If nepotism exists anywhere in investment banking, it surely exists in China. Take J.P. Morgan’s recruitment of 25 year-old Joe Gao, son of the country’s Commerce Minister, or the appointment of Levin Zhu, son of the former Chinese premier, as CEO of CICC.
However, both Gao and Zhu were appointed several years ago (in 2007 and 1999 respectively). After being called out for hiring the sons and daughters of Chinese officials (fuerdai or guanerdai in Mandarin), banks in the country are supposed to have cleaned up their acts. Have they?
Not exactly, say recruiters. “Hiring of fuerdai still happens all the time, but it’s not talked about in public now,” says Lesley Li, founder of Shanghai-based Matrix Search, an executive search firm. “People just chat about it over dinner or drinks.”
Although banks are still hiring fuerdai, recruiters say banks are hiring them because they’re strong candidates, not simply because of their family connections. In 2007, J.P. Morgan hired Joe Gao even though he was deemed one of the worst candidates the bank had ever seen and despite deeming him, ‘immature, irresponsible and unreliable.”
Since then, recruiters say banks have strengthened their hiring processes. “Banks are much more prudent in hiring now,” says Stephen He, partner of the recruiting firm Falcon Talent. “Background checks are not only conducted for graduates, but also for interns.”
As a result, recruiters say the fuerdai who make it through banks’ selection processes now are genuinely hardworking and talented.
Jean Liu, daughter of Chuanzhi Liu, founder of China’s largest PC maker Legend, is representative of the new breed – although she went into banking years ago. After graduating from Peking University and Harvard, Liu joined Goldman Sachs in 2002. She left in August 2014, after becoming an MD, and has only recently spoken about the 100 hour weeks she worked at Goldman. – Liu, at least, seems to have been treated just as any other analyst would have been.
“Jean Liu is one of those fuerdai who are highly driven,” says He. “There are some fuerdai who are really good,” he adds, “You just can’t knock a whole group of people down in one blow.”
Li of Matrix also thinks fuerdai have been unfairly criticised. “They have a good educational background and good international experience,” she says. “If they could go to top universities, it shows they work very hard, and they are smart too. Why wouldn’t global banks want to hire them?”