Getting a job at an elite I-bank like Goldman is harder than getting into Princeton, but fraternity connections help:
The fraternity pipeline helps undergraduates beat odds three times steeper than Princeton University’s record-low acceptance rate, with Goldman Sachs Group Inc. (GS)choosing 350 investment-banking interns this year from 17,000 applicants.
Sometimes it's as easy as using your handshake:
Conor Hails, head of the University of Pennsylvania’s Sigma Chi chapter, was in a Philadelphia hotel ballroom last month for a Barclays Plc (BARC) recruiting reception. A friend pointed out a banker from their fraternity. Hails, 20, approached with a secret handshake.
“We exchanged a grip, and he said, ‘Every Sigma Chi gets a business card,’” Hails recalled. “We’re trying to create Sigma Chi on Wall Street, a little fraternity on Wall Street.”
Here's how the frat-to-Wall Street pipeline works. Fraternity members at this bank go right at the top of the pile:
One of the recruiting e-mails to Dartmouth’s Alpha Delta arrived last month from an alumnus working in a unit of Wells Fargo & Co. (WFC), the largest U.S. mortgage lender.
The e-mail, a copy of which was obtained by Bloomberg News, was his best chance at reaching the college’s top men for next year’s analyst class in a San Francisco office that has had Dartmouth grads for eight straight years and Alpha Deltas for four, he wrote. Students could e-mail their resumes to him directly, he added, and they’d go to the top of the pile.
The network sometimes works so well that it can help accidentally. Jeff Librot, a former head of the University of Delaware’s Sigma Alpha Epsilon chapter, wasn’t looking to use its connections when he applied for a Bank of Montreal (BMO) equities internship, he said. A banker there sent him an e-mail with the frat’s secret motto, “Phi Alpha.” Librot was picked
This is how disproportionate the fraternity-guys-to-women hiring ratio is on Wall Street:
Fraternities have become so good at filling Wall Street’s openings that firms can hire several alumni for each woman. There are at least four members among 14 associates at San Francisco-based private-equity firm Hellman & Friedman LLC, according to resumes posted to LinkedIn. Two of the 14 are female. Fraternity brothers outnumber women four to one in the analyst program at Peter J. Solomon Co., a New York investment bank founded by the former Lehman Brothers Holdings Inc. vice chairman. Spokeswomen for both companies declined to comment.
Big shot Wall Street Bros remain powerful on the Alma Maters way after they leave.
Donors rebelled when Trinity College in Hartford, Connecticut, made fraternities go co-ed after a drunk student broke his neck in a shallow Psi Upsilon pool, Bloomberg News reported in May. With a private-equity veteran, real estate investor and stock analyst among grads condemning the school’s efforts, Trinity President James Jones decided to resign a year earlier than planned.
And sometimes they're straight-up greedy scumbags!
The fraternity pipeline works in reverse, too, when those titans return to campus bearing gifts as large as billionaire Steven Cohen’s $2 million pledge to Penn’s Zeta Beta Tau. His SAC Capital Advisors LP pleaded guilty last month to insider-trading charges.
The elite of the elite on Wall Street get to keep on fratting-on with grown-up Winter Formals at the St. Regis Hotel, well after they've moved on from college:
When those men and women make it to the top, Wall Street’s bosses have a secret society all their own with parties in Manhattan’s St. Regis Hotel. Kappa Beta Phi, founded before 1929’s stock-market crash, throws an annual bash where bankers and billionaires in tuxedos are entertained by neophytes who sometimes don ladies dresses and pumps. Officers called Grand Swipe, Grand Smudge and Grand Loaf lead revelers who’ve included former Goldman Sachs head Sidney J. Weinberg, American International Group Inc. CEO Robert Benmosche and Mary Schapiro, who ran the Securities and Exchange Commission until last year.