Goldman Sachs is rolling out a retention program aimed at keeping junior talent from defecting to private equity firms, the latest move in Wall Street’s escalating war over young bankers.
The investment bank will offer select interns a guaranteed path from investment banking to its asset management division after two years, according to an internal memo obtained by Bloomberg. The program targets analysts who might otherwise bolt for higher-paying PE jobs.
“Our goal with such a talented cohort is to offer the options to you,” Dan Dees, co-head of global banking and markets, wrote in the memo. “The path you find yourself on at Goldman Sachs might just be the one that keeps you here many, many years later.”
PE Firms Have Been Poaching Earlier Than Ever
The move comes as banks struggle with “on-cycle recruitment” – a practice where private equity firms recruit junior bankers almost immediately after they start work. Some new Goldman hires have been caught skipping mandatory training sessions to interview at PE firms for jobs that wouldn’t start for another year or two.
JPMorgan discovered last summer that new analysts were missing onboarding sessions to interview elsewhere. The bank responded by threatening to fire anyone who accepts a future-dated offer from a competitor. Goldman followed with plans to make analysts certify every three months that they haven’t lined up other jobs.
The recruitment timeline has compressed dramatically. In 2010, PE firms typically waited about 11 months before approaching junior bankers. Now some start recruiting within weeks of analysts starting work.
“There’s a finite pool of candidates, and a lot of private equity firms — it creates a situation where firms don’t want to miss out on hiring top talent,” said Adam Kahn, managing partner at recruiting firm Odyssey Search Partners.
Banks Are Fighting Back
Goldman’s program essentially creates an internal version of what analysts are seeking externally. Instead of leaving for a PE firm after two years, promising candidates can transition to Goldman’s asset management arm, which includes private markets investments.
The strategy acknowledges what banks have long resisted: many of their best analysts don’t want to stay in traditional investment banking long-term. By creating a buy-side path within Goldman, the firm hopes to retain talent that would otherwise leave.
JPMorgan CEO Jamie Dimon has called the early recruitment practice “unethical,” saying it puts junior bankers in a “terrible position” and creates conflicts of interest since they’re handling confidential information while committed to future employers.
Some PE Firms Are Backing Off
The pushback appears to be working. Apollo Global Management told candidates it was delaying hiring for 2027 positions, with CEO Marc Rowan saying asking students to make career decisions before understanding their options “doesn’t serve them or our industry.”
General Atlantic and TPG have also suspended early recruitment efforts for their 2027 classes, according to people familiar with the matter.
The retreat comes as private equity faces its own challenges. A prolonged deal drought has made it harder for firms to exit investments at favorable prices, potentially limiting their ability to absorb new hires.
The Money Factor
Private equity remains attractive largely due to compensation. PE professionals typically earn “carried interest” – a share of profits from successful investments that can dwarf banking salaries. But recruiters warn that the grass isn’t always greener.
“Private equity is not a panacea,” said Tom Ragland, founder of recruiting firm Harrison Rush Group. “It’s still long hours and still takes a while to make decent money.”
Some recruitment scenarios have bordered on absurd. Ragland recounted junior bankers taking PE interviews via Zoom from office bathroom stalls. In one case, the PE firm viewed the bathroom interview as a positive sign of enthusiasm, though the candidate didn’t get the job.
What’s Next
Whether Goldman’s program succeeds depends on execution. The firm needs to deliver meaningful roles in asset management and prove that internal advancement can compete with external opportunities.
Other banks are watching closely. If Goldman can demonstrate that retention programs work better than threats and loyalty pledges, it could reshape how Wall Street firms approach junior talent development.
For now, the early recruitment arms race appears to be cooling. But with billions in fees at stake and a limited pool of top talent, the competition for Wall Street’s best and brightest isn’t going away anytime soon.
Banks invested heavily in training programs, and they’re finally fighting back against firms that were essentially getting that training for free. The question is whether offering internal alternatives will prove more effective than trying to block external ones.