Associate at a CLO Fund moving to Direct Lending

Question

First-time poster here. I an Associate at a small CLO fund (~$2bln in AUM) and my job responsibilities include screening new credit investment opportunities in the primary and secondary broadly syndicated leverage loan markets (non-investment grade), as well as managing my current portfolio of credits.** My question is would a move to a direct-lending position at a private debt fund (i.e. Ares, Golub) be a feasible / strong career move? What are exit opportunities for someone in my position?** Thanks in advance.

Cries · Accepted Answer

To OP:

You are already more than qualified to get a direct lending job if you want one.  Or, at least you are qualified to get a first round pretty easily.

Not sure what your process there is like, but we do a lot of diligence on new syndicated loans.  Nearly on par with what we do on club deals & Distressed.

anonymooose33 · Answer

Know I'm late but wanted to throw another comment on here. As long as you are an analyst-Sr. Associate at a CLO and doing underwriting work, your work is 100% transferrable to direct lending. CLO jobs are incredibly transferrable nowadays due to leverage loans making up (purchased by) >75% of CLOs at the end of 2018. Direct lending usually entails a LBO, M&A, recap or refi of a leveraged borrower. Given at CLOs that you see much more volume in deals, your experience in screening deals will be second to none if you joined a direct lender.

Cries · Answer

Antares is pretty good, certainly on par with golub and ares.  It sounds like a step in the right direction (but idk what group/function it is).

Just be careful you dont get pigeonholed in origination (aka cold calling MM business owners to ask if they want loans).  Some direct lenders use their associates and VPs specifically for shit like that.

I personally think it would be great for you to experience MM direct lending as well, especially if you end up having to workout some loans.

Good luck with the decision!

Debthawk · Answer

Would be a good move for someone in your position, particularly if it is to a larger name shop like you mentioned above (could be feasible).  There is much more heavy lifting involved with direct-lending as it requires a much deeper dive into each name that is invested in as there of course is not a liquid market to exit the risk, unlike in the leveraged loan market.  Typically if you are participating in a direct lending deal, you have a chance to have more one-on-one face time with the management team as well as with the PE Sponsor than if you are a small CLO manager.

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Associate at a CLO Fund moving to Direct Lending

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Associate at a CLO Fund moving to Direct Lending

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