• Private equity reps are asking to meet with college seniors headed for jobs on Wall Street.
• These "coffee chats" often lead to interviews for jobs that won't start for two years.
• The May start has soon-to-be bankers on edge at a time when they should be celebrating.

Graduation season is supposed to be filled with commencement speeches, family dinners, and tearful goodbyes. Newly minted graduates headed to Wall Street, however, are finding themselves trading libations for leveraged buyout models.

Soon-to-be junior bankers told Business Insider that they have been summoned in recent weeks to introductory meetings with buyout firms and headhunters for associate jobs that won't start for two years — when their investment banking analyst programs end.

The communications reviewed by BI were for introductory meetings, often referred to as "coffee chats," and informational webinars. They came from employees and headhunters representing firms like Apollo; Hellman & Friedman; KKR; General Atlantic; Clayton, Dubilier & Rice as well as recruiting firms like Ratio Advisors, Gold Coast, CPI, and Amity. Spokespeople for these firms either declined to comment or did not respond to requests for comment.

Students said the coffee chat requests, which often precipitate more formal interviews, are taking place earlier than expected — putting them on edge about the industry's infamous recruiting frenzy, known as on-cycle recruiting.

For some, the feeling that official interviews could kick off at any moment has cast a pall over graduation season. Rather than occupying themselves with photo shoots in their caps and gowns, some finance grads are stressing over when interviews could break out.

"It's constantly monitoring your email," said an incoming first-year investment banker about the recent onslaught of meeting requests. She said she and her friends have their notifications on — "calls, texts, everything" — in order not to miss out.

The student, who hopped off the phone with BI just as her own graduation ceremony was commencing, said coffee chat meetings started hitting her inbox in early May, about four to six weeks earlier than classmates who received similar overtures last year.

"It's awful," said the student, who asked to remain anonymous to protect her future employment. "You never get a break."

On-cycle could kick off sooner than ever

Matt Ting, the founder of Peak Frameworks, which helps students prepare for Wall Street job interviews, said he's seen demand for his courses spike in the last two weeks as students gear up for on-cycle to kick off any day now.

"A lot of college grads go on a grad trip around now, which muddies things," said Ting, adding: "Some are still in school. Many firms had issues last year since it kicked off while many grads were backpacking somewhere in Asia."

The problem with the industry's on-cycle recruiting process is that no one knows when the hurricane will hit. And once it makes landfall, aspiring private-equity dealmakers are expected to drop everything to participate.

A second-year investment banker recalled getting an email around 10 p.m. when he participated in on-cycle recruiting last June. The firm's representatives asked him to interview the next morning at 8 a.m. Fortunately, he was within driving distance of the company's office. Some of his friends weren't so lucky.

"I personally felt it was too rushed, like I was taking the opportunity just because it presented itself, not because I was very calculated about it," he told BI about the experience.

The second-year banker said there is a clear distinction between coffee chats and official interviews that would signify the start of on-cycle. On-cycle recruiting, he said, only starts when a headhunter uses the word "interview" in their communication with candidates.

"The coffee chats are just an interview to get an interview," he said.

The process used to start after investment bankers got some job experience under their belts, but has been moving progressively earlier every year. Last year, the process kicked off on June 24, before many graduates had even started their jobs. The year before, it took place in July, prompting some investment banking analysts to skip out on training.

The sudden rush of coffee chat requests has students bracing for on-cycle to kick off earlier than ever this year. A college student running a college finance club said he'd heard on-cycle could begin after Harvard's graduation on May 29. An industry recruiter predicted that on-cycle recruiting might not get underway till late June, in keeping with 2024's cycle. They asked to remain anonymous to protect their relationships with prospective employers and private-equity clients.

Inside the coffee chat

Coffee chats, the step before PE firms proceed with formal interviews, may sound casual on the surface. In fact, they're a high-stakes way for recruiters to pre-screen candidates for official interviews, students told BI, so a lot is on the line.

"My advice has always been, no matter what, every coffee chat is an interview, implicitly or directly," said the second-year investment banker who participated in last year's on-cycle process.

These jobs, of which there are a coveted few, can vault early-20s professionals into the highest tier of American earners. Many tout comp prospects of more than $300,000, inclusive of salary and bonus, so the pressure for rookie masters of the universe to leave a good impression on recruiters is palpable.

A recent graduate about to start an investment banking job at a bulge bracket firm agreed. "I've had a firm tell me that I'm shortlisted," he said of his coffee chats, adding, "I've had headhunters follow up with me and say, 'Hey, by the way, this firm had great feedback on you. Let's stay close here,'" he added.

He said he moved to New York City immediately after graduation, motivated in part by the sense that he should be in a position for an early on-cycle recruiting process.

"I don't even have a couch," he confessed, so he spent his first few nights in the big city sleeping on a mattress on the floor. "Now I've got a bed frame."

"But if you want one of these jobs, you've got to play the game," he said. "And I'm just playing the game."

• Private equity secondaries have gone from a niche to a must-have strategy.
• It offers maybe the industry's best potential career paths, with open space for more partners.
• We asked investors and recruiters about how to get a job in the secondaries industry.

When Keith Brittain was starting out, buying secondhand shares in private funds was considered a niche investment strategy.

"I started at Hamilton Lane in 2010 and came from 10 years of investment banking, and until I started talking to the team here about the role, frankly, back then I didn't know much about the secondary market at all," Brittain, cohead of Hamilton Lane's secondary business, told Business Insider.

Today, the practice of buying stakes in private funds from investors who want to sell early is on the lips of the biggest names in private equity as "secondaries" fundraising reaches record levels.

According to Michael Arougheti, CEO of Ares, secondaries "are significant beneficiaries of a slowdown" in the economy. Blackstone president Jon Gray said secondaries' ability to provide liquidity "will be seen as attractive" in an environment where it will be hard to exit deals.

As the industry evolves from a curiosity to a destination, a lucrative career path is emerging. We spoke to recruiters and industry experts to understand the paths to a career in secondaries, as well as its perks.

They said they see more job opportunities opening up as megafunds, like Apollo, launch inaugural funds, and industry veterans launch new shops — as Vincent Gombault, cofounder of Ardian, did with Clipway in 2023.

"Other than fundraising, the primary thing that could hold the industry back is talent," said Brittain. "We need more great talent."

Candidates, however, could soon see more competition as the industry's reputation appears to be luring new applicants. "We are now seeing interest from college students and people who currently work at buyout firms," said Matt Roche, a partner at StepStone, a private markets investor with $179 billion in assets.

The payoff, he added, could be big for those who make it, including an improved chance at becoming a partner, the holy grail of the financial world.

"Even the most pessimistic participants in the secondary market expect this to be one of the highest growth parts of all private equity and just alternatives generally," Roche said.

Starting your career

The most common path to a job in secondaries is to start from the bottom. Like with other private equity jobs, this often means first doing a stint as an investment banking analyst because banks are a common hunting ground for private equity recruiters.

"What we keep hearing from our clients is that their preferred profile for associate hiring is an investment banking analyst, regardless of their specialty," said Alix Connors, Principal at Opus Advisors, a recruiting firm that's long recruited for the secondaries investors. "They want bankers with active deal flow experience and strong technical skills."

Roche joined StepStone as an analyst fresh out of undergrad.

"We hire analysts, test them for a couple of years, and then keep them as associates," Roche said. Other shops, like Hamilton Lane and Blackstone's Strategic Partners, also hire analysts out of college into their secondaries businesses as part of their larger analyst hiring programs, providing an even more direct path into the industry.

And while investment banking backgrounds are the most common, candidates with other profiles have broken in.

Brittain said that people who have worked in accounting, corporate development, or jobs evaluating companies have also found roles as secondaries investors. And increasingly, StepStone is hiring people who left buyout roles to try their hands at secondaries.

Seniors and specialists

Hilary Hurley, managing director at Amity Search Partners, said career paths at the mid-level are similar to those of typical private equity investors.

"They either did junior-level banking or went to the buyout world," Hurley said. "It is that same kind of traditional banker experience."'

The exact formula for the perfect candidate differs depending on the firm and strategy.

Hurley said roles focused on deals involving private equity firms looking to sell a portfolio company to a new fund with new investors, also known as a GP-led deal, will "often target" candidates with experience as direct buyout investors.

"This is because GP-led deals often require understanding the intricacies of the underlying assets and portfolio companies," Hurley said.

Of course, as one gets further up the chain, having real secondary experience becomes increasingly essential. At minimum, you will need solid buyout investing experience and all of the technical skills that it brings.

It's one reason many of the largest firms focus on promoting and developing in-house talent.

Opportunities for new senior roles "come up every so often," said Hurley, such as when a new firm launches or an established firm launches a secondaries business line.

Growing demand for the secondaries market has also increased roles that support deal flow, like lawyers, Steven Siesser, chair of the private equity practice and cochair of the transactions and advisory practice, at Lowenstein Sandler LLP said.

"We have teams that do nothing but secondaries now," Siesser said. "There are transactional lawyers who spend their days buying and selling interests in GPs and LPs, it's become a cottage industry."

Career considerations and the path to partner

The quality of candidates, and therefore competition over open roles, is at an all-time high.

"Candidates seem so much more familiar with secondaries," Connors said. "They have done their research and have more conviction in this asset class and building a career here as an investor."

Benefits tend to include more consistent hours, and pay has largely caught up to the rest of the industry. For those taking the long view, the industry's growth could also improve one's chances of making partner.

According to Brittain, just one to two percent of the total value of the private investment world trades in the secondary markets — leaving plenty of room for growth

"When you make new partners, they need to have a reason to exist, and the pie has to grow to make that path work," Roche said. "As long as that pie is consistently growing, you can have pieces of that pie for everyone."

• The secondhand market for shares of private investment funds hit record highs last year.
• Demand for the strategy is expected to continue this year amid tariff and deal uncertainty.
• BI spoke to recruiters and insiders for a sneak peek inside the job of a secondaries investor.

There's one corner of the private investment world benefiting from the Trump bump going bust: Secondaries.

"Secondaries" professionals buy stakes in privately held funds from investors looking to cash out early. They have been busy of late, closing a record $162 billion in deals last year, according to asset manager BlackRock. Demand could ratchet up again this year as investors look to raise cash to protect against the financial fallout of some of Trump's policies.

"I always joke there aren't any bad times for secondaries," Matthew Roche, a partner at secondaries firm StepStone told BI. "There are some really good times for secondaries, and this is one of them."

Uncertainty around Trump's tariffs has slowed already sluggish dealmaking, which is expected to lead to even more private equity investors looking to exit funds that have yet to make distributions. Large investors could also turn to the secondaries market to raise cash in the face of a volatile stock market

It's not just tariffs. The endowments of Harvard and Yale are in the process of selling private equity stakes amid a federal crackdown on university funding. While Harvard's sales process began last fall, according to someone with knowledge of the sale, and Yale said it's been in process "for many months," the sales come at a time of growing uncertainty for university finances.

As this niche industry takes center stage, it raises questions about the people and firms behind the deals. What firms specialize in secondaries investments? What is the job like, and how does it differ from other financial industry jobs?

We spoke to investors, recruiters, and a lawyer with deep secondaries experience to understand what private equity's hottest strategy does every day.

The firms

The secondary market has existed almost as long as private equity itself, but it was long viewed as a fringe strategy. Nowadays, it's considered a core strategy, making up the bulk of assets for some firms, including French private equity firm Ardian, which boasts the world's largest secondaries platform, north of $97 billion in assets managed. Other key players include Lexington Partners, HarbourVest, and StepStone.

It's also become a must-have strategy for any megafund, with Apollo raising $5.4 billion in a debut fund that closed this year. Blackstone, which acquired its secondaries business, Strategic Partners, from Credit Suisse in 2013, is now the second-largest secondaries investor in the world. Goldman Sachs' asset management unit also has a fund.

Secondaries investors are a category of private-equity professional, but rather than finding companies to turn around, they are responsible for locating, assessing, and executing private fund transactions, sometimes with the help of investment banks like Evercore or Jefferies.

Like other private equity pros, they are using money raised from investors. The secondaries industry raised a record $50 billion in the first three months of the year, according to Preqin. The goal is to buy shares at a discount to their future value.

The traditional secondaries deal is led by investors looking to cash out. These deals are known as "LP-led" deals. Increasingly, the industry has been transacting deals on behalf of buyout firm sponsors, known as "GP-led" deals, as more private equity firms struggle to make distributions to impatient investors.

The pace

The secondaries business is "fast-paced," said Keith Brittain, cohead of Hamilton Lane's $24 billion secondaries platform.

It's not high-frequency trading, as deals can take weeks or months from start to finish, but there are many more transactions in secondaries than in the world of corporate buyouts.

"Even in a two-year associate program at a traditional large/mega fund buyout, you're lucky if you get to see one deal from start to finish," said Alix Connors, a principal at recruiting firm Opus Advisors.

Roche said some incoming associates at StepStone came to the firm for a change of pace

"Our recent junior hires appreciate that every day can be different: different sponsors, different sectors, and different companies, with many active deals at all times," Roche said.

Holly McCarthy, founder of Opus Advisors, compared the workload to a "sample platter" of "sizes, sectors, and strategies.""You can work on a tech venture deal in the morning, a megafund buyout deal by lunch, and a real estate deal in the afternoon," McCarthy said.

The hours

Secondaries can also offer a bit more work-life balance than corporate buyout investing.

"You have a bit more control over your calendar," McCarthy said.

Connors said buyouts can be a bit like "banking 2.0" with a highly demanding, intense workload. Secondaries offer more "predictability," she said, though the recent increase in activity has likely led to longer hours.

And while the pay is below that of a buyout fund star, it's not by much.

"You might earn slightly less, but the trade-off in deal reps and lifestyle is worth it," McCarthy said.

But don't expect that you're going to always be home for dinner. Schedules can still be "inconsistent," said Brittain. "Like many transaction and investment-oriented jobs, you don't always have control of timelines."

The deals

The secondary investor is focused primarily on financial modeling, research, and closing deals. It's for those who want to underwrite versus meeting with CEOs and running businesses.

Brittain said secondary investors who buy a share of a fund must do financial due diligence on the overall fund, including the deals in the fund and the private equity manager.

