- Private equity reps are asking to meet with college seniors headed for jobs on Wall Street.
- These "coffee chats" often lead to interviews for jobs that won't start for two years.
- The May start has soon-to-be bankers on edge at a time when they should be celebrating.
Graduation season is supposed to be filled with commencement speeches, family dinners, and tearful goodbyes. Newly minted graduates headed to Wall Street, however, are finding themselves trading libations for leveraged buyout models.
Soon-to-be junior bankers told Business Insider that they have been summoned in recent weeks to introductory meetings with buyout firms and headhunters for associate jobs that won't start for two years — when their investment banking analyst programs end.
The communications reviewed by BI were for introductory meetings, often referred to as "coffee chats," and informational webinars. They came from employees and headhunters representing firms like Apollo; Hellman & Friedman; KKR; General Atlantic; Clayton, Dubilier & Rice as well as recruiting firms like Ratio Advisors, Gold Coast, CPI, and Amity. Spokespeople for these firms either declined to comment or did not respond to requests for comment.
Students said the coffee chat requests, which often precipitate more formal interviews, are taking place earlier than expected — putting them on edge about the industry's infamous recruiting frenzy, known as on-cycle recruiting.
For some, the feeling that official interviews could kick off at any moment has cast a pall over graduation season. Rather than occupying themselves with photo shoots in their caps and gowns, some finance grads are stressing over when interviews could break out.
"It's constantly monitoring your email," said an incoming first-year investment banker about the recent onslaught of meeting requests. She said she and her friends have their notifications on — "calls, texts, everything" — in order not to miss out.
The student, who hopped off the phone with BI just as her own graduation ceremony was commencing, said coffee chat meetings started hitting her inbox in early May, about four to six weeks earlier than classmates who received similar overtures last year.
"It's awful," said the student, who asked to remain anonymous to protect her future employment. "You never get a break."
On-cycle could kick off sooner than ever
Matt Ting, the founder of Peak Frameworks, which helps students prepare for Wall Street job interviews, said he's seen demand for his courses spike in the last two weeks as students gear up for on-cycle to kick off any day now.
"A lot of college grads go on a grad trip around now, which muddies things," said Ting, adding: "Some are still in school. Many firms had issues last year since it kicked off while many grads were backpacking somewhere in Asia."
The problem with the industry's on-cycle recruiting process is that no one knows when the hurricane will hit. And once it makes landfall, aspiring private-equity dealmakers are expected to drop everything to participate.
A second-year investment banker recalled getting an email around 10 p.m. when he participated in on-cycle recruiting last June. The firm's representatives asked him to interview the next morning at 8 a.m. Fortunately, he was within driving distance of the company's office. Some of his friends weren't so lucky.
"I personally felt it was too rushed, like I was taking the opportunity just because it presented itself, not because I was very calculated about it," he told BI about the experience.
The second-year banker said there is a clear distinction between coffee chats and official interviews that would signify the start of on-cycle. On-cycle recruiting, he said, only starts when a headhunter uses the word "interview" in their communication with candidates.
"The coffee chats are just an interview to get an interview," he said.
The process used to start after investment bankers got some job experience under their belts, but has been moving progressively earlier every year. Last year, the process kicked off on June 24, before many graduates had even started their jobs. The year before, it took place in July, prompting some investment banking analysts to skip out on training.
The sudden rush of coffee chat requests has students bracing for on-cycle to kick off earlier than ever this year. A college student running a college finance club said he'd heard on-cycle could begin after Harvard's graduation on May 29. An industry recruiter predicted that on-cycle recruiting might not get underway till late June, in keeping with 2024's cycle. They asked to remain anonymous to protect their relationships with prospective employers and private-equity clients.
Inside the coffee chat
Coffee chats, the step before PE firms proceed with formal interviews, may sound casual on the surface. In fact, they're a high-stakes way for recruiters to pre-screen candidates for official interviews, students told BI, so a lot is on the line.
"My advice has always been, no matter what, every coffee chat is an interview, implicitly or directly," said the second-year investment banker who participated in last year's on-cycle process.
These jobs, of which there are a coveted few, can vault early-20s professionals into the highest tier of American earners. Many tout comp prospects of more than $300,000, inclusive of salary and bonus, so the pressure for rookie masters of the universe to leave a good impression on recruiters is palpable.
A recent graduate about to start an investment banking job at a bulge bracket firm agreed. "I've had a firm tell me that I'm shortlisted," he said of his coffee chats, adding, "I've had headhunters follow up with me and say, 'Hey, by the way, this firm had great feedback on you. Let's stay close here,'" he added.
He said he moved to New York City immediately after graduation, motivated in part by the sense that he should be in a position for an early on-cycle recruiting process.
"I don't even have a couch," he confessed, so he spent his first few nights in the big city sleeping on a mattress on the floor. "Now I've got a bed frame."
"But if you want one of these jobs, you've got to play the game," he said. "And I'm just playing the game."
