Diversity correction
I’m seeing a thread abt diversity once a month. At what point will an MD or 5 get fed up w having to hire ‘too many diversities’ (I am by no means endorsing this mindset and have no clue wether or not these people are qualified or not)? Wouldn’t they just make their own firm/bank with their own principles?
While your comment isn't wrong, this is the true litmus test for which banks actually care about diversity. Banks with more diversity at MD level actually care and are building a pipeline.
bro he was being sarcastic
I'm sorry to burst your bubble but the idea that diversity candidates do a worse job once they hit the desk FT is a complete myth. After going through whatever training program the bank has set up, 85% of first years are within 1 SD of the mean in terms of ability, with the remaining 15% being split between the top and bottom analysts.
This is a job that requires no technical skills, no real intelligence or mental analysis, and no differentiating traits other than being hardworking and willing to grind. You provide no value other than your ability to get worked to the bone.
And in the long run, diversity hires actually add more value because at this point, many clients actually do take diversity pretty seriously. It's extremely unlikely that a beauty brand is going to take on a strategic advisory team that's 100% men vs. a more well-rounded bank. The goal of these programs other than positive PR is to eventually have a more diverse senior management team that will continue to attract and retain clients in the future.
Based
ALL HAIL CAPEX FAIRY
Source: trust me bro
I find it laughable that everybody is taking this seriously and assuming that there is a way to quantitatively measure the performance of an analyst (much less to precise enough data to use "standard deviations"). This guy is just pulling words out of his ass to defend the DEI pipeline that he broke in with.
My group has 10-12 analysts. 4 bottom ones are as non-diversity as they get. Not only they are dysfunctional, they don’t seem to accept or have any awareness of how bad they are (unlike 5th worst), let alone try to improve. We don’t need a scorecard - we just know they suck. Wish we could fire at least two of them (and maybe we will) but for now I just have to keep telling the staffer to not put them on my deals.
The lack of awareness and unwillingness to improve is in line with people trying to fake their diversity.
I’m Asian, but thanks for playing
CapEx Fairy speaks the truth and alot of the usuals wont like it lmao
this is the best explanation I've seen of this, unironically makes sense
Because the hiring is still done at the individual level. The bank might set a firm-wide mandate to put a priority on increasing diversity, but it's still the AN - VP who make the hiring decision. That + nepotism hires, the majority of which are white.
Companies aren’t choosing which bank to lead on a deal based on the diversity of the analyst class. A combination of having connections to the MD, and previous bank track record in the space are the biggest factors.
Corporations are always seeking out ways to make the most money and only portray the DEI angle through advertising and messaging but it becomes largely irrelevant behind the scenes. Are any of this corporations opening up factories in Baltimore to give poor black people jobs? No they outsourced everything abroad to increase the bottom line. Similarly, investment banking is largely out of the public eye and hence companies will pick the bank they are most familiar with that will get the best share price for them.
The point isn't to attract clients now through a diverse analyst class (although clients absolutely care more than you think - diversity initiatives are positive PR for a reason), but to set up a diverse leadership in 5-10 years that will continue to retain and attract clients.
Investment banking services are also largely commodified - "track record" in the space means literally nothing. Every bank will reach out to the same people and run the same process - most of the execution risk in a banked process comes from the client / management side, not the bank. Diversity initiatives are just another way for the banks to generate positive and differentiating PR against their competitors.
Also you seem to have a pretty limited understanding of the banking process (large, public corporations). Plenty of startups, tech companies, growth companies that absolutely care about DEI both on a professional and personal level. Picking a 100% white male advisory team for a sellside of a cosmetics company when the bankers will likely be interfacing with an outsized number of female counterparts is simply a sub-optimal business decision.
Lol wouldn’t 68% fall with 1 standard deviation given how standard deviations work (assuming normal distribution)
To be fair though, I found out through CFA nerdry that a "normal distribution" only has the word "normal" attached to it because of an extremely complicated mathematical reason that only mathematics PhDs can understand, not because it is "NORMAL/default/usually/popular/standard" in any real-life frequency-based sense of the words "normal". In other words, it doesn't imply "normal" in any conventional English meaning of the word.
Chebyshev on point but that only will be true in normal standard (perfect bell shape) but most distributions are not perfect and they skew one way or another
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Diversity will be corrected when nepotism and prejudice is eliminated from recruiting.
Nepotism and diversity recruiting aren’t disjoint.
Think about how many upper class connected kids with a different gender or race get in through the diversity pipeline.
Both present tangible value add to the firm. Diversity recruiting pleases shareholders/clients (your average pension fund will not be pleased if their transaction is 100% straight white men), nepotism secures relationships far into the future.
I propose for proper diversification. We shouldn't only diversify across races, ethnicity, income level and school. Thats like only diversifying across sectors, domestication, value/ growth etc. That's still holding an all-equity portfolio which is risky af. Banks should diversify across ASSET CLASSES. Therefore, banks should hire monkeys and cats to do the job.
I wonder if a clever circus chimp, after rigorous training and selection, could do a banking job. I'd pay money to see it happen
you are so smart, thank you for sharing your thoughts
Thank you for listening!
As ridiculous as it sounds, I can't say it won't happen in year 2063 where people will get cancelled by animal rights activists for saying that animals have less rights to employment than humans
just wait til the supreme court ruling on affirmative action comes out this summer.
Will not effect private businesses
homie what does that have to do with hiring practices lmao
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