UPDATE: Citi has just implemented a new policy targeting junior bankers amid a fierce recruitment battle with private equity firms. In a memo sent to managers on October 16, 2023, CEO Jane Fraser outlined measures to prevent aggressive job-hopping by employees, aiming to create a “fair and transparent environment” within the bank.
The policy requires junior bankers to disclose any lucrative job offers they may have from competing firms, reflecting the growing pressure from private equity companies that have been luring talent with attractive compensation packages. This attestation process will be a one-time form, potentially repeated on an annual basis, and will be evaluated on a case-by-case basis.
This move comes as Citi strengthens its investment banking division under new leadership from Vis Raghavan, who joined the firm from JPMorgan last year. Raghavan has been actively recruiting senior bankers from his previous employer, intensifying the competitive landscape. Other Wall Street giants, including Goldman Sachs and Morgan Stanley, have taken similar steps to retain their talent amid the mounting allure of private equity firms.
In a recent address, JPMorgan CEO Jamie Dimon warned that junior bankers who accept positions elsewhere within their first 18 months could face termination. “I know a lot of you work at JPMorgan, you take a job at a private equity shop before you even start with us,” Dimon stated, branding such behavior as “unethical.” His remarks were made during a talk at Georgetown University’s Psaros Center for Financial Markets and Policy.
Goldman Sachs has introduced its own loyalty pledge, requiring new hires to affirm their commitment every three months, while Morgan Stanley has threatened dismissal for non-compliance with similar policies. As a result, private equity firms such as Apollo Global Management are reassessing their early-stage recruitment strategies after backlash from major banks.
The competition for junior bankers has escalated significantly, especially as private equity firms raised over $1 trillion globally in 2024, according to Preqin. This figure highlights their growing financial strength and influence in the hiring market.
With the surge in post-pandemic deal-making and remote work options, talent competition is heating up across regions. In 2022, private equity-backed deals made up nearly 30% of global M&A volume, as reported by Dealogic, complicating banks’ efforts to retain their employees.
As private equity firms continue to attract young talent with promises of higher pay and diverse deal exposure, banks like Citi are scrambling to keep their best and brightest. Stay tuned for further updates on this developing situation, as the financial landscape continues to shift dramatically.
