2020 Intern Offer Rates

As a summer associate at a BB with roughly 3 weeks left in the internship, I was wondering if any FT guys have heard through the grapevine what return offers rates will be like this summer for their respective banks and how the pandemic will factor into it. As background I am at a bank that has decided to forgo live deal experience for summers so it's been hard to gauge what the group thinks of the interns and so far nothing to truly judge our work ethic on.

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Comments (114)

Jul 21, 2020 - 11:58pm

Still relatively early enough in the pandemic that I don't think many are downsizing.

Like the market, banks in general seem to be looking past the current environment in hopes of greener pastures ahead.

Like you mentioned, it's hard to judge performance right now so the fact you still have an internship should be comforting. Banks should still be giving offers roughly inline with their historical rates because no one really knows what demand will be like.

Between the sheer amount of SPACs being raised to PE firms not only sitting on record amounts of Dry Powder / raising even more who's to say deal activity won't pick up?

  • Intern in Other
Aug 4, 2020 - 1:10pm

.

Jul 23, 2020 - 4:34pm

I think that return offers will be lower than historical trends at least for Europe (M&A), churn rate has been reduced and that may have to also be taken into account.

Cant truly back it up, HR will decide who gets the offers based on feedback (we have pushed hard for some kids but couldnt get any confirmation about offers) so its just a personal view

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Jul 23, 2020 - 5:56pm

I mean have y'all seen annualized m&a volumes ? Probably down more than 50% vs 18/19. Going to be bad

Array
  • Intern in IB-M&A
Jul 23, 2020 - 9:30pm

I'm pretty worried. My honest opinion is that banks are going to split one of two ways- either nearly all offers or very low offer rates.

We've already seen places like Citi/Moelis/Blair go 100% offers, which is honestly just a nice thing to do given that it's a pandemic, it's hard to fairly evaluate people at home due to differences in things like wifi and qualify of work space, and a 5 week (or whatever shorter length) internship just makes it hard to adequately judge. I'd expect places that are known for good culture and taking care of their employees (think more EBs are likely to fall here than BBs, but who knows) make the nice gesture of extending more offers just to earn some good will with the incoming hires. If historic offer rates are around 90% (which is true at lots of EBs and MMs), giving 100% offer rates only means a few more offers at the end of the day, and then they can probably count on a few people turning down their offers so I think it won't end up changing much.

The other side of the table is that this is a pandemic, and, while many banks have avoided doing layoffs until after the pandemic is over, all it takes is one look at the league tables to get scared. M&A is getting absolutely smoked. RX and S&T might be floating the ship at some places, but lots of EBs and MMs are way overexposed in M&A. Especially if banks are trying to avoid layoffs, lowering the FT offer rate is a good way to keep head count lower in the long run without hurting morale as much. Especially at a public shop that is primarily driven by M&A (ie somewhere like Evercore or even a MM like Piper Sandler), they could publicly announce they're cutting headcount by 10% by 2021 or some bogus like that to show they are doing something, but in reality that could just mean they are giving less FT offers and thus reducing the headcount a year from now. This is pretty stupid because hopefully things will be good again by next summer when ETs would start, but unfortunately banks (especially public ones with pesky shareholders breathing down their neck) may be under some pressure to cut costs and not giving offers is likely the path of least resistance to trimming headcount.

The other interesting thing is the spread in which banks are performing. GS and MS put up some of their best quarterly earnings ever, so one would think that maybe there is actually more money in the pot to go around. Unfortunately for us IB folks, most of that money was from S&T and capital raises, but who knows whether that will be reflected by just those fields getting sick return offer rates or some of that wealth might spread to IB. On the other hand, places with big lending businesses like BAML (whose earnings were down 70%) might be under big time pressure to reduce offer rates.

The morale of the story is none of us have any clue, so let's hope for the first case where everyone is nice and gives us all offers but prepare for the worst case where we all get fucked. Let's all just crush the last couple weeks of our internships and hope for the best. We'll find out soon enough regardless.

  • Intern in IB - Gen
Jul 23, 2020 - 9:35pm

Completely agree, I've felt the same way. Either going to be easy and 95% return offers or tough sledding for us interns with banks being wary of low M&A activity.

Jul 23, 2020 - 9:40pm

Judged based off the limited work produced and overall attitude. Sad situation as a lot of kids didn't do a bad job just maybe needed a few weeks to ramp up but unfortunately did not have time.

The bright side is for the people who didn't get offers you won't be looked down upon compared to other years but other firms you apply for.

  • Intern in IB - Ind
Jul 23, 2020 - 10:24pm

Did your bank decide offers for internships that are still ongoing for the next few weeks or are internships about to wrap up? Just trying to gauge when in the summer groups usually decide on offers

  • Intern in IB - Gen
Jul 23, 2020 - 10:11pm

it's going to be a total bloodbath. i don't even know how they are gonna make selections. expecting around 50%, top MM.

  • Intern in IB - Ind
Jul 24, 2020 - 12:47am

Just an intern.. but my best guess is it will be the same as previous years cause M&A is a cyclical business and banks know that. Besides this summer class will only join next summer and it is likely the economy will pick up pace again.

Jul 24, 2020 - 12:57am

At the larger banks I don't see the offer rate being impacted too much. They are doing a lot of financings which will offset a big dip in M&A, if not fully then at least by a fair amount. Obviously if this situation persists much longer then things could change, but in 2020 / 1H2021 I doubt there will be a huge impact at the analyst/associate level at least.

