WSJ just released an article saying Evercore is offering junior $15,000 if they delay start date until January and $25,000 if they delay until next summer. Not sure why anyone would take that deal, and seems pretty small stipend for delaying work that long. May also be reflective of the layoffs Evercore had before COVID and theyre trying to further cut costs. Thoughts anyone?
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Sounds like bad news for FT recruiting at Evercore come August. And wonder if this will impact return rates for this summer's SAs.
Dont have an offer from Evercore but definitely wouldn't take it. Can't even really travel right now so whats the use of having that downtime??
Can certainly travel
Start a biz in reaction to change in the way businesses will be changed post-pandemic.
Not sure if this would make sense, but as someone who will still be living at home with my parents right up until full time work, an extra $15-$25K for sticking it at home a bit longer sounds like a pretty good deal. Obviously, this is okay with me as long as the full time offer remains intact. This is all just my opinion, of course.
From the article it seems like you just get the $15-25k and you're not paid regularly until you actually start in January or next summer.
Yes. While I would ideally like to start on time, delaying by 6 months and living with my parents a bit longer for only the $15K would be fine for me.
In other words, seeing as it's just your opinion, nobody gives a shit. Great. Thanks bro.
I guess when the OP asked to hear people's thoughts, he didn't mean their opinions. My bad.
Keep in mind, that 15 or 25k is paid as a lump sum and will be taxed like a MOTHERFUCKER. When I got my signing bonus I ended up getting about 40% of it withheld until I was able to get my tax refund a year later.
You’d only be getting 9k/15k up front which is atrocious.
Don't you get the opportunity to get that cash back come tax season?
(under the assumption you don't have a bunch of other income)
What does this do to conversion rates for incoming interns...if two analyst classes are starting at/near the same time next year?
An endless cycle of delaying start date by a year.
A 2-year recruiting cycle instead of a 1-year one.
A few thoughts here:
Kudos to those of you that can sit at home without work or distraction until the winter or next summer. That's beyond tough; even for $15K-$25K. I, for one, could not.
Isn't Evercore's RX business meant to prevent drastic personnel and cost-cutting measures in times of economic instability?
What's to prevent Evercore from further delaying new hire start dates if/when one takes the winter or summer option? A bit of a slippery slope.
Your third point is exactly what I would be scared about. Starting later to me just means a higher chance of them ultimately pulling the offer or delaying further
I seriously wouldn't be worried about a firm of Evercore's caliber pulling an offer, but opting into a deferred start date could result in a year of idle time without the normal luxuries of a sabbatical/gap year.
Yeah I agree with your 2nd point as well. I thought their Rx business is one of the best on the street - they shouldn't have trouble getting dealflow during this time?
Yes - a big selling point of having an RX business is that it is naturally counter-cyclical but Evercore's is historically significantly undersized relative to the top (HL / PJT / Moelis / Lazard). They have a solid practice but are much more leveraged to M&A.
For an idea of scale, in 2019 Moelis was #1 by value in completed restructurings at $74bn across 25 deals and Houlihan was #1 by quantity at 41 deals totalling $33bn. Evercore completed 12 deals worth $21bn.
RX is a much smaller portion of revenues than their M&A counterpart - this is true for most firms other than a couple exceptions (i.e. HLHZ, Ducera)
Also most RX fees are skewed toward the back end (have monthly retainer fees, but the bulk sum comes as a success fee at the end) and RX mandates typically take 6-12 months so while RX groups remain busy, a downfall in M&A activity will definitely cause issues from an immediate cash flow standpoint for most shops
What should incoming SA expect? Seems like rx would be fine but m&a not so much
I can't imagine an uber-reputable place like Evercore would pull an offer, especially after you did them a solid by delaying.
Also, I wonder if taking the delay would engender some goodwill for you... like hey, thanks for doing this for us. Also, WSJ article provides good reasoning why you'd wanna delay -- as starting FT'er, you wouldn't be in the office, wouldn't be able to establish a rapport with the other FT'ers and senior people. I actually think for that reason alone, I would take it. If shit hits the fan more this fall and you really haven't established that personal bond, I think firm would be more likely to cut you since, again, they might not feel quite as "bad" because, hell, they haven't even seen you in over a year.
Fair points. Is Evercore's analyst program two or three years? Analysts that delay will obviously miss portions (or all) of this year's buy-side recruiting cycle. I mention this as it is fair to assume that analysts at Evercore are more likely to focus on the traditional "path."