On the GP-led side, diligence is even more thorough.

"You're not underwriting 20 assets or 200 assets, you're underwriting one or a small number of companies," Brittain said.

You also get a chance to look under the hood of other private equity firms."You have to underwrite the quality of the GP," Brittain said. "Can they buy well? Can they exit well?"

• Private-equity dealmaking is down, but all is not lost for young dealmakers.
• A panel of private equity execs advised young people to get up from their desks and meet people.
• One exec said it can take 20 years before a relationship pays off.

If you want to be a private-equity dealmaker, you can start by getting up from your desk.

That was the advice from Alisa Amarosa Wood, a KKR executive, at the Milken Institute conference in Los Angeles on Tuesday.

"If you're sitting at your desk, you're not building personal relationships every day," said Wood, co-CEO of KKR's Private Equity Conglomerate LLC, an operating company formed to acquire, own, and control portfolio companies. "You should be talking to three to five people you've never talked to before," Wood said. "That's how you source deals. That's how you build a Rolodex. That's how you build a pipeline."

Wood said KKR talks to thousands and thousands of companies a year to do 20 to 40 deals. All of those conversations are about building relationships, she said, echoing comments made by KKR's cofounders at a Milken panel on Monday.

"You might be talking to the same company for two decades before you can go effectuate something that's called private equity," Wood said. "You're not going to fly in and assume you're going to have two meetings and get a deal done."

A.J. Rohde, senior partner at Thoma Bravo, a buyout firm focused on tech and software companies, said that his firm tries to "empower" its younger employees to look for deals themselves.

"The senior people have walked the floor every day like a trading floor," Rohde said. "What are you working on? People need help. They maybe hit a roadblock on diligence. Help them out, give them a perspective, spend five minutes, and then they'll go figure something else out."

The whole goal is getting the youngest employees to feel ready to step into the dealmaker's shoes, he said.

"The best deals happen at a grassroots level," Rohde said. "That's because some VP went on a line and she or he pushed it and made that her career, and she fought for a right to get that, but you were there helping her early to help you make that decision. Those are our best deals."

The comments come at a tough time for the private equity industry. Firms have a lot of money to spend, as well as companies to sell. Dealmaking, however, has been muted this year amid concerns about the impact of Trump's tariff wars on the economy and stock market.

• Chad Howard left corporate America after ten years to start a portable toilet business.
• It can be exhausting and the pay is worse — but Howard said he's never been happier.
• Howard's story comes as more young people flock to entrepreneurship amid a stagnating job market.

Being your own boss sounds great—until you realize the boss never clocks out.

Young people have been flocking to small business ownership, which has driven up demand for search funds, a targeted form of private equity where one or two entrepreneurs search for a small business to run. The trend is only expected to continue as tariff uncertainty casts a long cloud over industries ranging from private equity to consulting to technology.

To help understand the pros and cons of running a small business, Business Insider spoke to Chad Howard, an entrepreneur who quit his corporate job to start Halftime Rentals, a portable toilet rental business. He offered a realistic, and sometimes visceral, look at the transition and his new routine.

BI verified his story, including his past employment and revenue. The interview has been edited for length and clarity.

In the portable toilet business, at some point you're going to end up touching other people's shit.

Sometimes, the hose collecting sewage from a port-a-potty comes loose from a disposal truck. In the industry, we call that "getting baptized."

Our yard has a 20,000-gallon tank that holds sewage until we can send it to a wastewater treatment plant. That's usually the first thing I smell in the morning.

In moments like these, I wonder why I quit my corporate job to start a portable toilet company. But then, when I catch some fresh air and feel the sun on my skin, I realize how much happier I am.

The path to portable toilets

I had a successful corporate career in marketing at Procter & Gamble, but I've long had an entrepreneurial streak and ran a T-shirt printing business in college.

After I met my business partner, Austin Helms, he kept trying to get me to quit my job to buy or start a business. His background was similar to mine, but he had left corporate America with the help of a search fund accelerator program to run a plumbing, HVAC, and electrical company.

When Procter & Gamble asked me to move for the ninth time in my ten years there, I took Austin up on his offer.

I launched Halftime Rentals last year in Charlotte, North Carolina after six months of research and raising a million dollars from friends, family, and the blue-collar focused private equity firm 12 South Capital Partners. Just eight months into starting the business, I am already being approached by investors interested in buying the company, which has earned more than $1.2 million in revenue since launch.

The power of marketing

What really convinced me to join this industry was my experience shadowing three different portable toilet companies with Austin. We saw incredibly successful businesses, but no one hired dedicated salespeople or focused on marketing.

A light bulb went off. If these companies can succeed with almost no marketing, imagine what we could do.

We've hired a full-time salesperson and recently landed the Charlotte marathon as a client by quoting them a price for porta-potty rentals. They told us no competitor had ever reached out to them before. I use ChatGPT a lot to create lists of the top fifty largest outdoor events in Charlotte. I ask it to provide me with emails, and then I reach out to them.

A lot of our success comes from marketing. I go to conventions, like a local builders convention, and hand out shirts that say "Gettin' Shit Done." None of our competitors are there, and it's super memorable. At Procter & Gamble, I sold products to large chains and learned that you need to make those sales pitches memorable.

There's no out of office

On the weekends, all calls are routed directly to my cellphone. A few weekends ago, I got a call from an event an hour away whose toilet provider hadn't shown up. They asked for my help, so I threw two toilets in the back of my pickup truck and drove an hour both ways.

I don't plan anything on Saturday until 2:00 p.m. because there's a 70% chance that someone will call with an emergency.

It's hardest with travel.

I was visiting family out of state when one of his largest clients called to say that they had an emergency and needed 10 portable toilets delivered as soon as possible. If I were nearby, I would have just delivered the toilets myself, but I wasn't, and none of my usual workers were free.

I just don't travel as much as I used to.

Being the boss is great

My main goal in starting this entrepreneurial process was to enjoy my days, instead of feeling like I was wasting them reselling dish soap.

Now I'm reselling portable toilets, but the difference is that I am building something of my own. I'm able to be my own boss and do things the way I want them done.

I can also make a real impact on other people's lives. One of my drivers had a single DWI, and as a result, he couldn't get a driving job even though he has a commercial driver's license. I was able to give him a second chance.

In my old job, instead of focusing on our goals, we'd have forecast meetings, recap meetings, and email meetings. Now, I can focus on selling more of a great product. I'm not spending any of my time in meaningless meetings.

As your own boss, you can focus on building what you think you should be creating, not all of the other bullshit corporate America hands you.

There are no 'normal' days

I don't have time to focus on anything but work. I don't go out to nice dinners, travel, or hang out with my friends at happy hour. It's made it easier to live on my current salary, which is lower than my corporate salary, because I don't spend as much.

I can't sleep in until 8:00 am on the weekends anymore, or easily fit in a workout. It's more exciting, but it's much harder to have a "normal" day.

I can't even focus on food or exercise. I had a wake-up call after I put on 15 pounds in my first three and a half months.

When I was in Asheville, North Carolina, living in an RV for a month, there were times the gas station was my only option for a full meal. There was one day I ate Chic-fil-a for breakfast, lunch, and dinner. I was like, what am I doing?

Now, I'm more mindful about what I eat, packing healthier options for long days. And I try to fit in a workout where I can.

You reap what you sow

Outcomes are tied directly to my effort. I'm responsible for the business's success, which correlates to how hard I work.

Success in corporate America is more complicated. Promotions take into account how much someone likes you, or the macroeconomic environment, or the success of whatever product comes out.

Now, I have some control over my destiny, which is both good and bad.

One telling example was how I responded after the terrible hurricane in Asheville. Home Depot called asking for portable toilets, so we loaded up the toilets and drove the two hours to Asheville.

All of our toilets had our phone number, and the next day, I had 222 voicemails while still fielding calls.

I decided to set up shop for a month in Asheville, living out of an RV and ordering 500 more toilets to meet the demand. By choosing to put in the hard work, I set my business up for success.

Big decisions ahead

I've already received offers from people who want to buy the business, but I'm conflicted about it. I'm someone who lives in the moment.

People like to ask me what my goal is for the company. Transparently, I didn't really have an end goal in mind. I wanted to start this company and build it into the biggest portable toilet company in Charlotte, enjoy my days, and have a positive impact.

If I sold to a roll-up business, they'd still want me to run it. I'd have equity in their larger business, but I would be right back to working for someone else.

For now, I'm going to wait and see. One investor said that their main strategy would be centralizing the back office, which would mean letting go of our office manager. She's incredible, and it would pain me to the core if she lost her job because of my decision.

• Tenants are facing a boom in fees for services once included in the rent.
• Equity Residential and other landlords use fees to boost revenue amid rising rental costs.
• FTC and states are scrutinizing rental fees, with some legal actions and new regulations.

In 2014, Marianne Napoles moved into a two-bedroom garden apartment in Eagle Canyon, on the forested slopes of Chino Hills, California. She found the property managers helpful, and the landlord, Equity Residential, lowered her rent by $43 when she renewed in 2020.

Then came the fees, starting with $2 a month for pest removal, then $10 to use her unit's one-car garage — amenities originally included in the rent. The monthly parking charge was hiked to $20, and then she got hit with a $30 charge for compost pickup after Equity hired Valet Living for state-mandated organic waste disposal.

"It started to feel like I was being pushed out of the community where I've lived for the past decade," Napoles said.

In February, Napoles paid $165 in monthly fees, including water and sewage, up from $44 when she moved in. Her rent rose by about 70% over the decade, while her fees nearly quadrupled.

After she wrote an op-ed article about the situation for her employer, the Chino Valley Champion, Napoles' property manager emailed to say the costs were beyond Equity's control: "Our competitors that are REITs they have already been ahead of the game and charging such fees."

In reality, Equity Residential was an early champion of finding ways to squeeze more money from rentals.

The company's founder, the late billionaire Sam Zell, predicted 25 years ago that half of revenue for publicly traded residential real estate firms would come from income other than rent. Other huge corporate landlords have adopted the playbook, advertising one amount for rent and then tacking on a range of optional and mandatory costs.

A 2024 lease from Progress Residential, which manages some 85,000 single-family rentals, is 40-plus pages and includes at least 15 potential fees — for example, $125 for "Lease Administration," a $50 "Lease Application," "Insurance Exemption" fees, and a $75 "trip" fee on top of repair costs billed to tenants.

Leases reviewed by BI show that last year, Progress added a sentence directing tenants to a website to view a list of potential fees. A Progress spokesperson, Nikki Sloup, said by email that the company discloses "all mandatory fees at the start of the leasing process" but declined to comment on the added language.

Marty McKenna, a spokesperson for Equity Residential, said the firm did not consider itself an innovator in renter fees. "We have more transparency on fees today than ever," he said.

The industry's position is that the charges cover legitimate services tenants should pay for, and some landlords say it's long-standing practice to advertise rental pricing without fees. But the charges have also been labeled "junk fees." In 2023, the Federal Trade Commission sought to prohibit hidden costs attached to everything from concert tickets to hotel stays to rentals.

The real estate lobby argued that fees are not deceptive and that landlord-tenant relationships should be exempt. In December, the FTC omitted rentals from its rule in favor of case-by-case enforcement.

In January, the FTC sued the property management firm Greystar, which it accused of hiding fees from prospective renters. (In late April, tenants in California filed a federal class action suit alleging Greystar added mandatory "junk fees" while advertising a lower rental cost.)

Greystar called the FTC suit "agency overreach" in court papers and moved to dismiss the case, arguing an online listing with base rent is "not likely to mislead" since renters understand there will be more to the lease than an ad says. Greystar lawyers also noted the FTC recently exempted the rental market from a rule on deceptive fees.

Rebecca Kelly Slaughter, one of the FTC commissioners, told BI that the 4-1 vote excluding rentals was a sign of bipartisan compromise and not a suggestion that renters don't face junk fees or that landlords aren't subject to the law.

"The absence of rental fees in the rule is not an implicit, and certainly not an explicit, blessing of the practice of charging junk fees in rentals," she said."The rule we passed is better than having no rule at all."

President Donald Trump fired Slaughter and the only other Democratic commissioner in March, and both are suing to get their jobs back. Slaughter and said the "chaos" calls into question the agency's oversight of rentals and ongoing lawsuits against landlords.

But the backlash to fees does appear to be having some effect.

About 22 states have protections limiting fees, according to data compiled by the National Low Income Housing Coalition. Colorado passed a bill allowing renters to reuse background checks for up to 30 days to avoid multiple fees. Massachusetts and Rhode Island banned application fees. In April, Illinois' House of Representatives passed a bill that would bar landlords from charging a move-in fee and limit late fees; it's pending in the state Senate.

In January, an industry group started by the National Multifamily Housing Council issued updated data models that allow property managers to standardize how fees are displayed across listing platforms — in categories ranging from direct costs such as "clean" and "damage" to more opaque buckets like "admin," "accounting," and "other."

Ariel Nelson, a staff attorney with the National Consumer Law Center, described disclosure as "the most minimal level of consumer protection" and said such efforts were just one "piece of this puzzle to make it better."

The age of luxury

Through court records, interviews, and company documents, Business Insider traced the history of rental fees — from early experiments with luxury services to a widespread practice that affects many of the nation's 45 million residential rental units.

It begins in the early 1990s, when overbuilding and a credit crunch sent real estate into a downspin. The federal government seized and auctioned off $456 billion in properties and other assets from failed savings and loans — and investors smelled opportunity.

With the credit markets in shambles, this new crop of investors turned to the public market to fund their growing empires, using a newly popular vehicle, the real estate investment trust. According to the National Association of Real Estate Investment Trusts trade association, there were 119 REITs in 1990, with a total market value of $8.7 billion. Nine years later, the number hit 211 with a market value of $140 billion.

REITs came under scrutiny from analysts and pressure from investors keen on maximizing returns at a challenging time for rental housing, with vacancy rates climbing to nearly 11% before the 2008 housing crash.

As a result, REITs looked for creative ways to attract residents: high-speed internet and home theaters in a Dallas suburb, on-site day care in Santa Monica, even a synthy music album titled "Renters Paradise" produced by Equity for prospective and existing tenants. Equity and Camden Property Trust, which bought up properties in the Sun Belt and went public in 1993, used amenities like swimming pools and exercise rooms to stand out to prospective luxury tenants — and their own investors.

