Would love to hear from folks that made the jump:
- What are the pros/cons?
- How do the comp and hours compare (assuming you're in a moderately active CB group)?
- Is there as much administrative internal bullshit as there is in banking?
- Do you think VP is too seasoned to transition out of banking?
Based on the most helpful WSO content, here are insights on transitioning from Corporate Banking (CB) to Private Credit:
Pros and Cons
Pros: - Better Work-Life Balance: CB generally offers a better work-life balance compared to Investment Banking (IB). Seniors in CB often prefer a healthier work-life balance for themselves and their juniors. - Senior Exposure: Smaller teams in CB mean less internal competition and better senior exposure. - Relevant Work: The work in CB, such as cash flow/credit/capital return analysis, is often more relevant and useful to clients.
Cons: - Exit Opportunities: Transitioning to Private Equity (PE) from CB can be challenging due to a less established pipeline compared to IB. - Repetitive Work: Some find the work in CB repetitive and not as impactful at the analyst level. - Administrative Tasks: There can be a significant amount of administrative work, which can be frustrating.
Compensation and Hours
Administrative Internal Work
Transitioning at VP Level
These insights should help you understand the landscape of moving from Corporate Banking to Private Credit.
Sources: https://www.wallstreetoasis.com/forum/investment-banking/corporate-banking-vs-management-consulting?customgpt=1, Unpacking Corporate Banking at Citi/BAML?, https://www.wallstreetoasis.com/forum/investment-banking/pros-and-cons-ib-vs-pm?customgpt=1, Stuck in Corporate Banking - Fighting Complacency, Q&A:Commercial Banking SVP Ask Me Anything
What are the pros/cons?
Pros: Overall more interesting work. Stronger emphasis on understanding credit agreements/covenants/credit story vs. check the box mentality in anticipation for bond economics down the line. My CB exp. was "yeah we're basically losing money on the RCF/TL but we get to issue bonds through our relationship on this facility so that's OK", consequently the credit stories weren't intriguing (large names with few credit worries). Also, you have to look at the risk relative to return (look at IRRs MoM). My team also works on a greater variety of capital solutions including co-investing and 2L facilities outside of just sr. sec. 1L stuff which was our go-to in CB.
Cons: WLB took a hit, my firm isn't WFH friendly (5 days in the office). Culture shifted towards more results-oriented nature, more hardos.
How do the comp and hours compare (assuming you're in a moderately active CB group)?
Comp to work ratio was better at CB (comparing junior level to junior level), for me at least. I think the ratio itself improves with seniority (maybe) but I have l little solid insight (i went 2 yrs CB analyst to Aso1 in DL). Overall in absolute terms, comp is better and hours are worse.
Is there as much administrative internal bullshit as there is in banking?
Not in my experience no. PC platforms are designed to be nimbler and provide capital quickly, hence you see more 1-week turnarounds where the internal processes and procedures that are commonplace in CB are just not possible at my current firm. Everything internally at my current firm is designed to make our processes/approvals easier. It's refreshing. It frees up the needed brainpower to actually dig into the credit (the borrowers require more vigilance vs. a typical CB borrower).
Do you think VP is too seasoned to transition out of banking?
IMHO no, but you'd probably have to go to a smaller direct lending platform. Working your way up from there. Most seniors at my current gig have IB experience (RX/LevFin) or extensive experience on the buyside throughout the capital structure. You'd probably have to be in some type of PM capacity with pseudo u/w at incremental asks or refinances. The underwriting on the buyside is just much more extensive vs. my experience in u/w in CB (I handled both u/w and PM in CB).
Thank you very much for the response! Super helpful.
Do you think the move from energy corporate banking to private credit is doable? How much does industry coverage matter in this case
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