Two offers, both NYC. DCM at a non-BB or Private Credit at PE fund (imo same in reputation/‘prestige’). Personally am interested in both, no interest in switching to PE or M&A. Looking for views on what’s better for pay, progression, hours and the potential exit opps (both appear fairly pigeonholed...). Any opinions?
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Once you go into private credit, very hard to get out to other types of investing.
If you go DCM route, you have a better change of going to general PE / other exit opps.
I'm assuming you're coming out of undergrad so congrats on getting a buyside role already. You'll gain better 'investing' skills and by going private credit, but you may pidgeon-hole yourself into that kind of investing for a long time (debt investing very different than equity investing) whereas you may have a better generalist kind of experience at the BB.
What exits do you feel DCM would have that PC wouldn’t? My understanding is that both are rather siloed - I have virtually 0 interest in PE (much prefer the credit mindset). Thanks
DCM can lead into other opps like VC/entrepreneurial opps. You're not wrong that both are pretty siloed and obvs buy side Credit is a great gig, just have to make sure you're doing it because you do like looking at companies with a different mindset/strategy.
I worked in Private Credit and am now doing private equity. I don't think the switch is more difficult than coming from DCM. Ultimately in our group, we'd look more favorably on private credit backgrounds since those are investing roles and the level of thoughtfulness in underwriting is typically higher than in DCM.
Unrelated, but curious why you made the switch and which you prefer post-switch?
Forgive my tone, but why do people still give advice like this?
People have gone from Big 4 Audit to Hedge Funds and PE, I don't think starting a career in Private Credit will make it "very hard to transition" especially so early on in one's career.
I think someone good enough to have a buyside offer would be able to navigate the recruiting space if they wanted to into PE later on in their career.
I think you're best off at IB DCM. Private credit can silo you because lots of "private credit" is really just doing the same kind of lending a normal bank would do, but with a higher risk tolerance and higher pricing. What kind of private credit are you doing? Real estate? LevFin?
Pretty standard DL, typically sponsor-backed. I’m looking to stay somewhere for the LT rather than move around, but also concerned that careers are long and idk what I’ll be feeling 3-5+ years from now. Thanks
I work at a low-"preftige" private credit fund in a restructuring / workouts role and I think people here are giving you bad advice. If you have no interest in recruiting for PE, private credit will have higher comp progression through your career. Furthermore, I don't think credit exit ops are weaker than DCM - it's the opposite, imo. Both will pigeonhole you if you stay in there long enough, but it's really easy to switch out of credit -> RX / LevFin / M&A if you want to early in your career. I'm considering a lateral move to IB to recruit for PE, and it's been extremely easy for me to get traction with both RX and M&A groups. The modeling you do in credit is far more complex than DCM and the work is much more technical overall. For reference, exits from my firm's analyst program have been BB IB, MF PE (only one in firm history), BB corporate banking, MF credit (fairly often), MM PE (fairly often).
I also disagree with the idea that credit is bank lending with more risk tolerance. I think that @maestro_ vastly overestimates the risk tolerance of banks. Most credit funds have a wide mandate (we invest in everything from senior secured to preferred equity), and this is especially true if you're in the credit arm of a PE fund. Banks are pretty much limited to investment grade and often offers products / loans at a discount, since the end-goal of a lot of bank lenders is to cross-sell IB services. And even among lending groups that have riskier mandates, they are not authorized to take anywhere near the risk of debt funds.
Firstly, thanks for the detailed response. PE for me isn’t really an interest (I much prefer the credit downside-focused approach). I understand I’ll be joining a pretty lean classic DL/Sponser-backed team, so less of the hairier stuff
Thanks for the exits info - part of the problem was I never really considered the buy side to begin with (had the IB-or-death approach) so my knowledge is lacking around the industry etc.
I just want a role where I’m fairly well remunerated, don’t have to kill myself working literally all the time and have the chance to progress within the firm/to new roles if needed. DCM appears fun but perhaps my personality suits PC better - I just never really considered myself on the investing side until this opportunity came along. Thanks
Hey thank you for your response. I am a new comer in banking after spending 1 year and a half in audit. I want to transition to private credit in the next few years and I was wondering what the hours were like on the buyside in this space. Also what's the industry like in times of recession, I can't seem to find a straight answer to this.
This is a good answer and I was clearly not specific enough when I said 'like bank but with higher risk tolerance." I should have said more like a non SIFI bank, like Macquarie with the preferred, mezz, and occasional co-invest etc. Private credit at a firm which does all the things mentioned in this comment, will be far more interesting than DCM. Not all private credit does such a thing. If you're at MidCap financial (Apollo) in their RE platform, you're doing private credit, but not very interesting stuff. Seems like what you're doing will be very interesting, OP.
If you enjoy staring at Bloomberg all day and pricing IG bonds, DCM. If you like taking risks (=higher reward), credit fund.
I like the idea of higher reward but I’m risk-adverse! Haha
DCM is boring IG work IMO. Not a lot of exciting work and modeling per my friend who works in DCM. Credit is siloed for sure but it’s a good gig in terms of wlb and pay for hours you work. There are also a lot of different types of private credit from direct lending/sponsor finance (most boring), junior/mezz, to hairier deals/SSG type shops. Those places can be exciting with the job you do. If you want to get into PE it’s definitely an uphills battle but there are people who’s done it before, either directly or from PC to IB then PE. You need to explain your story well and network aggressively because your resume won’t get as many interviews vs IB resumes at PE recruitments. IB resumes get more hits on average especially for M&A, RX, LevFin but not so sure about DCM.
Private credit will be far more interesting and analytical and thus easier to switch to say Lev.Fin / Rx etc. DCM guys in my BB are just pricing IG bonds all day so it gets boring quite fast. Skillset less transferable to traditional IBD than Private credit.
What do you mean by pricing bonds exactly?
I think private credit is a no brainer here
I would also take the private credit role, might have a different answer if it was between HY DCM / Levfin.
How different is an Associate role at a place like Golub versus doing Lev Fin IB. They essentially do the same thing no? Would hours improve moving from one side to the other?
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