Private Credit Comp Check
Approaching the final rounds of an interview process with a higher yielding credit fund (not special sits but also not vanilla LBOs), with mid single digits billion AUM.
With a typical 2 year IB background, think it’s reasonable to ask for $225k all in? I know private credit is less standardized and the ranges are like $150-275 for Associate comp, so wanted to check based on their AUM and higher yielding focus
Ya pretty reasonable although I don’t think I ever got to ask in my process. Was more like hey here’s what we got, take it or leave it / we’ll hire other guy if you’re not happy
Would veer more towards the $200 side, you won’t be getting $225k at a private credit fund unless you’re at a firm the size of an Ares or HPS
My thought process is that if I speak to HR and they ask about my expectations, $225 wouldn't be an insulting request, right? So maybe I'd be able to end up closer to $210 or something, esp if I have another offer to try and leverage
Disagree with this. It depends more so on risk profile vs aum. More risk = more pay. If you’re underwriting 400 spread loans then yeah 225k is not happening. If the average loan is around 750-800 then yes probably getting paid that much due to difference in work load
Agree with you to an extent, but also disagree. Think about it this way - how are investment professionals getting paid? They’re getting paid via management fees so if you’re an opportunistic credit shop or a direct lending firm doing hairier deals, sure you might be getting compensated more for doing hairier deals relative to a vanilla direct lending firm of the same size, but you won’t be getting paid serious dollars unless the firm had established scale. Speaking from experience being in the space myself and having many friends in the space and speaking about comp, I can tell you for a fact that Ares will pay you more than a Whitehorse or Comvest Credit even though the latter does “hairier” deals
An underrated indicator of comp is also the backgrounds of associates. If associates come from accounting or valuation programs (Twinbrook, Madison, Monroe, BMO, etc.) vs from investment banking programs (most MF’s, Whitehorse, Crestline, PennantPark, Maranon, Golub, Fortress, etc.) then they won’t likely make as much given their previous background in accounting or valuation is oftentimes discounted
Reasonable. You may not get it, but definitely reasonable. I was pitched $200-240k by the recruiter and ended up on the lower end of that. Didn't have much room to negotiate but the guy wasn't wrong I guess.
Just finished up Y2 and was a hair above 200. Large fund in a T2 city - we are known to pay under market though.
Not to hijack here, but I'm curious if anyone has comp data points for "Portfolio Analyst" type roles? I have seen postings in recent months for firms like Apollo (BDC), Oaktree, First Eagle, Crestline looking for folks with 2-3 years of Valuation/Comm Banking backgrounds. Maybe 150-160 all in I'm guessing
Think it’s more like 100k all in. Those aren’t really front office jobs
Former “portfolio” person here. At my previous firm, I was on their portfolio team for ~1.5 years before leaving to join a different firm’s traditional new investment team. Private credit is a weird buyside niche where titles/roles aren’t always synonymous across shops. Some private credit shops are structured as one single investment team that does it all including originations, underwriting, execution, syndication and portfolio management. Others have any mix of teams that focus on certain areas like an origination team, new transaction execution team, syndication team, portfolio management/distressed credits team, etc. For shops with a “portfolio” team, roles & responsibilities vary widely and as such, so will the pay. At some firms, the portfolio analyst role functions like a loan accounting role. At others, it’s a valuation role. At others, it’s a role to underwrite any post-close transactions or amendments. At others, it’s a role to run syndication processes and secure potential co-lenders for debt facilities. And at others, it’s like a restructuring role where they handle any distressed portcos/workouts. I have seen all of the above org charts at shops I either interviewed at or have worked with on deals. My old firm’s was a bit of a blend and on their port. team I was running syndication processes, working on distressed portcos, underwriting financing for add-ons, managing relationships and doing some valuations. My base salary was the same as the new transaction execution associates, but my bonus had a ~10-15% discount which makes sense as new transaction execution will always be the bread & butter. My day-to-day still involved a lot of memo writing/modeling and heavy interaction with the IC, our lawyers, the sponsor/management and co-lenders. If we needed to syndicate out $150MM of a deal, I’d be leading co-lenders through diligence and trying to get their IC comfortable. Or, if a portco became distressed, I’d work on restructuring their cap table (whether that was negotiating a Sponsor cap infusion, converting part of our debt to pref, or exercising our rights if it came to that) to maximize our recovery - getting 2% fees on our new platform investments is important, but so is avoiding a $50MM loss on a single portfolio company when it goes bottoms up since we don’t have the equity upside in other deals as a hedge like PE firms do. If you’re considering a portfolio role, it is SO important to understand what your actual responsibilities will be beyond the title. Because I still got significant transaction exposure through restructurings, underwriting incremental $, and syndication processes, I was able to lateral to a different shop where I now underwrite our new platform investments. If you join a portfolio team that strictly does loan accounting or valuations or internal asset allocation, your exit opps will be much more limited and your base pay lower ($80k-$100k maybe?).
Awesome response. Thank you! Sounds like you had a great experience at your old firm
I'm in basically the exact same position you were in, and am looking to swap to the underwriting side. Do you mind if I PM you (or if you PM me since youre anonymous)
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Anyone willing to take me under their wing? Current 1st year at BB working in non-public debt issuance i.e term loans, revolvers, bridge loans, etc interested in learning more about Direct Lending/Private Credit. I really like Credit and what I do since it is the intersection of finance + legal knowledge, but 1 year in I can already see how my job is repetetive and I would like to do something more exiciting. Drop the username and I will reach out.
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