It’s no secret that young bankers are queuing up to move into private equity, but if they want to secure a job at Blackstone they’re in for a culture shock. While junior bankers are indoctrinated into a hierarchical structure and beholden to associates and MDs alike, Blackstone employees are will be thrown into deals from the get-go.
Even more importantly, according to Robert Ramsauer, senior managing director at Blackstone in the UK, you’ve got to be liked by the whole team – and this means a rigorous interview process.
“Candidates typically go through a dozen interviews, with analysts through to senior managing directors, so that everyone feels comfortable with the new hire,” he says. “We get a lot of CVs for each entry level job. What we look for is a top education, and internships in the financial world – whether that’s private equity or investment banking – and how they’ll fit into the environment.”
Blackstone was the top-ranked private equity firm in the eFinancialCareers 2016 Ideal Employer rankings, which polled over 6,500 finance professionals globally on the companies they’d like to work for.
Across the private equity industry, typically one in 300 applications is eventually offered an entry level job. Most juniors switch to the buy-side after a couple of years in investment banking, but Blackstone is one of an increasing band of large private equity firms to recruit graduates. Globally, it takes on around 80 analysts each year.
What does it take to get in? Like most private equity firms, Blackstone vets candidates based on the university they went to, the technical skills they have and evidence that the applicant is an elite among their peers. But with such a high volume of applications, softer factors inevitably come into play and there’s a real focus on ‘cultural fit’.
Raphael De Botton, managing director at Blackstone, admits that there’s a “little bit of luck” involved in the final selection process.
“We have 25 people working in private equity in London and you spend a lot of time together,” he says. “Therefore, the recruitment process is focused a lot on the cultural fit. We want people who have technical skills, who are proactive and able to go into complex business deals at a time of strategic change, but our recruits have to fit in with the rest of the team.”
The ‘beer test’ is a classic criteria that’s applied to potential entry-level recruits to private equity in a tie-break scenario. Recruiters in the sector tell us that the one thing that sways the hiring decision is if senior people in the business can see themselves sitting in a bar with the candidate for a few hours – or whiling away a few hours on a long-haul flight.
Moez Gharbi, an associate in private equity at Blackstone, joined the company through its graduate programme in 2012 and has just been promoted from analyst. The recruitment process, he admits, was tough.
He was studying at HEC School of Management in Paris, with a secondment to MIT, and had to fit more than 10 interviews in London during this time. He’d already interned at Lazard, Goldman Sachs and Morgan Stanley and had multiple offers on the table by the time Blackstone came calling.
Choosing private equity over investment banking – where a number of his university friends ended up – was relatively straightforward, he says.
“A lot of my classmates went into finance without thinking too hard about what they really wanted to do,” he says. “On my end, investment banking internships provided the experience I needed to build the maturity for working in private equity straight out of university.”
Blackstone’s recruitment process for analysts may be tough, but getting into the company is no guarantee that you’ll stick around. The firm prides itself on its retention rates, says Ramsauer: “Most of our senior management team joined the firm as analysts or associates”.
However, moving up from analyst to associate is the crunch point in your career at Blackstone – or a “significant hurdle”, according to Ramsauer. Many don’t make it, but those who do tend to kick-start their private equity career.
“There are a number of reasons people don’t make it to associate, but often it’s about having the maturity to manage down as well as up,” he says. “Associates are both more exposed to clients, but they also have to begin to manage people. What’s more, even juniors – which are knee-deep in the financial analytics – are expected to have an opinion on a deal.”
Blackstone has around 2,200 employees and last year allocated $1.8bn to compensation – an 8% reduction on 2014. Within private equity, however, compensation was flat at $280.2m. It doesn’t break out employees by division.
It was perceived as being a generous payer by respondents to our survey. 82% of respondents said they’d expect a generous salary and bonus to work at Blackstone. Of the top 20 companies in the ranking, only Goldman Sachs – the overall winner – scored higher.
However, just 16% of respondents who voted for Blackstone said that manageable working hours would be a strength. Private equity requires a lot of travel, and the hours are not perceived to be exactly easy, but it’s supposedly a change of pace from the 80+ hours required of investment banking juniors.
“You work hard, but there’s no face time culture. If you’re in the office at 1am it’s because it’s a busy time and the whole team is working towards a common goal,” says Gharbi.
Investment banks have focused on both fast-tracking their juniors, and making the work more interesting for analysts, who have typically spent long hours poring laboriously over spreadsheets.
82% of people in our survey who wanted to work for Blackstone said that they expected interesting or challenging work. This beat all the investment banks in our rankings and tied with Google.
Gharbi believes that the benefit of working at Blackstone is the variety of work and the level of responsibility given to analysts and associates at an early stage.
“You are expected to manage people both internally and externally early on in your career although you will always find the senior help that you need to make the right decisions,” he says. “Because the team setup is small, your work always has an impact on the decision making process and you ought yourself to have an opinion on the investments you work on.”
Another downside for Blackstone in our survey was the issue of diversity. Just 23% of respondents perceived this to be a strength, which was significantly lower than investment banks in the rankings.
Anna Mignot, senior vice president, human resources at Blackstone believes this perception is misplaced.
"We focus on attracting, retaining and developing the very best talent, both for the firm and for each individual role," she says. “We recognize the value that diversity of thought brings, and consider it critical to our thorough and debate-driven investment process,” she says.
View the complete 2016 Ideal Employer Rankings