IB to Private Equity/Distressed Debt

Hi All,

First I'd like to say a big HI to everyone - this is my first post, so please be gentle!

I'm hoping to seek some career advice from you all. Basically, I've got an offer to move to a distressed fund/private equity. I hope you can appreciate me not mentioning the fund by name but it's a fairly well-known PE shop which has in the past got involved in financial institutions and real estate. THe role will involve analyzing distressed structured finance securities (i.e. CDO, ABS, RMBS etc).

My background is 3 years in an i-bank (now 1st year assoc) on the structured finance/DCM desk London but have experience across most of the products mentioned above. Most of the analyst years were spent on modeling so I'm comfortable in this area. Naturally, I am looking to move because of the markets at the moment, and couple of months ago a number of my colleagues were made redundant. I was surprised not to have been axed myself, just simply because there has been less business coming in at the time.

To be honest, I never sought out private equity - so my idea of what goes on in PE is rather vague and on the lines of what a FIG DCM/M&A analyst does on the sell-side, ie. due dili, data room, presentations, etc. But I heard many people saying that distressed funds were the next best thing etc so I applied on the basis that I would be involved on analyzing structured finance paper. I know I would be totally out of my depth if I was to analyze a bank or a corporate, for example.

My questions are:
1) Given my lack of 'traditional' PE knowledge (most people i understand come from M&A and/or have MBAs), is this a decent opportunity?
2) Should I be naive to think that I could only analyze distressed structured finance securities whilst I'm here? (I'm keen to learn new things but I'm seriously allergic to balance sheets...)
3) Should I swap the relative security at the bank for the risks of entering a new place, where I have to learn new skills and gain recognition again amongst colleagues? (I say relative because we've already had 2 rounds now, and there might just be 1 more round of cuts before end of year depending on business levels, but we're now pretty lean in anycase)
4) Would Hedge Funds be a better place to go if one was to move into distressed funds? Which one would offer the better type of work? I see that the strategy at the PE fund would, for example, be to buy-and-hold heavily discounted paper and then repackage in a CLO when the markets recover, as an exit strategy, whereas in a HF, the strategy would be very much shorter term, e.g. relative basis trades.

Just to say, on the comp side - it's probably better in that there's a guarantee for this year and slight increase in base - but, to be honest, and i say it to all juniors (those at VP and below), moving for cash reasons at this level would a wrong reason. I'm clearly thinking about the long term prospects.

Many thanks for taking your timeout to read. I would be glad to contribute future advice in these forums.