While I'm about to transition into IB this summer, a family friend of mine who was a 3rd yr associate (Top 10 MBA) in RE IB coverage at a BB in NY was laid off early Sept and it's now about to be Feb and he still hasn't been able to get an offer anywhere. For obvious reasons, he hasn't told recruiters or wherever he's interviewing at that he's been laid off.
He has interviewed some but these jobs aren't even banking; they're corporate dev and consulting. And not even in NY; all interest in him has been outside of NY.
Why aren't banks interviewing him?
Granted he wasn't top bucket and the writing was on the wall when he was passed over for VP but I thought he would get more opportunity in NY with other banks once he puts his name and experience out there. I'm just surprised how a senior associate at a top BB from a top MBA program has such a hard time getting hired somewhere else.
How screwed is are IB associates once they get laid off?
What have you noticed from associate colleagues that have been laid off? Did they land at another bank quickly or did they also languish in purgatory until landing a job that's not even banking and a major step down pay?
There are many reasons.
First off, lateral recruiting generally occurs in Q1 / Q2 of each year. Most banks prefer to not hire laterally in the back-half of the year given a candidate's expectation for a guaranteed compensation package for the fully year.
Secondly, most banks will view being passed up for VP promotion as a red flag. It's also difficult for banks to hire an associate that has an expectation to be promoted within the first 12 months on the job.
Lastly, Wall Street isn't currently in a position of strength. The U.S. fee pool was down ~11% in 2019 and many banks are looking to reduce existing headcount.
As someone currently looking to lateral I must say the situation for associates is pretty dire. There are only a small handful of job openings out there as a result of banking groups shrinking headcount, less voluntary turnover, and mba/a2a classes filling the void.
The competition for these limited spots is intense. You have people going downmarket from BBs to MM (sometimes not by choice) and then you have the a2a guys who run circles looking to move to Associate at other banks, the boutique hustlers looking to go upmarket, and finally the increasing amount of MBA grads who didn’t get summer return offers.
I can see why your relative is switching gears to consulting as that industry unlike banking seems to be hiring like crazy and is generally a better spot to be over the next couple of years as investment banking continues to shrink.
MBA associates are almost always viewed as inferior to A2A by banks (from analysts to MDs), so that might be a reason too
Most associates if they are laid off move out of banking into something else. Most that I know went into corporate and are now very successful and happy in their roles.
I've had this happen to colleagues at different levels (Analyst to Director). There is one guiding factor that determines how easily/successfully you will be able to lateral in any situation (whether you are laid off or just looking): deal experience. Your bank's brand is usually a distant second.
For someone who is a recruiter or head hunter or any way involved in hiring (other bankers at later stages), it's the best/only proxy for how good you are.
Here's the problem: BB's (while great platforms, good prestige with larger deal sizes and generally great training programs and technical development) have deal cycles that take YEARS. Some of the largest marquee deals will take years to do and will burn through analyst/associate classes without a tombstone. So you could be lateraling as a junior (analyst or associate) banker and have little deal experience to talk about. That can make it really difficult to move.
I've seen very talented junior bankers struggle to move because they didn't have much to talk about. I've also likewise seen bumblef*ck idiot bankers move easily because they had deals to talk about that they were "on" (but actually did nothing). Unfortunately, sometimes luck just doesn't bend your way.
This doom and gloom stuff is ridiculous. As if everybody knows everybody and a single blemish eliminates all future hope. Seeing a few comments questioning "can you really move from corp dev bank to banking?" Of course you can. Life is not linear and paths are not set in stone. Besides, if they were would you really be that interested? I know plenty of people who have moved back and forth between corporate and banking roles based on their current skill set and personal preference. Make your own bed; don't let others make it for you.
Honestly sounds like this guy is doing something wrong. As someone who recently went through a lateral associate recruiting process I actually found plenty of opportunities. Granted it may be different given I was already employed at the time, but I still have a hard time imagining his process and interviewing are flawless.
Sounds like he is severely limiting himself, probably only interested in more senior-associate roles and then only looking at RE. That's not a huge pool. There is no way this guy is such an RE industry vet that he can't look elsewhere, I have known plenty of associates who go to other groups or banks that focus on completely different industries. I have also known plenty of VPs and even MDs who have done something similar. The industry is an easier thing to learn than the process and general working dynamics, and if banks don't want someone with RE experience they just won't look at you - so I don't understand why you wouldn't be applying for those.
The fact that he can't get his head out of his ass enough to realize he needs to widen his net likely speaks to a broader ineptitude in terms of basic reasoning and awareness. His irrational selectivity is probably coming through in the way he presents himself, and turning a lot of people off. IB likes hunger, and some MBA and thinks his failure within a BB environment earns him anything does not scream that. It actually sounds like the opposite - someone who is expecting a lot and going to perform at a low ceiling.
Somebody who's so 'screwed' that, after 5 months of unemployment, they have to look at consulting and corp dev jobs (and god forbid they be outside of NY) needs a dose of reality, and to realize they should be lucky enough to have anyone paying them.
Agree with this, guy needs some tough love.
Real Estate IB can really pigeon hole you and the groups across the street have significantly fewer slots vs. say TMT/Industrials/HC, etc. If the RE group was also attached to something broader like gaming/lodging he may have a decent story to move to media or something similar.
He should use this as an opportunity (before getting to VP+) to switch to a a different industry where he'll develop more skills. The problem with RE IB groups is that often times the work you are doing (merging two REITs for example) is very different than investing in real assets so your exits to other real estate jobs are more limited than you think.
I'd advise him to do one more year as an associate to 'prove himself' to the new bank and position himself to be a VP. Do a broader industry search - you don't need to be an expert. Just have a compelling rationale for wanting to switch to that specific industry and spend a couple days looking up recent deals, understanding the comps sets, etc. and you'll sound plenty smart for a 30min interview.
He needs to hire you as his life coach! Getting fired was a slap in the face for him but I think he still doesn't quite get it. Maybe he's just not cut out for banking; maybe he never was.
He's a passive personality in an environment of killers.
My girl just told me I don't need to worry about losing my job in banking like my buddy did b/c my personality fits with banking; his doesn't.
But I guess banking has a lot of these types of people? Smart, great school pedigree, but don't have the spine to push back, confront issues head on, speak the F up?
You are obviously pretty young and just getting into IB, but be cautious with that mentality. Don't mistake being 'hungry' with being a 'killer'. IB is really a sales and client-service job at the end of the day, and one of those gets you farther than the other in that respect.
Don't fall into the facade that IB is some Mecca of brash geniuses. Don't assume it's full of any one type of person actually.
Don't conflate your own personality with the inherently void 'personality' that IB has.
As crazy as it may sound now, recognize that there's a high degree of likelihood that you actually will be fired yourself at some point in your career, and, like it probably was for your friend, it could be 100% out of your control and could happen at any point.
Good luck.