Starting Career at Boutique AM
Loving the job so far (~10 bn AUM public credit fund) but want to hear opinions about career risk versus starting in IB. I've chosen credit intentionally because IB life seems hellish (why wouldn't I just start where people from IB exit?) but understand that IB provides a de-risking component. Am I screwed if I ever want to transition to other buyside roles besides credit? How difficult would it be?
Starting your career at a boutique asset manager with ~$10bn AUM in public credit is a solid move, especially if you're enjoying the work and have a clear interest in credit. However, there are some considerations regarding career risk and transitions to other buyside roles:
Career Risk vs. IB:
Investment Banking (IB) is often seen as a "de-risking" path because it provides a broad skill set, strong modeling experience, and a wide range of exit opportunities (e.g., private equity, hedge funds, corporate development). Starting directly in credit can limit your exposure to other areas of finance, which might make transitions to non-credit buyside roles more challenging. That said, if you're confident in your interest in credit, this may not be a significant concern.
Transitioning to Other Buyside Roles:
Moving to other buyside roles outside of credit (e.g., private equity or equity-focused hedge funds) could be more difficult without the foundational IB experience. Many firms value the rigorous training and deal exposure that IB provides. However, transitions are not impossible, especially if you:
Why Start in Credit?
Your reasoning for starting in credit is valid—if you know you want to work in credit long-term, skipping the IB grind can save time and energy. Many professionals in credit funds have successfully built lucrative and fulfilling careers without ever stepping into IB. Additionally, credit roles often offer better work-life balance compared to IB.
Long-Term Outlook:
If you decide to stay in credit, your career trajectory can still be highly rewarding. Credit funds, especially those managing significant AUM, offer opportunities to specialize in areas like distressed debt, high-yield bonds, or structured products, which can lead to senior roles with strong compensation.
In summary, you're not "screwed" by starting in credit, but your path to non-credit buyside roles may require more effort compared to someone with an IB background. If you're passionate about credit and enjoy your current role, you're already on a solid track. Just ensure you continue developing transferable skills and maintaining flexibility in case your interests evolve.
Sources: Best Route to a fundamentally driven HF in Londob: IB vs AM?, CIB Credit Risk J.P. Morgan, The best of the back (or middle) office?, BB Corporate Banking vs Terrible Boutique Investment Banking, What are the different types of Credit?
I would say in short, if you like what you do and want to build a career as a credit investor, you are the opposite of screwed, you are in a great seat. If you don't like it and want to pivot, then yes there is a cost to specialising early in your career. That said, within Credit there are loads of flavours (investing up and down the cap structure).
Based on your comment about cutting out IB to just go straight to what you want to do, it sounds like you would be happy building a career as a Credit analyst and eventually PM. My advice would be to lean into AI as much as you can. Don't be the analyst who is replaced with AI, but be the one who enables it. Also, try to learn and develop as a PM as quickly as possible. AI isn't going to take that job anytime soon, in my view.
Finally, you can never forecast getting laid off, so hard to plan your career around that. If you do get laid off, you have transferable Credit skills and flows into the asset class are strong right now given high starting yields and decent total return of the asset class.
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