Credit secondaries
What do you guys think of credit secondaries? Is it a good place to build a career? Curious on how it's different than regular credit investing. Thanks!
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Very new/emerging field.
Top players like Apollo are building out their expertise atm, if it's an area that seriously interests you it could be a great space to grow into.
It's currently a nonsense/gimmick sector.
A credit secondary is simply an LP secondary on a credit fund - nothing new or exciting here as you're just buying some random senior debt fund for a 5% discount and hoping to get a 12% IRR after pumping it full of leverage.
What Apollo are doing is more direct lending and preferred equity to actual credit funds - once again, not a new concept and not a secondary.
I would avoid this space as there are very limited good credit LP stakes that you can buy for decent discounts.
This. Secondaries is different than warehouse/fund finance/other bespoke structures directly to credit funds to originate more
Is this what Apollo is doing out of their credit secondaries fund? It's mainly made up of credit guys, not secondaries folks so I'd assume they wouldn't be doing much LP stuff.
No idea on if that’s what Apollos credit secondaries focus is on, but I’ve done a couple of credit LP secondaries.
It’s super similar to portfolio purchases of bank loans so I’d think credit folks are better hires than secondaries. There is a bit less GP underwriting since a lot of funds are in the same assets and the low / base / high cases generally should be at par or close to par.
Seems incredibly boring
The other gimmick sectors are Real Estate e Secondaries and Infra Secondaries ...simply buying LP stakes in these funds, and there is such limited supply...most groups now do these weird GP-led single asset deals at par value on failing infra assets or real estate with high LTVs and cash injections to cure debt breaches.
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