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Graduating into a Bad Economy
 

CompBanker's picture
PE
(Almost Human, 8,504
 
Points)
 on 9/18/11 at 3:14pm
jump_off_cliff.jpg

After reading through the thread on the 2011 hiring freeze, I'd thought it would be valuable to share with the community the thoughts and experiences of someone who graduated into a good economy. While it is easy to sit back and say that my class had it easy compared to today's graduates, this argument only goes so far. Here is what happened to the 2007 grads:

I was fortunate to graduate in 2007 when the economy was great and jobs were abundant. In fact, I secured my IB job in the Fall of 2006 when times were even better. Myself and my classmates all started work in Summer '07 post-graduation. Things were great, work was plentiful, and we all got paid. Then the recession hit in Fall '08. Work dried up and pay went down. People started getting fired. A lot of them. Entire banks collapsed and armies of qualified people lost their jobs. Industry cut back and all of a sudden no one was safe. Small businesses and start-ups failed as no one was spending money. A huge collection of '06, '07, and '08 grads were made redundant -- cast out into an economy where no one was hiring.

Meanwhile, those of us who were part of 2-year banking programs were on the market pursuing our "exit ops." Come Summer '09, we too would be out on the streets. When PE recruiting hit for the '07 grads, opportunities were bleak. PE firms were reducing their associate intake as deals weren't getting done and they didn't need as high a headcount. Previously, analysts in my program had near 100% placement into PE, and great PE names no less. For my analyst class, only the top performers (~20%) were able to secure PE roles. The rest begrudgingly accepted 3rd year offers. Some took middle office industry jobs, some got frustrated and ended their analyst years unemployed.

For those of us who did secure jobs, we lived in constant fear that our PE firms would implode or cut us before we even showed up for our first day of work. For some people, this was true. A number of PE firms pulled the job offers they had originally extended, offers that analysts were counting on for when they finished slaving away in investment banking. Other PE firms were less forgiving, not opting to slash associates until a few months after the associates started working -- after they had signed expensive leases and spent their banking bonuses in anticipation of receiving a monthly paycheck and other future bonuses.

I admit, I got lucky. My PE job was still waiting for me when I finished banking. They had decided to reduce associate headcount prior to hiring, so I was safe. I worked for two years and got a fantastic experience, mostly because there were fewer associates so I got staffed on more deals and covered more portfolio companies than my predecessors. A number of deals fell apart, but miraculously the ones I got staffed on all got completed and I was able to stuff my resume with closed transactions. Things were looking up and all that was left to do was to apply to business school -- surely the economy would rebound by the time I graduate b-school in 2013...

But this year was different. Harvard Business School elected to diversify its MBA class away from finance and consulting in favor of less traditional candidates (http://management.fortune.cnn.com/2010/12/17/harva...). All of a sudden even the superstars from Megafunds found themselves with no acceptance in hand and the prospect of being unemployed in Summer '11. HBS caused a trickle down effect in MBA programs as the finance superstars scrambled to pull together applications to lesser schools. In the end, a lot of '07 grads found themselves looking for employment again this Summer. This put them in a tough situation though, they had a number of options, but few were appealing:

1) Negotiate to stay on another year at their PE shops and try again at MBA admissions the next year.
2) Lateral to another PE shop and "re-do" their pre-MBA associate years.
3) Try to skip the MBA altogether and secure a post-MBA job.
4) Leave the industry.

Option #1 wasn't available for many and option #2 meant a two year career set back. Option #3 was preferable, though even HBS MBA students with IB/PE experience were struggling to find post-MBA PE jobs; competition was fierce. Many folks I know were forced into option #4, though I admit that some of my friends are a lot happier now as a result.

Obviously luck plays a huge role in any given person's situation, but you can't wait around to get lucky. So folks, before you throw your hands in the air and claim that you never had a chance, realize that everybody has had to fight for their place on Wall Street, regardless of when they graduated.

CompBanker
Tags:
UFOinsider's picture

I graduated in December in a

O
(Human, 10,302
 
Points)
 on 9/18/11 at 3:29pm

I graduated in December in a shit economy and landed three internships within two weeks, found a fulltime back office position a few months later, and made it to front office a few months after that. I came from a state school, liberal arts degree, below average grades, no experience, and I'd taken off from college for five years at one point. The things that put me ahead of all the younger kids graduating with good grades and finance degrees from target schools are NETWORKING, solid work ethic, and an extremely fast learning curve.