EVR is a publicly traded company that gets rewarded by the public for these cost cutting measures, unlike PWP and other boutiques who are private. IMO this is not a worry for incoming analysts and summers. This is a top place to work and if any independent firm is positioned to withstand covid, it is EVR because they have the RX to buttress fees and a stellar M&A practice that will pick up next year.
Obviously can’t fault juniors for worrying but I think this is just a short term issue. The main concern would be for first years who want to do buyside recruiting. Maybe on-cycle will get pushed back?
Lazard, PJT and Moelis are also public.
Fully understand that. Does not change the situation and you may see see those firms announce similar measures as time goes on.
Either way the point is that shareholders will see this as an effort to combat covid whereas other firms may not take action.
People need to realize that while RX dealflow is up the fees and overall revenue compared to M&A is small.
So even if rx revenues were to double it still wouldnt be enough to keep the firm afloat to pre-covid levels
How does this look for incoming interns?
Evercore is known for babying interns and analysts, and being pretty progressive in general. You could just as easily read this as “stipend for kids who are too scared to come back to the office during the pandemic”
Just a guess but maybe they're doing this with the fact that offices wont be back to 100% in NYC until 2021 most likely so people won't be able to learn on the job and you don't want to be paying kids 95k+ who have barely been trained yet especially when there aren't many deals for them to work on.
Some quick thoughts to address some prospect fear given my vantage point at a EVR/LAZ/MOE/PJT.
1) This is probably a net positive for employee and employer. EVR saves money at a time when the capacity isn't needed given uncertainty and incomings still have future employment and some comp. The alternative is rescinding offers.
2) IB is a human capital business and good talent is hard to find. This enables them to retain future talent in an otherwise torrid market.
3) Reputation is also important so I would see this as a positive signal that aims to maintain that again vs. the alternative.
4) As mentioned in the prior posts of others and my understanding is that EVR has shifted a lot of existing capacity to address the RX opportunity, so the model is working. But bringing in tons of new headcount would put them over given anemic M&A. This reduces the need for RIFs (that's a good thing that they actually give a shit.)
5) For prospects aiming to go to PE, your first several months of training and hitting the desk are critical to helping you prep for recruiting. You probably want a full experience not the virtual version to set you up correctly for the season.
6) For 2020 summers, a couple more reassuring thoughts. M&A should hopefully start ramping again long before you hit the desk given the current delay and buildup. Also, existing analysts who are 2nd/3rd years are still leaving en mass for the buy-side in a couple weeks. Meaning the need for two classes worth of capacity will probably be there (not a prophet but that's my guess). Will internships at EVR/LAZ/MOE/PJT be more competitive? Probably. Will offer rates drop from 90s to 50s? Doubtful, given the points above.
From what I can see overall, well capitalized strategics are chomping at the bit to go buy stuff given decreased pricing in many sectors but are on the sidelines given uncertainty and closed financing markets. Sponsors are keeping an eye towards the future but are still currently focused on value plays where they can pick up material investments with favorable terms and good downside protection. Eventually, those opportunities run out and it's back to more traditional investment strategies. All of this means the need will be there, but in the mean time boutiques are just getting creative to manage headcount and costs until that time comes while minimizing the need to take negative actions. BBs on the otherhand (having also been in one), we'll see if they revert to the good ol' pendulum headcount management technique.
thanks for sharing. If more 2020 FT analysts choose to defer one year (start in Summer 2021), will that lower the FT headcount for interns this summer? Both of them will then start at the same time.
Yes and no. Almost certainly lower offer rates but don't think it will go from 90s to 50s for example due to the pent up volume reasons I mentioned before.
I like the positive spin but this is a bit naive. EVR (and every other bank) has excess capacity right now and is effectively furloughing part of its incoming analyst class in order to cut costs. If things improve, great -- all furloughed analysts will begin work at the later date. If things don't pick up as planned, guess what. Start dates get deferred further and then indefinitely. This is what happened in 2001 and 2009 to incoming analysts and associates. In the last crisis, start dates got deferred for so long that many analysts and associates eventually gave up and looked for other jobs because they had to move on with their lives and begin making a real paycheck, or their offers were outright rescinded. Nobody knows if this will be a V-shaped recovery or a U-shaped one or even W shaped. Hopefully it's a V shaped recovery. If it were me, I would not take the offer. I would rather secure my spot and take my chances with layoffs if they come -- it's not great to be laid off, but at least I will have been in the door.
