rd year is an honor, a privilege, something that you have to earn- let's be honest, in reality if you are decent at your job and express interest the option is usually yours- not many people are going to stay on a 3rd year making 10k more than they made their 2nd year when they can go somewhere else and make 60-100k more (or greater).
With all the talk/'concern' of low analyst retention rate, I'm wondering why these banks don't swipe the 3rd year analyst program and allow for direct promote to associate after 2 years- this means putting them through associate training (with the full time MBA hires) and paying associate pay (200-240k all in). If you start paying comparable to the majority of PE funds (let's be honest, most of us aren't going to Apollo), you take away a huge piece of incentive to leave after 2 years. PE (and I can't speak to those who take the HF route) isn't dramatically more interesting/stimulating work than IB (my opinion), and while the hours can be better, in many cases they are still pretty lousy. Furthermore, banking is a significantly more stable job compared to a PE fund that will kick you out to b-school after 2 years as an associate.
From the perspective of the bank- maybe they in fact really could care less about keeping analysts on long term, and maybe they in fact see no difference between an NYU MBA who worked for E&Y for 3 years (someone is going to be sensitive to this example) and an analyst at their firm. But to think a 3rd year is required for someone to pick up the skills necessary to become an associate seems silly to me. All of the former analyst now associates I have interacted with are significantly stronger than their MBA peers, and this is not due to the extra year they spent on as an analyst.
Anyways, the end of my rant so to speak- if you allow for direct promote to associate after 2 years and make it actually rational to stay on, I'm sure many many more would. Interested to hear thoughts on this- I'm sure it has been brought up at times, though I can't recall seeing it on here recently.
What you're saying isn't groundbreaking - I know Credit Suisse has a program where you can get directly promoted to associate in 2 years. Other banks may have this as well, not too sure on the specifics.
I think some banks are making their analysts sign a 3 year contract. I think JPM is for example.
Yes- but this isn't preventing them from leaving after 2 years, which is still (and I imagine will continue to be) the norm
I have seen an increasing number of analysts stay on after their 2nd year, especially at banks aside from top 3 banks. I have noticed non-US banks that have analysts continue their service to the bank past the "common" 2 year analyst stint. I also have noticed top analysts - that don't move on to HF/PE/VC/MBA - complete the analyst stint and get promoted to Associate, at most for non-US banks.
Overall, it appears there is a large shift in the banking position and hiring, maybe due to reduction in industry, market conditions, or aliens (not sure).
Overall, I feel hirings and positions will be changing and evolving within the next 2-4 years.
There are some cases where this happens. GS and Moelis both have two-year accelerated programs for top performing analysts who are interested in sticking around.
From what I understand though, at least at GS, the analysts that are given the offer to accelerate straight to associate are top analysts that leave for buy-side jobs.
JPM is now a 3 year analyst program, but analysts can leave whenever they want. However, top performers in their 2nd year are offered up for direct promotion to associate. This is also the case again for 3rd year analysts. This change was meant to address BlackJack's concern, and they realized they were losing a lot of top talent to the buyside, with a major reason being compensation.
Analysts can leave whenever they want, but isn't part of the signing bonus on the condition that you stay for three years? Or is that just something I made up in my head.
TLDR: Get over yourself, 3rd year program is useful to banks, please go to a PE shop.
A couple of thoughts on this rather long post (FYI I was promoted after 2 years to associate).
The 3rd year analyst program is a bit of an anachronism, but it serves a very real purpose. First, it gives banks a way to get rid of people who were fine analysts but have no place as an associate. You don't fire them, and by giving them plenty of warning that they don't have a position the next year you give them time to find another position or help them get in an MBA program. Second, it gives banks more time to figure out if you would make a good associate, by letting them see you mentor junior team members. They can do this while paying you less than an associate. Many third years have no idea if they want to be bankers long term and banks didn't interview you to figure out if you would make a good associate.
On the whole "pay issue", 3rd year analyst pay is not significantly below the vast majority of buyside jobs (throw out the few people "lucky" enough to work their asses off at a mega fund). The $20-50k "extra" you might make in a buyside job over your third year is not significant over your career and should not be what you are worried about. Anyone who is smart enough to realize that banking is more stable than PE, as you have said, shouldn't sweat a few grand over their career.
