Ins and outs of Private Credit...2025
Hi all,
Had a bunch of questions about PC, and decided to post on here to see if I could get them cleared up. As follows:
- What is private credit & how is it different from private equity / VC/ asset- based finance / LevFin? What does a day - to - day look like (hours etc)?
- I feel like PC has exploded in popularity recently...why is that, and what is the forecast for the industry over the next 5-10 years?
- Obligatory prestige whore question -> how "prestigious" is PC considered in the broader business / finance community? Do you predict it increasing / decreasing in prestige?
- What does the tier list of PC firms look like as of now, and how does compensation compare to other careers like corp finc, consulting, IB, PE etc?
- What is the best way to break into the field ( is it considered an exit, with a lot of experienced professionals, or a feeder with lots of junior hiring)? Ideal background? What makes it 'interesting'? Who is it for? Target schools?
Is it a 'technical' career? If so, is it DCF / LBO type technical or something else entirely?
Apologize for having a bunch of questions, but I decided to lump them all together instead of making multiple posts. Thanks in advance!!
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Great stuff thanks man - on the last point, wanted to ask if you can talk more on the valuation/modelling side of PC? Say for special sits/direct lending
For valuation it is a wide approach and will depend on the transaction. DCF, LBO, sum of the parts, runoff/winddown cash flow value analysis, hard asset value, IP value, liquidation value, public comparables with haircuts, transaction comparables, 363 sale comparables.
For modeling, traditional LBO modeling with operating drivers. SS will be more granular likely than traditional DL.
As a note here, modeling is generally a farce in the industry as no one will ever model a company correctly, but it is used to show what would happen to the company under a set of certain circumstances. Once you have the basics of modeling down you realize how much of a joke it truly is. You will build the most granular model of your life just for the revenue growth to spit out GDP + 3%. Or to have a senior member of the team tell you to tweak the 2000 row assumptions you made because it should look like GDP + 4.5% instead of GDP + 3% because the numbers don't "look good".
Incoming SA in commercial banking at a large bank (Citi,HSBC, Wells) this summer, do you have any tips / advice for my best chance to break into PC down the road? I'm most likely going to stay in a graduate program for 2-3 years if i get the return offer after this summer. Thx
It is entirely about networking aggressively early and consistently. Do not be afraid of rejection / people not responding to your cold emails / cold linkedin messages. Reach out to anyone that is at a firm that you are interested in and see if you can get coffee with them to slowly build the relationship. Then in two-three years time, you can hope some of these individuals team's are looking to add and you'll get the first look. Other route is just to be right place, right time with recruiters.
Do you see RX consultants that do primarily debtor side work being viable candidates for PC roles?
Typically for workout or portfolio roles
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