The drive to explore non-rental revenue gained steam in 2001 when the REIT Modernization Act allowed these landlords to own third-party property management companies. Ernst & Young's then head of real estate said the change would allow REITs to "really blow these activities out."

Equity Residential's Zell was a loud voice in favor as landlords began to explore ancillary income opportunities.

"For every dollar you get," Camden's CEO Ric Campo said in 1996, "you don't have to raise the rent."

Supersizing through software

The concept of optimizing revenue without reducing costs or making major investments wasn't without controversy. When the airline industry pioneered dynamic pricing of tickets, the Department of Justice found it tantamount to illegal price fixing because it was coordinated through a shared software system. (The airlines settled in 1994, agreeing not to share pricing information.)

About a decade later, these revenue models began cropping up in rentals. Lease Rent Optimizer and YieldStar, which suggest pricing for clients' units, were among the early tech offerings; several were bought out by RealPage, now the largest revenue management software in the market. (RealPage is the target of a DOJ suit over claims of price fixing through shared software; it denied that its software has anticompetitive effects, called the lawsuit "baseless," and has a motion for dismissal pending.)

The impact of automation was striking. When Equity tested Lease Rent Optimizer, an executive later said, revenue increased by 3% to 5%; in 2006, Equity rolled it out to all properties.

When the 2008 housing crisis hit, more major players looked to fees to replace lost rents. Camden's 2008 financial filings show revenue from its properties jumped 1.5% despite low occupancy rates.

Camden's then president, Keith Oden, said the company would focus on what it could control: lowering costs and charging fees — a "nickels-and-dimes business," he called it. The company launched a trash service similar to Valet Living, which Oden predicted would clear $2 million in profits by 2009. (A Camden spokesperson said in an email that today's renters had "better visibility" into what is included in a "quoted rental rate" and that tenants appreciated its "ancillary services.")

A wave of corporatization

The subprime mortgage crisis also accelerated investors' acquisition of rental housing. As millions of borrowers lost their homes to foreclosure, investors started showing up to auctions to build out portfolios of single-family homes.

From 1980 to 2004, fewer than one in five rental properties were bought by nonindividuals. From 2013 to 2015, that number jumped to nearly one in two. And with more corporate landlords came more dynamic pricing — and more fees.

Big landlords expanded their influence over the terms of the rental market, said Jeffrey Newsome, a private consumer protection lawyer in Tampa, Florida, who represents tenants in several class action lawsuits. "They'd like to make money out of every single aspect of it but not be held accountable for it," he said.

Blackstone saw an opportunity when it launched Invitation Homes in 2012. Within five years, the company owned 82,000 residential properties, making it the nation's largest owner of single-family homes at the time.

The firm went hard on fees as it went public. In 2017, its CEO said "automated charges" helped push a 22% increase in ancillary income during a single quarter.

At a 2019 investor event, as Blackstone was winding down its investment, Invitation Homes announced a new plan to boost revenue: It would grow its auxiliary income to as much as $30 million by 2022.

The company added mandatory charges for "utility management," "smart home technology," and "air filter delivery" that generated more than $60 million in fees from 2021 to June 2023, according to the suit.

An FTC unfair-practices lawsuit against Invitation Homes, filed in 2024, said CEO Dallas Tanner told a vice president it was time to "juice this hog." The suit also alleged that in a November 2021 slide deck, senior leadership instructed Invitation's salesforce to avoid readily disclosing these charges to prospective renters.

"Invitation Homes was not trying to hide any fees, but it instead recognized that its fees could change and intended to ensure that copy was always as accurate as possible," Kristi DesJarlais, a company spokesperson, said by email. "Nothing we do should be classified as a 'junk fee,' but rather as transparently communicated services that directly align to the enjoyment or use of the homes."

The company settled in September without admitting wrongdoing, paying $48 million in refunds and agreeing to list a home's "true rental price."

When the COVID-19 pandemic arrived, along with a moratorium on evictions, corporate landlords again looked to fees to plug revenue holes. Camden's chief financial officer credited utility fees as one of the additions that helped the company's revenue the first year of the pandemic.

With tenants in lockdown, institutional apartment investors buoyed by cheap debt went on another buying spree. RealPage, meanwhile, had just rolled out new updates to its revenue management software.

The DOJ's lawsuit against RealPage alleges it floated add-ons for landlords, like "weekend premiums" to discourage renters from moving on weekends without paying a fee. The suit added several landlords as defendants in January, including Camden and Greystar. Both have joined other landlords in filing motions for dismissal.

The great unbundling

Alongside the rise of service fees came fees for the basics of life as a renter.

Camden piloted turning some utilities historically included in rent into a revenue boost. In a 1996 press release from a real estate industry group, the Camden CEO Campo said the company cut company water bills in half by passing costs to tenants.

Equity Lifestyle Properties, the mobile home and RV park cousin of Equity Residential, called the process "unbundling" — a strategy to charge for utilities separately "every chance we get," CFO Paul Seavey said in a 2022 investor call.

An Equity Lifestyle spokesperson, Jennifer Ludovice, said by email that the company used unbundling "to increase transparency in billing and allow residents better control of their expenses."

Today, rebilling services help landlords remove those costs from their books. They act as an intermediary between tenants and utilities and typically charge tenants the cost of the utilities plus an administrative fee.

Last year, a group of tenants in Washington, DC, tried to find out how much extra they were paying. They compared utility costs for two one-bedroom apartments: a 913-square-foot unit in their building, Guild Lofts, owned by the asset manager Brookfield, and a 728-square-foot apartment in the older Insignia on M, owned by the real estate firm Bozzuto.

In addition to the cost of consumption, the Brookfield tenant paid nearly $40 in utility fees in June — almost half of them to a Brookfield-owned water metering service. The Bozzuto tenant paid $19 in fees.

Brookfield told Guild Lofts tenants in their 2024 lease amendments that they would be hit with a new "common area electricity" charge, which included charges for heating and cooling tenants' own units and common areas like the lobby. This charge, which changes month to month based on building use and for which tenants don't see the underlying calculation, added about $100 a month to the tenants' bill.

"Market giants like Brookfield view our homes as assets, and their only objective is to squeeze residents for profits," said Noëlle Porter, an organizer for Brookfield DC Tenants and director of government affairs for the National Housing Law Project. "Deceptive and even illegal fees are on the rise across the country, and overburdened renters cannot afford $200, $300, $400 per month in additional, surprise charges and fees."

One tenant's December class action suit accused Brookfield of violating local laws with hidden utility charges. Brookfield said in a filing that the case should be dismissed because it "expressly told its tenants, including Plaintiff, exactly what they were paying for and exactly what they were receiving in return."

However, an April email exchange between Brookfield and its utility billing partner, obtained by Business Insider, showed they were accidentally overbilling some units at a Navy Yard property called Foundry Loft for gas, stormwater, and trash. A Brookfield spokesperson said the company is now conducting "a complete review of billing" across the Navy Yard properties, and the company is distributing about $4 a month to Foundry Loft tenants for gas, stormwater, and trash overbilling from June 2023 to April 2025, according to an email obtained by BI.

"We care a great deal about being fair and transparent in pricing apartment homes to be consistent with market demand and in line with all regulatory requirements," they said to BI.

Meanwhile, other tenants are now being charged for the simple act of paying the rent.

Landlords who use AppFolio, a property management tech company whose software is used to manage over 8 million properties, may pass onto tenants those fees: $2.49 for each eCheck or 3.49% of their rent if they use a credit card — which would be $70 a month on a median US rent of $2,000, according to Zillow.

The strategy has been lucrative. In January 2024, the company's CFO at the time, Fay Sien Goon, said "value added services" had contributed to year-over-year revenue growth of 39%, partially driven by 48% growth in ancillary revenue. "Card adoption for rent payments," she said, "continued to exceed our expectations." AppFolio did not respond to multiple requests for comment.

'The market has determined that it's fair'

Not all housing-related fees are imposed by landlords. Third-party vendors are now competing for a piece of the action, promising to trim costs and drive revenue for landlords — including mom-and-pop property owners — by providing fee-based services like garbage collection or offering "resident benefits" like air filter delivery and move-in "concierge" help.

Valet Living, owned by private equity, has become the nation's largest provider of doorstep trash collection. One of its sales presentations said the service could add an average of $40,000 a year in net operating income for a landlord.

In a statement, Valet Living said that it didn't set prices or collect money directly and that the company supported "transparent fee structures that allow residents to understand all housing amenities and costs before they move-in or sign a renewal." A spokesperson did not respond to a question about how the firm would increase net operating income for landlords, or whether it charges landlords directly and then encourages landlords to mark up the service to make a profit off of their tenants.

The growth of proptech, or property technology, fueled by a venture capital spend that peaked at $32 billion in 2021, has further spurred the rise of third-party providers.

Latchel, which launched in 2017, offers landlords a "resident benefit package" that includes pest relief, a drain snake, and reimbursements for accidental damage to a unit, for a fee of 2% to 3% of the rent — $40 to $60 a month on the national median rent — which can then be passed on to the tenant. Latchel, which did not respond to BI, advertises that by outsourcing a landlord's maintenance costs, Latchel can generate savings of up to $20 a unit each month.

Other vendors, such as CredHub, charge landlords to report rent payments to credit agencies. Chris Dukelow, CredHub's cofounder, said that unlike add-ons "used more to make money" from tenants, rent reporting was beneficial. He said that tenants should be allowed to opt out or have the cost folded into their rent but that most CredHub clients marked up the cost through fees.

"Ultimately, it's up to the property manager what they do," he said.

Todd Ortscheid is a partner in PMAssist, a consulting company that helps property managers pursue what he calls "fee-maxing" through online courses that lay out more than 75 kinds of fees that can be charged. Ortscheid declined to comment but publicly credits more than a quarter of his own property management company's revenue to fees charged to tenants.

Ortscheid provides services mostly to single-family homes and "accidental landlords" — those who inherit a rental property, for example — the other end of the spectrum from massive REITs. He credits the National Association of Residential Property Managers conference with introducing him to "fee-maxing."

"Remember, if a tenant will pay it, the market has determined that it's fair," he said in a webinar recording viewed by BI.

'Pushing the envelope'

Regulators have been slow to catch up to the spread of rental fees.

In 2024, a California judge ruled that Equity crossed the line with a 5% late-payment fee that violated a state ban on marking up fees; the judge found that the company had charged more than $36 million in late fees in California over nearly 11 years and agreed with the general structure of the plaintiffs' calculations that found $26 million of that was excessive.

In a response to the filing, Equity argued that the calculations didn't take into account rising personnel costs and argued that the court should limit monetary relief. On an April 2024 earnings call, CEO Mark Parrell said the company was considering an appeal. McKenna, the Equity Residential spokesperson, declined to comment on lawsuits.

The evidence in the case included a 2008 internal document on "the potential upside" of hiking late fees to 5% of rent. Denise Beihoffer, the company's vice president for legal affairs, said Equity was "committed to pushing the envelope a bit where the risk of doing so is low." The firm's vice president of financial planning at the time told her in a May 2008 email that it looked like a "slam dunk"; because California's average rent was $1,500, "the average late fee would come in at $75," a 50% increase.

It may have been a reasonable calculation: The FTC has gone after only a few landlords over rental fees recently. And the impact of voluntary transparency efforts has been uneven.

In July 2023, as part of the Biden White House's push to ban "junk fees," the listing portals Zillow, Apartments.com, and AffordableHousing.com agreed to display fees and calculate the total cost of renting for renters. But that can be only so effective. A Zillow spokesperson, Emily McDonald, told BI that fees showed up only "when landlords and property managers provide them."

Listings within a property manager's control may not be complete. In the FTC case against Greystar, the agency said the company was not listing all fees on its sites. The lack of transparency had cost renters hundreds of millions of dollars, the suit says, citing one tenant whose actual monthly cost was 40% higher than what they were quoted when signing the lease.

In a press release, Greystar said no tenants paid any fee "they have not seen and agreed to in their lease" and said it had expressed willingness, in discussions with the FTC, to "display total monthly leasing price" whenever it was "within Greystar's control."

Greystar also said the FTC provided "zero guidance" when it decided to exempt landlords from its rule on fee transparency.

"The most effective path to achieving uniform and consistent fee disclosures is through clear regulatory guidelines for our industry," it said. "It is disappointing that the FTC has failed to show any leadership in this area."

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• Apollo spent $25 billion buying depressed assets during the April tariff turmoil.
• CEO Marc Rowan pointed to the seized-up bond market as a buying opportunity.
• The company has also been busy making investment-grade loans, Rowan said.

Apollo Global Management, known for its nonbank loans, is on a buying spree — but not where you might think.

Since Trump's tariff wars have wreaked havoc on stocks and bonds, the alternative asset manager has been busy putting its excess cash to work, Marc Rowan, the company's CEO, said in a conference call to investors.

"We believe we are one of the largest active buyers of assets post-Liberation Day, with $25 billion in April alone," Rowan said, referring to President Trump's April 2 rollout of his expansive plan to tax imports, which sent stocks tanking.

The private-market specialist's biggest target: the publicly traded markets, including bonds, which seized up amid uncertainty over how the tariffs would impact the economy, leading to wide spreads between what buyers would pay for a bond and what sellers were willing to accept.

While the firm has long invested in public assets alongside its private ones, the recent buying spree is a realization of Rowan's longtime position that bonds are less liquid than private debt during economic downturns.

"There just is no liquidity in publicly traded fixed-income markets, said Rowan, who interviewed for the role of Treasury Secretary under Trump. "And therefore we expect extreme price volatility to the point where sometimes public markets offer better returns on a risk-adjusted basis than private markets," he added.

Rowan made the comments during the company's first-quarter earnings call on Friday. The firm announced a record $559 million in fee-related earnings, largely on the strength of its hybrid equity fund, though it missed on its spread-related earnings generated by its insurance arm, causing the firm's share price to drop 1.50% on the day as of 11:50 a.m.

Jim Zelter, president of Apollo, said recent market volatility was predictable to anyone paying attention to the Trump administration's messaging.

