MM IB vs. MM Private Credit
Hi all,
After spending a summer at a boutique credit fund I now have opportunities to join a middle market bank (Baird/Piper/HL) as well as an opportunity to join one of the larger insurance backed private credit funds (Barings/Metlife IM/Churchill).
Comp is quite different between the two (50k+ per year higher for the bank) however I do value WLB, enjoy lending and think it is a space where I could spend most of my career.
Thoughts?
i'm leaning toward saying go banking for optionality since people rarely know what they want to do for the next 5 years let alone their entire career at 22 years old. How big is the comp difference specifically?
comp difference is 70k+ first year
When comparing MM IB (Middle Market Investment Banking) to MM Private Credit, here are some key considerations based on the most helpful WSO content:
Compensation: As you mentioned, MM IB typically offers higher compensation, especially at the junior levels. However, this often comes with longer hours and a more demanding work environment. Private credit, while offering slightly lower pay, tends to provide better work-life balance (WLB).
Work-Life Balance: Private credit funds, particularly those backed by insurance companies like Barings, MetLife IM, or Churchill, are generally known for more predictable hours. MM IB roles at firms like Baird, Piper Sandler, or Houlihan Lokey (HL) will likely involve longer hours, especially during live deals, with less control over your schedule.
Career Longevity and Fit: If you enjoy lending and see yourself building a long-term career in this space, private credit could be a better fit. It allows you to focus on direct lending, mezzanine financing, and structured credit, which are less transactional and more relationship-driven compared to the deal-heavy nature of IB.
Exit Opportunities: MM IB roles often provide broader exit opportunities, including private equity, corporate development, or even transitioning to private credit later. Private credit, on the other hand, can pigeonhole you into the credit/lending space, but this may not be a concern if you’re already committed to a career in lending.
Lifestyle and Culture: MM private credit funds often have a more collaborative and less hierarchical culture compared to MM IB. Additionally, the insurance-backed funds you mentioned are known for their stability and focus on long-term investments, which can contribute to a more balanced lifestyle.
Recommendation:
If work-life balance and a long-term career in lending are your priorities, the private credit opportunity seems like the better fit. However, if you’re looking to maximize compensation and keep your options open for broader exit opportunities, MM IB might be the way to go. Ultimately, it depends on your personal goals and what you value most in your career.
Sources: An old man looking for advice, Private Equity shops with the best work/life balance, https://www.wallstreetoasis.com/forum/private-equity/then-and-now-compbanker?customgpt=1, Private Equity vs Megafund Credit,
curious - what is the group at the mm bank? is it a well regarded group at said bank. Can you see yourself staying in that industry after banking? Same for the PC shop, is it direct lending, special sits, abf, etc..?
industrials, so one of the better groups at the bank. I would definitely leave to PE or PC after 2 years
PC offer is direct lending & mezz lending
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