Best pathway to Buyside Credit

Based on the most helpful WSO content, here are some insights into pathways to buyside credit from your position as an incoming MM IB Summer Analyst in coverage M&A:

1. MM IB Summer Analyst → M&A IB Analyst → Buyside

• This is a traditional and straightforward path. Working as an M&A analyst will give you strong modeling skills and transaction experience, which are highly valued by credit funds. However, transitioning directly to buyside credit may require networking and positioning yourself as someone interested in credit-focused roles.

2. MM IB Summer Analyst → Rerecruit FT to Buyside

• If you can secure a full-time role directly on the buyside, this could save you time and effort. However, buyside recruiting is highly competitive, and many credit funds prefer candidates with prior IB or LevFin experience. This path is viable if you can demonstrate a strong interest and relevant skills during the recruiting process.

3. MM IB Summer Analyst → Ratings Agency → Buyside

• While this path is less common, it could work if you gain significant credit analysis experience at a ratings agency. However, transitioning from a ratings agency to the buyside might be more challenging compared to coming from IB or LevFin, as ratings roles are often seen as less transaction-heavy.

4. MM IB Summer Analyst → IB Analyst → Lateral to LevFin → Exit

• This is one of the most effective pathways. LevFin roles are highly aligned with credit investing, as they involve structuring and analyzing debt products. Lateral moves to LevFin can position you well for exits to direct lending, CLOs, or other credit-focused funds.

5. Other Potential Pathways

• MM IB Summer Analyst → Credit Research → Buyside: Credit research roles at asset managers or hedge funds can provide a strong foundation for transitioning to credit investing.
• MM IB Summer Analyst → Structured Products → Buyside: If you can gain experience in structured credit or securitized products, this could open doors to CLOs or other credit funds.
• MM IB Summer Analyst → Corporate Banking → Buyside: Corporate banking roles often involve working with syndicated loans and capital structures, which can be relevant for private credit funds.

Key Considerations:

• Networking: Regardless of the path, networking is crucial. Many buyside credit roles are filled through referrals and connections.
• Skill Development: Focus on building strong financial modeling, credit analysis, and debt structuring skills.
• Certifications: Pursuing a CFA can enhance your credibility, especially for credit research or public credit roles.

Among these options, the LevFin lateral path is often highlighted as the most direct and effective for transitioning to buyside credit, particularly for roles in direct lending or CLOs.

Sources: BofA Wholsale Credit vs Credit Risk, IB Credit Risk to Buyside Debt, BB Corporate Banking Exit Opps?, Buy-side vs sell-side path to credit funds, How do top credit shops compare to MM/LMM buyout?