"The current administration was clear on their objectives pre and post election," he said, adding, "While the tariffs should not have come as a surprise, the scope and approach clearly rattled markets."

Zelter said Apollo had been preparing for this moment, including by positioning the firm "defensively in anticipation of this market disruption with dry powder and liquidity to thrive."

Apollo has the ability to invest its own balance sheet capital from Athene, Apollo's wholly owned insurance arm that offers guaranteed income products to its clients, Zelter said.

'As a reminder, we run our business as an equal opportunity investor wth the ability to pivot between public and private primary and secondary, allowing us to focus on the most compelling risk-reward," Zelter added.

The firm has also been busy in nonbank loans, citing over 40 direct lending and financing transactions since the tariff chaos kicked off. It's also been lending to private equity competitors based on fund net asset values.

With M&A largely halted, Zelter said the firm sees opportunities to provide capital to companies that can't go public, provide liquidity to investors in private funds that need their money now, and act as a source of private capital to publicly traded companies.

Amid all of the optimism and opportunities for investment, there were some signs that Apollo still sees quite a lot of chaos ahead. The firm is investing the $36 billion it raised in the first four months of the year into cash, treasuries, agencies, and paying down leverage to prepare.

"That is not without its cost," Rowan said. "But it sets us up well in a volatile market.

• BNY is requiring employees to work in the office four days a week, up from three.
• The news comes as banks across Wall Street pull bankers back to the office full time.
• Business Insider obtained the memo, which said the bank has no plans for fully in-office work.

Bank of New York Mellon Corp., known for helping financial clients clear and custody securities, is the latest bank to rein in remote work. In a memo to staff, the firm's executive committee announced that it was asking employees to return to the office four days a week.

The memo, a copy of which was obtained by BI, said the new requirement would take place starting September 2, 2025, the day after Labor Day. The firm, commonly known as BNY, has required its workers to be in the office three days a week since 2023. Managers were called back to the office four days a week earlier this year.

The switch comes as companies from Amazon to AT&T start asking workers to return to pre-pandemic norms. Similar efforts are unfolding across Wall Street: JPMorgan Chase called its workers back to the office five days a week earlier this year, prompting some workers to explore unionization efforts or look for new jobs.

The memo from BNY's executive committee focuses on the importance of community and culture, which requires that employees spend more time together in the office.

It also emphasized the importance of "personal flexibility."

Indeed, BNY told its 51,000-plus employees it has "no plans" to require five days a week. It said employees will also continue to have the flexibility to work two weeks a year from anywhere, a perk the bank has dubbed "work from anywhere."

The bank, which also offers wealth management and investment advice, had previously instituted a 2-week "recharge period" around the end of each year, which allows employees to work remotely and skip non-essential activities, like internal meetings.

See the memo below:

As we continue to place even more emphasis on our community and culture, we believe that it is important that all of us spend more time together working, leading and learning from each other. As a result, we have decided that it is appropriate to ask all employees* to return to the office 4 days a week by September 2, 2025.

As a leadership team, we're committed to maintaining personal flexibility, and will continue to support remote work one day a week. We have no plans to return to 5 days in office unless circumstances were to demand otherwise.

We also want to remind everyone that we provide a "work from anywhere" benefit and a range of other benefits to help colleagues care for their mental and physical health and wellbeing. 

This step is also facilitated by the continued investments our firm is making in our offices and workspaces to deliver a modern, world-class in-office experience to our employees.

Being in the office together helps us collaborate and move work forward more efficiently. Occasional remote work can be effective, but in person we can respond more quickly to dynamic, fast-paced financial markets and better serve our clients. Most managers are already in the office 4 days a week, and we have seen the positive momentum this creates.

While we expect all employees to return to the office 4 days a week by September 2 at the latest, our offices are already open to you to come in as frequently as you'd like. 

One BNY is more than an idea or a concept — it's a culture, and culture is made up of people. Which means all of us. Thank you for your commitment to our clients, our company and our community, and to this next step on our journey to Thrive Together.

The Executive Committee

• Search funds are having a moment, but that doesn't mean they're right for everyone.
• Half of all search funds fail, so it's important to be sober and clear-minded when jumping in.
• We list the dos and don'ts of success in the world of entrepreneurship through acquisition.

Judd Lorson became interested in search funds as a pathway to entrepreneurship while at the Yale School of Management and launched a fund shortly after he got his MBA.

Even with the help of Search Fund Accelerator, which provided capital and mentorship, the road to buying a company turned out to be "messy and chaotic," Lorson said. In a research paper about his experience, coauthored by Yale School of Management senior lecturer A.J. Wasserstein, the former Navy officer described how he and his wife would search Zillow for homes when he was close to a deal, only to see their dreams evaporate when the acquisition fell apart and they had to start over again.

Even after buying a business, the challenges continued, with Lorson once having to forgo pay for two weeks while waiting for a short-term loan from his investors to pay expenses.

Search funds, sometimes referred to as "mini private equity," are having a moment. A 2024 Stanford Business School study found that the creation of such funds, which raise money to buy an existing small business, hit an all-time high in 2023 (the latest year studied) with more than 90 first-time search funds raised. Stanford found that the strategy is particularly popular among young people with nearly 80% of first-time fundraisers in 2023 clocking in at 35 or younger, including many freshly graduated MBAs.

For every story of someone becoming their own boss and making millions, however, there's a story of a failed business or someone who never even buys one. Lorson wrote that he hoped his own challenges would help others see the "realities of this career path" before making the plunge.

In an effort to help aspiring searchers, Business Insider spoke to search fund researchers and entrepreneurs about what they should know to make a clear and sober decision about their future.

"Many entrepreneurs fantasize about a $10 million payday," said Wasserstein. And while this can happen, it's rare. Wasserstein's examination of the 2022 Stanford Search Fund Study found that only 16% of search fund entrepreneurs delivered a $10 million-plus payday, with an average payday for those who managed to sell their business at $5.7 million.

"It is rare and not easy in any way," Wasserstein said of the big payday. "Understand what needs to happen for that to be a reality."

Don't plan a vacation anytime soon

Being the boss means you're never really off the clock. This can create challenges in your personal life and prevent you from taking a vacation — or even a weekend off.

Chad Howard, who left his corporate job to start a portable toilet rental business last year, has dealt with this firsthand. Howard was visiting family out of state when one of his largest clients called to say that they had an emergency and needed 10 portable toilets delivered as soon as possible to a location that had just run out of water. He would have just delivered the toilets himself, but he wasn't nearby, and none of his usual workers were free.

"I just don't travel as much as I used to because that feeling when you have to coordinate everything by phone feels terrible," he told BI of the experience.

Howard said the pressure to be available is magnified by the desire to make a good impression as a new business owner.

"Work-life balance exists in corporate America because most things aren't an actual emergency," he said. "Someone might say that, but in reality, if something comes in at off hours, it can wait until the next day, and nothing bad will happen."

Howard said you have to be able to solve problems when you're in charge. Gone are the days when he could sleep in until 8:00 a.m. on the weekends or easily plan out when he could fit in a workout. It's more exciting, but it's much harder to have a "normal" day.

Don't expect to walk away when you sell

According to the Search Fund Primer, the typical search fund timeline involves two years of searching for a business, followed by five to six years of operations before exiting a company, usually through a sale. A study conducted by Wasserstein, however, suggests that an "exit" doesn't necessarily mean the commitment to the business is over.

Wasserstein found that more than three-quarters of sales were to private equity firms or companies backed by private equity. And the majority of entrepreneurs making these deals maintained stakes in their businesses.

"Our data says that 65% of exiting searchers roll 25% to 49% of their equity," Wasserstein said. "Additionally, they need to stay with the acquirer for approximately two years."

They often have to stick around as CEO under a private-equity boss, which can present a whole new set of challenges. Instead of answering only to their investors, searchers may also be beholden to their new owners. Wasserstein's study found that these new owners have a net promoter score of negative 33, which suggests that search funders who've sold are more likely to be unhappy with their new partners than not.

The pay is better, however, with the majority of those who stick around for more than five years with their new equity partners making more than 30% more than they did when they were running the business themselves.

Be prepared to give up

Half of search funds fail. According to the 2024 Stanford search fund study, 37% never find a business, while 19.5% fail to make a return on investment. Another 5% have actually lost all of their equity. Failure is part of the game in entrepreneurship, and the earlier you can deal with it, the better your career.

The inability to accept failure can be costly as it can lead searchers to stick by businesses that aren't working.

"Our data says that entrepreneurship through acquisition CEOs and investors hang on to floundering businesses for too long," Wasserstein said, adding that "bad companies tend not to recover."

His research categorizes search fund failures into three categories: no-dealers, imploders, and drifters.

No-dealers never find a company, which can be emotionally challenging but doesn't carry nearly as much risk of long-term negative impacts. Imploders fail soon after acquisition, which can be traumatic, but means that the searcher hasn't put too much of their career into it.

Drifters hold on because they're determined to improve their companies, but, as Wasserstein writes, "time is a vicious enemy."

"If a drifter runs a business for five to ten years in perpetual anticipation of breaking out the next year, time becomes fleeting," he wrote, adding, "If a searcher is a decade into a project at 45 years old with no equity to show for their efforts, they understandably feel frustrated and disappointed."

The longer an entrepreneur spends with a failing business, the worse the impact on their lifetime earnings and professional opportunities.

It can even lead to "emotional and physical wear," he said, and can have a major negative impact on their relationships.

"As the CEO relentlessly fights to improve the company, they often neglect their health, friends, and family," Wasserstein wrote. " More often than not, the CEO's spouse, closest friends, and family realize perseverance is futile before the CEO admits this to themself."

Find a peer group or mentor

There are many guidebooks, most notably the Stanford Search Fund Primer and the Harvard Business Review's Guide to Buying a Small Business, to help searchers navigate the process, and a range of online influencers and communities. But it's also important to find people you can call in a jam.

Finding and running a business is "far more demanding than it appears on paper," said Newton Campos, professor of entrepreneurship at IE University in Madrid and the founding partner of Newton Equity Partners, a recently launched fund that invests in search funds. You must be a capable fundraiser, negotiator, sales agent, and business operator. And because investors are often buying someone's "life's work" or "a piece of family history," it requires emotional intelligence alongside modeling skills.

If you're in graduate school, find a professor or alumnus you can lean on. People coming from the business world might want to find investors who have the time and ability to act as a guide or mentor, or work with an accelerator like Lorson did.

Finding support can also help emotionally. Searchers often move to new cities to start their businesses, which can leave them socially isolated and much too busy to make friends. Also, being the boss can be lonely, as Josh Leslie, a CEO, told BI back in 2019.

"I don't get to go to lunch and complain about the boss with my coworkers," he said. "My role in the company is unique and uniquely isolating."

• Every year, private equity recruiters hold a week of speed-dating recruiting for junior talent.
• Known as "on-cycle," the practice has drawn critics, including JPMorgan's Jamie Dimon.
• See how to get ahead of the fast-approaching interview frenzy — and who should avoid it.

Imagine graduating from college with a six-figure investment banking job lined up. You might be planning to backpack across Europe, or just to get as much sleep as possible before the grueling 80+ hour workweeks begin.

Then, perhaps while sitting in a French hostel, a private equity recruiter will reach out to insist that you start interviewing as soon as possible for a job that won't start for two years.

Welcome to the private equity recruiting storm known as on-cycle recruiting. Nobody, not even the recruiters, knows when it will begin. According to an Amity Search Partners newsletter, the process began on August 29 in 2022, July 21 in 2023, and June 24 in 2024.

Once one firm kicks it off, however, potential candidates (mostly junior investment bankers) can be expected to drop everything to interview, including vacation plans or training for their investment banking jobs, as Business Insider has previously reported.

Unsurprisingly, the practice has its fair share of critics, including executives of the investment banks targeted by PE poachers. JPMorgan CEO Jamie Dimon called the practice "unethical" and said that he might try to eliminate it at his bank.

Even some private equity firms have been sitting out for fear that the process, which used to take place in the fall, has gotten so early that it's forcing candidates to make decisions they're not ready to make, industry insiders told BI.

We spoke to recruiters with experience filling entry-level private equity roles to understand how the process works, how to know if it is worth it, and how to prepare.

They said that on-cycle recruitment tends to be a small fraction of private equity recruiting, so there's no harm in waiting. If you want to try your hand at it, however, you'd better be ready well before the starting gun sounds.

It can't hurt to wait

On-cycle is not the only path to an entry-level private equity role.

According to numbers compiled by Danielle Strazzini, cofounder at Bellcast Partners, it only results in at most 10% of the roles hired for any year's associate class in private equity, leaving plenty of room for other interviewing opportunities.

"It's become such a small part of recruiting," Strazzini said, adding that "off-cycle is the story."

Other recruiters agreed. Holly McCarthy, founder of Opus Advisors, said that the majority of her firm's recent work at the associate level is to fill roles that will start in the next few months, not the next few years.

"The predominance of our search work more recently has been for summer 2025 start dates, not 2026 or 2027," she said.

Only engage when you're ready

The only firms hunting during on-cycle are megafunds. The logic is that by going early, these firms can pick off the most qualified candidates.

So, who should think about on-cycle recruiting? Only those who have thoroughly prepared for it.

"There are those kids who know freshman year that they want to go into private equity, whose parent, neighbor, or friend works in the industry, and have been reading the Wall Street Journal since they were in elementary school," said Strazzini.

In other words, people who know exactly what they want and who already have a job at a top-tier bank. People who interview before they're ready risk tarnishing their reputations, recruiters said.

"First impressions matter, and candidates should begin recruiting when they are ready," Shannon Simons, managing director at Opus Advisors said. "You shouldn't go with the herd."

She noted that firms are unlikely to re-interview a candidate who didn't perform well in the next year's recruiting cycle. "They typically don't give second looks."

"There's a real danger of putting your hat in the ring too early and not performing," Strazzini said, explaining that it is better to develop your technical and professional skills through your job as a junior banker.

Just don't wait too long, McCarthy said, explaining that candidates who engage at the end of their two-year banking arrangements may have to answer questions about why they waited, or why they don't already have an offer.

