Sell-side vs Buy Side CLOs
Can someone explain the difference in the day to day, work life balance, and compensation working in CLOs at a Manager vs as a structurer at a Bank? Particularly interested in comp at the associate level as well.
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Based on the most helpful WSO content, here's a breakdown of the differences between working in CLOs on the sell-side as a structurer at a bank versus the buy-side as a manager:
1. Day-to-Day Activities: - Sell-Side (Structurer at a Bank): As a CLO structurer, your role is highly analytical. You'll spend a significant amount of time working with Excel, focusing on modeling and constructing CLOs. This role involves less of the traditional investment banking tasks like PowerPoint presentations and is more centered around the technical aspects of CLO structures. - Buy-Side (CLO Manager): On the buy-side, the role involves managing portfolios of leveraged loans for CLOs and possibly direct lending. Your day-to-day would include detailed analysis of loans, assessing business and industry risks, and preparing credit memos. This role requires a deep understanding of the leveraged loan market and the ability to make investment decisions.
2. Work-Life Balance: - Sell-Side: The work-life balance can vary, but roles in structuring tend to be slightly more predictable than traditional investment banking roles, primarily because the work is project-based around the structuring and issuance of CLOs. - Buy-Side: As a CLO manager, the work-life balance might be more favorable compared to the high-intensity environments of investment banking. However, the workload can still be significant, especially when the market is volatile or when actively managing a large portfolio.
3. Compensation (Associate Level): - Sell-Side (Structurer): Compensation for a structurer can be quite competitive. At the associate level, salaries range from approximately $200,000 to $400,000 USD, depending on the bank and the individual's performance. - Buy-Side (CLO Manager): While specific compensation data for CLO managers is less transparent, it is generally comparable to broad street averages for similar roles in investment banking or private equity, especially at larger firms. The compensation package often includes a base salary and a performance-based bonus, which can be substantial if the managed CLOs perform well.
In summary, both roles offer unique challenges and rewards. The choice between sell-side and buy-side in CLOs should consider personal interest in either creating financial structures or managing investment portfolios, as well as lifestyle preferences and compensation expectations.
Sources: Q&A: Corporate Banking Associate, The CLO Sell Side experience, Work/Life Balance: Equity Research vs. Investment Banking - (A Definitive Guide, Part 1), CLO Asset Manager, Q&A: Corporate Banking Associate
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