Commercial Credit Analyst Exit Opportunities

I am a commercial credit analyst with almost 2 years of experience at a regional level commercial bank and am interested in exit opportunities. I am set to take the Level 1 CFA Exam in less than a week, and am ultimately interested in portfolio management. Would there any "set" path into investment research/portfolio analyst? Has anyone out there taken this path to a career in Portfolio Management?

 

I am finding the same about fixed income. I personally am more interested in the debt space. I am trying to get into a trader assisstant or rotational program for FICC. For the CFA work experience, you need to write an essay on why you qualify and then you need referrences to back that up. So far, I am finding it to be a big stretch to qualify as CFA work experience. If you spin it right you may get lucky though.

 

Credit markets are hot right now. You should be looking right now because once the next credit bust comes, you will have to wait til we hit the next maturity mountain for the opportunities to reappear.

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I work at a rating agency as a corporate credit analyst. The longer you stay in credit the harder it will be to break into equities. I am interviewing at equity funds as we speak but its always the same question: why equity instead of credit? You need to open a brokerage account and invest in equities and be able to talk about equities if you want to be taken seriously. Also, keep up the CFA studies, after I passed level 2 I started to get a lot more interest. If you stay in credit longer than 4/5 years I think you would need an MBA to make the switch. Best of luck!

 
Best Response

I'm a credit analyst and it's not a bad place to start. You learn the fundamentals of underwriting and financial statement analysis. At my previous bank, I was in an unsegmented position where I underwrote both C&I and CRE. This position is where I discovered that I loved CRE and I've since moved to a CRE specific group at a different bank. Learning to underwrite C&I was valuable in that I'm now able to underwrite tenants and understand their business and whether or not they'll be able to pay rent. Commercial banking opens a lot of doors - I know people leave to work for developers, REITs, debt funds, small PE shops and other areas of CRE. Staying with the bank and becoming a relationship manager isn't the worst gig in the world either. If you can make it rain at a bank with minimal overhead, you can kill it. The woman who mentored me at my last bank made about 350-400m per year (rare case but shows that the potential is there), most RMs will make between 150-250m per year.

If you know for a fact you want CRE and that you want to move to the buy/build side of things with time, CRE brokerage is also a good place to start. Brokerage may give you better deal flow exposure depending on where you're at and you may get exposure to underwriting the equity side of things, which is what the buy/build side looks for. Underwriting at a brokerage probably won't be as intense/detailed as at a bank but underwriting RE isn't rocket science so don't worry about that. Both are great places to start while brokerage is a more common place to start. Feel free to PM with any questions that come up.

Also, if you're thinking about mega funds like LoneStar, Tishman, or Carlyle, you'll have to start in IB or a top brokerage like Easdil. I'm in Denver and rcently looked up KSL Partners... Every single one of their associates came from IB somewhere else in the country which kinda bummed me out but that's life.

 

I forgot to address your assumption of the job function. You are correct - I look at tax returns, financial statements, and appraisals all day. In a sentence, my job is to try to determine an existing or potential borrowers ability to repay a loan or line, based on historical and/or proforma (future) financial information. The main basis of the decision is debt service coverage - Cash available for debt service (EBIDA) / proposed or existing debt service. We also look at loan to value (LTV), market conditions (you'll learn how to do a detailed market analysis to determine if a proposed project is feasible and realistic), and guarantor strength if it's a recourse deal. Commercial banking doesn't pay as much as IB but you have a much better work life balance (I work 40-50 hours a week and RMs work 20-30).

 

Wow that insight is incredible, thank you! I think that getting a stronger understanding of financial analysis is better use to me than experience in a brokerage. What do you know about Key Bank? My understanding is they are a MM bank with decent exit oops locally. Their internship also feeds into a 2 year underwriting and analyst program that I think is worthwhile. What type of entry level salaries are credit analyst making in a MM setting especially entry level? I'm not expecting IBD money for the work life balance and regard of position coming out of a non target.

 

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Like the unadjusted- only with a little bit extra.

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