Don’t disagree with your perspective at all, certainly a downside view to my upside view, and a very real potential one at that, no one knows. I for one do think it’s a big fat W with a softer but elongated second U. Ultimately the economy wins elections and the “do the right thing and isolate” mantra requires people to put the good of others ahead of their own. People will do it for so long but ultimately fatigue sets in and in the long run, the vast majority of people are self-interested. With that backdrop, I think governments will try to power through a re-open in Q3/Q4, particularly with the U.S. election in November, Trump really only has the economy to stand on with moderates and independents so he will push hard. M&A ramps Q4 and next year, probably not to the hyper levels of the past several years but sustained levels. All of that points towards needing the headcount to chase and execute mandates throughout next year hence my view on timing. Also, with all the money being pumped into the economy, cost of capital will probably be depressed (again) meaning a quicker ramp and sustained bull run. Definitely not gospel, just my view from what I see. But in the end who the hell knows...
As for prospects, the whole deferral thing and what that means for your career trajectory, in the last crisis, I had a lot of friends who got deferred/rescinded, as far as I can tell, they’re all in pretty decent spots at this stage. A couple of them deferred for 6-months, volunteered (so they could say they didn’t just waste their time), started in Jan., recruited to MF and then went a number of routes from there (stay in PE, MBA, CFO-trek). Ultimately, I believe if you’re truly a high achiever, have some grit and endurance, you’ll (a) stand out and (b) figure it out.
Could you elaborate more on 5) the PE rationale? Why would the first several months of training and hitting the desk be critical for PE recruiting? Most of the stuff you learn in training won't be helpful in PE interviews where they're concerned with LBO modelling and case studies and PE recruiting has been so accelerated that most kids recruiting don't have any deal experience once they hit the desk anyways. Just curious if I'm missing anything or to what you were getting at.
Who knows what this cycle will look like but for the public boutiques I mentioned, learning how to model an LBO seems like basic training. If you target early recruiting firms then the work experience is less beneficial (as you will have none) but more so the interactions, guidance and prep tools that the An2/3s impart. Keep in mind, a lot of people don’t place in that first wave and a lot of good firms place throughout the year. I’m not an expert in PE recruiting as I chose a different route so better left for the actual experienced analysts to comment here but just observations from trying to help my analysts place over several years.
From what I understand from friends...this offer applies to RX analysts as well. Why would Evercore offer 1st years in RX this? What does this mean for the group?
This means nothing for the group. Assume they're just giving the option to everyone - bad optics if just given to M&A.
Were they though?
If analyst class sizes are 1.5x, will this make buyside recruiting more difficult?
Layoffs and now delayed start dates? Feels like EVR grew too quickly and are now rightsizing going into macroeconomic softness.
EVR has always been a general forward indicator for the broader EB sector so would imagine others who grew aggressively over the last 5-10 years will follow.
My $.02.
Last times RIF probably, delayed start this time think you're wrong. Find me a bank that pre-planned for COVID while giving out FT offers in summer of 2019.
I think they're just leading the pack. This isn't going to be a unique story. Wouldn't be that surprised in the coming weeks to hear about more delays and potential rescindments from others although I think the industry wants to avoid rescinding offers as much as possible given the reputational black eye that the industry got the last time around and still hasn't fully recovered from on a recruiting perspective losing ground to consulting and tech.
Not following...
The point was that there’s excess bandwidth in their staffing structure right now due to transaction volumes being depressed. They, and other EBs (likely), are all discussing whether they need additional manpower to come online in this environment. If a bank’s near-to-medium term forecast calls for a prolonged depression in volumes, then there’s no point bringing on additional staffing.
Since EVR just completed a RIF (like 4-6 months ago) they must be looking for additional areas to cut back. Delaying onboarding is an easy way to accomplish that.
I wouldn’t accept the payoff, as others have indicated. If we get a second wave of C-19, who knows how long your “on-hold” employment lasts. Get your foot in the door and figure it out from there.
Some good posts that are on point here.
I do love how the majority seem to forget about the burden that this will place on the currently employed, productivity strained, and already stressed staff. Adjusting to a new work flow after years of your routine was pulled away? Don’t care - Train some kid you’ve never met, doesn’t know squat, and could leave for PE before you ever meet him....
Pretty much all of my peers are JUST ramping up to real desks, chairs, monitors, eating/work out habits etc. Finally realizing Cuomo the cuck is going to drag this thing out till 2021.
Do you know how awful it is going to be when employees are asked to waste hours of their day trying to explain excel spreadsheets and power point edits through the phone to someone who can barely write a formula? I can’t think of anything worse to pile on to my already shitty and f’d up “new normal”.
