Buy-side firms are increasing their focus on junior recruitment and upping their graduate intakes for 2014 as they take advantage of improved revenues and the diminished appeal of working in investment banking.
Securing a graduate job at an investment bank is notoriously competitive, with only around 2-5% of applicants eventually getting offered a full-time position. However, each of the large investment banks still recruit hundreds of graduates across Europe, Asia and the U.S each year, receiving around 40 applications for each role. Even large asset managers, however, hire a handful of graduates each year and receive thousands of applications.
Investment banks continue to talk the talk on graduate recruitment, insisting that hiring at the junior level is a priority and increasing analyst pay, while expensive managing directors are shown the door. However, figures from High Fliers suggest that banks’ graduate recruitment targets have been declining this year – 235 roles have gone since January 2014.
On the buy-side, though, graduate recruitment is on the up. Aberdeen Asset Management, for instance, has 22 graduate positions this year, up from around 6-7 in 2010.
Aberdeen tends to recruit for its graduate positions directly from its summer internship pool. Interns are invited into the company for six weeks during the summer and a proportion of these are offered full-time positions at the end of the process. In 2010, 40-60 interns competed for these 6-7 jobs, this year 54 people came in and 22 were offered places.
This means that in 2010, just 12% of interns were offered a place at Aberdeen, whereas in 2014 around 41% secured a full-time job.
Other large asset managers, such as BlackRock, M&G and Fidelity have also increased their graduate intake this year, suggest sources close to the situation.
One asset management graduate recruiter, who requested anonymity because she is not authorised to speak to the media, tells us that there was been an uptick in applications for internships this year, and they expect the same when the graduate recruitment season kicks off later this month.
“Generally, a lot of graduates applying for our roles come from economics or finance backgrounds, and top-tier universities. We are competing with the investment banks for the same pool of candidates, but this year we have seen a noticeable rise in interest.”
Competition for places on the buy-side remains tough. Terra Firma, one of the few private equity firms to recruit graduates straight from university, says it received 1,589 applications for just six roles in 2013.
Hedge funds have also increased their graduate intakes this year, according to research from headhunters Glocap, but tend to recruit on a rolling basis according to business needs rather than through formal graduate schemes. Larger hedge funds, such as Man Group, CQS, Brevan Howard, Winton Capital Management and Bridgewater Associates are some notable exceptions.
Asset managers ask for the same academic requirements as investment banks for their graduate recruits – namely, a 2.1 degree (in the UK) and a minimum of 300 UCAS points. However, research from eVestment shows that just six universities in the UK have provided the bulk of candidates moving into asset management in Europe – University of Oxford, University of Cambridge, London School of Economics, University of Edinburgh, University of Bristol and Imperial College London.