Be upfront about what you want

You may have clear ideas about your path that align with your current investment banking role, such as healthcare or media mergers. Even if you're a generalist, it's important to know what you want before engaging with the recruiting process, Strazzini said.

This extends to considerations about where you want to live, whether in New York, Chicago, or Charlotte, North Carolina, and the size of the fund: a megafund may offer more options for lateral moves, while a smaller firm can offer more hands-on opportunities.

"The more specific you can be, it helps your recruiters, and it helps your interviewers believe you actually want to work at that specific firm," Strazzini said.

Otherwise, you'll be inundated with options, and there's a good chance your interviewers won't find you as passionate as other interviewees.

Simons gave the example of a candidate who gives generic answers about the consumer sector, suggesting they care more about the fund's brand name than the specifics of the job. "Compare that to a candidate who said they started reselling sneakers in the fifth grade, or someone can talk for hours about the trends in the beauty sector," she said.

While candidates may think having a broad search aperture will be advantageous, the on-cycle recruiting process is lightning quick, so time is your greatest resource. Therefore, it's best to be upfront with your recruiter about what you want.

"Don't take interviews during on-cycle with firms that you're not interested in," Hilary Hurley, managing director at Amity Search Partners, told BI. "It's a time crunch, and you want to preserve your time for firms that you're really excited about."

How to get ready

If you're ready for on-cycle recruiting, you'll probably know it. You'll likely have attended an on-campus recruiting event offered by a recruiter, gone through the top internships, and have a job offer from one of the big-name banks after graduation.

Recruiters also suggest using study guides like those provided, for a fee, by Peak Frameworks or ReCalc. They will give you a chance to try your hand at building a model or passing a case study. If you struggle with these guides, recruiters suggest you don't jump into the on-cycle recruiting cyclone.

"The test is very binary, pass or fail," Simons said. "You'll know if your returns are correct, and if your balance sheet balances. Your model should tie together in a neat bow."

Candidates should think of their recruiters as not only the firm's first round of assessment but also as their own career counselor. It's important to be transparent with your recruiter, said Hurley, as this means they'll make sure you are applying for the right roles.

"If the candidate is upfront that they would never want to work for a healthcare fund, it doesn't make sense to take an interview with a healthcare fund," Hurley said.

Recruiters get paid to place candidates and want to ensure they're spending their time wisely.

"We are the buffer for firms and they're hiring us to give them a curated list of high-quality, vetted candidates," McCarthy said.

It's also important to do your research on the firms you plan to interview with. Also, try to network before your interviews and send a thank-you note afterward—just don't overdo it.

"Making a connection at a firm can provide useful insight and demonstrate authentic interest" McCarthy said. "But realize they are busy and may not be able to respond."

Imagine the average Wall Street worker, and Christian Bale's investment banker character from "American Psycho" might come to mind: conventionally attractive with slicked-back hair, a posh Manhattan address, dual Harvard degrees, and, of course, white and male.

What if we told you that front-office workers at four of the largest banks were actually less white than the general public? And equally male and female? Or that Baruch College, a public school in New York City, is a more common undergrad alma mater than Harvard?

The Wall Street stereotype exists in part because the industry is insular and hard to break into, a trend that is only calcifying as the industry's already strict recruiting pipeline narrows. Students who want to become investment bankers, private equity dealmakers, or hedge fund traders now feel they must start checking off a long to-do list as early as freshman year — or risk missing out. The system prioritizes people who are lucky enough to be exposed to the finance industry and its all-important investment banking internship at a young age.

In light of this, BI decided to put Wall Street's diversity to the test. We wanted to know where the average Wall Street worker went to school, how likely they are to have a master's degree, and how far the banks have come in hiring more women and minorities after years of promising to branch out. This is the third in a series of stories about the changing path to jobs on Wall Street and how this is affecting young people and the industry at large.

We turned to disparate sources of information to synthesize a picture across four of the largest Wall Street banks: JPMorgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs. We used Equal Employment Opportunity Commission disclosures for race and gender information and the data software firm Revelio Labs for other things, like educational and professional experiences. To determine pay, we consulted the New York State Comptroller's annual compensation report, which relies on tax data.

Read on to learn more about the average Face of Wall Street.

It's not essential to be an Ivy Leaguer to get a job

While an Ivy League degree can help you land a front-office bulge bracket job, it's far from a requirement, the data showed.

Only 11.7% of New York-based front-office workers at the four firms we studied went to Ivy Plus schools (defined as the Ivy Leagues plus the University of Chicago, Stanford, Duke, and MIT) for undergrad, according to the Revelio Labs data.

Nearly as many received their undergraduate degree internationally, which can serve as a proxy for employees who are not from the US. Almost four out of five went to other schools.

The numbers change as you go up the pecking order. BI studied the educational backgrounds of the 69 members of the management committees at these four banks and found that 17.4% of them went to an Ivy Plus for undergrad, and a striking 30.4% hailed from an international school.

Downtown kids rejoice: NYU is the top undergrad degree.

Wall Street's front-office workers hail from a range of undergraduate programs, but there are some top hits. Three of the five most popular undergraduate schools are in New York City, led by New York University, which charges more than $65,000 a year for tuition. Next up is Baruch College, a public school in Manhattan known for spitting out finance talent, and Fordham University, a private Jesuit school in the Bronx.

New York City's Ivy League representative, Columbia, didn't make the top five. The only two Ivies in the top five are the University of Pennsylvania, home of the Wharton Business School, and upstate New York's Cornell.

More than a quarter have a graduate degree

The study found that 28.3% of these workers have a graduate degree, most likely an MBA, though it could be another degree.

The most attended graduate schools among this cohort are largely a who's who of top business schools, with NYU and Columbia taking the lead. UPenn and Harvard also make an appearance. Fordham is the third most common in another strong showing for the Bronx school.

Almost a quarter are lifers

Nearly a quarter, 22.3% of employees, have been at the same firm since graduation — highlighting the importance of getting on the right career track in college. Among job switchers, most worked at other bulge-bracket banks led by Bank of America.

The only non-bank employer in the top five was the US government, which remains the nation's largest employer despite recent cutbacks under the Trump White House.

They are paid well

Note: The above chart shows nominal bonus size and is not adjusted for inflation.

Working on Wall Street pays well, with entry-level bankers earning about $110,000 a year, not including bonuses. Bonuses can make up half or more of total pay but will fluctuate depending on how bad or good business was the year prior.

In 2024, bank revenues soared, sending Wall Street's bonus pools to an all-time high of $47.5 billion, according to New York State Comptroller Thomas P. DiNapoli's report. That works out to an average bonus of $244,700 for every Wall Street worker, the report said.

Using banker pay data for 2023, BI estimated that the average Wall Street worker earned roughly $529,970 in 2024. According to the latest data from the Social Security Administration, the average salary in the US is $66,622.

Less white than the general population

The latest available data shows that the employees at these banks are 48.67% white, about 10 percentage points less than the latest census data shows for non-Hispanic whites. It's also, however, slightly less Black and slightly less Hispanic than the country.

One exception is the Asian population, whose representation in finance is about three times that in the country as a whole. Nearly a fifth of the employees identified as Asian, compared with 6.4% of the US population.

Since 2019, the studied banks have become 5 percentage points less white, with all minority categories increasing, led by Asian workers.

Perhaps unsurprisingly, Wall Street's executive level is whiter than the general population. The four banks are essentially three-quarters white at that level. Asian executives are also more highly represented at that level, with 14.18% of roles.

Other minority groups are substantially less represented than they are in the general population, with only 4.74% Black executives, who make up 13.7% of the general population, and 5.23% Hispanic executives, who account for 19.5% of the general population.

Despite banks' diversification efforts, white people now represent 74.2% of firms' executive ranks, up from 70.2% in 2019. At all other levels captured in the disclosures, the firms have become more diverse since 2019.

While the data is separated into different job categories, it doesn't make more granular distinctions between investment bankers and those who work in other fields like technology and marketing.

Most of the banks' data comes from 2023 EEOC disclosures with the exception of Citi, which has not released its 2023 disclosure. As a result, we're using Citi's 2022 data.

We've also collapsed the Native Hawaiian or Pacific Islander, American Indian or Alaskan Native, and multiracial categories into one "other" category. We're following JPMorgan Chase's lead in combining these categories so we can compare the banks against one another.

Gender parity gets better the further down the chain you go

If you look at the overall gender breakdown, the banks are almost exactly 50/50 male and female, and have been since 2019.

But an interesting story emerges when you look at the gender split by rank. At the "other" level, which features administrative employees among others, the banks are 57.5% female.

The next bar up, professionals, are more male than female (53.3% to 46.7%) but near parity. At the midlevel management rung, the firms get slightly more male, with 57.8% of employees identifying as male.

The executive levels are the most male, with 69.6% of executives identifying as male. That share is lower than in 2019, when nearly three-quarters, 74.1%, of top bank executives were male. But as with race, Wall Street has the furthest left to go at the executive level.

Want to share your career path with us? Fill out this quick form.

Editor's note: Revelio Labs' data comes from its internal talent database, which uses public sources like LinkedIn profiles that are standardized through the firm's proprietary algorithms. For this project, Revelio pulled data for roughly 36,500 employees of Goldman Sachs, Morgan Stanley, Citi, and JPMorgan who identified as front-office workers based in the New York area.

• Trump's "unprecedented" tariff negotiations are slowing the economy, said Blackstone chief Steve Schwarzman.
• While M&A dealmaking will slow across the board, president Jon Gray sees the worst impact on IPOs.
• But Blackstone does see an opportunity to maybe buy more public companies as their values sink.

Instead of announcing the arrival of a dealmaking bonanza, Blackstone CEO Steve Schwarzman stressed the importance of "patience" during the firm's earnings call. Schwarzman, who is a Trump donor and was a first-term trade emissary, said that the markets are waiting to see the "outcome of unprecedented multilateral negotiations with perhaps over a hundred countries."

Once this is resolved, Jon Gray, Blackstone's COO and president, said, "underlying momentum" will mean the return of deals.

"You'll see that people want to transact," Gray said. But the IPO market, which has seen a particularly poor few years, is unlikely to be leading the charge.

Right now, financially motivated buyers are "still in the market" and may still be able to transact with the help of a growing base of private credit investors, he said. Strategic buyers, meanwhile, who would use their public equities to buy companies are "a little more cautious."

And the "IPO market, which is the most sensitive to market confidence and conditions, has been the most impacted," Gray said. It has "toughest" conditions, and will need some stability to turn back on.

For a firm that has made some of its most profitable investments during periods of uncertainty, an advantage of private capital that the firm's execs highlighted multiple times on the call is that there's opportunity to buy. That's the case even if sales that would flow to their fund investors are likely to slow.

This has led the firm to increase its purchases of certain public securities, like stocks and bonds, that are potentially mispriced.

"There are opportunities where we think the value of the security may be decoupled on the screen just given the technicals," Gray said.

That same opportunity means that Blackstone could have a chance to take more companies private in 2025 at a favorable price. Last year, the firm took companies like grocery-anchored retail real estate firm Retail Opportunity Investments and software company Smartsheet private.

"Across our different platforms, we're often having discussions with public companies, and when stock prices trade off, the receptivity from boards to our prices may be better," Gray said.

Instead of a year that could have seen more companies try to take their businesses public, 2025 looks like a year where the market will become even more private. For an investor that's betting on an increasingly private economy, with an opportunity to bring retail investors and even 401k into the private markets, there's a chance to benefit.

As long as those tariff negotiations don't drag on too long and bring the whole economy down with them.

"The faster this tariff diplomacy can play out, the better it will be for the economy and markets," Gray said.

• Trump's tariff pause was great for stocks, but for deals, it just kicks the can down the road.
• The pause threatens to extend Wall Street's hiring freezes and further lower bonuses.
• Bankers and PE execs share how they are spending their time as they wait for clarity.

Long hours, hiring freezes, and a souring bonus outlook. This is the life of the Wall Street dealmaker right now as M&A stalls amid continued uncertainty over Trump's tariffs.

On Wednesday, President Donald Trump announced a 90-day pause on most tariffs, with the exception of China, which is now facing tariffs of up to 125%. While the reversal lifted stocks, resulting in the biggest single-day gain for the S&P 500 since 2008, it isn't expected to do much for M&A, which was already on the fritz leading up to Wednesday's announcement. In fact, some are predicting Trump's pause could make things worse.

"We're going to have three more months of paralysis," said Alan Johnson, a finance industry compensation consultant. "Buyers and sellers are going to say, 'I'm going to wait,'" added the Johnson Associates founder.

It's not just investment bankers who are sitting on the sidelines. Private equity deal pipelines are also on hold as investors and target companies try to understand how current and future tariffs could affect business revenues and supply chains.

"If you're an investor, unless you have an amazing conviction that you're insulated from the tariffs, you're sitting on your hands and waiting," said the head of a sector at a major private equity fund.

As one investor at a midmarket private equity firm put it: The news of the 90-day pause was well-received, but nothing to celebrate. "We pop bottles when we have great exits that earn our investors tons of money, not for short-term noise."

Inside the lull

What do dealmakers do with their time when there are no deals? The people who spoke to BI said they and their teams aren't going home any earlier. In fact, some are traveling more to stay in touch with skittish clients even as they predict year-end bonus declines. Others are working longer hours to understand what the tariffs will do to their portfolios.

Eric Stetler, the head of mergers and acquisitions at the independent investment bank D.A. Davidson, told BI that far more of his time is being spent keeping clients updated.

During a time like this, Stetler said, "just staying in front of clients" is paramount. "People want to know what's happening."

Stetler said senior bankers tend to devote about "75% of their time" to existing client mandates and the rest to drumming up new business. "At times like this," he said, "that reverses, or close to reverses."'

"That's not to say that our new business development activity is pausing because we're still having a lot of conversations," he said. "We're still pitching new business. We're preparing businesses for sale, and looking at processes with our clients."

The PE sector head said private equity deal teams are spending more time with their portfolio companies or updating their models with the latest tariff numbers.

"The announced tariffs were more severe than what was expected, so we've been having to update Plan B, Plan C, and Plan D to make sure we can mitigate the effects," the executive said before Trump announced the 90-day pause.

