Exit opps: Best way to maximize chances at distressed debt / distressed PE?
Hi guys, I am a first year analyst at a BB, and I have grown more interested in distressed securities hedge funds and distressed private equity. It looks like the work would involve both value investing style analysis and dealing with, at times, complicated problems. I was hoping to get some advice from those in that industry or second year IB analysts who have interviewed on whether I should focus solely on recruiting for distressed funds or tell the headhunters I am more than willing to start at any PE / HF. Also, which is more relevant for distressed investing: traditional LBO PE or L/S equity HF (if I couldn't find a job in distressed debt / distressed PE to begin with)??
I am afraid of coming off as someone who doesn't know what he/she wants if I tell headhunters "I'm interested in distressed debt and distressed PE investing, but I don't want to narrow my options so I'm willing to work at a L/S hedge fund or traditional LBO PE fund" - since this does nothing to narrow down the opportunities I'm looking at. I really am open to starting off at a L/S hedge fund or traditional LBO fund since I would be gaining the foundational skills there anyway, but obviously if I could start at an Oaktree or another distressed debt fund then that would be ideal.
Any discussion would be appreciated. Happy to answer any questions.
To get to Distressed Debt Investment Firm: Restructuring Associate at IBank or Desk Analyst at DD Desk? (Originally Posted: 10/07/2014)
Thank you for reading!
I am a JD who is currently working in bankruptcy law. I have been lurking on these boards for a while to determine whether it is better for my next step to be to an investment bank doing RX (likely as an associate), or if working as a desk analyst at good sell-side distressed debt trading desk would work / be better. I have gotten mixed reviews concerning the DD desk, and it seems that most people who speak about Ibanking are really referring to analysts so I am somewhat at a loss of which step is best for me given my lack of the holy grail banking analyst experience. I have already been tapped to interview with 3 distressed funds in the last six months or so, so I am already getting some interest, but do not want to wait in law for the opportunity if I think either of these directions would be advantageous.
Would either of these work? Should I hold out and try to go straight to a fund? Is there anything I am missing?
Thank you!
Distressed debt recruiting (Originally Posted: 09/29/2013)
Looking for some advice on how to lateral from a bulge bracket (2nd year associate) to distressed debt funds. Both undergrad and grad schools are nontarget - is there a way to do this other than cold calling through alumni networks? Any advice greatly appreciated - thanks!
headhunters aren't contacting you?
What group are you in now? I feel like working at a bank that specializes in restructuring would position you better for distressed debt PE.
best way is to work at a top restructuring shop (bs, HLHZ, laz). JD seems like an interesting route but I know nothing about law so cant chime in
Making it to a distressed debt fund (Originally Posted: 01/03/2009)
Ever since I started looking into finance, I've wanted to work in distressed debt because it seems like the ultimate value play, using a not too quantitative skillset.
Problem is, I'm about as far from making it into a fund like this as humanly possible. I went to a top 30 school that is hopelessly non-target and with the economy as it is, the only thing I was able to get in May was a job as a fund accountant for a major custodian (think BONY Mellon/State Street). The fact that I majored in International Relations doesn't help.
My question is, what would you suggest for getting into a distressed debt HF (ie. Avenue, Marathon...)? I realize I will probably need to go for more schooling and definitely need relevant experience but time is on my side (I'm 20). I'm thinking of getting a J.D. and doing bankruptcy law, or maybe working for a Big 4. Any advice would be greatly appreciated.
Wanting to transiting to Distressed Debt Industry (Originally Posted: 09/04/2013)
I have started to learn a little about the world of distressed debt industry which has piqued my interest to spend even more time gaining a stronger understanding. I wanted to seek out some advice and ask:
How would someone get started in Distressed debt analysis?
What books should they read (fun reads or very basic textbook)?
How would someone who has experience just in equities analysis make a transition to the distressed debt industry?
What type of job or internship could they get on the bottom floor of that industry and start to learn from the ground-up while still making money?
http://www.amazon.com/Distressed-Debt-Analysis-Strategies-Speculative/d…
*piqued
Based on what I've heard/read on the site, IB associates have a tough time going to the buy-side - might not be true given your background in your specific case, but if your end goal is to work at a distressed debt fund and some funds clearly think you're already qualified enough to work there, why not skip intermediate steps and go straight to what you really want to be doing (esp. if the funds are reputable - not so much if they are risky places to be)? Seems logical to go straight there rather than take intermediate steps that may not be necessary
Hi,
I am in the same situation than you. I have been working 2 years as equity sales in an investment bank and I am on the way to take a tax & law degree. I was wondering if tax & law was suitable if i want to work in the distressed funds industry? What degree are you going to get?
Thanks in advance
Distressed debt fund recruiting (Originally Posted: 07/17/2012)
Hi all,
Going into recruiting I've been told to target distressed debt (and other credit) funds due to my background. I have good investment banking experience and I will be completing my law degree this year. I have done Google/WSO searches, but if anyone here is knowledgeable about distressed debt funds it'd be great to hear from you. Thanks in advance.
This. Moyer's book is solid.
fixed it
Haha, I'm just pulling your leg.
Also: http://distresseddebtinvestorsclub.com/ - Free to join and have great write ups.
http://www.distressed-debt-investing.com/
What about getting an entry level job? where would one start?
Unfortunately, I'm not in restructuring - I am in M&A (I'm not at GS as my name suggests). I have heard that I am disadvantaged compared to the kids who do restructuring all day full time, but hopefully I can learn enough to not be clueless in interviews and try to convince my interviewers that I'm a quick learner...
