Ideal Background for Distressed PE?

I was curious as to what the ideal background is for those who want to work for a distressed private equity firm? I know many tend to come from restructuring groups (HL, Evercore, etc.), but I was wondering if there were any other backgrounds that would enable you to work for a distressed pe firm?

 

Leveraged Finance is a very common background. Alot of loan to own firms participate in credit origination. Special Sit's groups are essentially the same thing as RX at some banks.

Speaking to @masters comments: cyclical industries are often prone to distress. These industries can be commodity price dependent and can fluctuate with the price of the underlying commodities (e.g., oil). In addition, industries like manufacturing are typically low margin and capex intensive. These can be the bread and butter of some distressed firms. Furthermore, given technological advances and the growth of e-commerce shopping in the past decade, brick and mortar retail has seen a significant amount of distress as large, slow moving companies, such as Sports Authority, bear significant fixed costs from storefront leases, but have to compete with lower opex online competitors; fast moving fashion trends have decreased product life cycles and have increased the rate at which inventory becomes obsolete, which further erodes margins.

Play the long game - give back, help out, mentor - just don't ever forget where you came from. #Bootstrapped
 

To answer your question about other backgrounds that would enable you to work for a PE distressed firm, I've seen some guys get in coming from M&A. While it's not the obvious path, M&A involves the type of analytical work which builds skill sets that can apply to a variety of situations. While you may not have the specialist knowledge that you would have from a restructuring group, the thinking is if you have an M&A background then distressed investing shouldn't be something too hard for you to learn/pick-up.

 

Are you doing distressed arbitrage, or actually taking control of troubled companies, rebuilding operations and restructuring the balance sheet? I do the latter and got into it after being an operator and then learned the financial restructuring side.

Are you also asking about temperament? I cant speak to the arbitrage temperament, probably a gambler. The turnaround/restructuring person is usually an ADHD adrenaline junky who wants to be in the crisis, not just observing or betting on it. Probably similar to an ER surgeon.

Background for turnaround work; operations, finance, M&A, deep understanding of insolvency law, psychiatrist, etc.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
 
Best Response

Fugiat eveniet ducimus consequuntur accusamus. Labore sint architecto quaerat tempore. Doloribus libero rerum dolore dicta. Autem reiciendis sit sit dolores itaque.

Tempora saepe et porro et et qui. Quisquam et ea assumenda id voluptatem tenetur dolorem nesciunt. Consequatur quod possimus voluptas cupiditate ipsam animi id eaque. Non praesentium tenetur hic qui earum accusantium et. Nam id et dolore qui aut aut.

Sint repellat ut incidunt molestiae quos necessitatibus. Reprehenderit perferendis possimus rerum sapiente sint veniam. Ut modi corrupti fugiat. Consequuntur id officiis similique repellendus eveniet. Reiciendis quo voluptas recusandae iste esse.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.

Career Advancement Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 99.0%
  • Warburg Pincus 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

April 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

April 2024 Private Equity

  • Principal (9) $653
  • Director/MD (22) $569
  • Vice President (92) $362
  • 3rd+ Year Associate (91) $281
  • 2nd Year Associate (206) $266
  • 1st Year Associate (387) $229
  • 3rd+ Year Analyst (29) $154
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (314) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”