Breaking: JPM may now “reconsider your employment” if you participate in oncycle and accept a PE offer
Awful news for hardos everywhere. Kind of surprised to see JPM take this stance. Will be interesting to see if other banks follow.
does this mean off cycle is basically impossible now?
All of the hardos in my finance club at school who have accepted JPM offers are currently freaking out bc they think this will hurt their chances at KKR/BX/Apollo offers lmfao
Following
Since it looks like the rest of the top BBs will follow soon, do we think GS or RBC will enact this first?
Won’t be an issue at RBC with those exit opps
This is literally the most underrated benefit of going to a place like Evercore or Moelis. You can tell your groups you’re recruiting and they’ll cover for you, make calls to help you, and be happy for you when you exit.
Congrats on Evercore or Moelis, hope you enjoy working insane hours for the same exit opps as BB guys who get paid the same and have equal finance exits and better non-finance exits
Thank you lowcalibertalent
Congrats on Moelis.
Not a helpful comment - Evercore and Moelis are historically by far the most supportive of external recruiting. Centerview definitely isn’t, PWP is mixed, and PJT I honestly don’t know / haven’t heard much.
I love these comments
Can they even enforce the disclosure policy?
They’re betting on people’s fears/paranoia
Technically yeah, they can fire people for whatever they want. I guess you could try and keep things secret, but that's tough for 2 years, and your new firm might mention it at some point if it's the same coverage/a client of the firm
I actually think this is meant to pressure the firms going oncycle to get them to move back, rather than trying to screw over analysts. Having oncycle before they even start is not helpful to anyone - there's no reason you can't do it at the 1 year mark when people have their bearings a bit more.
Hey guys - here to offer some insight to help calm your nerves...
All in all, don't let this scare you from recruiting with us. We get looks from almost any shop you'd want. If anything, an incoming 1st year able to secure a PE offer before hitting the desk signals strength, not weakness...people will want you on their deals.
Not saying I agree with the course of action JPM took but just playing the devil’s advocate here…isn’t there technically a potential conflict of interest though if you’re running a sell side process where the firm you signed with is one of the sponsor’s looking at the deal?
This is the only scenario where I could imagine a potential conflict of interest. Although it’s unlikely, I could see the sponsor calling the analyst for some “unfiltered” thoughts the deal that may involve sharing materials not shared with other sponsors in the deal for some brownie points with the future employer. Unfiltered thoughts could mean many things regarding how many sponsors involved in the deal, how many offers they got and pricing expectations, any dirty laundry associated with the business, etc. These would probably be rare exceptions though and I doubt this would happen often.
Again, not saying I agree with the course of action but just playing the devil’s advocate, it does seem there could be conflicts of interest from my perspective. Agree or disagree?
Doesn't matter if it doesn't happen very often. One time is enough to be a major fuck-up and cost millions in fines.
I agree with the above and the sense that it's a conflict of interest, this is a smart comment.
The other potential conflict of interest is taking ideas to the new employer (e.g. planning to pitch on the sellside for one of the new employer's assets, or building a buyside book for an idea of asset where JPM know that the new employer won't hire JPM for whatever reason).
I'd agree though this seems like a weird stance for the reasons "Works at JPMorgan" stated
It’s one thing if there’s an appearance of a conflict of interest, a different thing if there is a conflict and a whole other thing if that conflict of interest is acted on. One of those leads to a sell side client choosing a different bank next time. One of them leads to you being sued. And one leads to criminal charges. There is a hell of a lot of money at stake here so at no level is it tolerated for you to be representing someone while having a side deal with the other side. Just because nothing has gone wrong yet doesn’t mean it won’t.
Lol. I mean they are not wrong. That is in fact an obligation you have. But just like how weed is in fact illegal in America, it doesn't matter that is what the rule is. Everyone does it. No one is actually going to stop doing it. And no one is going to be telling their employer that they already have another job lined up
I can understand why someone who is not in the industry would think this way but this is not how IB works.
If you're going to client, the firm needs to be able to manage the conflicts process and dynamic with potential competitors.
Analysts are expected to leave so telling them you're leaving after 2 years won't be held against you. The risk of not disclosing here far outweighs the risk of disclosing.
(1) "If you're going to client, the firm needs to be able to manage the conflicts process."
Like I said, it is an obligation you have. So I guess thank you for agreeing with me?
(2) "Analysts are expected to leave so telling them you're leaving after 2 years won't be held against you."
We are speaking about a specific company in regards to a specific communication. Speaking generally like this is irrelevant. If JPM is saying this, then clearly "telling them you're leaving after 2 years won't be held against you" is, at best, highly misleading. JPM is literally saying that it may be held against you.
(3) "The risk of not disclosing here far outweighs the risk of disclosing."
No it doesn't. Like I already said in the comment you responded to, there is a reason why there is this obligation. There is a risk. Just like how weed is illegal in America. It is illegal in all 50 states. Yet no one actually cares. It is only if you do something else IN ADDITION to the weed ONLY THEN does the weed use become an issue.
So unless you are in a situation where you (i) signed a job offer in PE, (ii) are advising another PE firm, and (iii) are explicitly providing advice in a way that is detrimental to your client and to the benefit of your future employer, nothing real is going to happen to you. Like you said, it is very common to leave IB for PE. The only way this provides any realized risk to you is if you are stupid.
People are looking at this the wrong way. This is a great move by JPM.
The hope should be other banks follow suit and tell PE firms to F off.
These timelines are truly absurd. They harm the candidates and the firms.
If JPM is actually serious about this, this can be a good thing like you said. However, this is most likely just a pressure tactic. This likely isn't real
Seems like analysts could simply not say anything? If JPM will fire you whether you tell them or they find out themselves....you might as well not snitch on yourself.
Also sponsors can give out informal "tentative indications of potential interest in future employment" or something. Analysts wouldnt technically accept an offer until after they resign from JPM. This lets analyst (somewhat) honestly say they haven't officially accepted another role if anyone asks.
Its not like the current agreements you sign offer much more protection - they're still at will employment contracts.
The selection dynamics here are interesting. If the most capable future analysts avoid JPM for this reason, that's not good for JPM all else equal
but maybe (1) interest in on-cycle isn't a great proxy for analyst quality and (2) jpM still comes out ahead by weeding out people with one foot out the door
Instead of JP Morgan, some are just saying “Ass Morgan” for short
Any chance they set a clawback clause on the bonus contingent on your employment after your JPM stint? Would that be even enforceable?
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