Not to mention how terrible your FT 1st year post-grad experience is going to be remotely. Don’t expect much. Maybe consider that cash.
One of the single-largest complaints from juniors is lack of exposure to clients/meetings/decision making. “I am so tired of being a meaningless powerpoint jockey”. Christ, you think you’re about to be Cc’d and included on meeting invites and looped in to meaningful dialogue when I have never seen your face? Yeah right.
The firm is doing you a favor while mostly considering the impact on revenue generating employees that they are leaning on hard to make revenue targets. Quit thinking these decisions have something to do with “impacting recruiting” and other PC garbage like that.
Any thoughts on how this might impact incoming summer 2021 SAs?
Any word on whether the delay offer was extended to incoming associates as well? And how much the amounts were?
Are many incoming analysts even going to take this offer? I highly doubt it, but what’s going to happen if most people don’t take it? Another round of layoffs?
Asked around and it doesn’t seem like many ppl are considering the offer
is this specific to the US or across the globe?
isn’t there even a remote risk of having the offer pulled?
This is going to suck so badly for the existing first year analysts and associates (assuming a decent chunk take the offer)
You have a whole class of 2nd year analysts who are leaving at the end of this month after completing their two-year stint and going off to PE (which is the vast majority at Evercore).
1) Essentially no interns to take some of the load off for the July-August period
2) Now you don't have a full-time class either so you are covering the work of a whole analyst class for 6 months to a year
All the terrible coverage books that 2nd years would pass on to 1st years will have to continue to be absorbed by the 2nd years. I'm not sure what deal flow looks like at Evercore but you can't lose an entire analyst class and have no replacement. Every year at my firm the July -> Late August period sucks (for all juniors) because you have so few analysts to spread around the deals and Associates end up having to do a lot of the Analyst work, etc. It's bearable for 2 months but 6-months to a year would be horrible.
Nobody is taking the deal tho
More people than you think are taking the deal. They proposed the delayed start without giving any hard figures in terms of compensation and it had garnered interest. Most of us werent expecting 25k, can guarantee there are people taking it.
I would take the deal and go travel the world for a semester/a year with the money + work bar shifts here and there and surf during the day.
You won't have many opportunities to do whatever you want for a year before having a guaranteed prestigious job at the end.
Honestly sounds like a dream, I may be a bit naive just being an intern but I don't understand all the opposition. I would take the offer in a heartbeat, deferring 6 month start date to have absolute free time to do whatever you want AND get $25k for it?
^Of course this is only relevant if you're able to stay with parents until you start work.
Honestly, you can solo travel in Latin America and SE Asia for $1500/month, staying in hostels (not including flights). Let's say you have 0 savings, most people can manage borrowing 2-3000$ from family or bank if you're guaranteed to make a minimum 85k/year in 6-month.
So no, would not stay with parents, would totally go as far as I can and explore the world before my life becomes trash in IB
$15k for Jan start, $25 to start next summer.
Seems low, but also generous at the same time.
The time might seem really appealing, but you lose a lot of experience by delaying even until January. Will be very difficult to ramp up or even have a role on the team if you start that late, especially if other first year analysts have been on the desk for a while.
It sucks because personally I would love to take the time and travel, but seriously as a first year Analyst I don't think it's a good idea.
EDIT: LOL y'all really don't like truth on this website. Best of luck explaining your leave of absence to PE headhunters in the future. What do you want me to do, validate your opinion that you can take the critical first 4 months off work in a job with a J curve difficulty and it won't matter?
Evercore or no Evercore the experience these first years is going to have will suck all around. it’s just a shitty situation but I guess people will have to make the most of it. I think the banking experience will be heavily compromised but I think you have to weigh the risk of potentially losing out on the offer period if deal activity remains bad. there’s no telling how activity will be and yes EVR has a reputation to uphold but first and foremost it’s got shareholders and partners with equity and honestly could give less of a shit about one class of analysts when push comes to shove. what is going to happen they’ll be banned from Ivy Recruiting OCR? to someone who brought up the dearth of top talent, let’s not forget there are boards of people willing to do this job and would probably be great at it. it’s not rocket science or a field where there is actually a supply scarcity
Does this mean bad news for FT recruiting at EVR this summer?
Just wanted to throw in here that this entire thread is the epitome of the circle jerking for "EBs" and especially the favorite child- Evercore. Everyone is spinning this so positively I almost thought I was reading a CNN article about Biden.