As I said in another recent post, analysts need to get over themselves and how much better they are than their Post-MBA associates who worked god knows where before. I was as guilty of this as anyone for years. The qualities of a rockstar analyst are not the same as in an associate or VP or MD.
Post-MBA associates are hired to be career bankers. First year analysts and even direct promotes are not. I was promoted after two years because they saw potential and I was a very good analyst. Like most of my direct promote bretheren, I stopped doing banking for a few years after a short time as an associate.
The recent issues of analyst retention have way more to do with people not quitting 6-months, 1-year, or 18-months into the program. We make our hiring decisions on getting 2 years total out of you (1-1.5 good years). If you are really good and don't leave, even better. However, we aren't looking at making associates out of the vast majority of you guys. Banks are actually happy when you leave after two years and go places where you are now our clients, it is a major driver of business.
Why do most direct promotes leave after a short tenure as an associate? Are they mostly just burnt out, or do they usually not have the necessary skills to be a successful career banker?
As an undergrad going through recruiting right now, it seems like you definitely need be very sociable and likable to get an analyst offer. To me, it's hard to believe that post MBA associates have superior leadership abilities and career banker potential than a direct promote analyst.
@"Black Jack" I think saying
is a bit misleading... most MM PE shops actually pay pretty similar to what you'd be getting as a 3rd year analyst. Maybe $20-30k more on average, but $60-100k more? Maybe if you were going to a megafund, but that is the minority...I think @Powermonkey has a point here on the pay not being the main drive to get out...I was offered a 3rd year at Rothschild because I busted my ass there, but I couldnt take it. I was burnt out as I'm sure a lot of other analysts are after their 2 years. They could have offered me $500k and I promise you I would have still left. It helped that I had a job in PE back in Boston (my home town), but I was done either way.
For those that have the stomach for it, I bet 3rd year analysts are some of the most productive employees in the firm -- they are like super analysts since they can likely run circles around the 1st years and get how the process works after 2 yrs of 90+hr weeks. I think it's more a questions of burn out and wanting to try something new after 2 years...
I stayed for a 3rd year, mostly because I was a lateral and promised my staffer upon hiring that I would stay. Because I started ahead of my class I was actually an analyst for almost 3.5 years. Maybe my perspective is somewhat skewed, but when I was an analyst, it was pretty much only top bucket kids that got 3rd years.
One note on the comp - it is likely going to be much more than a $10k jump because the 3rd year bonuses (at least mine was) tend to be more generous. My 3rd year came in a good comp year, and I made WAY more that year than I did as a second year.
UBS is modifying the analyst program to do this. Now, instead of a 3.5 year program (3 years as an analyst, plus half a year as a stub associate before being promoted to first year associate), it's a 2.5 year program. See the timeline below. Analysts are now on the same fiscal year (calendar year) as all others at the bank, as opposed to a July-July schedule.
-Analyst starts in July 2013. Labeled a first-year analyst as usual. -January 2014 rolls around. Analyst is paid a stub bonus for their half a year of service. Is promoted to second-year analyst, thus making the first-year a half-year in actuality. -January 2015 rolls around. Analyst is paid their full year bonus for their work in the 2014 calendar year. Is promoted to third-year analyst. -January 2016 rolls. around. Analyst is paid their full year bonus for their work in the 2015 calendar year. Is promoted to first-year associate.
Still, at the end of the day, people that aren't interested in banking long-term are still gonna try and move to another job. The 2.5 year program just gives them more money to play with, effectively, by promoting them to the associate level faster.
Does anyone else know of any other BB's that are following this 2nd year analyst -> Associate trend?
GS has agreed to direct-promote people who were threatening to accept megafund offers. I'd imagine other firms would agree to it as well if you had that kind of leverage (and wanted to stay).
I have heard that most associates in Europe are former analysts and few are post-MBA hires. Is this true?
