Odyssey’s Quarterly Buyside Newsletter Q4 2020
Trends and Insight
Trends and Insight
Views on Careers, On-Cycle Recruiting and MBAs
Review of a Tumultuous 2020, and a Look Ahead
How Outcomes may affect Investment Strategies, Performance and Hiring
Every first-year investment banking class is distinctive in some ways, but the class of 2020 is truly unique. This is the first class in history to launch their careers from their living rooms, and meet their colleagues for the first time over video conference.
We at Odyssey sought to learn more about this first-year IB analyst class, as we’ve done with previous classes, with our annual survey. Over the month of October 2020, we received over 1,000 responses from the newest entrants to the finance industry. Below we share their demographic makeup, career interests, overarching concerns, and thoughts on life as a first-year banker during the Coronavirus lockdown.
The bankers, typically spring/summer 2020 college grads, are currently working at bulge brackets and major boutiques (most started remotely in August, though Deutsche and Barclays pushed their start dates to November). The banking analysts are associated with offices around the US as follows.
One thing to note off the bat is that the size of the banking class is almost the same as in 2019 – that is to say, over 1,500 investment banking Analysts at the top 40 banks (the universe we comprehensively cover). Of course, most of the offers for these positions were made and accepted in the pre-COVID world.
It may be some time before these 2020 college grads end up applying (average age of those entering the top business schools in the US is 27), but as they consider their career plans, business school is becoming a less important factor.
As the chart below indicates, the proportion of those planning to stay in PE without an MBA continues to fall, while those with no interest in an MBA slowly rises. There may be more immediate pressures on post-graduate educational institutions in 2020, but this is a trend worth paying attention to.
For IB Analysts considering PE, changes in how they’re thinking about careers /MBAs
|(Respondents chose best answer; other answers included ‘unsure’ which led the responses to total 100%)||2017||2018||2019||2020|
|Planning to stay in PE long-term, with an MBA en route||40%||33%||33%||31%|
|Planning to stay in PE long-term, without getting an MBA||16%||14%||11%||11%|
|After the PE Associate program, plan to reevaluate options, but no interest in an MBA||5%||8%||11%||13%|
|Want to head into a PE Associate Program, with the goal of joining a Hedge Fund||4.0%||3.0%||2.4%||
NOTE: As of late October 2020, on-cycle recruiting for these 1st-year investment banking Analysts has not started. Odyssey surveyed the class, as it has previous classes, but made clear that this was not directly related to any particular client or search, and we have not yet initiated conversations with these candidates.
Here at Odyssey, we’ve been noticing an uptick in credit-focused searches from our clients. This is noteworthy, given how private credit and CLO searches—along with deal flow—dried up for the first half of 2020 (activity and hiring in the distressed/special situations sectors has remained robust throughout the remainder of the year).
The kickstart got us wondering: will 2020 go down as a brief pause in the otherwise upward trajectory of the credit market cycle, or is this year the beginning of a new normal? We spoke to several hundred private credit, performing credit and distressed
industry participants via online surveys and informal conversations, and came away with a holistic picture of the overall credit market. We first take a look at the roller coaster ride that was the past eight months, and then where things are headed in terms of activities and opportunities.
Odyssey Search Partners is a premier executive search firm founded in 2010 and led by Adam Kahn and Anthony Keizner. We specialize in placing investment professionals in the private equity, hedge fund, family office, and private credit sectors. Our expertise spans all levels of recruitment, from pre-MBA hires to Partners and Portfolio Managers. We approach every search with diversity in mind.
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