Hey Guys,
I have an interview with a private credit fund this week. I am currently in associate at a boutique IB and am interested in learning more about the day-to-day of a private credit analyst.
I am trying to leave IB primarily to get away from the spontaneous hours and working weekends. I do not mind doing this if it is at least anticipated a couple days in advance (i.e. earnings season for ER) instead of knowing a couple hours before. Would any of this change at a private credit fund?
I prefer not to ask this sort of question in an interview.
Thanks!
-Slim
Ive been working at a credit fund for almost a year now.
Hours are definitely better than they are in IB but spontaneous hours and working weekends are not uncommon. There certainly is a lot more visibility - you'll most likely know a couple days in advance if you have a long week/weekend upcoming (company reaches out to your firm with a deadline as to when they need financing done) and from there on you'll need to execute on it.
With that being said, it isn't uncommon for deals to die as you're ramping up on your work (disagreements on rate, structure, and not meeting fund IRR requirements, etc.).
Thanks for the reply. I have witnessed what you are saying with funds we have reached out to. How often would you say you work weekends?
Aside from the intellectual benefits of working at a fund, I am trying to get some since of a normal life back and avoid mental burnout. I have kind of hit this point in my life where I am done chasing those million $ dreams so I am just looking for something that has more sane hours (don't mind working hard) and doesn't hurt the checking account that badly. Weird question, but If you were to scale the improvement in your quality of life and stress level, what would it be compared to IB (if you did IB before)?
In my particular fund, we are allowed to invest in syndicated deals. I would say that in the couple of times I've had to work weekends (maybe once a month) they were because of some rushed syndicated process in which we had to have a quick turnaround on diligence and work in order to submit a term sheet and compete in the process.
Of course this would also depend on the number of deals your firm looks at as well as the number of people in your group. We have a pretty lean group so senior management tries to makes sure we don't waste time chasing deals that we have little chance of closing.
I joined straight out of college so I can't provide any color on your last question but the seniors above me all came from investment banking and have definitely commented on a great improvement in terms of quality of life over their banking days. I work 60-80 hours on average a week.
Feel free to PM if you want to for more of a breakdown on day to day/Other questions.
personal experience: Average of 50 hours per week, travel 2-3x per month, work one or two weekend days per month, lower all-in comp than IB, start to get (a little) carry at VP level
feel free to ping me directly
Curious about the comps at MF (Ares, GSO, Apollo Credit) Is the carry a large discount comparing to PE VP level? Thanks!
Bump
bump
What is the work itself like?
Day to day tasks? Ultimately is it more deal type work in the mould of M&A /PE or is it more market related a la L/S Hedge Fund ot Long Only AM?
Deal work. There are originators who spend most of their time networking with pe firms/banks/intermediaries to source deals and there are underwriting teams who spend most of their time putting together models, screens and memos, as well as portfolio monitoring. My day consists of: review initial materials, develop thoughts on leverage, screen with investment committee, send term sheet, attend management presentation, review data room, put together 30 page memo, get investment committee approval, negotiate credit docs, close, review monthly financials, and value portfolio quarterly.
I am in the process of talking to a private credit fund as well. I am coming from CD - M&A and I had a few questions I wanted to run by you.
How was the recruiting process (what did it entail? Technical? etc.) and does your current firm have a specific industry they focus on?
TIA!
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Had a few friends in private credit and comp does seem on a different scale to other buyside shops.
Anyone else seen this - seems to plateau much quicker IMO?
Comp is a bit lower than PE and seems to vary a lot more from shop-to-shop. Smaller shop in a non-core market you're looking at ~$170k all-in, larger shop in NYC you're looking at ~$220k - $250k
Is this comp at the analyst level or associate?
I currently work in commercial banking (some origination but mostly underwriting) for a large bank but would be very interested in checking out private credit funds. I know roughly how they operate and what their business model looks like, but little detail beyond that. Would definitely be interested in moving to one at some point, as the idea of getting carry/skin in the game is very appealing. What's the best way to find funds? I'm honestly not even sure if any exist around me.
most are in chicago and nyc, lesser extent boston/sf/la and a few shops in some of the other large cities. i know shops in atlanta, philly, dc, miami, austin, dallas, houston, minneapolis, etc.
