Is reading textbooks enough - want to move to Distressed investing
Hi all - currently working in direct lending but find the monotony insanely boring. I have read Moyer as well as the other main texts for distressed investing - everyone I have spoken to / met for coffee suggested I try to move to a distressed desk internally but my BB doesn't have one....
Seems impossible to recruit into Rx advisory / direct to distressed shops with my background - I would even be happy to take a drop in seniority for the right opportunity.
Based on the most helpful WSO content, transitioning from direct lending to distressed investing can be challenging but not impossible. Here are some actionable insights:
Reading Textbooks is a Good Start, But Not Enough: While reading foundational texts like Moyer is valuable, practical experience and networking are critical. Distressed investing requires a deep understanding of game theory, liquidity, covenant work, and complex corporate structures—skills that go beyond textbook knowledge.
Internal Moves: If your BB doesn't have a distressed desk, consider exploring other internal opportunities that align more closely with restructuring (RX) or special situations. This could help you build relevant skills and position yourself better for a future move.
Networking and Coffee Chats: Continue leveraging your network. Meeting professionals in RX advisory or distressed funds can provide insights into what they look for in candidates and help you identify potential openings.
Skill Development: Focus on building skills that are directly applicable to distressed investing. For example:
Recruiting Challenges: It's true that moving directly into RX advisory or distressed shops from direct lending can be tough. However, you might consider:
Timing and Market Conditions: Keep an eye on market cycles. Distressed investing opportunities often increase during economic downturns or periods of financial stress.
Alternative Pathways: If RX advisory or distressed funds seem out of reach, consider roles in leveraged finance (LevFin) or special situations groups. These can serve as stepping stones to your ultimate goal.
Remember, persistence and a strategic approach are key. Keep networking, refining your skills, and staying informed about the distressed investing landscape.
Sources: Direct Lending --> Distressed/Special Situations Investing, Distressed Investing: This Time It's Different, Leaving IB to read books for a year and maybe join a start-up, Credit Hedge Fund opportunities, Leaving IB to read books for a year and maybe join a start-up
Reading textbooks is a good start, but it won’t be enough on its own for distressed investing. Since your bank doesn’t have a distressed desk, consider looking for opportunities elsewhere, even if it means a lower title. Networking is key—reach out to people in the field, attend events, and connect on LinkedIn. Look for internships or project work that can give you relevant experience. Keep pushing for opportunities; you might find something great when you least expect it!
Let's hope so - I'll be doing all of those things. Just think it's super difficult to convince someone to take a risk on a hire from an un-standard background, especially in the lean teams found in distressed vs say IB.
What does your day to day look like in your current role, from analyses to communications internally and externally?
And do you mean RX IB when you say advisory?
Illo quam est rerum. Blanditiis aspernatur repellendus soluta voluptatem earum odit sed.
Rerum dolor eos aut sit minima adipisci. Illum officia consequatur voluptas tempora pariatur facilis quaerat. Et ex quidem consequuntur pariatur et tempore ea. Aut sapiente qui cupiditate qui incidunt atque fugiat.
Earum maiores pariatur id ipsam velit eveniet facilis. Qui quia officia dolorem hic omnis non. Sint laborum qui autem laudantium perspiciatis consequatur. Debitis nam aut consequuntur ratione quos itaque iure.
Vel consequatur nesciunt praesentium aperiam cum et fuga. Qui nihil tenetur id odit. Eaque possimus voluptatem voluptatibus sed quisquam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...