Reed Alexander,Emmalyse Brownstein,Alex Nicoll
4 min read
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JPMorgan recently drew a line in the sand over private equity's recruiting of its newbie bankers.
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Within days, Apollo and General Atlantic said they would bow out of the practice this year.
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Here are some of the other factors that may have played a role in their decision.
When Jamie Dimon speaks, people listen.
Early last week, the JPMorgan CEO blasted the practice of private equity firms hiring junior bankers for future-dated jobs. Days later, buyout shops Apollo Global Management and General Atlantic heeded the warning and announced they'd stop the recruiting tactic.
Even Apollo's CEO, Marc Rowan, seemed to credit Dimon for his firm's decision.
"When someone says something that is just plainly true, I feel compelled to agree with it," Rowan, the Apollo CEO, told Business Insider last week, following his firm's decision to back out of recruiting 2027 associates this year.
Dimon, who has proven influence over a wide range of topics including the economy and the workplace, has been no stranger to critiquing private equity's recruiting practices.
He blasted them last year, telling students at Georgetown University that he believes they're "unethical" and that he wants to ban them.
"I think it's wrong to put you in the position," Dimon said, adding: "You have to kind of decide the next career move before you have a chance to even decide what the company is like."
The question is, why now? Nothing changed last year — so what triggered Apollo and General Atlantic to suddenly reverse course?
Neither firm responded to interview requests from BI to speak with executives in time for the publication of this story. Industry insiders, however, pointed to a series of factors that they said have made it easier for firms to heed Dimon's words of warning, including the persistent slowdown in deal activity and the rise of artificial intelligence, which could supplant the need for some early career jobs.
Frustrations have also been mounting over a recruiting process that has shifted earlier and earlier in recent years.
"The matching process is yielding a lower success rate and many candidates will sign without fully knowing what they're getting into," Matt Ting, the founder of Peak Frameworks, a popular Wall Street careers course provider, told BI in April.
Should any one of these factors change (deal activity picking up, for example), the rat race could come roaring back, some people said.
"Being cynical, it's an easy time for them to make such a decision," said a senior banker, who asked to remain anonymous to protect his job and relationships with financial sponsors.