For anyone with doubts, let this serve as a lesson that there are plenty of jobs available, it's just a matter of what people will do, and if I can find a job I'm convinced that ANYONE can.

Go get some

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

PossumBelly's picture

People graduate into bad

IB
(King Kong, 1,689
 
Points)
 on 9/18/11 at 6:04pm

People graduate into bad economies every 5-8 years. 2008-09, 2001-02, early 90's, late 80's, early 80's, late 70's,...and on it was and will be through time.

All you can do is bust your ass and eventually it will work out.

db729's picture

I understand your point but I

(Monkey, 63
 
Points)
 on 9/18/11 at 6:55pm

I understand your point but I really don't think your perspective is that reassuring. The reality is, despite those of you that graduated in 06/07 also facing tough times with the economy, you guys are much better off than those that are graduating now. At least you have direct experience and easier to find a job. Difficulty finding jobs, figuring out the best way to get into a top MBA, taking on jobs that's not the 1st choice, etc, are problems we all face at this point. But your experience puts you in a much better position than those without.

With that said, I don't think anyone regardless of when they graduated, should be making excuses. At the end of the day, we all have to hustle and grind. You'll never always be at the right place and right time. If you don't learn to create opportunities for yourself, you'll never find success in the long run.

Btw for full disclose, I graduated in '09 and luckily got an offer with Big 4, so I am fortunate to be employed. But I can understand those graduating now's sentiment in feeling discouraged because I was trying to recruiting during absolutely shitty times. It's dreadful thinking that after four years working your ass of (for the most of us), you can't even get a chance to interview. By no way am I saying you're wrong. I just think it's hard for those graduating now to understand your pains when they can't help but only see theirs.

WalMartShopper's picture

UFOinsider wrote: I graduated

 
Points)
 on 9/18/11 at 8:13pm
UFOinsider:

I graduated in December in a shit economy and landed three internships within two weeks, found a fulltime back office position a few months later, and made it to front office a few months after that. I came from a state school, liberal arts degree, below average grades, no experience, and I'd taken off from college for five years at one point. The things that put me ahead of all the younger kids graduating with good grades and finance degrees from target schools are NETWORKING, solid work ethic, and an extremely fast learning curve.

For anyone with doubts, let this serve as a lesson that there are plenty of jobs available, it's just a matter of what people will do, and if I can find a job I'm convinced that ANYONE can.

Go get some

I'm really beginning to hate you...jk congrats man. My networking efforts are paying off big time lately and if it comes to fruition I will divulge my tactics.

Also good post comp, hopefully when you run your PE firm you remember us little people...

If the glove don't fit, you must acquit!

marcellus_wallace's picture

The difference is you could

ST
(King Kong, 1,617
 
Points)
 on 9/18/11 at 9:21pm

The difference is you could have stayed on at your bank and became an associate no? Could you not have stayed at your PE firm? Could you not go right back into banking right now?

Graduates in bad economies don't have those options usually, they can't get their foot in the door to begin with.

CompBanker's picture

marcellus_wallace wrote: The

PE
(Almost Human, 8,504
 
Points)
 on 9/18/11 at 9:38pm
marcellus_wallace:

The difference is you could have stayed on at your bank and became an associate no? Could you not have stayed at your PE firm? Could you not go right back into banking right now?

Personally, yeah I could have stayed with my bank and become a 3rd year analyst and then maybe an associate. Not everyone is offered a 3rd year though, so a lot of people are out of luck regardless. Also, the reality is that after two years of banking, you're desperate to get out. To your question about going back into banking after two years in PE: I suppose it is an option, but there is a reason that there are almost no bankers who are ex-PE. After working in PE, the thought of going back to the banking lifestyle is pretty much unfathomable. As for staying at the PE firm: Most PE firms are 2-3 years and out. They tend to be a lot stricter than banks on letting people stick around past the pre-designated 2-3 years. I certainly didn't have an option to stick around.

