The Myth of the Badge of Honor
“Worked 100 hours this week.” You’ll hear that in every bullpen. But here’s the uncomfortable truth: it’s not sustainable. Sleep deprivation taxes your body and your judgment. In a world where one miscalculated spin off vs carve-out financial model can shift millions, that’s not a small issue.
The Sleep Tax
Sleep tax is the hidden cost you pay when exhaustion creeps into your work. The late-night edits, forgotten links in project finance modelling, broken formulas in financial models, or missing exhibits in investment banking pitch decks aren’t a question of competence. They’re fatigue-driven errors.
Research consistently shows decision quality plummets with lack of sleep. Yet investment banks still push analysts into marathon sprints. Why? Because private equity bros and MDs “did it back then.”
Burnout Is Real
Burnout isn’t about being tired. It’s about losing sharpness. By week 12 of grinding 80-hour weeks, even the sharpest analyst struggles to prep a clean private credit case study interview.
Burnout doesn’t just show up in mental health surveys. It shows up in:
- Risky shortcuts: skipping proper sensitivity analysis in a private credit modelling test.
- Sloppy notes: missing details for a limited partner advisory committee.
- Over-reliance on templates: leaning on a free private equity course outline instead of original analysis.
Decision-Making Under Pressure
The irony? Banks rely on analysts to catch details that prevent errors in $500 million M&A. But by demanding unsustainable hours, they undermine their own teams.
It’s the professional equivalent of asking a pilot to fly while drunk. Only in this case, it’s a junior banker running numbers at 3 a.m. on a private debt case study.
What gets lost isn’t just accuracy. It’s creativity. Exhausted analysts stop questioning assumptions, stop stress testing models, and stop thinking about alternative deal structures. That’s not diligence. That’s attrition disguised as efficiency.
The Next Generation Pushback
Change is coming. More candidates now walk into a private credit interview and ask directly about private credit salaries, work life balance, or even private credit compensation reports.
And unlike the prior generation, they are willing to walk. The best candidates know that optionality exists from growth equity shops to top real estate funds, and they are ready to take it.
Some firms are already adjusting. Boutique investment banks and best real estate investment banks know that talent will not tolerate perpetual grind. The message is clear: keep the model unsustainable and only second tier talent will accept the trade.
Forward Outlook
If nothing changes, the industry risks driving away sharp minds to tech, fintech, or even alternative paths like special situations investing. The finance world cannot afford that brain drain.
The firms that adapt, that treat endurance as less valuable than judgment, will get the edge. Retention will not be an HR slogan. It will be a competitive advantage in closing deals and raising capital.
The badge of honor may have defined one generation of bankers. The next will measure strength in a different currency: clarity, precision, and staying sharp when it matters most.
