Business Development Companies (BDC's)
Anyone have any insight on some of the larger BDCs? Comp/culture/hours/exit opps? Particularly ones that invest across the entire capital structure.
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Do you realize how many BDCs there are now? You need to be more specific. They are going to vary.
Given the lack of discussion surrounding BDCs on this board, I felt it would be best to keep it general. Specific names would include BlackRock Kelso, Apollo Management, Fifth Street, Ares Capital Corp, and Prospect Capital.
Only experience I have two friends who are working at smaller ones that are debt (senior, 2nd lien and Mezz) and equity co-invest. Here is what I know: Comp: below what you would see in PE or HF but slightly above associate level corp dev work... from my knowledge you are likely looking at HF Hours: goes hand in hand with culture - probably looking at ~50 to ~60 hours per week (again, this is a generalization, programs likely vary) Exit opps: most of these places are more of a career track so people look to stick around. I do know of one person who left a BDC for a lower MM PE fund, but that is definitely not the norm. Business school is an option and my guess is moving over to a credit fund is a popular track as well.
One item to note - although some of these places say they invest "across the capital structure" you will not be taking controlling equity stakes at a BDC. These places are primarily focused on the debt side and can offer unique solutions for a PE firm doing a buyout. Because their debt solutions are so tailored to PE investment, they often get co-invest opportunities, but IMO the more interesting work they do is on the debt side. Whenever a BDC invests in equity it is basically along for the ride with whichever PE firm is leading the deal; on the other hand the BDC often controls the debt structure and runs the primary diligence from that side.
Kind of rambled a bit with that response but hope it is helpful.
Excellent response in_the_money23. Thanks for the insight. Thought comp would be better than that for an associate level. Do these type of firms tend to place well into b-school?
My guess is the "brand name" BDCs that you mentioned in your post above (BlackRock Kelso, Apollo Management, Fifth Street, Ares Capital Corp, and Prospect Capital) have comparable B School placement to PE firms, with Apollo and Ares potentially getting you into Harvard / Stanford and the rest potentially getting you into M7s but that is pure speculation.
One caveat to my comment on comp, the comp could be better at a larger BDC (particularly Apollo given their reputation for paying extremely well on the PE side of the house) - my direct knowledge is with smaller funds than the ones referenced above.
I'll be heading to one this summer so I'll do my best to give an unbiased opinion on the culture.
I am not going to a BDC that is mentioned above; however, I can speak to basics around compensation and culture specific to the firm that I will be joining. As I am not currently there, I do not have a first-hand opinion of hours, etc., but I can say that the culture seems to be less intense than traditional PE (MM and MF) just by speaking and meeting with colleagues within the firm. The people that I met with genuinely seem interested in cultivating talent and maintaining a good atmosphere. More importantly, they seemed extremely focused on allowing Associates to not only showcase their modeling skills from IB, but also allow Associates to start developing their own investment stances (similar to traditional PE), which sort of lends itself to less BS work you'd find in banking. Additionally, the current associates have been there +3 years, which speaks to the fact that the culture must be somewhat tolerable / pleasant.
Regarding pay, I received an offer that was above the figure listed above and is comparable to MM PE (HIG, etc.).
I'll be heading to one this summer so I'll do my best to give an unbiased opinion on the culture.
I am not going to a BDC that is mentioned above; however, I can speak to basics around compensation and culture specific to the firm that I will be joining. As I am not currently there, I do not have a first-hand opinion of hours, etc., but I can say that the culture seems to be less intense than traditional PE (MM and MF) just by speaking and meeting with colleagues within the firm. The people that I met with genuinely seem interested in cultivating talent and maintaining a good atmosphere. More importantly, they seemed extremely focused on allowing Associates to not only showcase their modeling skills from IB, but also allow Associates to start developing their own investment stances (similar to traditional PE), which sort of lends itself to less BS work you'd find in banking. Additionally, the current associates have been there +3 years, which speaks to the fact that the culture must be somewhat tolerable / pleasant.
Regarding pay, I received an offer that was above the figure listed above and is comparable to MM PE (HIG, etc.).
Awesome man. Any idea about the bonus or other options? My best guess is the pay is above IB and almost comparable to a MM PE fund all in (not just on the base). Any input?
Also any idea where the breakdowns 100% of a years investments are in? (eg. 30% Mezz, 10% equity, etc.) I know they vary deal to deal, but how about overall?
Business Development Companies - Comp at business development firms? (Originally Posted: 11/30/2007)
I was just wondering if anyone knew what the comp was at a business development firm, and how they are looked on by MBA programs?
Thanks
bump
Public Business Development Company Pay and Lifestyle (Originally Posted: 11/19/2011)
Does anyone know what pay is like at larger BDC's like American Capital?
Specifically pre-mba analyst/associate with 2 yrs banking experience?
Also, what is their reputation like? do b-school adcoms like the experience?
What are hours like?
Thanks
Bump. Any ideas?
All I know is that the hours are terrible at ACAS. Can't comment on the rest.
Business Development Companies - Any insight is appreciated (Originally Posted: 03/30/2007)
Are they just private equity firms that are publicly traded from the get-go, or what is the structure? As I understand it, they look to nuture the companies they hold more than pump and dump, but my knowledge is limited. Any insight is appreciated, including any notable players in this category.
Top players are American Capital (NASDAQ:ACAS) and Fortress (NYSE:FIG). A BDC is a PE/VC that raises its funds through the public markets vs. privately.
Key drivers are: 1. Provides permanent capital; 2. Access to public markets and retail investors;
Compensation is done through management fees, performance fees based on net income and capital gains.
I don't know too much about them as our fund is private, but there is a pretty decent article at:
www.akingump.com/docs/publication/677.pdf
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