Hiring and bonuses

Hiring is largely frozen, according to a banker and Wall Street recruiter. "What I'm hearing is that it's kind of like, 'Maybe this is not a good week to push something through. Can we give it a week or two?'," the headhunter said.

Though the firms this recruiter communicates with had yet to invoke full-on hiring freezes — which are rigid postures that tend to presage layoffs — the word "freeze" had been mentioned in some conversations.

"If things don't get better," the recruiter added, "there will be layoffs."

Bonus expectations have also hit the skids as the prospect of closing a deal gets pushed further into the future. As Stetler explained: "It takes roughly four to six months to run the sale process" on a live deal. Even if a buyer decided to pull the trigger on a purchase today, "you are looking at a late Q3, probably, at best," for when such a merger might close.

Trump's tariff pause threatens to further dampen bonuses by pushing the timeline out even more — potentially to 2026, said Johnson, the compensation consultant.

"Would you do a deal now if you're a buyer? In 90 days, maybe he changes his mind again, or 90 days becomes 30 days, or 90 days is tomorrow, or 90 days is 180 days," Johnson said, referring to President Trump. "Maybe things will be a lot better in three months, the sun will start shining. But now we're in what, July? And then by the time the lawyers get involved and you sign an agreement, it's 2026."

Get in touch with these reporters. Reed Alexander covers Wall Street banks; he can be reached via email at [email protected], or SMS/the encrypted app Signal at (561) 247-5758. Alex Nicoll can be reached via email at [email protected], or Signal at @alexnicoll.01

• Young people are flocking to search funds, which seek to buy and grow small businesses.
• The model is popular with MBAs and young professionals looking to test their entrepreneurial mettle.
• The trend comes amid growing job insecurity for white-collar workers.

Just two weeks ago, Adam Froendt was a vice president of private equity and junior capital at Churchill Asset Management, a private capital affiliate of insurance giant TIAA's asset manager Nuveen.

Not yet 30, he had been promoted three times in his eight years in the industry, closing more than 60 middle-market private equity deals and 30 fund investments.

Last month, he quit that promising job to run a business. Now, he just needs to find one to run.

Froendt is one of a growing number of young people looking to test their entrepreneurial mettle through the world of so-called search funds. Sometimes described as mini-private equity or entrepreneurship through acquisition, a search fund is a small investment fund run by one or two people established to buy an existing small business. Once the business is purchased, the "searchers" run it with an eye toward creating value by streamlining operations and growing in size.

A 2024 Stanford Business School study found that search fund creation hit an all-time high in 2023, the latest year with data, with more than 90 first-time search funds raised. The strategy is particularly hot among young people, with Stanford finding that nearly 80% of first-time fundraisers in 2023 clocked in at 35 or younger, including many freshly graduated MBAs.

Some searchers, like Froendt, are so eager to be their own boss that they forgo outside investments — using their personal savings or their spouse's income to fund their entrepreneurial ambitions.

The boom in search funds is partly a response to a more complicated job market. White-collar jobs, once the obvious pathway to success, feel less stable. The dream of entrepreneurship is still alive and well, but tech startups can feel out of reach given the enormous shadow tech giants like Google and Amazon now cast over the economy.

Search funds and their various cousins offer a more realistic path to entrepreneurship.

"It's an alternative to the romantic entrepreneurial belief that you can only succeed by starting a company," Newton Campos, professor of entrepreneurship at IE University in Madrid and the founding partner of Newton Equity Partners, a recently launched fund that invests in search funds, told BI.

Froendt, who was bitten by the entrepreneurial bug running a car wash in high school, calls it "betting on himself."

"Traditionally entrepreneurship is thought of as "zero-to-one," involving brand new ideas starting at the ground floor," Froendt said. "When my eyes opened to the thought of being an entrepreneur in the context of an existing business, it immediately resonated with me."

Here's why some of the brightest young people are choosing to buy and operate unglamorous businesses like porta-potty rentals (yes, really) instead of climbing the corporate ladder.

How search funds work

The original search fund model, created in the 1980s, begins with an entrepreneur finding investors to fund their salary and expenses during a multi-year search for a business worth buying.

Froendt is taking a higher-risk and higher-reward path by self-funding his search, which takes, on average, two years. This model offers more flexibility over the businesses targeted, as well as more control and, eventually, more equity. As the founder of TrueGrit Capital, Froendt will be living off his "own personal balance sheet" (his savings) for up to two years.

The next step is to buy a successful small business, often from an owner-operator looking to retire. Froendt is looking for a company with between $3 million and $12 million in yearly revenue located between Maryland and South Carolina and in the healthcare services (think home health or care management), financial services (think insurance or accounting), or knowledge (think training or certification) industries.

The searchers' goals are to streamline operations, grow revenue, and create value for themselves and their shareholders. Most searchers plan to exit after five or more years, though some plan to hold indefinitely, which is what Froendt hopes to do.

The payout can be massive. According to the Stanford study, the average return on investment across the search funds studied was four and a half times invested capital, much higher than that of a traditional private equity firm.

There are many similarities to private equity, causing some to call the model "mini private equity." But Peter Kelly, a lecturer at Stanford Graduate School of Business who conducts the biannual survey and who ran a successful search fund business in home health care, said the terminology is inaccurate.

Kelly, who prefers the phrase entrepreneurship through acquisition, said that the model borrows from private equity financing but is fueled by the entrepreneur's desire to become an owner-manager.

The manager of a private equity fund gets paid through fees, incentivizing them to grow their assets under management, he said. A searcher is a direct investor (usually the largest) and gets paid by growing the business.

A.J. Wasserstein, a senior lecturer at the Yale School of Business put it this way: "Search is about jumping into a CEO role and leading and building. Private equity is about providing capital."

Why it's growing

Search funds were developed in the MBA world, and some of its popularity can be traced to an ever-growing list of courses about the model.

Campos counts 25 schools that teach it worldwide but said he expects the number to reach 100 in just a few years.

As interest in search funds grows, more firms, including Pacific Lake Partners and Relay Investments, have raised funds to invest in them. Campos founded his own investment fund earlier this year to help institutional investors find search funds in Europe and beyond.

Campos, who said he sold a rental apartment to invest, has made 18 personal investments in search funds, which have netted him a nice return.

Websites like SearchFunder, which connects investors with prospective searchers, and a series of how-to guides have made "searching" easier than ever.

"A Primer on Search Funds," updated every few years by Kelly and his Stanford colleagues, offers a very granular guide to the process, including sample legal documents to help close a deal. Campos called the document the "Bible" for the business model.

Harvard professors and entrepreneurs Rocye Yudkoff and Richard Ruback have published the "HBR Guide to Buying a Small Business," another essential read for anyone interested in the industry.

They've even turned it into a podcast, recently discussing how buying a successful small business can be less risky than betting on a career with a large corporation.

"That institution might be around forever, but that doesn't mean you're going to be around forever inside that institution," Yudkoff said.

Interest in search funds is only expected to continue as tech and consulting firms cut jobs and Wall Street hiring slows amid fears of an economic downturn.

Some 15% of the Harvard Business School's 2024 class that were looking for jobs did not receive any job offers after graduation, compared to only 4% in 2021.

Search funds have even become the target of online jokers. They are a recurring theme of Search Fund Stu, a financial meme maker on Instagram whose page is full of jokes about unsexy businesses like port-a-potty rentals and social media influencers promoting the model.

Search Fund Stu told BI that he is operating a business that he bought through a search fund, and asked to remain anonymous so he can post freely. One of his posts shows a photo of an uncomfortable-looking dog, labeled "MBA without a full-time offer" and riding a mini-horse labeled "a $500k search fund."

Alongside the jokers, there are lively discussions on "SMB Twitter/X," where current operators commiserate and gloat about the highs and lows of the model, spawning some bonafide influencer stars, like Codie Sanchez, with more than half a million X followers and 2 million Instagram followers.

Sanchez left a career as a private equity investor to buy and sell small businesses and teach the model to others through her media brand, Contrarian Thinking.

Froendt recently quit social media but said that Walker Deibel, another influencer and author of the guide "Buy Then Build," played a big part in his decision to try out the model.

Kelly warns, however, that people shouldn't jump into search funds because they see it online. They are still quite risky compared to climbing the corporate hierarchy, with 37% of funds raised failing to acquire a company and 31% of companies acquired either still operating or having exited at a loss, according to the Stanford survey.

"We try not to promote it in the classroom, and I don't care if my students do it, I just want them to learn about it," Kelly said.

"If no Stanford business school graduates did it one year, I might say, 'That's too bad,'" he said, adding: "If 30 graduates did it, that would make me nervous."

• Private equity's slump continues as the business of buying and selling companies remains sluggish.
• Buyout funds recently underperformed the stock market for the first time in decades.
• Here's what it means for those already in the industry and those eager to break in.

Wall Street's "Barbarians at the Gate" are slowing down after nearly 25 years of beating the stock market. As a result, anyone contemplating a career in private equity should rethink their approach.

Earlier this month, investment firm Hamilton Lane issued a report showing that the MSCI World Index, a leading stock market indicator, beat out private equity returns for the first time since the dot-com bubble burst in 2000. Hamilton Lane's data represents performance through September 2024 for buyout funds that started investing in 2022.

Prior to this, the leveraged buyout industry, also known as private equity, had been on a tear. Sure, it felt some pain during the housing crash and the following recession, but that also meant that interest rates stayed lower for longer — paving the way for cash-rich companies like Blackstone to pick up assets on the cheap, which helped drive returns and more investors. In July 2023, Blackstone became the first private equity firm to manage $1 trillion in assets — three years ahead of the company's prediction to investors.

As Apollo CEO Marc Rowan said at a presentation last year, much of the industry's returns over the last 15 years (he excluded Apollo's) "was not the result of great investing, but as a result of $1 trillion in money printing. Well, guess what? We stopped printing that magnitude of money."

Indeed, since interest rates started ticking higher, financial sponsor dealmaking has slowed, IPOs have ground to a halt, and dry powder (industry speak for money yet to be invested) has stood at near all-time highs even as fundraising slowed by almost half from its 2021 peak.

That's not to say that the industry broadly known as "private equity" is dead — or that all buyout funds have underperformed stocks in recent years. Quite the opposite. Firms like Blackstone and Apollo have been busy issuing loans and investing in large infrastructure projects (think data centers). Indeed, Apollo's lending business is now nearly 10 times larger than its traditional buyout business.

What does it all mean for budding masters of the universe looking for a career in private equity? We spoke with a range of experts, from industry insiders to consultants and recruiters, to understand what is ahead for professionals looking to break into the lucrative field of private-market investing.

"Private equity was able to get lazy because of ZIRP."

They said there is no shortage of opportunities for aspiring financiers who know where to look. Private equity's loss has been private credit's gain, and within private equity, there are more opportunities than ever for pure-play operations experts skilled at running businesses.

As Robin Judson, founder of recruiting firm Robin Judson Partners, put it: "I think that people who want to do private equity will pursue it, while people who just want to invest may look toward other strategies."

Here's a guide to a career in private equity as the golden age of corporate buybacks gives way to private credit and other types of dealmaking.

The rise of the portfolio operator

When interest rates started rising in 2022, company valuations remained loft, making it harder for buyout firms, which rely heavily on debt to make purchases, to find deals that could generate returns. This has led to a shift in demand for professionals who know how to drive returns by changing how a business is run, said Glenn Mincey, KPMG's head of US private equity.

"This recalibration has given professionals in the industry new focus outside of buying and selling companies," Mincey told BI.

Indeed, these pros used to be called in to help manage a company after it was purchased. Increasingly, they are getting involved in advance of an acquisition because they are often best positioned to know how to maximize performance through operational improvements.

The largest firms will hire teams of operational experts with expertise ranging from technological transformation to supply chain and logistics to talent acquisition and management. Even traditional deal professionals have become more operationally focused.

"Private equity was able to get lazy because of ZIRP," a VP at a mid-market private equity firm told BI, referring to the acronym for the Federal Reserve's zero interest rate policy response to financial crises starting in 2001. "That's gone away, you have to know your shit now," this person added.

This hands-on, entrepreneurial approach can be seen in the growing rise of so-called search funds. Sometimes described as mini-private equity, a search fund is a small private equity fund run by one or two individuals that's focused on purchasing one small business like a carwash or HVAC company. Once purchased, the fund works on streamlining operations and creating value.

According to a 2024 Stanford Business School study, search fund creation hit an all-time high in 2023, the latest year with data, with more than 90 first-time search funds raised. This strategy is attracting a younger group of professionals right out of business school, or even before business school, with Stanford finding that nearly 80% of first-time fundraisers in 2023 clock in at 35 or younger.

The private credit boom

The same high interest rates and global uncertainty that have dampened the traditional private equity industry have made nonbank lending, also known as private credit, more attractive.

Even in a tough economy, "companies still need capitalization," explained Judson. And with banks pulling back on riskier lending, private investors have stepped in to offer "more creative financing solutions," she said.

Blackstone, which made its name in private equity and then real estate investing, saw its credit business grow to become the largest business in its portfolio by assets under management last year. Apollo now counts more than 80% of its $751 billion in assets under management as private credit.

As PWC's leader of its private equity advisory practice Kevin Desai told BI in January, the private credit job market is hot in part because there simply aren't enough people with direct experience to fill lenders' needs. One reason is that private credit firms want professionals with lending experience.

That means recruiting from the debt-raising or trading arms of investment banks — or really anyone with lending knowledge who can be trained.

Nelson Chu, CEO and founder of private credit investment marketplace Percent, told BI that his firm has also recruited talent from debt rating agencies like Morningstar and Moody's. Its often worked out so well that the firm has seen its workers get quickly poached after they get up to speed, he added.

What this means for private equity jobs

Anthony Keizner, cofounder and managing partner of Odyssey Search Partners, told BI that hiring is "very buoyant" in certain private equity businesses, including the popular and dry-powder-rich niches of secondaries, buying and selling of stakes in other private funds, and infrastructure.

The slowdown in the traditional private equity business of buyouts is felt most acutely in midlevel and senior positions, he said.

"Most buyout firms have slowed their hiring plans in 2025 compared to the recent boom years," he said. "Many private equity firms feel they are adequately staffed at current deal volume levels."