GS has a direct-promote policy (or had, given that we haven't yet seen how it is changed with the new analyst program and lack of contract)
Strong analysts who wanted to stay began as Associates immediately after their two-year contract ended.
There are things to consider besides compensation...PE is investing, banking is selling. Both require a fair degree of technical skill, but executing on behalf of an investor, and being the investor are two different things. Plenty of people on the sell-side take (modest) paycuts to get to the equivalent position on the buyside at either HF/PE because they look at the upside potential 10 years down the road.
I for one think the sellside career is pretty awesome in some roles, but pretty terrible in other roles (specifically market-oriented sales roles, which seems like it would wear me down pretty quickly). I'm on the buyside now and have friends across the spectrum, and there is no consensus on who is happier. It all depends on a combination of the people you work with, the interest in the industry/product, and obviously compensation is a factor. But being comped 10%-20% less or more is NOT a deal breaker and should NOT be the primary driver of any long-term decision making process.
Further, the third year analyst role is basically you don't work as hard as your first 1.5 years, and instead are focused on transitioning into a role that fits you, and your firm typically helps try to place you at either a PE shop or somewhere internally that better fits your goals. A third year analyst role is not typically a sure thing to become an associate.
Don't want to get too off topic but was hoping you could address where you said your firm helps try to place you at a PE shop. Does this happen often? I thought most banks in some shape or form try to discourage analysts trying to jump to the buyside (only places that encourage it are the elite boutiques, or so I thought)
I was a 3rd year analyst, and for me the last paragraph definitely resonated. My group viewed 3rd years as a high value resource, and tried not to staff me on bs, mostly reserving me for urgent live deals that came up. When I was there the market was dead (I think it still is from the headlines I read), so this had the nice effect of meaning I ended up working on average 55-65 hours per week, with the exceptions of like maybe 2-3 90+ hour weeks while I was there. I also had said that I wasn't going to go up for promotion (and don't think it would've been an option even if I'd wanted to), so I was pretty fully focused on interviewing and preparing pitches (since I was focused on moving to HFs).
I did (albeit very slight) - I moved from an associate on a distressed/special situations trading desk to a role at a Megafund's credit fund. Not apples to apples I guess, when comparing to IBD --> PE.
My broader point was that its more about your career goals and how it applies to your personality and what interests you, as opposed to small differences in compensation.
I know quite a few 3rd years that took a small stepdown in comp to move to small/mid-cap PE firms as well. I'm talking firms with 1-2 associates. I'm sure if you think hard, you will think of some instances of that occurring as well, assuming you came from a BB IBD background and have seen people transition into varying tiers of PE shops (tiers in terms of size, not quality).
And honestly, being able to afford a few less blacked out nights of bar tabs at 230 Fifth or Avenue or something is fine if you are happier in general (also may negate the need to black out in the first place).
TheBlueCheese: "Don't want to get too off topic but was hoping you could address where you said your firm helps try to place you at a PE shop"
Yeah, when you are a third year analyst and your firm has communicated to you that you likely won't make associate (either directly or indirectly), they will serve as a reference and you can tap into the networks of your senior guys. Outside of headhunters, the way a lot of smaller PE shops recruit is by asking their own network for potential junior associates that are looking to transition.
This occurs when its the bank telling the analyst there is no role for you...and if they are a good firm with good people, they'll help try to place you to expand their own network. You'd be surprised how many positive, helpful personalities there are in banking in the backdrop of what is considered a harsh professional environment.
Of course, this relies on a few factors, including being liked by your team at a personal level and not being an incompetent worker.
1/3rd of the 2nd years in my group at GS got direct promotes. they found out recently. i doubt any will take them though. hard to compete with buy side opps. It's not just the amount of money, it the now or never aspect. It's significantly harder to get a buy side job if you don't jump to the buy side right after being an analyst.
When I said I would take a 'step-down in comp' I was accidentally misleading - I took a stepdown from my expected compensation on the trading desk for the year based on what I was guided to by my senior friends/bosses. So my YoY compensation still went up, so I never actually took a paycut - just a decline from what I had been told to expect. The MF which hired me put me in line with what their existing associates make. Like I was on the trading desk, I'm the only person
....
