I hadn't thought much about it before the last month or so, but suddenly I find myself thinking about why investment bankers are often so young. Perhaps I wonder because I am not so young.
As I've aged, one of the things I've done most successfully in my life, I've taken a sort of odd sense of pride in my graying hair and the aches and pains I associate with getting older. I'm certainly not 23 any more! (I'm 41 years OLD.)
That said, I've had a lot of young folks come work for me in the last few years. Typically, I hire super bright young folks either while they are finishing their last year of school or immediately after they graduate.
Matt Marsh is one of the great ones! Matt was active in almost everything in school, including serving (and this is top secret) as the regular back up to the school mascot, Swoop, at the University of Utah.
For years, I've thought of age as providing an advantage in the work place as I gain perspective and skill. But a few months ago, I was visiting with a private equity professional from New York who pointed out, when I bragged about how old I was, that most investment bankers in New York are quite young--and the system works pretty well.
There are a lot of reasons, I suppose, for the youth of investment bankers. Let me suggest a few:
1) Investment banking doesn't require a great deal of capital so young people without capital are eligible.
2) Investment banking can be lucrative, providing young people with an incentive.
3) The work is hard. Really hard. Youth provides a definite advantage for the long, intense hours required to succeed.
4) The role of investment bankers requires a great deal of effort and a measure of critical judgment--youth can provide the effort, leveraging the experience of a select few senior bankers who provide the judgment.
5) Once a young investment banker accumulates capital, she leaves to go do something more fun!
One of the great young analysts to ever work for me at the Thorpe Capital Group was Petra Svet, who now works for Lehman Brothers. She joined our firm right after finishing her Masters in Finance at the University of Utah, where she won the NCAA slalom championship. She left within a year to join Lehman.
I can't name all of the great, young alumni of our firm, but some notables include Seth Shaner, Scott Holley, Shawn Hassett and Dan Harrison. They've all gone on to greater successes!
Bright. Young. Successful.
I was a young investment banker working at Lehman Bros the summer between business school (University of Chicago) and then went to Kidder Peabody which eventually was acquired by PaineWebber.
It takes a lot of energy and personal sacrifice to work on Wall Street. Maybe the youth are just gullible enough to do it. In two years in New York, I can count on my hands the times I did not eat dinner at my desk.
I think it is all about leverage. I-banks routinely hire some of the most talented graduates. They get 80 hours a week for the price of 50 hours. Meanwhile, the young talent is willing to participate because they get the equivalent of 18 months experience for every 12 months worked, get paid relatively a lot, network with the best and occasionally hang out in limos and at four-star hotels. It is a proving ground and if you survive, many opportunities lie ahead.
Posted by: Hal Halladay | February 15, 2006 11:08 AM | Permalink to Comment