If this was ANY BB firm everyone would be posting "lmao well too bad you're not at Evercore or PJT and you don't have RX to hold you down" - looks like the tables have turned here. Grass aint that green over there at the EBs now huh?
In all seriousness I think its a terrible indication that they are putting this difficult situation on their analysts- they have money to pay you guys- just means the MDs bonuses will be smaller. Obviously M&A will be down and there are little to no capital markets/ trading activity to speak of at EVR.
Furthermore, the only bankruptcy situation has been Hertz so far, and most firms are raising debt just fine with the government backstopping every issue- this is a huge positive for the BBs with syndication desks- it also means little to no deals for RX- hence why this offer is to both M&A and RX.
I come here not to gloat but just to expose that the circle jerking for EBs is out of control on this site. Good luck everyone!
Have no desire to discuss the rest of your post, but you do realize that: 1. there have been more bankruptcies in the last 2 months than Hertz 2. RX firms work on deals that aren't straight Chapter 11
If you know anyone at any RX group you'd know there's plenty of RX dealflow. Even companies the government is offering an implicit backdrop to, like the airlines, have engaged RX advisors to work with them.
Keep the jerk going my man- obviously there are more complicated arrangements/situations that are being worked out through RX practices- the point is that the major fees (as compared to the massive fees from M&A and huge bankruptcies like Toys R US/ Worldcom/ Enron/ Lehman) are just not there- better luck next time though.
No worries bud - realize reading isn't always the easiest skill. Deals like Enron / Lehman are very rare, so saying there isn't much RX activity isn't a real comment unless you're implying that there only really was significant activity in 01 and 08 - if this is what you're saying, no need to read further - you're more stupid than I thought. Obviously for an M&A heavy bank like Evercore they're going to be affected by this crisis, but agree with the above poster that you're so clearly wrong when you state that Hertz is the only real activity in the space right now.
Figure given your struggles with reading you may also struggle with Google search, so here are some quotes from the restructuring shops confirming an increase in activity. Keep in mind that COVID impacts only began to be felt near the end of Q1 so business likely grew into April.
Moelis (from Q1 earnings call): "At the same time, our restructuring business, coupled with our capital markets capabilities, has experienced a tremendous increase in mandates recently."
PJT (from Q1 earnings call): "Since the onset of the economic shutdown resulting from the pandemic, we've experienced a dramatic increase in restructuring activity."
HL (from Q4'20 earnings call): "New restructuring engagement activity is running at almost double our recent monthly run rate as the pandemic has greatly increased the number of troubled situations and the speed at which solutions are needed."
Evercore (from Q1 earnings call): "Demand for restructuring and more broadly, debt advisory and liability management advice, has dramatically increased in the current environment as companies focus on their most immediate liquidity needs."
Let me know if any of those words were too big - happy to break anything down for you.
Epic smoothbrain moment. The other guy already got you pretty good, but here it is straight from Schlosstein's mouth (paraphrased):
>Q: Do you have an opportunity to grow into restructuring?
>A: Those parts of our businesses are going more than flatout. We're actually repurposing some of our M&A bankers to become restructuring bankers and financing bankers... no question, those parts of our business will grow over the next 12-18 months.
EVR doesn’t need my defending but I’ll post since I’m a charitable guy and I like to help people retrieve their heads from their asses by addressing factual inaccuracies. I’m going to stick with just Q2 activity since I worry about you if I roll it back further. I’m also not even going to rely on Bloomberg, CapIQ, MergerMarket, FactSet or any other subscription database to keep it real simple.
“... it also means little to no deals for RX...” *Google the following: Boeing, Ford, Frontier Comms, Ultra Petroleum
“...there are little to no capital markets/trading activity to speak of at EVR...” *Google the following: Danaher, Blackstone (not even bothering with co-manager roles like WMG, Equinix, Southwest)
...on M&A... *Google the following: Expedia, Blue Jeans, Alnylam
And before you go “...this is only 9 deals...”, they make that easy for you too.
*Google the phrase “Evercore transactions” and click on the first link. And that’s just the publicly announce-able stuff. You know what, if you do that same search but replace “Evercore” with “PJT”, “Lazard”, “Moelis” it lists out all of the boutiques’ public deals...HOLY SH!T
Let me know if you need me to pre-populate the Google search URL so you can copy/paste.
Lmao you’re such a joke. Energy group is on at least 5 RX mandates right now
A buddy who used to work there said they’re on about 20 right now across all energy verticals.
Go live on a beach in Thailand and teach english for a year. You can very easily live on
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