CompBanker

WalMartShopper's picture

What is the typical route

 
Points)
 on 9/18/11 at 9:41pm

What is the typical route after pe 2yrs?

If the glove don't fit, you must acquit!

CompBanker's picture

WalMartShopper wrote: What is

PE
(Almost Human, 8,504
 
Points)
 on 9/18/11 at 11:20pm
WalMartShopper:

What is the typical route after pe 2yrs?

The majority go to b-school. Many then return to PE afterwards.

CompBanker

International Pymp's picture

^some will go to HFs and

RE
(King Kong, 1,882
 
Points)
 on 9/18/11 at 11:42pm

^some will go to HFs and other firms directly too

The Phantom's picture

I am with marcellus_wallace.

HF
 
Points)
 on 9/19/11 at 12:35am

I am with marcellus_wallace. At least we made it in. Those who cannot get 3rd year analyst/1st year associate offers at ibanks are either: shit out of luck in timing (2008) or weren't suppose to be in banking in the first place.

LIBOR's picture

Comp, are you in bschool now?

EN
(Neanderthal, 2,156
 
Points)
 on 9/19/11 at 12:40am

Comp, are you in bschool now?

looking for that pick-me-up to power through an all-nighter?

Sonic's picture

I know someone who graduated

HF
 
Points)
 on 9/19/11 at 12:42am

I know someone who graduated from my target last year, didn't get his BB offer on a long-term bond desk, and is now day trading on his own.

UFOinsider's picture

WalMartShopper

O
(Human, 10,302
 
Points)
 on 9/19/11 at 1:11am
WalMartShopper:
UFOinsider:

I graduated in December in a shit economy and landed three internships within two weeks, found a fulltime back office position a few months later, and made it to front office a few months after that. I came from a state school, liberal arts degree, below average grades, no experience, and I'd taken off from college for five years at one point. The things that put me ahead of all the younger kids graduating with good grades and finance degrees from target schools are NETWORKING, solid work ethic, and an extremely fast learning curve.

For anyone with doubts, let this serve as a lesson that there are plenty of jobs available, it's just a matter of what people will do, and if I can find a job I'm convinced that ANYONE can.

Go get some

I'm really beginning to hate you...jk congrats man. My networking efforts are paying off big time lately and if it comes to fruition I will divulge my tactics.

Also good post comp, hopefully when you run your PE firm you remember us little people...

Thanks for the compliment, but I'm only a year and a half in man: don't waste your time hating or praising me, just send me your resume. I'm a HUGE fan of paying it forward any way I can. I believe that if you do good things for other people when you can, people will do good things for you when you need it most (corollary being do.not.fuck.with.me)......What goes around, comes around, and it picks up a lot of speed.

A very small fraction of people have a perfect resume because of this thing called LIFE, and shit happens. Just reach out to people, be a decent person, and work hard. The rest will take care of itself......keep going man, you can do it! Personally, I want to stay in banks / brokerages for the forseeable future: as bad as it looks, it's safer there than HFs currently are and there are more types of exit ops (for example, a PE fund will never pay for law school.....)

ALSO: OP, your story is really good and I saw shorts' post citing you as the inspiration for his. Good job man, seriously, thank you!

YOU JUST GOT TROLLED
http://www.troll.me/images/red-foreman322/dont-you...

TDSWIM's picture

CompBanker

(Orangutan, 314
 
Points)
 on 9/19/11 at 1:23am
CompBanker:
WalMartShopper:

What is the typical route after pe 2yrs?

The majority go to b-school. Many then return to PE afterwards.

What if you do two years in banking and then go to business school and come out with a PE associate offer? Does the 2-3 year and out rule still apply? What happens for MBAs after that, do they just go to another shop, or if you have the MBA already is it assumed you will stay on for a longer time period?

DontMakeMeShortYou's picture

Pre-MBA buyside experience is

HF
(King Kong, 1,900
 
Points)
 on 9/19/11 at 1:32am

Pre-MBA buyside experience is almost mandatory for post-MBA buyside jobs.

