I'm currently a 2nd yr associate at a BB's special assets/special situations desk. We mostly trade whole loan portfolios (performing/NPL), structured credit (loans) and some bespoke credit derivatives. I've had a great experience so far with top bucket performance ratings. Just completed 3yrs in banking.
However I've lately been pretty confused as to where things go from here. Trading at a BB has become so macro/regulator driven that it feels like long term career development is out of my control. We're capital/BS intensive, act as principal (coughpropcough) and the general outlook is not too sunny. I see the following options going forward:
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Stay at BB, move up the ranks, with the most probably wrong notion that if i'm considered intelligent/hard working/loyal there will always be a role to do
Concerns: little control, low interest in market making, 0 interest in IB/Sales (except say LevFin) -
Use network to move to a credit fund at HF/PE. many are active in the loan portfolio space
Concerns: too niche + only active in NY/Ldn as far as i know -
Bit of a stretch, but try for REPE given resi loan experience. I know that REPE is mostly CRE hence the stretch, but I understand the fundamentals of valuation and also the process related stuff
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Do #1/#2/#3 temporarily and then shoot for a top MBA program. I already have good acads and a good gmat score (750-780 range). Post MBA get back into #2/#3 or pick up something completely different based on what i pick up at school (VC? Startups?).
Concerns: not sure how tough to get into AM/PE/HF post-MBA. I'm not interested in IB/Consulting which really brings down the expected value of the MBA for me.
I speak to a lot of senior people in the industry regularly, but unfortunately most people are a little out of touch with current trends. Usual responses have been slightly naive - try for H/S/W or get into tech.
I find the WSO community very impressive in terms of how 'up to date' people's inputs are, and I'd really appreciate your thoughts.
Thanks a lot in advance!
bump
In college so I don't have any input. Just curious. Why not something like a hedge fund?
It's niche, but couldn't moving to a hf give you the opportunity to do exactly what you're doing now, just with much more freedom?
Good luck, though.
jaspast06, Thanks. Re freedom, at least in a bank, I see people moving around in their respective departments a lot more (eg. within credit moving to ABS, HY, Distressed, CRE etc)
Working at a fund would mean committing to this asset class. Without an MBA, not sure where I'd end up if say after 5 years I wanted to do something else, or wasn't on the partner/PM track. It's definitely an easier choice for someone who's 100% into it. So in some ways, I actually feel there'd be limited freedom.
A credit fund at a large PE could potentially be better in terms on internal mobility, but I have no idea. Finance as an industry is heavily perception based and you can be seen as 'pigeonholed' even if you've picked up multiple skillsets along the way. Anyways, looking for more guidance on this front (MF credit fund).
It's not really my space but is whole loan portfolio really that niche? Thought a lot of larger funds did this stuff.
mrb87,
By niche I meant it doesn't really translate into any other job. Couldn't really move to ABS trading at AM/HF unless there was a dedicated team doing equity tranches/resids. Definitely no overlap with macro HF/mainstream PE/mainstream AM.
I guess my concern is I don't do any macro or corporate finance related analysis, therefore closing out a lot of the more broadly known options in finance. When people start crowdfunding e-mortgages (consumer p2p is already growing rapidly), don't know where I end up. Don't know if I'm overthinking this, but I just want to be more agile than the next trader (hence MBA thoughts), given things are set to change so much over the next 20yrs.
Do you think working at a large PE firm's credit fund helps offset such risks, given the breadth of businesses they are involved in? Any idea what the culture is like at these places?
Could you parlay loan expertise to move to a more distressed-focussed space? Just thinking Macro trends for the next 5 years point more toward restructuring/distressed opps than growth-oriented places (imo). From distressed could try emphasise asset valuation skills to a more corporate finance role/have a path into restructuring.
given your background, i feel like its not too much of a stretch to try aim for one of the following: LevFin, dcm, corporate derivatives (depending on how much exp you have with derivatives). surprised you don't think abs is possible
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