As the title suggests, I am looking for a new job (outside of credit). Nothing wrong with the career, just not my ideal long term investing style. Started out of college in MF credit but finding little luck in finding opportunities outside of credit investing. Two years in, I feel technically competent and that I have a fair amount of reps given the velocity of transactions in PC. At this point, with another year here, I feel that I’m risking pigeonholing myself as a credit investor and prefer to leave sooner than later given I already know this is not for me. However, I feel like it’s been a tough battle convincing recruiters that I can do the job of a PE associate. How do I best position myself to pivot? Specifically would like to pitch myself to PE / special situation type investing roles.
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Based on the most helpful WSO content, here are some strategies to position yourself for a pivot from credit investing to PE or special situations investing roles:
Highlight Transferable Skills:
Tailor Your Pitch:
Network Strategically:
Prepare for Interviews:
Leverage Your Current Role:
Consider Intermediate Steps:
By following these steps, you can better position yourself for a successful transition to PE or special situations investing roles.
Sources: Traditional Private Equity vs. Special Situations Investing, How Do I Get Into Private Equity?, Did on cycle just start?, Special Situations / Distressed Recruiting, Q&A: HF Analyst @ $5bn+ Fund - Breaking In and Transition to Risk-Taking Role
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Do you have connections in PE from deals you've worked on that you could leverage? Recruiters are always skeptical about career pivoting and try to push you toward opportunities in your existing field - feels irrational given skill sets are transferable but maybe a recruiter can opine on why it is a big risk to do this with a client. Are you open to doing IB? I would imagine the level of due diligence is a skill gap so I would think a PE modeling course would be helpful
True, but some shops have strong brand names even outside of credit (particularly MF). Bx Credit analysts have done PE exits, some months ago an analyst went to H&F (London)
maybe the recruiters have said this to you - but it's an uphill battle for you to move from PC associate to PE associate.
PE market is brutal rn with MF candidates that did not get promo to Senior Associate / VP looking around without a job for 6+ months
such is life - but you will need to reset slightly at PE Analyst or look at MM PE firms.
When you say MF credit, do you mean at a firm that is a MF PE fund that has a credit arm (ie; BX, APO, KKR, Bain, etc.) or do you mean a credit fund that runs a ton of AuM like an Antares, Guggenheim, Golub, etc. Either way it will be a bit tricky but better to be at the former and depending on firm, a lateral move can sometimes be there, but need cards to work in your favor and be a top performer.
I would suggest trying to move up the risk spectrum on the credit fund side to a more opportunistic lender that takes significant equity like risks if you are in more vanilla direct lending.
I think it will be pretty tricky to move directly into a private equity seat (especially at a MF) or a good equity hedge fund given that street views are that training can be hit or miss. This is ultimately why alot of times when people have the top RX IB vs. MF PC Analyst decision, realistically most people should got to a top RX IB seat given the optionality is much better out of one of those seats despite "getting to the buyside" faster going MF PC.
What PRECISELY is the function of a "credit arm within PE"?
credit investing
Direct lending, LBO financing
Bruh
BX, KKR etc have various investment strategies
This includes PE, it also includes credit, among others…
Well it’s a bit late for me on that last part. But agreed, probably most likely next step is to move further up the risk spectrum
Ignore title. I did this into the MM fund of a large PE platform (not MF), from MF credit. MF/UMM PE is mostly out of the question, unless you get an MBA (even then it should be uphill battle). Of course, anything can happen with good personal connections, I'm just speaking objectively from a job market perspective. I made the move due to similar reasons - I was doing fine in my career trajectory but just didn't want to be stuck in credit forever. I think your options are as follows:
1. Move into spec sits that does some credit, either within your MF or into independent managers. This is a dying breed, but there are still some out there that will look at both private structured equity and senior credit. You have a credible sales pitch to add value on day 1 by working on all their credit deals, but gradually getting up to speed on other asset classes over time. This is the best-trodden path, but it does not necessarily have a later path into classic PE, if that is what you want. The way control PE looks at the world is very different from special sits funds and they don't really understand each other. The market pull will come from more distressed special sits funds (likely with a DL arm, like Silver Point), given your profile. I would resist this as much as possible and try to swing a fund that knows how to do growth equity or esoteric asset deals that have nothing to do with distress. Distress is a secular decline asset class that will not perform and long-term career prospects are bleak. The way they look at the world is still from a very credit lens (some will say otherwise, but trust me on this), which is not what you are trying to get more of.
2. Pivot into high-profile startup operating role or PE portco M&A. You will take an upfront pay cut, but these guys don't care as much that you were a credit guy. They just look at the brand name and assume you are smart and capable (as long as you can back this impression up in interviews). They will not go that deep on whether you are "equity thinker" or not. But this is a viable path into later VC/growth equity or MM PE after 2-3 years. Staying and getting some equity is not a bad play either - worst case, you will get better shot at top MBA than pure play credit folks to reset later.
3. You can try for lesser-known or startup LMM/MM PE. Hopefully with a star founder spinning out of a big platform. These people are just looking for hungry folks and can compromise on pedigree a bit, especially at the junior levels. But the issue you will run into with trying to go as an Associate at MM is they will assume you don't know how to deal with messy datarooms and complex operating model buildouts. There is mobility within MM so you can start out at a smaller shop and move your way up. But frankly I think you will get better chance at upward mobility and carry economics if you stick out at a promising startup fund from the ground floor. Recruiters will only put you in front of low-risk mandates (startup funds) and will not jeopardize their relationship with established platforms that hire large volumes that are their best clients. You can get around this by direct networking, but a lot of them are tied up by established recruiting protocols that involve agencies - so a MD/principal needs to go to bat for you.
You understand me! Thank you for the practical advice and creative ideas here.
I’ve strongly considered these options, particularly 1) and 2). I’m leaning 1, given I actually really like investing and want to give it a career, but the pull towards distressed funds is real and has been most of the opportunity set thus far. Alas, I think it’s realistic and seems like a decent landing spot with keeping the other considerations you had in mind.
How did you think about approaching path 3) for yourself, with regards to picking the right MM PE fund?
I picked the best brand I could get (fund size + name recognition + returns), with less emphasis on culture or pay. I deemed this to be important because I was resetting to PE and this will in effect be my first branding in this world. Unless you are doing distressed for control, the PE world really have little familiarity with credit work and frankly don’t care. The MF name got me in the door but nobody was interested in what I did there, as it was not PE. I like the strategy better but I dislike the PE culture compared to credit. It is way more hierarchical and bureaucratic (so many more stupid memos and DD packs). But management interaction and your perspective on growth is way better than wearing the credit lens, which is a sucky way to look at the world and not a narrow skill not useful outside of credit investing.
My hope is to find the right early platform and join a small but smart team I could see myself being with in the long run. First acquiring the brand name gives me this optionality, whereas the reverse is tough, or so my theory went. With a few years under my belt with a brand PE, starting my own independent sponsor is also not out of the question. Barrier to entry is a lot lower in PE than credit to start your own biz (you can get started with $10-20m first raise, whereas in credit anything under $300m is DOA as unable to compete)
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