Hiring at the junior level remains active, he said — a sentiment echoed by Tim Roth, partner at advisory firm Armanino Advisory.

"I don't believe junior hiring is decreasing, but I think it's becoming more competitive to get a shot," Roth told BI, noting that AI could exacerbate the challenge.

For professionals who have already broken into the business, there's less pay but not a lot of eagerness to jump ship either. One reason is that PE firms still have a ton of dry powder to invest and portfolio companies to sell when the time is right.

"I tell candidates not to leave their jobs right now without having another job," Judson said. "If you have a job, assuming the portfolio is sustainable, you will eventually get paid."

The private equity VP agreed. "I haven't heard of many people at my level looking to run for the exits," he told BI. Even with realizations, and therefore carry and bonuses lower, the industry still offers "the highest upside" for compensation, he explained.

Private equity, with its tie to interest rates and the overall health of the economy, is a cyclical business. Previous golden ages, like the 1980s or the early 2000s, also ended, and new ones rose up in their stead.

"The key word right now is stagnation," Judson said. "Nobody knows how long this uncertainty is going to last. Is it going to last for months or years?"

Even as Silicon Valley giants cut jobs like a hot knife through butter, the competition among startups for the best global talent remains as fierce as ever. And with critical skills, particularly in artificial intelligence, still in short supply, startups like OpenAI and Anthropic rely on the H-1B visa program to bring in skillful foreign workers and secure their place in the race.

For a startup to hire a foreign worker, it sponsors their petition for an H-1B visa, which lets them work in the US for up to six years. The job candidate is entered into a lottery for one of 85,000 visas. Despite challenges, including a demand for visas that has outstripped supply and ongoing discussions about reforms, startups continue to recruit talent abroad through this Rube Goldberg system to gain a competitive edge.

Using data from the Department of Labor and US Citizenship and Immigration Services, we ranked the startup employers that filed the most H-1B requests during the 2024 government fiscal year. The data comes from applications submitted by businesses seeking to sponsor workers' visas.

Here are the startups leading the charge, ranked by their number of filings.

Ripple: provides crypto infrastructure for financial services

Headquarters: San Francisco

Total funding: $325 million, according to PitchBook

Total certified H-1B filings: 26

Grammarly: writing assistant that edits and corrects language

Headquarters: San Francisco

Total funding: $400 million, according to PitchBook

Total certified H-1B filings: 28

Plaid: collects and shares personal financial info with apps and other services

Headquarters: San Francisco

Total funding: $734 million, according to the company

Total certified H-1B filings: 28

Carta: helps businesses track ownership and manage equity plans

Headquarters: San Francisco

Total funding: $1.19 billion, according to PitchBook

Total certified H-1B filings: 30

Thumbtack: allows users to search for and hire local service providers

Headquarters: San Francisco

Total funding: More than $500 million, according to the company

Total certified H-1B filings: 31

X Corp.: social media platform

Headquarters: San Francisco

Total funding: Elon Musk took X private at a purchase price of $44 billion in 2022.

Total certified H-1B filings: 32

Anthropic: develops foundation AI models aimed at business users

Headquarters: San Francisco

Total funding: More than $17 billion, according to the company

Total certified H-1B filings: 35

Zipline: develops and operates drone delivery fleets

Headquarters: South San Francisco, California

Total funding: $1.23 billion, according to PitchBook

Total certified H-1B filings: 35

Turo: car rental marketplace

Headquarters: San Francisco

Total funding: $527 million, according to the company

Total certified H-1B filings: 36

Scale AI: data labeling company helping apps and models scale

Headquarters: San Francisco

Total funding: $1.6 billion, according to PitchBook

Total certified H-1B filings: 42

Gusto: payroll and HR solution for small businesses

Headquarters: San Francisco

Total funding: $751 million, according to PitchBook

Total certified H-1B filings: 48

Verkada: cloud-managed security cameras

Headquarters: San Mateo, California

Total funding: $700 million, according to the company

Total certified H-1B filings: 52

Nuro: develops self-driving tech for robotaxis and delivery vehicles

Headquarters: Mountain View, California

Total funding: More than $2 billion, according to the company

Total certified H-1B filings: 59

Cohesity: develops software for securing and managing cloud data

Headquarters: San Jose, California

Total funding: $1.8 billion, according to the company

Total certified H-1B filings: 61

OpenAI: develops cutting-edge AI models and apps like ChatGPT

Headquarters: San Francisco

Total funding: $63.92 billion, according to PitchBook

Total certified H-1B filings: 74

Chime: provides fee-free mobile banking services

Headquarters: San Francisco

Total funding: $2.65 billion, according to PitchBook

Total certified H-1B filings: 101

Stripe: provides financial infrastructure for businesses

Headquarters: San Francisco and Dublin

Total funding: $8.73 billion, according to PitchBook

Total certified H-1B filings: 265

Databricks: cloud-based platform to help enterprises build, scale, and govern data

Headquarters: San Francisco

Total funding: More than $14 billion, according to the company

Total certified H-1B filings: 283

ByteDance: Chinese internet technology company

Headquarters: Beijing

Total funding: $18.95 billion, according to PitchBook

Total certified H-1B filings: 997

TikTok: video-based social media platform

Headquarters: Los Angeles and Singapore

Total funding: TikTok is a subsidiary of ByteDance, which has raised $18.95 billion in venture capital, according to PitchBook.

Total certified H-1B filings: 614

• Bill Chisholm, cofounder of private equity firm STG, paid $6.1 billion for the Boston Celtics.
• Chisholm is a lifelong Celtics fan from Massachusetts.
• The sale was the largest ever for a North American sports team.

After Bill Chisholm agreed to pay $6.1 billion on Thursday for the Boston Celtics, the NBA's most storied franchise, Celtics fans — in nervous excitement — asked, "Who?"

Not only was it the highest price ever paid for an NBA team (the Phoenix Suns sold for $4 billion in 2022), it was the most paid for any North American sports franchise ever, and Chisholm's name had never come up in earlier reports about interested parties.

Wyc Grousbeck, a member of the current ownership, Boston Basketball Partners, and the team's governor, called Chisholm a "true Celtics fan" who is "totally committed" to the Boston community.

Chisholm cofounded STG, formerly known as Symphony Technology Group, in 2002 alongside Indian-American billionaire philanthropist Romesh Wadhwani, who is still chairman of the company, and investor Bryan Taylor, who is now a managing partner at Advent International after spending more than a decade at TPG.

STG focuses on investments in midsize enterprise software and technology companies, such as its $1.4 billion 2023 purchase of Avid Technologies, the manufacturer of media-editing software like Pro Tools, and its $1.5 billion purchase of SurveyMonkey creator Momentive that same year, as well as its creation of Trellix, a cybersecurity company that STG created by merging together McAfee's enterprise business and FireEye.

The company rebranded to STG in 2017 and has owned 50 companies since its founding. According to its website, it had $10 billion in assets under management as of March 2023.

Chisholm is now the chief investment officer and managing partner at the company, where he runs the day-to-day management of STG companies, according to the firm's website. The firm says he holds a bachelor's degree from Dartmouth College and an MBA from The Wharton School at the University of Pennsylvania.

Boston Basketball Partners said in a press release that Chisholm is a lifelong Celtics fan and is native to the Boston area. The release said that Grousbeck would remain in his position and oversee team operations through the 2027-2028 basketball season if the deal is approved.

"Bill is a terrific person and a true Celtics fan, born and raised here in the Boston area," Grousbeck said. "His love for the team and the city of Boston, along with his chemistry with the rest of the Celtics leadership, make him a natural choice to be the next governor and controlling owner of the team."

Grousbeck added that Chisholm "quite simply" wants to be a great team owner.

"Growing up on the North Shore and attending college in New England, I have been a die-hard Celtics fan my entire life," Chisholm said in the release. "I understand how important the Celtics are to the city of Boston — the role the team plays in the community is different than any other city in the country. I also understand that there is a responsibility as a leader of the organization to the people of Boston, and I am up for this challenge."

The Celtics won the NBA championship in 2024 in a five-game series against the Dallas Mavericks. The win was the team's 18th championship in its history and the first for the team since 2008.

• Dealmaking on Wall Street has sputtered out in recent weeks, bankers and consultants said.
• It's a reversal of the industry's hopes that 2025 would deliver an M&A and IPO rebound.
• Industry insiders pointed to Trump administration actions that have clouded the economic outlook.

Wall Street's dreams of a dealmaking rebound have been put on hold over Trump's tariff turmoil.

Investment bankers welcomed 2025 with high hopes that Trump's business-friendly, antiregulation policies would lead to a surge in fee-generating deals. Instead, many corporate boards and buyout firms are standing on the sidelines as they wait to see the impact Trump's aggressive trade policies and gutting of federal agencies could have on the economy and stock market.

How bad things are depends on who you ask. Some bankers said corporate dealmaking has merely slowed, while others described Wall Street's bread-and-butter business of M&A and IPOs in more dire terms. What's clear is that no one knows when — or whether — the clouds might lift, raising questions about everything from bonuses to layoffs to hiring.

"A common refrain I hear amongst dozens of sponsors over the last six to eight weeks," said Seth Goldblum, whose firm provides deal advisory services to private equity firms, is that "the uncertainty in and of itself is actually the worst thing."

"A lot of our sponsors are just sitting on the sideline," he said, referring to private equity firms, which are often referred to as financial deal sponsors. The managing director for CBIZ Private Equity Services pointed to the negative impact Trump's tariffs could have on inflation and interest rates as among the issues holding firms back.

"It's a shame. It looked like we were finally getting unstuck," Goldblum said, adding that the deals industry now appears "back to being stuck."

What bankers are saying

Rob Stowe, an equity capital markets banker with Barclays, agreed that 2025 has proved more challenging than many in his field anticipated.

"We are still seeing companies coming to market, and we still expect we'll see companies coming to market, but it's definitely making decisions harder, and it's adding an extra element of caution for corporates and the sponsors that are thinking about raising capital," said Stowe, who heads the division that handles IPOs for the bank's Americas region.

Eric Li, who covers investing banking for research firm Crisil Coalition Greenwich, said his discussions with clients suggest a more dire picture.

Dealmaking, he said, has largely "frozen."

"There aren't any deals going on," Li said. "It's almost as bad as Covid," he added, referring to the dealmaking stoppage that followed widespread stay-at-home orders in 2020 as the deadly virus spread across the globe.

According to the consulting and advisory firm EY, Wall Street started the year strong. In January, there was a 29% year-over-year increase in mergers and acquisitions in the US, valued at more than $1 billion. The consulting firm's M&A data has yet to be released for February, however, and that is when the stock market started reacting negatively to Trump's trade policies, sending the S&P 500 down roughly 10% since a high set on February 19 and about 8% since Trump was sworn in on January 20.

Layoffs and hiring

On Wall Street, the big question is what it all means for the bottom line — and how it will impact pay and jobs.

At the end of 2024, investment banks were hiring aggressively as dealmaking heated up in anticipation of a Trump White House. Now, there are questions about whether the momentum will continue.

Brianne Sterling, head of the investment-banking recruiting practice at the financial services search firm Selby Jennings, said hiring hasn't reached the gangbuster levels some had hoped to see when the year started. She said some clients are still interviewing new hires even if they've indicated they'll push off the timeline for filling open roles till later in the year in hopes of improved market conditions.

Still, she feels optimistic.

"I think we will still see hiring," she said. "I just don't think it'll be as aggressive or as much volume as we initially anticipated, but we'll see how the year goes."

Even amid rosier expectations many banks were focused on cutting costs this year, including Goldman Sachs. As Business Insider previously reported, CEO David Solomon has tasked some staffers with finding ways to save money, including by reducing redundancies and moving workers to cheaper locations like Dallas, Texas.

The bank's vice president ranks have been targeted for cuts because their numbers have gotten bloated. The bank even moved its annual headcount-cutting exercise from fall to spring, when it is set to cut roughly 3% to 5% of its workforce, which stood at 46,500 as of the end of 2024.

Bank of America has also recently cut investment banking roles, including positions in New York, a person familiar with the cuts said. The more recent round of layoffs primarily impacted junior bankers, such as analysts and associates — though some may be reassigned to other roles within the firm, added the person. Earlier this year, the bank also cut more senior positions in a round that amounted to under 1% of the bank's workforce in global markets and global corporate and investment banking, this person added. The cuts were first reported by Reuters.

Sid Khosla, a financial services executive at EY who serves as the firm's banking and capital markets leader, told BI that such layoffs are part of what he calls "the efficiency conversation" among companies seeking to please shareholders — a trend that started before Trump took office. The topic has come up increasingly in talks with clients, particularly in the past three to four months, Khosla said. "It's always the top two or three conversations. Some institutions may think it's a No. 1 conversation."

Whether corporate dealmaking picks back up depends on how long the turmoil lasts, bankers said.

"I think any reasonable outlook is going to be a little clouded here for a while because there's no certainty that the conversations around tariffs and the concerns around the US economy or around interest rates are going to stop," said Stowe, adding: "I also don't think there's any certainty that the current level of volatility will dissipate in the near term."

Reed Alexander is a correspondent at Business Insider covering Wall Street and financial services. He can be reached via email at [email protected], or SMS/the encrypted app Signal at (561) 247-5758.

James Faris contributed reporting.

• Tech companies seek to hire thousands of skilled foreign workers through H-1B visas each year.
• President Donald Trump's immigration crackdown is raising questions about the future of such visas.
• See which tech companies file for the most H-1B visas, according to publicly available data.

Tech industry giants are hiring thousands of foreign workers through H-1B visas each year, even as the program faces renewed scrutiny under President Donald Trump's second term and growing skepticism from Silicon Valley leaders who once championed it.

The H-1B program allows US companies to hire up to 85,000 foreign workers with specialized skills annually. Workers are chosen through an annual lottery, which kicked off last week and will run through March 24. While Trump expressed support in December, calling it "a great program" that he has "used many times," key figures in his political base have voiced opposition.

Things escalated late last year when Trump appointed Sriram Krishnan, a first-generation Indian American who immigrated to the US from India in 2007, to serve as a senior White House advisor for AI. The appointment drew backlash from some MAGA supporters, including former Trump aide Steve Bannon, who called the program "a total and complete scam to destroy the American worker."

