Apollo pulls the plug on recruiting practice that led to JPMorgan crackdown: See the memo

One of the most prominent private equity firms is pulling back on a controversial recruiting practice that has drawn criticism from banking leaders like JPMorgan Chase CEO Jamie Dimon.

Apollo, which manages $785 billion in assets, told would-be candidates for its 2027 associate class that it will not participate in recruiting for their cohort this year.

The news, communicated via email, was sent by Apollo’s cohead of private equity and head of human capital on Wednesday. Business Insider obtained and reviewed a copy of the memo, which was first reported by Bloomberg.

“As you transition to the workforce, we believe you should take time early in your career to deepen your understanding of the business world and reflect on what you are most passionate about so you can make the best-informed decisions as you contemplate your career,” the letter said.

The move flies in the face of industry norms to recruit first-year investment bankers for jobs that won’t start for two years. This practice, known as “on-cycle,” demands junior bankers compete for future-dated private equity jobs within a day or two after being notified, which can result in missed vacations or middle-of-the-night interviews after work.

In recent years, the timeline has inched earlier, kicking off before candidates even start their first postgrad jobs with investment banks.

The news comes days after JPMorgan told its incoming first-year bankers that they’d fire anyone who accepted one of these pre-dated jobs. The bank also sought to crack down on analysts sneaking out of job training to interview with private equity firms.

“I think that’s unethical. I don’t like it, and I may eliminate it regardless of what the private-equity guys say,” Dimon told college students at Georgetown University last year.

One first-year banker planning to participate in on-cycle recruiting said he was stunned by Apollo’s letter and that friends who had been planning to interview with the firm were feeling let down.

“It’s quite surprising,” he told BI. “My friends who have been preparing are disappointed. Those who have not been are relieved.”

In a statement to BI, Apollo CEO Mark Rowan said the bank is making the change to improve the quality of its recruits while also acknowledging concerns raised by Wall Street leaders like Dimon.

“When someone says something that is just plainly true, I feel compelled to agree with it,” he said in a statement to BI. “Bank CEOs, along with others, have said what many of us have been thinking: recruiting has crept earlier and earlier every year and asking students to make career decisions before they truly understand their options doesn’t serve them or our industry. We are in a fortunate position where we see an abundance of talent. But when great candidates make rushed decisions it creates avoidable turnover—and that serves no one.”

See the letter Apollo sent to would-be job candidates:

Congratulations on your recent graduation and the start of your career in investment banking. We know how exciting — and demanding — this period can be, and we’re confident it will be a valuable foundation for your professional journey.

As you transition to the workforce, we believe you should take time early in your career to deepen your understanding of the business world and reflect on what you are most passionate about so you can make the best-informed decisions as you contemplate your career. Similarly, hiring decisions at Apollo are among the most significant to our business.

With that in mind, we will not formally interview and extend offers this year for the Class of 2027.

We continue to be deeply interested in getting to know talented individuals like yourself, and look forward to reconnecting down the road to explore Associate opportunities together. In the meantime, we encourage you to stay in touch.

Wishing you all the best as you embark on this next chapter.

Warm regards,

Nicole and David

David Sambur — Co-Head of Private EquityNicole Bonsignore — Head of Human Capital — Equity

The post Apollo pulls the plug on recruiting practice that led to JPMorgan crackdown: See the memo appeared first on Business Insider.