Understood, thank you. Well done.
No problem, happy to help.
No no, this was not what I titled this forum post
Most of the Canadian banks all offer their top analysts direct promotes after 2 years.
would have to question your source for this one. have lots of friends at Cad banks and haven't heard of this in the west coast or east coast offices. maybe this is in Calgary O&G space only? can tell you this does not happen at RBC, BMO, CIBC, scotia, nbf and td in toronto or vancouver.
do many people do 3rd year analyst? (Originally Posted: 09/28/2006)
its about 20% according to 1 analyst i know at his BB
depends on the firm, but generally its the top fourth to fifth of the 2nd year class...
do you mean the firm will fire all other 2nd year analysts?
No...
Most contracts stipulate it is a 2 year term. If they want you to do a third year, they make you an offer. If not, you're expected to leave so its not quite firing.
I see..in my contract, it only specifies my commitment to be with the firm for 2 year. It did not mention about the two year term..does your contract says differently, MonkeyBusiness?
Yea that's what my point it. Your contract says you are committed to the firm for 2 years ONLY. Beyond that...the firm makes no guarantees.
I'm going into DCM so my contract doesn't ahve teh 2 year line. My friend headed for MA does though.
What do most analyst's do after they have completed their 2 year contract?
Most people I know who did 2 years analyst went back to school for an MBA or moved into a PE shop
Thanks, MonkeyBusiness
Third Year Thoughts. (Originally Posted: 01/24/2007)
I graduated in 2004, and while people were interested in going to bulge PE, maybe VC, maybe a long/distressed hedge fund. The amount of worry that I and my friends put into exit opps weren't even close to what they were now. My sole goal was to get into banking, see what it's about then move on if it doesn't work out.
People here think it's negative to do a third year (you couldn't get an offer, ie. scottiwbeell or whatever) give everyone on here a break. I had offers with Oak Hill, LGP and MDP after my second year, but i said fuck it because, I liked banking because 1) I was still learning, 2) I liked the status quo, 3) I liked the structure, 4) the resume continuity. I stayed and realized I wasn't ready to go straight to associate because i wanted to be sure I explored the other opportunities out there, maybe go to bschool and come back.
I know a guy from Banc of America at KKR. It's all case by case. I know we rank banks and stuff, but that's just how everything is. You look at a pitch book in tech and you see the same top 5. In a Credit Suisse book they rank CS, UBS, GS, MS. As an MS guy i just laugh, but this business is about making coin, so why would you put GS/MS ahead of you when they kill you?
You're a lifer huh? Kudos to you then--I can't wait until I check out.
And that is probably the reason you are getting into a leading PE fund...
What's LGP and MDP ? Interesting to read your thoughts by the way.
Leonard Green & Partners Madison Dearborn Partners
What PE fund are you going to? You said you know someone from Banc of America at KKR......what did he do to stand out from the crowd and get noticed? I'm just about to start my analyst stint and from the sounds of it, if I'm not at GS, MS, UBS LA, or CS LA, I'm screwed......just intersted in how someone from a lower-tier firm was able to break in.
Thanks
Dude, you just made yourself look like an ass with respect to what he/she posted.
That made my morning.
Don't quite understand last sentence. Clarify?
Interesting. I'm pretty sure i know which office you're in, not that it matters.
Saying you can't compete if you always think other people are better than you. CS has to show their potential clients they are better than GS/MS or why would CS be banking them?
As a recruit going into PE, are you going to tell the dude at SG that you don't think you can roll because you worked at CS?
.
.
3rd Year (Originally Posted: 08/01/2006)
I thought most ibankers staying for only 2 years. What does a 3rd year mean?
and they want to use you for another year before they drop you.
Doing a 3rd year (Originally Posted: 05/22/2006)
What are the pluses/minuses to doing a 3rd year?
plus: more pay minus: more pain
Some PE/HF firms may view a third year analyst as someone who couldn't make it through the process. Thus, your PE options may be limited. This isn't always the case though.
It really depends where you're situated and where you want to go. For example, if you want to be directly promoted to an Associate, 3rd year is the way to go!!
