Is it likely to go from a structured finance/securitization role -> private credit?
Firstly, I'm very new to all things debt-related and have just recently fostered an interest in credit, so bear with me if this all sounds conflated, it's most likely because I'm still trying to get my head around things and struggle differentiating aspects between LevFin, DCM, Fixed Income, Securitization/Structuring, etc.
Recently I've been reading a lot about LevFin via reading PDFs online like S&P's LCD Loan Primer and Chapter 4 and 5 of Rosenbaum's IB textbook, as I was interested in what a financing role within IBD in a BB looks like (as I've only ever read into M&A and the classic industry groups). Naturally, I also looked into the exit opps, all of which looks like to revolve around Private Credit and Fixed Income Investing. However, when reading into FI, a lot of it is about trading (I'm not interested in any type of trading role), but rarely come across a post about FI AM and/or investment advisory - would work experience in a firm that specialises in FI AM be a good stepping stone into the Private Credit career path? And is there any good resources I can access to give me an idea of what to expect in this type of role?
I'm also wondering about other routes such as: Securitization/CLO structuring roles into -> P. Credit ? How about private structured credit divisions within BB's instead of their LevFin IBD arms -> P. Credit? Or even Goldman Sachs has its SFIL group that can surely place you well within the credit industry?
I feel like in a structuring role there's a lot of exposure to different debt instruments, cash flow modelling and credit analysis, as well as reading many legal documents, all of which I would assume would prep one well for a really good exit opp in credit. When I look at BX or Apollo Credit, it overwhelmingly seems to be ex-IBD (industry or LevFin), which is ofc the case for most of the roles at these PE firms, but it'd be nice to know if alternative routes like the ones above actually have a chance at gunning for it
Would be great to hear some advice and overall thoughts, views and opinions on breaking into Private Credit. Also if I sound utterly naïve rn, I apologise, I do feel like this all needs to be broken down for me like a child
Personally know a guy who went from ABS structuring to private credit and does a decent amount of speciality finance corporate level lending deals now
Can you tell me the name of the firm that does this.
The hurdle would be lack of 1:1 DD reps with companies and sponsors. The roles have commonalities and differences. Really depends on what skills you're learning. Agency MBS and sponsor finance may not overlap tremendously, and your day to day will be different. Someone in a CLO seat with exposure to levered loans will have much more relevant exposure to docs and market terms. 2 things - 1) skill overlap and 2) working around perceived optics / appeal of prior role - see below.
Also, a lot of PC firms are standalone (with ex-IB, CB and restructuring guys) and frankly don't have enough exposure to guys from securitization to be able to assess them. Just means you have to do more leg work to sell them on why you can do the job.
+SB
YES
Source: Me - I did it.
PM me if you wanna chat as I I'm 99% sure I'll be the most helpful to you
Care to be a little more specific on your background and the switch you made? Might help some users determine whether it’s a useful convo to start.
Some credit funds do the ABS, securitisation and NPL stuff.
The skills you develop are different and it is obvious when discussing with someone with a securitisation background and one with a LevFin background.
Generalising, I know but:
My background is in LevFin and work in team where half of the team has a securisation or receivables financing background. They really struggle with the credit analysis and tends to start talking docs before even have a look at the asset. Sponsors notice it as well.
Is your new mandate ABS or investing in things with derivative exposure (i.e hold a scouring in a spv that gets cash flows from say a pool of mortgages or credit card receivables or buy now pay later consumer receivables etc)? If so, curious how you got up the learning curve there.
fat bump
Heavy bump
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