Do you have an MBA? If so, I would reach out to alumni. If you're interested in Midwest I know couple people at distressed funds, but they usually let headhunters recruit top talent at BBs.
agree with ^i^, a top restructuring firm like BX, HLHZ or LAZ will give you the necessary skill set that will be transferable to Distressed HFs. You will also learn a lot about bankruptcy law as it is the nature of the business.
On another note, there are a good amount of top restructuring guys that came from law school. 20 is pretty young so you should definitely start off in the restructuring route.
I read Moyer's book and it's great to understand the basics.
Thank you for your response!
The issue is that while I have interviewed at several funds, I have not yet received a hard offer from any, and have already contacted the headhunters that I know of. Several of the headhunters told me I should get a finance job to increase my candidacy. I could wait where I am in hopes of more interview offers trickling in, but I have been told that my weakness is my lack of on-the-job financial modeling, and have been advised that trying to get some would make me much more marketable.
i have seen a couple lawyers who came into the distress space. However, the main focus is still recruitment from people have previous finance experience.
IBD in sponsor groups, restructuring / M&A, industries with heavy debt exposure (industrials, telecoms, etc.) is the best background to break into distress besides being in the SSG in different banks
Then you have others such as high yield research, but in general people still prefer bankers.
I am not sure what specific stuff you want to learn about distress
What about getting an entry level job? where would one start?
Probably fair advice then - I was assuming you had/are expecting offers. I have definitely heard there isn't much room for IB associates on the buy-side, although some definitely make the jump and your background sounds like it would make you much more relevant/a much stronger candidate.
That being said, take any advice I have with a grain of salt - I am just beginning a career in IB and have no real knowledge of law and limited knowledge of investment management.
@"SSits" (who I pull into conversations often, and hopefully not so much it's getting annoying) was a lawyer who moved to finance - might have some more relevant advice.
When I inquired about getting a full time entry role at couple DF they told me I need at least 2 years of investment banking and preferably an MBA from top 7 school.
Do you know what law schools/grad schools/b-schools are targets for top restructuring shops? My current job wont't exactly help me lateral into one of the firms you mentioned.
Got it. -- thank you. Can anyone lend advice or help light the way on what I can do to successfully make the jump?
Thank you Rickles for your advice.
Personnally, I am interested in distressed debt brokerage.
I know some folks who went to distressed investing path after IBD, but they all have restructuring background, like guys from Moelis/LAZ/EVR, so I assume it is difficult without the background, because it is quite different from your normal banking knowledge.
Maybe you can talk to headhunters and check with their feedback?
Yeah I have heard that too. I was reading a book called "Alpha Masters" and one of the people who ran a DF started in trade claims. So I am wondering if that is the bottom level?
any top 10 bschool will give you a shot to get in there
StayingAwakeetc - I'm on the road this week and next. Send me a PM next Wednesday to remind me and I'll give you what advice I can.
There are a lot of different ways in man. Blaze your own trail. There are a lot of great resources about getting into distressed/HY debt on this sight. Start here: http://www.wallstreetoasis.com/forums/im-fing-in-youre-fing-out
@Oreos ; beat me nearly verbatim by a second!
i would lateral to a pure play restructuring group at a boutique like HL, MB, PWP, LAZ, etc. There are also strong lower tier boutiques out there like imperial (although I wouldn't call them low tier exactly), GLC Advisors, Gugg just started a RX practice this summer. With a BB on your resume, and pure RX experience should set you up well for distressed buyside interviews.
restructuring/bankruptcy/turnaround consulting as well.
We're about to enter a Great Depression. Don't you want a president who's already dressed for it?
Firstly, restructuring experience is definitely preferable if you want to go down the distressed path, but M&A is not too bad as an alternative. Certainly beats being in an industry coverage group. I've seen BB M&A analysts go to Oaktree. Not sure it's worth trying to lateral to restructuring, because that will add at least another year to your search, and you get perilously close to associate-land...where your chances dwindle materially.
Secondly, on the topic of approach to headhunters, you absolutely want to be focused in your approach to EACH GIVEN headhunter. That does not mean you need to take the same approach with EVERY headhunter. For every headhunter that reaches out to you for a meeting, you should be going online and talking to friends to figure out who that headhunter's typical client set is. Tailor your focus based on that. At least until you've performed well on a few interviews, headhunters will be reluctant to put you in front of employers unless they think you will come across as 100% enthusiastic and will take the job if it's offered to you. If you nail a couple interviews but are just short of converting to full-time offers, headhunters will see you as a fee just around the corner, and will get more willing to expand their offerings to you if you say you want to see more.
Finally, as for whether or not you should err to the side of straight LBO PE or straight L/S HF if you can't do distressed, the right answer is probably to take the one you are most happy staying in indefinitely, as the odds of switching tracks gets slimmer and slimmer as you progress in the world of finance. Switching costs are just too high, and there are enough candidates with perfect backgrounds that there's generally no need to hire a guy with an off-perfect background. Having said that, I'd say the balance tilts slightly in favor of PE. I see more (distressed) hedge funds hire (distressed) PE guys than the other way around. Perhaps an overly simplified explanation, but investing is investing, whereas PE is distinct because it usually adds the element of investing for control.
DD desk or the fund, dude
Thank you, re-ib-ny, very helpful. Guess I have to play the game when it comes to HH's.
high yield research
Obviously RX is the preferred experience at these distressed shops, but I was wondering how much weight an leverage finance experience has? LevFin provides the analytical skills in being able to understand the firm's cap structure, and would that be a favorable experience as well?
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