Good way to learn more about deals by taking more of an associate role - if you still care.
I agree, i had the impression that it was a fought for priveledge to stay for a third year.
try to go abroad. see europe. what's the worst they can do?
bump
bump
Explain the "3rd year analyst"? (Originally Posted: 03/11/2007)
How does one get kept by one's bank for a 3rd year? Is it a compliment? Will you get promoted to Associate? If you get promoted to associate, do you loose anything intangible from not going to business school and making loads of contacts?
general info is good too. thanks.
you might make associate, you might not, all depends on your performance
from what ive seen, you get an offer for a third year at the beginning of your 2nd year/end of first year. it basically means you were a well-trained monkey and they want you to stay in the zoo. its not necessarily a guaranteed promotion to associate, but its more like a test run. you take on more responsibility where sometimes you'll be running projects as a pseudo-associate. you do well, you get an offer. otherwise, its plan b.
I know a few people from the states who have been able to do their 3rd year in London where they have traditionally promoted more people to associate without an MBA than in the states.
That's a lot of money to save.
Do third year analysts get the shaft on bonuses? (Originally Posted: 03/26/2007)
Since they are leaving....
What is the motivation for the bank to give them an extremely large bonus? I guess that this same questin applies to 2nd years who didnt get a 3rd year promo...
Why should they be leaving mate? On the contrary, if those 3rd years are top-performers, its in the firm's best interests to retain them as associates, so they are paid very well.
Those who perform not to the standards required for the direct promotion, might be getting smaller bonuses, you have a valid point here
for one thing if reputation spread that 3rd years dont get good bonuses (and word spreads fast) no one will ever take up a 3rd year job at that bank.
also another reason could be they want to direct promote the person, and what better way to entice a young banker than throwing money at him?
Theres a couple of third year analysts i would like to shaft if all it will take is giving her a bonus
hahahaha
Not in my experience. If they want to retain you, they pay.
Gonna give her the short end of the stick, huh?
Any 3rd years out there? (Originally Posted: 10/05/2006)
Just started my 3rd year as an analyst (MM bank - real estate group). Anybody else doing the same? What's your plan for next year?
I think 3rd years are just a myth kind of like how you tell little kids that when their puppy dies it goes to heaven.
well I figure if you are a 3rd year, you are pretty dead set on doing IB for life, and are just waiting for that promotion to an associate
The promotion to associate is a distinct possibility, and while the immediate positive aspects ($$$) are compelling, getting some other experience before going to b-school is my current mindset.
The b-school question is, of course, another beast unto itself (and I did see the 'F--- B-school' rantings from a while back on this forum).
And no, 3rd years are no myth. We exist (I am friends with several). I stayed on simply because a) I like my group; b) the money can't be beat; and c) there's an element of 'signaling' in the sense that it DOES look good to get a third year offer, and if you keep it, future employers hopefully think you're not a jumper.
Kind of an open-ended post. Just wondering what others in a similar spot are thinking.
Quick question:
What happens after 3rd year? I heard about 90% get the boot and the rest get direct promotions.
3rd Year now common? (Originally Posted: 11/08/2009)
I currently work at a PE shop and we went through our standard recruiting process this fall. Interestingly enough, we received a pretty substantial number of resumes from 3rd year analysts and even a number from direct associate promotes. In fact, I'd say more than 50% of the resumes we received were from these folks.
My question to you all is: Have people been seeing a large increase in the number of people accepting 3rd year offers?
Huge increase in 3rd year and Associate promotes due to the market. With the soft PE recruiting market for the past 2 years more people took third year offers and associate promotes. Transaction experience was slow for a long time, giving kids 2 years where most head hunters wouldn't show their resumes. Also, with slower deals means there are less firms you get to work with (decreasing networking options).
Also, more firms were open to giving out 3rd year offers recently. They were able to keep costs down by decreasing associate hires.
I think it has been more of the trend this past year; half my class will be continuing on as 3rd years, including me.