The top boutiques all have good restructuring arms, which will expect to see large amounts of activity later in the year. And on the M&A side, these firms tend to advise the largest players in their respective sectors, who are more likely to be active in M&A even during these times, acquiring smaller and more struggling players.

The lower tier boutiques / MM shops without any capital markets activity is where I could see a significant impact in terms of offer rates.

My former group at a BB is not planning to change its offer policy, will still be around 75-80% (which it has been historically).

  • Prospect in IB-M&A
Jul 24, 2020 - 9:39pm

not the OP, but a friend who's an analyst at BofA told me that every intern got an offer.

  • Prospect in IB-M&A
Jul 24, 2020 - 10:22pm

I'm a different "prospect" (can't figure out how to change it) than the other one in IB-M&A that replied to you. One of my friends from school who's a first year said everyone got return offers in his group.

  • Analyst 1 in IB - Ind
Jul 24, 2020 - 7:21pm

Too early to tell at most banks. Lots of uncertainty still. Will say if you're at a bank that plays in capital markets that activity should help and would expect a pretty good offer rate. Would be more worried if at a pure sell-side M&A place that don't have balance sheets and don't do capital markets (or no RX). Just my feeling from talking to people

  • Prospect in Other
Jul 24, 2020 - 11:15pm

Anyone have thoughts on returns for EB shops with less of a focus on RX (EVR, PWP, LAZ, Greenhill) and those with a RX focus (PJT, HL)?

  • Prospect in Other
Jul 25, 2020 - 12:03am

Considering EVR is #1 in RX league tables YTD, you really live up to your "prospect" title by saying they are less focused on RX

Jul 25, 2020 - 1:40am

That may be true, however what is important is the ratio between a shop's RX revenue and total revenue and hence Evercore's vulnerability. Shop that have a higher ratio in RX such as PJT and HL can have the RX temporarily subsidize and make up for the lost revenue from M&A and other sectors. While @ Evercore RX can in no way make up for the lost revenue from the bread and butter in M&A. Just because something has a high total raw count doesn't means shit. China has the second largest economy by raw GDP. But you would be a fool to want to be born in China rather than any Western Capitalist country because the second largest economy divided by 1.4 billion people doesn't yield a very favorable number.

Besides those with a high RX revenue/ total revenue that are PJT, HL, Moelis it doesn't make any economic sense for any MM/EB to maintain the same class sizes.

  • Prospect in PE - Other
Aug 4, 2020 - 9:22am

Can confirm PJT London was close to 100% (interns were told there were spots for everyone but some didn't perform)

  • Intern in IB - Gen
Aug 4, 2020 - 12:43am

You already gave out offers or are they yet to be announced? And what did you do to choose who got an offer and who didnt? Obviously it's hard to discern peoples' competency but did you choose based on who made the least mistakes or who you personally liked the most?

  • Intern in IB - Gen
Aug 4, 2020 - 5:42am

confirmed top MM with LESS than 50%. it was by group ranking and some groups had literally 25-30% return rates.

  • Intern in S&T - Other
Aug 4, 2020 - 9:28am

Canadian bank I work at in Toronto will be cutting headcount of internship program so offers will be reduced. Not sure by how much though, but it certainly won't be like previous years

  • Prospect in IB - Gen
Aug 4, 2020 - 10:00am

So did the interns this summer just get totally screwed with things getting probably back to normal by next summer with normal return rates

Aug 4, 2020 - 10:03am

Yep. Their careers will be screwed too assuming they don't break in FT or get another job in finance or apply to grad school. Have hear anecdotes of people graduating in the gfc studying finance and having good ecs and past finance internships only to not end up going into high finance because they couldn't get a job senior year and had to pivot

Array

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  • Prospect in IB - Gen
Aug 4, 2020 - 10:30am

I don't think a bank can run on just 50 percent of their analysts especially when you knows analysts are going to be leave anyways. You always need analysts. Also I think most banks are taking less 2021 interns right now cuz they know the situation already in turn probably making next year interns probably have normal rates

  • Prospect in Other
Aug 4, 2020 - 10:19am

Interesting that Jefferies had low rates cause fee wise they're doing great this year

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Aug 4, 2020 - 10:22am

it's interesting because while rich handler is on instagram pretending to be cool and hip by commenting on finmeme accounts his employees are being treated like shit at his bank

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Aug 4, 2020 - 11:31am

Wow sucks to hear that about jefferies. Know some kids were summering there before I left school... makes me feel even worse for non target kids cause I know JEF takes a decent amount. The targets have a better shot of having ppl they know pull for them (from my POV) hope someone sticks up for the non targets.

Oh well tho. Gotta agree it's shitty how that dude preaches on his IG. I swear to god everyone's a closet Ellen (see what I did there hehe)

  • Analyst 3+ in IB - Ind
Aug 4, 2020 - 12:35pm

Jefferies offer rate was likely down this year because they changed the returns to be direct group placements instead of generalist offers. Interns that ranked certain groups high in their preferences would be SOL if those groups didn't reciprocate and vice versa.

  • Analyst 3+ in IB - Ind
Aug 4, 2020 - 12:54pm

Jefferies historically has done a generalist intern program with generalist FT offers. This year interns were still generalist but given group specific FT offers at the end. First time this was ever done to my knowledge, probably to slim down the pack to only the top candidates.

  • Intern in IB - Gen
Aug 4, 2020 - 12:41pm

What other banks do direct placement?

Also did Jefferies fill all slots? By doing it this way it seems likely that nobody would really rank the shit groups so they wouldn't have anyone to even take the offer. I'm assuming theyll have to do recruiting again for desk specific ft spots? Why didnt they decide to just make it generalist again?

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