URGENT UPDATE: Citi has just implemented a strict new policy targeting junior bankers amid escalating competition from private equity firms. The banking giant, led by CEO Jane Fraser, is now probing its junior staff about potential job offers elsewhere, a move revealed in an internal memo to managers on October 16, 2023.
This decisive action aims to “foster a fair and transparent environment” as private equity firms aggressively poach talent. According to Bloomberg News, the new attestation process will require junior bankers to disclose any lucrative offers but will be evaluated on a case-by-case basis. This policy marks a significant shift as Citi strengthens its investment banking division under the leadership of Vis Raghavan, who has been actively recruiting senior bankers from JPMorgan.
The clampdown follows a pattern seen at other Wall Street powerhouses. Goldman Sachs and JPMorgan have also initiated measures to retain their talent, reflecting a fierce battle for skilled bankers. Recently, Jamie Dimon, CEO of JPMorgan, warned that job-hopping juniors could face termination if they accept another position within their first 18 months at the bank. “It puts us in a bad position,” Dimon stated during a talk at Georgetown University, addressing the ethical implications of early departures.
In a similar vein, Goldman Sachs now requires its recent hires to pledge loyalty every three months, while Morgan Stanley enacted a compliance policy in May that could lead to dismissal for non-compliance. This trend underscores the rising appeal of private equity firms, which have raised over $1 trillion globally in 2024 alone, according to Preqin. The firms entice young bankers with competitive pay and diverse deal-making opportunities.
The heightened competition comes as private equity-backed transactions accounted for nearly 30% of global M&A volume last year, as reported by Dealogic. The surge in deal-making, fueled by post-pandemic recovery and remote work flexibility, intensifies the race for talent across the financial sector.
Furthermore, private equity firms like Apollo Global Management are now reconsidering their early-stage recruitment strategies due to backlash from banks. This evolving landscape poses a critical challenge for financial institutions, which have invested heavily in training their junior bankers only to see them lured away by the allure of private equity.
As this situation develops, all eyes will be on how Citi, along with other banks, adapts to retain their talent and navigate the fierce competitive environment created by private equity firms. The implications of these policies are significant, not just for the banks, but for the future careers of thousands of young bankers across the industry.
Stay tuned for further updates on this urgent matter as the battle for banking talent unfolds.