How do you (during PE recruiting) view 2nd years competing with 3rd years for PE jobs? Do you see 3rd years as having more experience and thus being more valuable, or are they at a disvantage since "if they were good enough" they would have gotten a PE offer when they were 2nd years?
Thanks.
Honestly, it doesn't get nearly the level of consideration that I would have guessed. In fact, in none of our recruiting discussions have we ever discussed whether or not a 3rd year would be more valuable than a 2nd year. I will say that the third years tend to be far more experienced and polished than the 2nd years (they had a year of hot market activity from 07-08), and thus end up representing themselves better in interviews. However, they certainly don't come into the process with a leg-up on their competition.
bump
Interesting topic for the current 1st years and those looking to become 1st years this summer. With more 3rd years around than ever, it will be interesting to see how this will impact deal-flow at the Y1 level. Will the more high profile assignments go to Y2 and Y3 analysts, who will be staying with the firm, to try and keep them as associate promotes or will the previous trend of putting Y1 on hot engagements continue? Makes sense to put a seasoned analyst with experience
Without a doubt, I think there will be decreased deal-flow for the incoming first years, simply because of the added presence of the Y3 analysts. I think that we might see a trend where you'll see a lot of Y2 analysts sign on for another year instead of quickly jumping ship (buyside, corpdev) , simply because the ratio of engagements / analyst will not be as high as it once was.
Interesting to hear others' thoughts on this....
Interesting insight, I could see that happening. Luckily there aren't any more 3rd year offers given out in my group than before.
Are more BBs making a formal push to keep analysts at the firm instead of the model of the past where they spent resources training kids for 2 years and then pushed the majority of them out?
I’ve heard of some firms beginning to take this stance (and it makes a lot of sense for the firm from a human capital perspective), however I've heard that it can make the PE recruiting process trickier for the analysts.
It is interesting, as it could be a different dynamic with a larger amount of 3rd years who would get the best staffings. However, I still think that for most analysts, the prospect of having to do a 3rd year of bs analyst work for pretty much the same pay would be too much to handle, and a good majority will still be trying to leave after year 2 in the coming years...
% of analysts who make 3rd year and associate? (Originally Posted: 01/01/2010)
What percentage of analysts get offers for a 3rd year?
What percentage of 3rd year analysts get promoted to associate?
I will be joining a BB regional office with around 7 people from my class, so any raw number predictions in that context would be helpful as well. Also, is there any chance none of us would get promoted?
Not very high I would assume. Regional office might give you better odds. If you do a good job and there is a need you stand a chance, but most BB's throw you out after 2 years. I would work really hard the 1st year, build your network within the firm and then start planting seeds that sticking around for a 3rd year is what you are looking for. Middle Mkt firms might be more open to this also.
some non-BB's have talked to me about having the option of analyst-->associate promotions.
anyone have advice on whether this is recommended, assuming i want to stay in IB. would i have trouble finding another IB job without an MBA even if i have a year or two of associate experience?
(don't mean to thread-jack but this seems to be the next logical step of the OP)
Possible - 2 of my friends just got offered early promote to associate at a top 3 BB
I met a guy who is now a VP with only an undergrad. In response to monkeyman2010, I say go for it. Think of all the time and money you will save by not going the MBA route, especially since you want to stay in banking. If you wanted to do PE/HF then it might hurt you not having the MBA right away, but even if you decide later on that you want to do something else think of how much better your graduate school app will be with associate or higher on it. Take the promotion and run with it. My .02 cents.
to me it seems like the biggest downside would be a lack of re-hiring opportunities in case you get let go soon after the A-->A promotion. it's a highly cyclical industry so it seems like a pretty present risk.
trying to look for another associate position with no MBA and only 1 or 2 years at a MM or boutique when you're competing with others with an MBA (in presumably a down market) seems difficult. any opinions on this?
in addition, the higher ranks seems to be a bit of a boys club largely influenced by where you went to school. wouldn't that leave the non-MBAers out?
^^ Not difficult - are you kidding me? People will be more than happy to take an associate with 4-5 years of banking expreience than an MBA fresh out with 0-1 years of relevant IBD experience ....