My fund is hiring. Feel free to DM me to discuss more.
I am also interested in this field and just started looking. What firms have you looked at and how did you get connected with the firm you are about to interview at?
Big firms that are not banks are Antares, Ares, Madison Capital, Golub. Smaller firms include Barings, NXT, Varagon, TIAA-CREF, Monroe Capital, PennantPark and many many others. Many utilize a BDC fund structure. Google that and you will find all of them.
I appreciate the info. Best of luck in your potential move.
DM me. We’re hiring.
Any elaboration on life as a Private Credit Associate? Comp around $115-125k base and bonus at least 50% of base right? How is the market right now with rates and spreads rising?
Interested in response to your question as well. Bump!
Comp is accurate, obviously location and firm size dependent. Expect $150-200k all in. Market is just adjusting as you'd expect... firms are either lending at higher leverage points, lower interest rates, and/or moving around in the cap structure to meet either of the two above.
Bump---
Would be curious as to understand how much grunt work (i.e. cutting files in data rooms, modeling/excel work) vs. actually doing deal work/assiting in writing up memos is done @ the associate level? Maybe you could provide a % breakdown of job responsibilities?
Private credit has relatively lax hours. 9am-6:30pm. Maybe one or two weekends every couple months. Lots of spontaneous email checking, lot of admin shit for closing processes, wiring, notifying, etc. but there’s also plenty of time analyzing cims and modeling. I’d say it’s 60-40 with admin shit being the 40
Comm banking is the same.. except switch the 60 with the 40 in your statement
Not sure which kind of private credit shop you’re at but our hours are certainly not 9-6:30ish, more like 8:30-7:30 on weekdays and 5-6 hours of work on the weekends. On average ~60 hours of work with it being 80-90 with deals closing. Our firm is around ~$3 billion AUM.
I'm guessing it differs if your firm drives their own diligence vs those that piggyback on the equity side?
I agree with this. I'm an analyst at a private credit fund after spending my junior summer in lev fin at a BB and the hours are better and work is much more interesting but when a deal is live you will work long hours and sometimes your entire weekend may get jammed on a last-minute transaction. You may also have weeks that are laid back. It comes in waves rather than being a 24/7 sprint.
What city are you in? And is your shop more senior focused or investing across the cap structure? Happy to discuss through PM if you're more comfortable.
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How often do you close deals and get up to 80-90?
What are the AIG and Prudential private capital groups considered/labeled as?
AIG private credit consists of several teams: corporates, ABS, infrastructure and leveraged capital - all based in Houston. Lev cap is a pretty small group, especially when compared with the others.
Can someone please share a modelling case they had as part of the recruitment process?
Thanks
bump!
Depends on the firm. Credit models are almost always concerned about leveraged free cash flow. You just need to build the operating assumption to ebitda and then lfcf. Very rare for three statement modeling since it’s less relevant. I’d recommend doing a short form, one hour model
Does anyone have experience at THL Credit and what the typical hours are?
Do you see any success stories about commercial banking credit analysts making the transition to credit funds?
I mean its basically the same job but for a different organization. Yes seen people from banks large and small as well as credit rating agencies make the lateral to a credit fund.
Does anyone have info on BlackRock's "private credit" team?
They're a group formerly known as Tennenbaum Capital Partners; got acquired. by the Blackrock platform last year I think. I don't know too much about them specifically, but in my experience they're a regular way direct lender. Might be some more info on WSO now that you know to look for TCP
TCP is by no ways a regular direct lender. They focused on special sits, opportunistic, and distressed debt investing prior to being acquired by Blackrock. Following Blackrock’s acquisition they still focus on more special sits type investments that are higher yielding ex. Specialty finance, litigation finance, etc. Very different than a typical direct lender that is just underwriting and providing debt for vanilla LBOs. That’s not to say Blackrock doesn’t finance LBOs which is still a huge part of the business, it’s just usually hairier credits that command a higher yield.
https://www.blackrockbkcc.com/our-firm
curious if anyone has seen cases of people going from public > private credit and how feasible that is at the junior level. what would be the main differences in the way you approach the modeling/investment thesis overall?
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