Imagine this – you are caught up in a minor disagreement or have a small task to do, to get your deal through. You immediately realise that you have some friends on the side of the other party, and you know the people since college. You only up, as any one of us would do, and he works on the deal, so it ends in the way you want it to – this has been how many of the largest settlements in investment banking have been done, traditionally.
Investment banking has always been thought to be dominated by an elite few. They constituted what was informally called an ‘old boys’ network’, and people who do not have the important contacts thought that they could never cut it in the competitive world of IB. In this article, we shall take a deeper look at what the Old Boys’ network exactly is, and whether it still exists in the Investment Banking world.
What is the Old Boys’ Network?
The term ‘Old Boys’ Network’ refers to an intimate connection or a network between some of the old students of a particular institution, or the early employees at an organisation. The term has its origins from the British Elite of the mid 20th century since most of them studied from a select few schools and colleges. The result was that the network helped the future students of the schools get employed by large corporations and banks, and the effect was passed on to the next generation. This is similar to an alumni association regarding how it works- however, it is less formal. The phrase ‘it’s not what you know, it’s whom you know’ is also applied here. An example of the Old boys’ society regarding organisations are the Paypal Mafia currently dominating the Silicon Valley, which is made up of the early employees of Paypal.
So does it still exist in the Investment Banking landscape?
Does the Old Boys’ Network still exist in Investment Banking?
The answer is that it does, but the effects have been significantly reduced. For example, the Investment Banking jobs in Britain used to be traditionally filled by the graduates from Oxbridge, until a couple of decades ago – this was as a result of their contacts, and the strong alumni network in place. However, organisations have now started hiring new employees based on their merits, rather than the institution they have graduated from.
The effect of the standardised recruitment process has been that talented students and employees from less prominent organisations have been getting the chance to show their skills at the job. The investment banking landscape has become increasingly decentralised, although some institutions are still held in high regard by recruiters – however, this is more because of the merits their students have, rather than the institution itself.
So if you worry that you do not have the right contacts in the IB world, you do not have to fret – if you have the skills and the passion, you are sure to get your job if you persist.