Private Credit to Fixed Income?

Hi All, I'm an incoming associate 1 at a more special sits oriented private credit shop and am thinking about a move to LO fixed income, or even a CLO. I enjoy the work of credit and the comp in the private space is great (350k+ with 3 YOE), but I am completely beyond burnt out and have found the private deals process/intensity breeds toxic people. Basically, I want to work a job where a 80 hours a week isn't a base line.

Has anyone seen this move happen? I understand that there's a macro perspective I don't have, and also have almost no experience in relval anything, but I'm willing to learn (and take a pay/rank cut). So far headhunters have been lukewarm about putting me in front of traditional T1 AM, and usually push me towards either vanilla direct lending (mind-numbing) or pure special sits (sweatshops). I've thought of the following to help my chances:

  1. CFA, heard mixed things about its value in the space

  2. Start putting together pitches on HY opportunities (have some experience in pull-to-par trades I could use)

  3. Spend a year or 2 in credit research (would rather not do this)

  4. MBA (would also rather not do this)

Definitely keen to hear anyone's thoughts.


Based on the WSO threads and discussions, transitioning from a specialized private credit role to a more traditional fixed income or CLO position is indeed a path some professionals consider, especially when seeking a better work-life balance. Here are some insights and suggestions based on similar transitions discussed in the forums:

  1. CFA Certification: While opinions on the value of the CFA in fixed income spaces can vary, it generally remains a respected credential that can demonstrate your commitment and expertise in financial analysis and credit assessment. It might not be a game-changer but could certainly bolster your resume, especially when transitioning to roles that value deep analytical skills.

  2. Developing Investment Pitches: This is a proactive approach. Crafting pitches on high-yield opportunities can showcase your ability to identify and analyze investment opportunities, a skill valuable in both LO fixed income and CLO roles. Leveraging your experience in pull-to-par trades could provide a solid foundation for these pitches.

  3. Credit Research Experience: While not your preferred route, spending some time in credit research could provide you with a broader perspective on market dynamics and enhance your understanding of different credit instruments. This experience could be invaluable, making you a more attractive candidate for traditional asset management roles.

  4. Pursuing an MBA: An MBA could provide a structured way to broaden your network and gain exposure to a wider range of financial theories and practices. However, it's a significant time and financial commitment, so it would be crucial to weigh the potential ROI carefully.

Additionally, networking within the industry and possibly finding a mentor who has made a similar transition could provide you with more personalized advice and potentially open doors to opportunities that are not widely advertised. Engaging in relevant professional groups or forums, such as those on WSO, could also help in gaining insights and making valuable connections.

Sources: Private Credit Comp, Private Credit to Liquid Structured Credit?, Associate at a CLO Fund moving to Direct Lending, Private Credit -> Public Credit Exits?, Restructuring --> Direct Lending / Private Credit

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Yes, this is very doable. No different than moving from PE to LO equities early in your career. The CFA is valuable from a marketing perspective, in that it is useful for a fund to be able to say that x% of their research team has it.

Relval is easy to understand conceptually, and you will develop an intuition for it over time. It is pretty similar to pricing debt on the primary side. 


Why do you assume all private credit shops are equal in terms of WLB? My guess is that there are some out there that aren't as grueling.

Also, I'm confused why you want to do LO fixed income, but think traditional direct lending is boring. I've worked on a credit trading floor. Public fixed income (imho) is pretty boring. Relative value is not real credit analysis and its just looking at duration and spreads and credit ratings.

In my experience, all private credit tends to have some hair on it (otherwise traditional commercial banks would provide the loans), which keeps it interesting.


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