Distressed Debt

def. Sankaty Advisors

I don't know much about others - Cerberus does deal with distressed stocks - but I don't know if they focus on debt too (I would assume they would?)

are a lot now, but the following guys are defintiley big players (they all went through the last cycle, have diversified into larger multistrat funds, raised distressed funds)...I'm probably leaving out a few

No particular order: Cerberus, Avenue, Goldentree, Quadrangle, Silver Point, Harbinger, Canyon, Fortress, Marathon, Highland, GSO, Oaktree, Plainfield, Satellite, GS distress, Anchorage, Mattlin Patterson, etc (the list goes on, probably another 10-15---every guy on this list has over 5bn, Harbinger over 25bn...yes, the HF industry is very large even in subsectors, prestige matter very little unlike investment banks, unless you are sitting on top of the empire)

The big macro funds (Tudor, Moore) and large multistrats (OZM, GLG) and even value/event funds (Eton Park, TPG-Axon, Viking) all have started practices also. Almost every major fund probably is looking or already has a sub-fund to concentrate on distress for the upcoming cycle.

All have good reputations and have bright people, you really want to find a place where the fit is good and you might have some upside 3-5 years down the road (don't base it on reputation from banking or in the WSJ, the industry itself works very differently in terms of pay/responsibility). You can also move around pretty easily after 2-3 years, very close knit community

Prestige may not matter once you're in, but does it matter when you're applying to these HFs? In other words, must you have come from a brand name?

are these distressed debt funds looking for restructuring experience when hiring junior people??

I was thinking the same thing. Would these HFs prefer someone with experience at a mid-tier restructuring boutique or M&A at a BB, for example?

people tend to fall into distressed funds from all backgrounds (know guys from M&A, traders, restructuring guys, leverage finance, long/short, PE). Also depends if you plan on focusing on the public or private side. The more private the deals in nature, the more banking oriented skillset needed (providing dips, rescue financing, restructurings, etc). If more public oriented, than deep value, public market experience definitely helps, and risk controls matter more. Obviously, there is huge crossover here also (you might buy distressed bonds in the public markets based on public information and end up restructing the company over a 2 year period with private information, etc). In general, distressed funds do tend to like people with more experience compared to long/short shops (due to the more technical/complex nature of bancruptcies, restructings, etc), but that has been changing as many of these shops have become so big.

At the end of the day, I think they look for very bright, inquisitive and hard working people (it is that generic). On the prestige front, ofcourse coming from a top bank (GS) helps, but there are plenty of people from the restructing boutiques at distressed funds.