On-Cycle - To be or Not to be?

Jaime Dimon and Marc Rowan may be the smartest people in finance. When they talk, we should listen. Recently, they have talked quite a bit about junior-level hiring in finance. They have a unique symbiotic relationship when it comes to hiring talent. JP Morgan hires new grads into 2-year investment banking analyst programs. When they finish those two years, those bankers hope to be hired by Mark Rowan at Apollo. 

For those who are not aware, a little background: "On-cycle recruiting" is a process where the top PE firms begin to interview Investment Banking Analysts just a few months into their investment banking careers for a role that starts 2 years later. Imagine you are a 22 year old ivy league grad who just started at JP Morgan as an M&A Investment Banking Analyst, and during the first few months, you have to interview with a top private equity firm for a position that starts 2 years later! The interview process begins with preliminary meetings with a select group of headhunters. These headhunters then rank candidates based on school, GPA, persona, perceived interests and technical ability. The initial screenings are then followed by Private Equity firms conducting coffee chats and other networking events. 

At some point, one firm will “kick off” recruiting, and many firms will follow, which begins the rolling ball of on-cycle. This turns into marathon interview superdays, with candidates receiving exploding offers at the end of the day, or sometimes right at the end of an interview.  These private equity firms all want to compete for the best junior talent. Over the past five years, the intensity and timing of on-cycle recruiting has crept earlier and earlier. Last year, several firms even began recruiting in July—before bankers had even hit the desk, just two weeks after training. Compared to 5 years ago, the process may have started in the fall (at least giving new grads an opportunity to settle in by a few months!). 

The interview process has become more intense as well. Firms will conduct superday interviews, which could be several hours long, and ending with an exploding offer at 2AM! As Dimon notes, you could have a banker who is signed up to go to a Private Equity Firm in two years, yet working on a transaction with that firm as the client. This is a clear conflict of interest. 

I’ve always wondered;, How can you do your best in a job when you already know your career lies elsewhere? Aside from that, I tend to think on-cycle recruiting bears some resemblance to the NBA or NFL draft. There’s a small group of incredibly talented young prospects from the top schools. In this case, it's the MITs, Harvards, and Whartons—rather than the Alabamas, LSUs, or Ohio States. But as we commonly see in college sports, it’s not always the five-star recruits who become the best college players—or who ultimately succeed in the NFL. Success doesn’t come down to pure ability. There are plenty of quarterbacks who can throw the ball better than anyone—but there are usually only 10 who can truly excel at the NFL level. Why? Because they know how to adapt, make decisions quickly, and navigate complex, ever-changing environments. Investing is very similar.

Not every top investor comes from an Ivy League school or was a first-round pick. Many of the most successful people I’ve come across didn’t attend top 20 or 30 schools. So if you’re interviewing someone who’s worked on zero transactions, how can you evaluate their ability? How do you know how they’ll respond when a deal goes sideways? Who sees the forest through the trees? Wouldn’t you want to collect as much data as possible on the future prospect who could one day be directing hundreds of millions of dollars of investments for your firm—*before* you commit to them? A lot of private equity firms have an ill will towards on-cycle recruiting, but they feel like they have to participate, or risk being left with the scraps of the investment banking class. And in a highly competitive marketplace, the war for talent is as intense as ever.

If even half of the firms refrained from recruiting during the first year, the talent pipeline would have more time to develop and mature. Candidates could focus on learning the job, gaining real experience, and developing a clearer sense of what they actually want. With more time, they’d be making decisions based on firsthand understanding, not pressure or hearsay.

The reality is, many first-year bankers take these roles without fully knowing what they’re signing up for, and a year later, they’re no longer excited by the path they initially chose. Some even renege on their offers. That’s not a character flaw—it’s a reflection of how quickly people evolve early in their careers. Their interests shift, their exposure to new areas broadens, and their priorities change. As they grow, so do their aspirations—and naturally, so does their thinking about what’s next.

Our data shows that bankers who skip on-cycle recruiting tend to have longer careers in their second roles—and are more likely to transition into a thoughtful career path, rather than winding up on the standard IB–PE–MBA–Consulting hamster wheel that increasingly fails to interest or excite them.

I don’t know if this process will ever end, but Jamie Dimon and Marc Rowan pushed the first domino. In just the month since their initial announcement, other firms are following suit in their own way. Morgan Stanley and Goldman are now pushing analysts to disclose if they are ‘signed up’ for a new role. General Atlantic is reportedly “pumping the breaks” on early recruiting. We will see what happens next, but the ground has certainly started to shift. 

Candidates should not feel forced into this process. The world's most selective hiring firms should not be forced into this process. Time will tell what happens, but there will be opportunities if you wait. As a candidate, you only have one career to manage and you should really try to take better control of it early on.  

Good luck recruiting everyone!

With Love,

Your Friendly Neighborhood Headhunters at Long Ridge Partners