Why JPMorgan’s Jamie Dimon Is Unsatisfied With Private Equity Recruiting

“The other thing I don’t like,” he told the crowd, “a lot of you work at JPMorgan and take private equity jobs before you really start with us.”

The comments were met with laughter until Dimon made it clear he didn’t find it funny.

After quieting the room, he said: “I think it’s unethical. I don’t like it and I might take it down, regardless of what the private equity guys say.”

Dimon’s comments follow increasingly aggressive efforts by buy-side firms to recruit young investment bankers for jobs that won’t start until they complete two or three years of training at a Wall Street bank . In the past, such recruiting tactics often occurred after rookie investment bankers had gained some hands-on experience. But as Business Insider reported, the rush to recruit PEs has gotten earlier as buyout firms vie for talent.

Last year’s private equity recruiting cycle began while many bankers were still preparing for their first full-time jobs out of college. This year, BI reported, it started so early that some inducted junior bankers had not even moved to the cities where their new jobs would be.

Dimon’s comments appear to be the first time the CEO has directly addressed the controversial hiring practice. Private equity firms are a major source of revenue for investment banks like JPMorgan, which deal with mergers and acquisitions, raise money for companies and take companies public.

In August, JPMorgan issued a warning to incoming investment bankers about the risks of quietly accepting jobs with private equity firms, including possible termination.

In the August letter, JPMorgan warned that jobs with future dates at a private equity firm could present conflicts of interest for the bank. Dimon expanded on that thought at the Sept. 17 conference in Georgetown.

“You’re already working elsewhere and dealing with highly confidential information for JPMorgan,” he said.

He also commented on the impact this practice could have on JPMorgan’s talent pipeline.

“I think it’s wrong to put you in that position,” Dimon said, adding, “You kind of have to decide your next career move before you even have a chance to decide what the company is like.”