In late January, Republican Senators John Kennedy and Rick Scott introduced a joint resolution under the Congressional Review Act to reverse a Biden-era rule that extended the automatic renewal period for employment authorization documents from 180 days to 540 days. Kennedy said the extension "hampers the Trump administration's efforts to enforce our immigration laws," signaling there would be additional scrutiny of work permits for foreign nationals.

Even tech leaders have softened their stance. Elon Musk and Marc Andreessen, once unequivocal supporters, have recently acknowledged the need for improvement.

Andreessen said on Lex Fridman's podcast last month that the US has been conducting "a 60-year social engineering experiment to exclude native-born people from the educational slots and jobs that high-skill immigration has been funneling foreigners into."

Musk has called for raising the minimum salary requirements for people on H-1B visas and adding a "yearly cost" to make it more expensive for companies to hire from overseas. "I've been very clear that the program is broken and needs major reform," he posted on X.

While the program's future remains uncertain, any significant changes or restrictions to H-1B visas would profoundly impact America's largest technology companies, which have built their workforces around access to global talent.

Business Insider used publicly available data from the Department of Labor and US Citizenship and Immigration Services to analyze which tech companies filed the most H-1B requests during the 2024 government fiscal year. The data comes from applications submitted by businesses seeking to sponsor skilled workers' visas.

Our analysis shows that tech giants collectively file for thousands of these visas annually, using them to fill critical roles that they claim cannot be adequately staffed domestically.

Notably, not every visa filing results in an actual hire, and occasionally multiple filings might be associated with a single position. Companies sometimes submit new applications to accommodate amendments or extend existing visas. Nevertheless, the data available to the public offers a reliable glimpse into the H-1B visa requirements of major corporations.

We have excluded IT consulting firms from this analysis to focus specifically on tech product companies, despite consulting giants like Infosys and Tata Consultancy Services traditionally being among the program's largest users.

The analysis reveals that tech giants like Amazon, Microsoft, Google, Meta, and Apple are among the program's heaviest users, with thousands of filings each.

While most positions are for software engineers and other technical roles, companies also use the program to fill specialized positions in research, product management, and data science. The employee head count for each firm comes from the latest publicly available data such as the company's latest annual report, their corporate website, or according to sources BI spoke with.

The firms listed either did not respond to a request for comment or declined to comment on the record.

Here are the top 40 tech companies sponsoring H-1B visas, ranked by their number of filings:

1. Amazon

Total certified H-1B filings: 14,783 (including 23 for Whole Foods).

Total employees worldwide: 1,556,000 as of the end of 2024.

2. Microsoft

Total certified H-1B filings: 5,695 flings (including 970 from LinkedIn).

Total employees worldwide: 228,000 as of the second quarter of 2024.

3. Alphabet

Total certified H-1B filings: 5,537 (including 115 from Waymo and Verily).

Total employees worldwide: 183,323 as of the end of 2024.

4. Meta

Total certified H-1B filings: 4,844.

Total employees worldwide: 74,067 as of the end of 2024.

5. Apple

Total certified H-1B filings: 3,880.

Total employees worldwide: 164,000 as of the third quarter of 2024.

6. IBM

Total certified H-1B filings: 2,907.

Total employees worldwide: More than 293,400 as of the end of 2024.

7. Intel

Total certified H-1B filings: 2,558.

Total employees worldwide: 108,900 as of the end of 2024.

8. Oracle

Total certified H-1B filings: 2,141.

Total employees worldwide: 159,000 as of the end of May 2024.

9. Tesla

Total certified H-1B filings: 1,677.

Total employees worldwide: 125,665 as of the end of 2024.

10. Bytedance

Total certified H-1B filings: 1,611.

Total employees worldwide: More than 150,000, according to the company's website.

11. Salesforce

Total certified H-1B filings: 1,525 (A Salesforce spokesperson said that the company filed 1,808 H-1B petitions in fiscal year 2024 including new hires, amendments, and extensions).

Total employees worldwide: 76,453 as of the end of January 2025.

12. Nvidia

Total certified H-1B filings: 1,519.

Total employees worldwide: 36,000 as of the end of fiscal year 2025.

13. Cisco

Total certified H-1B filings: 1,330.

Total employees worldwide: 90,400 as of the end of fiscal year 2024.

14. Qualcomm

Total certified H-1B filings: 1,291.

Total employees worldwide: 49,000 employees as of the end of the third quarter of 2024.

15. Adobe

Total certified H-1B filings: 787.

Total employees worldwide: More than 30,708 of as November 2024.

16. Intuit

Total certified H-1B filings: 770.

Total employees worldwide: 18,200 at the end of fiscal year 2024.

17. Uber

Total certified H-1B filings: 703.

Total employees worldwide: 31,100 as of the end of 2024.

18. Paypal

Total certified H-1B filings: 623.

Total employees worldwide: 24,400 as of the end of 2024.

19. eBay

Total certified H-1B filings: 548 (An eBay spokesperson said eBay filed 494 H-1B visas in fiscal year 2024, noting that the publicly available information doesn't disclose the exact number of roles hired for.)

Total employees worldwide: 11,500 as of the end of 2024.

20. Rivian

Total certified H-1B filings: 584.

Total employees worldwide: 14,861 as of the end of 2024.

21. ServiceNow

Total certified H-1B filings: 578.

Total employees worldwide: 26,293 as of the end of 2024.

22. HP

Total certified H-1B filings: 533.

Total employees worldwide: 58,000 as of the end of 2024.

23. Dell

Total certified H-1B filings: 489.

Total employees worldwide: 120,000 as of February 2, 2024.

24. Lucid Motors

Total certified H-1B filings: 488.

Total employees worldwide: 6,800 as of the end of 2024.

25. DoorDash

Total certified H-1B filings: 427.

Total employees worldwide: 23,700 as of the end of 2024.

26. Fiserv

Total certified H-1B filings: 403.

Total employees worldwide: 38,000 as of the end of 2024.

27. Micron Technology

Total certified H-1B filings: 369.

Total employees worldwide: 48,000 as of August 29, 2024.

28. VMWare

Total certified H-1B filings: 359.

Total employees worldwide: 16,000 according to Business Insider's sources.

29. ADP

Total certified H-1B filings: 350.

Total employees worldwide: 64,000 as of June 2024.

30. Workday

Total certified H-1B filings: 347.

Total employees worldwide: 20,400 as of January 31, 2025.

31. Expedia

Total certified H-1B filings: 331.

Total employees worldwide: 16,500 as of the end of 2024.

32. MathWorks

Total certified H-1B filings: 295.

Total employees worldwide: 6,500, according to the corporate website.

33. Snowflake

Total certified H-1B filings: 285.

Total employees worldwide: 7,004 as of January 31, 2024.

34. Databricks

Total certified H-1B filings: 283.

Total employees worldwide: More than 7,000, according to the company's website.

35. Synopsys

Total certified H-1B filings: 267.

Total employees worldwide: 20,000 as of November 2024.

36. Stripe

Total certified H-1B filings: 265.

Total employees worldwide: Approximately 8,200 according to BI's reporting.

37. Snap

Total certified H-1B filings: 258

Total employees worldwide: 4,911 as of December 2024.

38. Netflix

Total certified H-1B filings: 256.

Total employees worldwide: 14,000 as of the end of 2024.

39. Block

Total certified H-1B filings: 231.

Total employees worldwide: 11,372 as of the end of 2024.

40. Pinterest

Total certified H-1B filings: 225.

Total employees worldwide: 4,666 as of the end of 2024.

• Trump opened the door for alternative assets in 401(k), but the entrance to market has been slow.
• Private equity bosses now say they want protection from lawsuits over fees.
• Here's what this could mean for savers.

In June 2020, Eugene Scalia, the acting head of the Department of Labor and son of the conservative judicial legend Antonin Scalia, issued a letter paving the way for private equity investments to be added to funds popular with 401(k) plans, like target-date funds.

The move, Scalia said, would "help Americans saving for retirement gain access to alternative investments that often provide strong returns" and help "level the playing field for ordinary investors."

Nearly five years later, the industry, which invests in everything from privately held companies to corporate loans, has barely moved on this massive opportunity, save for two investment vehicles launched last year tied to assets managed by Apollo Global Management.

Why?

Apollo CEO Marc Rowan explained at the Goldman Sachs Financial Services Conference in December: When asked what the Trump administration would need to do to open up 401(k)s to nontraditional investment strategies, Rowan said, "Litigation relief."

With President Donald Trump back in office, Wall Street bosses can't seem to stop talking about litigation reform. Michael Chae, Blackstone's longtime chief financial officer, mentioned it just this month at a Bank of America financial services conference; Ares CEO Michael Arougheti made similar comments in December. KKR appointed its first head of defined-contribution plans, a category that includes 401(k)s, at the end of 2024.

Business Insider talked to industry insiders and other experts to find out what these firms want and what it could mean for the average investor's retirement plans.

Bridget Bearden, a research and development strategist with Employee Benefit Research Institute, a retirement research group, says litigation stands in the way of new investing models. Her research indicates that ESG funds, which invest in companies that pass certain standards of environmental and social responsibility, have also been left out of reach for most retirement funds because of the threat of lawsuits.

"The general theme is that litigation risk inhibits innovation," Bearden said, adding that this is the case for ESG funds and other asset classes.

But change comes with risks, including the potential for higher costs and less transparency into underlying investments. Here are the potential benefits — and risks — associated with these plans as firms like Apollo and KKR gear up to sell their investments to retiree 401(k) plans.

Fees

401(k)s are employer-sponsored retirement plans that allow employees (and some employers) to contribute pretax earnings into an investment account. That money is usually parked in index funds made up of stocks and bonds managed by a large money manager like Vanguard or Fidelity for a fee.

The alternative-assets industry, whether private equity or hedge funds, has traditionally been excluded from these plans thanks to the Employee Retirement Income Security Act of 1974, which designates the employer offering the plan as a fiduciary. Fiduciaries are legally responsible for selecting investment offerings that are in the sole interest of the plan participants. Fiduciary best practices can be open to interpretation, but the law specifically mentions keeping expenses down, and a series of lawsuits in recent years have helped make fees top of mind for plan fiduciaries.

Jerry Schlichter, the founder and managing partner of Schlichter Bogard, was described by The New York Times in 2014 as the "Lone Ranger" of 401(k)s for his example-setting lawsuits over fees at companies like Lockheed Martin and Caterpillar.

The Illinois federal judge Harold Baker once described Schlichter as acting as a "private attorney general" in his work, which he said reduced retirees' fees by $2.8 billion.

From 2009 to 2021, when Schlichter began filing these suits, 401(k) fees decreased by 25%, to an average of 0.81% of assets annually. These fees are much smaller than the typical 2% of assets and 20% of profits charged by private equity, though that's not to say funds invested in private credit or other alternative assets would rise to that level.

Better performance?

The industry's pitch involves looking at fees through the lens of overall returns.

During Apollo's fourth-quarter earnings call in January, Rowan put it this way: "Simply being told as a trustee that your job is to produce the best net returns, not the lowest fee, I believe would go a very, very long way to solving this in a way that would be overwhelmingly positive for our business."

"Everywhere in the world, where privates — and I'm going to use the word 'private,' not 'alternative' — have been added to retirement solutions, the results are not just a little bit better, they're 50% to 100% better," Rowan said.

Rowan, who interviewed for the position of Trump's treasury secretary before the role went to Scott Bessent, has also suggested that giving retirees access to alternative investments would help 401(k) savers diversify.

"We basically have levered the retirement system of the country to Nvidia," he said, referring to the practice of investing most retirement income into public markets.

A study from Georgetown University's Center for Retirement Initiatives estimated that a 10% exposure to real estate and private equity assets could increase the net return for the US defined-contribution market by $35 billion. The study was funded by the American Investment Council, formerly the Private Equity Growth Capital Council, a private-markets lobbying and advocacy group.

Pension funds have long invested in alternative assets like hedge funds and private equity, which has prompted Jon Gray, the president of Blackstone, to refer to pensioners as the "haves" and 401(k) savers as the "have-nots."

A 2023 Morningstar white paper examined the performance of pension plans that allocated funds to private equity and found that these funds largely outperformed the public markets and provided diversification — but not in every case. While the best funds outperformed the public markets, Morningstar found a wide range of outcomes, including some underperformers.

Liquidity

While 401(k) plans are designed to be held until retirement, they can be tapped earlier, whether for a financial emergency or a home loan. They may also need to be liquidated or moved when someone moves jobs or is laid off.

That need for liquidity is easy to satisfy when it comes to publicly traded stocks and bonds, but private markets often invest in illiquid assets like real estate and loans. In order to meet liquidity demands, these funds may need to set aside a portion of funds as cash, diminishing potential returns, Schlichter said.

"So what that means is you'd have to set aside cash for that eventuality, which means you're not investing, which means you're losing the whole point of what the private equity industry pitches — that you'll get a great return," Schlichter said.

Proponents of alternative assets in 401(k) plans say liquidity is an easily solved structural problem because the private investment vehicles themselves have a pool of liquidity they can draw on.

Additionally, the private funds would make up only a portion of an actual defined-contribution plan, which would also include maybe a dozen allocations to traditional liquid assets.

For example, the 2020 Department of Labor letter and more recent industry proposals recommend these funds make up only a portion of a professionally managed target-date fund. That, they say, would allow the manager to access liquidity the same way they do now: selling off the liquid assets within the plan first.

Transparency and risk

Private assets, whether an office building or a privately held company, are less transparent and less regulated than public assets. It's even in their name.

As a result, plan members would have to get used to less up-to-date valuation information than they get with publicly traded stocks and bonds.

Less transparency could also mean more risk, depending on who you ask.

"Price discovery, to the extent it really exists here, is minimal," Morningstar said of the valuation of certain private assets, which are often valued by appraisal.

Rowan said he disagreed with the long-held idea that public necessarily means less risky, citing the 50% decrease in public companies and the trend of companies staying "private for longer."

"I think that professionals in our industry now understand that private is safe and risky, and public is safe and risky," Rowan said.