See my WSO Blog

islandbanker's picture

I have to agree that this

(Orangutan, 257
 
Points)
 on 9/19/11 at 2:01am
International Pymp's picture

TDSWIM wrote: CompBanker

RE
(King Kong, 1,882
 
Points)
 on 9/19/11 at 3:25am
someotherguy's picture

Graduating in 2007 is orders

HF
(Orangutan, 278
 
Points)
 on 9/19/11 at 8:56am
shorttheworld's picture

DontMakeMeShortYou

EN
 
Points)
 on 9/19/11 at 9:44am

I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe

From trading equities to slanging wine in Latin America

A ship is safe in harbor, but that is not what a ship i

TheKing's picture

CompBanker wrote: After

O
 
Points)
 on 9/19/11 at 9:51am

Check out my WSO Blog

ccmonopolies's picture

CompBanker wrote: After

(Monkey, 53
 
Points)
 on 9/20/11 at 12:29am
HerSerendipity's picture

I have to agree with

PE
(King Kong, 1,031
 
Points)
 on 9/20/11 at 9:25am
TheKing's picture

HerSerendipity wrote: I have

O
 
Points)
 on 9/20/11 at 9:51am

Check out my WSO Blog

aempirei's picture

Some people are pretty out of

IB
(Gorilla, 726
 
Points)
 on 9/20/11 at 12:22pm

My name is Nicky, but you can call me Dre.

HerSerendipity's picture

TheKing

PE
(King Kong, 1,031
 
Points)
 on 9/20/11 at 1:16pm
weeds499's picture

Comp - are you in bschool/HBS

IB
(Orangutan, 255
 
Points)
 on 9/20/11 at 8:14pm
CompBanker's picture

Nope, I didn't make it into

PE
(Almost Human, 8,504
 
Points)
 on 9/20/11 at 9:01pm

CompBanker

Al Bundy's picture

edit: deleted. Was posting

ER
 
Points)
 on 9/20/11 at 9:29pm

Pretty women make us BUY beer. Ugly women make us DRINK beer.

SpacemanSpiff's picture

Haven't read the whole

HF
 
Points)
 on 9/20/11 at 9:27pm
Genetic's picture

I met with a CFO for a large

 
Points)
 on 9/22/11 at 2:08am
RE Capital Markets's picture

CompBanker wrote: Many folks

RE
(Gorilla, 649
 
Points)
 on 9/22/11 at 4:55pm

Man made money, money never made the man

RE Capital Markets's picture

HerSerendipity wrote: I had a

RE
(Gorilla, 649
 
Points)
 on 9/22/11 at 5:04pm

Man made money, money never made the man

CompBanker's picture

RE Capital Markets

PE
(Almost Human, 8,504
 
Points)
 on 9/22/11 at 5:40pm

CompBanker

RE Capital Markets's picture

CompBanker wrote: RE Capital

RE
(Gorilla, 649
 
Points)
 on 9/22/11 at 6:20pm

Man made money, money never made the man

CompBanker's picture

RE Capital Markets

PE
(Almost Human, 8,504
 
Points)
 on 9/22/11 at 9:46pm

CompBanker

HerSerendipity's picture

RE Capital Markets

PE
(King Kong, 1,031
 
Points)
 on 9/22/11 at 10:56pm
RE Capital Markets's picture

CompBanker wrote: Disagree on

RE
(Gorilla, 649
 
Points)
 on 9/23/11 at 12:46am

Man made money, money never made the man

WalMartShopper's picture

CompBanker wrote: Disagree on

 
Points)
 on 9/23/11 at 10:45am

If the glove don't fit, you must acquit!

CompBanker's picture

WalMartShopper

PE
(Almost Human, 8,504
 
Points)
 on 9/23/11 at 6:07pm

CompBanker

marcellus_wallace's picture

A macro bond trader MD once

ST
(King Kong, 1,617
 
Points)
 on 9/23/11 at 6:55pm
AnATLieninNY's picture

Great thread everyone

ST
 
Points)
 on 3/2/12 at 12:19pm

I say fuck change, I don't chase dimes

BetaRhoOmega's picture

How do people see prospects

(Chimp, 15
 
Points)
 on 3/2/12 at 12:41pm
RE Capital Markets's picture

Here's a breakdown (based on

RE
(Gorilla, 649
 
Points)
 on 3/2/12 at 2:22pm

Man made money, money never made the man

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