• The optimal moment for being a junior investment banker in recent history was probably early 2022. Deals were plentiful post-pandemic, juniors had the upper hand after the Goldman Sachs unofficial ‘working conditions survey’ blew the whistle on inhumane working hours, and pay was booming.

  15 months later, things are very different. It’s not just that junior banking jobs are being trimmed as deals stay slow, or that pay is likely to be a lot lower in the coming analyst bonus season. It’s the exit opportunities: private equity firms aren’t hiring like they did before, and this is partly the fault of junior bankers themselves.

  Headhunters who work with private equity firms on both sides of the Atlantic say that while clients are hiring fewer people from banks, the drop in hiring isn’t entirely demand-driven. It’s also down to the supply of juniors.

  “Private equity firms didn’t hire as many people in the recent hiring season,” says Anthony Keizner, a partner at New York-based Odyssey Search. “But this had less to do with the fact that their number of target recruits has fallen, than with the fact that they couldn’t find the right sorts of people to hire.”

  Who are the right sorts of people? Diversity hires for one. Private equity has a notorious diversity problem and Keizner said many firms are holding out for female or ethnic minority recruits.

  However, he says there’s another issue with today’s junior bankers that has nothing to do with gender or ethnicity: they can’t pass the tests.

  After a drought in the number of deals, Keizner says contemporary juniors seem a lot less able than their predecessors. “They’re not doing as well on the standardized assessment tests,” he says. “We heard this for the past few years and thought it was because people weren’t in the office, but what now appears to be the case is that because the deal flow wasn’t there, then people’s technical skills simply aren’t as well-developed. They don’t do as well on financial modelling tests as a result.”

  Charlie Hunt, director of the UK at private equity recruitment firm PER, says the testing issue has been compounded by the way junior bankers work now. “The bar is as high as ever and not everyone has the skills or intellect to pass it,” he says of private equity firms’ assessments. “But more bankers are working off modelling templates so they are likely to struggle when building their own models as part of a case study.”

  Speaking off the record, the head of another search firm in London, says the issue isn’t just assessments but attitude. “Some banks have over-pampered people,” he says. “Private equity funds are struggling to hire because there’s a change in attitude to work.”

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