Blackstone Tops Wall St Peer Rankings | Chief Investment Officer

Art by Nigel Buchanan

Blackstone topped the overall ranking of North American banks based on prestige and quality of life as the “most prestigious program for budding investment bankers,” according to career research firm Vault.

Ranked by nearly 3,600 banking professionals in North America, Blackstone scored in the top five in quality of life, firm leadership, and business outlook by survey respondents.

Its employees said the firm offers “the opportunity work with the best collective talent on Wall Street” with “unlimited opportunity for responsibility and career progression, with extremely little bureaucracy and corporate nonsense.”

For more stories like this, sign up for the CIO Alert newsletter. 

Goldman Sachs remained at number two for the second year, according to Vault’s survey. While the firm was rated the “cream of the crop” in prestige, it lagged in work-life balance—a quality that is “extremely difficult to achieve, given very high expectations”—despite the new no-work Saturday initiative.

Morgan Stanley stepped up to the number three spot this year, supported by reorganizing efforts and an increased focus on wealth management, the research firm said. However, there’s room for improvement in spite of high profile transactions, including Facebook and Alibaba’s IPOs, the employees said, due to lower than average pay and long hours.

Still suffering from the aftermath of the London Whale scandal, JP Morgan slipped to fourth place from third last year.

Centerview, a New York-based boutique firm, jumped to number five on the rankings with prominent mergers and acquisitions transactions. It also ranked first in compensation and fourth in job satisfaction, according to Vault, beating out well-known top firms.

Quality of life and workforce diversity are also improving on Wall Street, according to Vault.

Survey respondents said work-life balance was better this year than last, largely due to changing workplace policies such as “protected Saturdays.” Its average rating rose almost 3% from 6.9 to 7.09 out of a possible 10.

Diversity scores climbed again this year as firms are increasingly “hiring managers [who] understand the effectiveness of diversity and the need for ideas coming from different backgrounds, cultures, and experiences,” survey participants said.

Since 2010, female diversity scores have risen by 8.1%, ethnic diversity by 7.7%, and lesbian, gay, bisexual, and transgender scores by 12.1%.

vault ranking

Source: Vault's 2015 Banking Employers Rankings

Pressure from clients and positive PR are more important considerations than moral motives when investment companies sign up to the United Nations’ Principles for Responsible Investment (PRI), according to academic research.

In a paper titled “Sources of Stakeholder Salience in the Responsible Investment Movement: Why do investors sign the Principles for Responsible Investment?”, authors Arleta Majoch and Andreas Hoepner of the International Capital Market Association Centre, and Tessa Hebb from Carleton University, analysed five years’ worth of data from PRI signatories, and quizzed them on their reasons for signing.

The research found that pressure from clients (“utilitarian power”) and the perceived advantages of being signed up to the principles (“pragmatic legitimacy”) were the most important drivers for signatories.

In addition, the reputational benefits of adopting the PRI were noted as an important factor.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

Majoch, Hoepner, and Hebb wrote: “Investors recognise the reputational benefit of signing the PRI, as well as the legitimising effect it has on both their organisation in general and on their environmental, social, and governance capacity, resulting from the high degree of legitimacy of the PRI itself on the market.”

But the researchers noted that “moral motives” have become far less important than when the PRI were first introduced in 2005. For the first two years, signatories were primarily those who supported the values encapsulated in the principles, but the authors stated that the moral factor has been “completely superseded” since then by factors such as reputation and client pressure.

They added: “These findings offer an interesting insight into how both the investment industry and the PRI’s place in it have changed between 2007 and 2011. It draws attention to how important branding and image are at an organisational level in the financial industry, and how signing the PRI has been increasingly motivated by such benefits.

“It highlights that ESG investing is a continually developing space where investors are keen to join forces in action, sharing knowledge and exploring ESG themes and strategies. The high degree of salience coming from a variety of sources confirms the PRI’s role as central in this emerging logic.”

More than 1,000 companies and organisations have signed the PRI since its inception. The researchers estimated that the signatories represented more than $45 trillion worth of assets, more than a third of global assets under management.

In April this year Harvard became the first university endowment to sign the PRI. In contrast, a number of Danish pension funds removed their signatures in December 2013 amid concerns that the organisation behind them had governance issues of its own.

The research is available to download here.