Photographer: Michael Nagle/Bloomberg

Private Equity Firms Race to Recruit in Pre-Christmas Showdown

  • ‘It disadvantages recruits, and it disadvantages us’: Bain
  • Firms compete to attract top candidates for analyst class

The private equity recruitment cycle is starting earlier than ever, forcing firms and candidates into the frenzied process before Christmas.

Last weekend, Francisco Partners Management was making offers for spots in its 2019 analyst class. By late Sunday, fellow California firms TPG Capital and Silver Lake began arranging interviews after catching wind that others had started. Firms in New York were on the move by 5 a.m. Monday.

So kicked off private equity’s annual recruiting process, the frantic period of interviews and take-it-or-leave-it offers that’s become the industry’s method of culling its future analyst group, many of whom just hit the desks at investment banks after graduating college. While extending formal offers in recent years has started earlier and earlier in January, never has it come before Christmas, a timeline that industry insiders and job hopefuls had come to rely on.

“You’re taking a tough timeline and compressing it even further,” Susan Levine, the head of private equity recruiting in North America at Bain Capital, said in a phone interview. She was texting with a head hunter around 2 a.m. Monday deciding whether to formally kick off the process.

“You’re making these decisions on people who are starting in 19 or 20 months and who have barely finished their first assignment at work,” Levine added, saying Bain likes to keep a few spots open for high-caliber applicants later in the process. “It disadvantages recruits, and it disadvantages us.”

Read more about the frenetic ritual of private equity recruitment

Access to the best talent can go quickly, so the process works like a levy breach: Once one firm starts, the others flood in to follow suit. For big firms, spots can fill up in a matter of days, forcing job-seekers into a hectic yet delicate dance as they calculate their chances and weigh offers.

TPG Capital filled its 2019 class within 41 hours with a 100 percent acceptance rate, spokesman Luke Barrett said. Francisco and Silver Lake declined to comment.

As the timeline moves earlier, the decisions get quicker. So-called exploding offers, which give candidates a day or even just hours to decide, have in some cases been replaced by a nuclear option: accept on the spot or pass it up.

Some firms have tried to coordinate on a later start to the process, but inevitably one tries to get a jump on the others and the starting gun begins the race. Recruiters and executives are often forced to clear their schedules to interview the applicants.

“It’s unfortunate, it’s absurd,” said Josh Grauer, a partner at Dynamics Search Partners. “I wish there was something I could do about it.”

Potential candidates lamented the hurried timeline on a financial careers website this week. One called it a prisoner’s dilemma, saying firms and candidates would be better off if they agreed to wait for another year. Others said the firms are acting like the young recruits are professional athletes, who have to be on the right track early to have a shot at fulfilling their dreams.

— With assistance by Yueqi Yang, and Kiel Porter

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