Some new associates were like HR people or marketing in a previous life with 0 clue on what they're doing
hm, thanks for the advice, didn't look at it like that. just finish undergrad and not that eager to jump back into school -_-
Yep - if you like what you're doing no need to go back to school
Most people I know go back to school for
1) Credentials / credibility upgrade 2) Bored with work and want a break 3) Want to do something different after
It's stupid if you quit as a 2nd year and go to MBA then come back as associate ....
And yes - experience matters more than a few letters at the beginning of your resume
So does anyone have an idea of what percentage of analysts get 3rd year offers and how many 3rd year analyst get associate offers? Again, any rough predictions for a 7-person analyst class at a top BB's regional office would be fantastic.
Depends on the bank and the desk you're on and also how your group's doing
Let's say it's TMT and the group is doing really well.
Based on experience at two BB banks + BB friends (this may not apply to MM banks but hopefully it helps you):
If the group is open to having third years and open to direct A-to-A promotes (depends on the culture), then a rough percentage would be 20-40% offered 3rd year spots, with 75% of those eventually being offered associate spots if they want it.
The number will be on the higher end in groups with less transferable skillsets (e.g. DCM, ECM) and on the lower end in groups with more transferable skillsets (e.g. M&A, model-intensive coverage groups, LevFin groups with in house modeling, etc.). The number will also be skewed by early leavers and early exit offer recipients. Some groups would rather not give offers to people who are highly unlikely to accept it.
Depends on your bank and how well you do. Ask the analysts who have left before.
All, I might ask a dumb question, is it general for people to be promoted to associate level after 2 or after 3 years? In normal not super boom market, is it no possible to get promoted after 2 years? Thanks.
2 of my friends at top 3 bb just got offers to straight promote to associate after 2nd year
Thoughts on Recruiting as a Third Year (Originally Posted: 05/11/2013)
I recently got an offer with a lower-MM PE fund that had some issues raising its most recent fund and am hesitant to accept. I am also not crazy about the firm in general. Alternatively, I can accept a third year offer to stay with my group (top industry group at a non-MS/GS BB) and recruit over the next several months for opportunities with other funds. What do you recommend? Do you view a third year as a positive or negative for PE recruiting?
I think the question to answer is, in a few months, would you rather be starting your third year in IBD or first year in PE? Maybe they end up bumping you to associate after next year? IMO, if you're not crazy about moving to that PE shop, I would stay in.
"I am not crazy about this firm, should I go work for them?"
The lunacy some of you guys exhibit boggles my mind.
Of course you shouldn't go work for them...
If there is a chance you will be an associate stay at IB. If not the jump to PE.
A couple of considerations:
How many interviews did you have this cycle? If you interviewed at most of the funds you wanted and got cut, you usually won't have the chance to interview for those funds again (with exceptions), but if you interviewed at very few places this time around you'll have a chance to meet with a lot more funds next year
Headhunters are often hesitant to send 3rd year resumes to funds and there is a slight stigma against it, but if you can get MDs in your group to really push your resume that could really overcome it
What ranking/bucket do you think you're going to get? Often many headhunters use school/GPA as a proxy for how good you are, but if you can get a top ranking or review you can overcome an average background and do better next year. On the flip side, a bad ranking could really hurt you for recruiting next year especially as a third year
Have friends who got good MM offers, took a third year instead and get a megafund, but also friends who took third years and have trouble finding jobs, so the risk/reward is up to you based on the factors above
Finally what's "lower MM PE"? If you're talking a fund of $1 billion+ latest fund with multiple funds, that could still be a great opportunity, but if the fund has $500 million total, that could be more of a problem
How do you feel about your learning curve and your experience? It's easy to think about exit opportunities as a goal, but as an analyst you also do develop a lot of skills (not just modeling, but also how to think about a company and industry, how to talk to senior bankers and clients with a level of polish). If you think you can really hone and develop them even as a third year and your curve isn't flattening, it could make sense to do a third year just from a personal development point of view
Adding to this, is there a stigma about second-years recruiting (may have missed the wave due to slightly lower GPA)?
Try applying to bigger funds. It might be easier from a BB perspective.
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