Private Credit / DL Megathread
I’ve seen many threads on here regarding PC/DL and wanted to start one large thread (like PE) so we can consolidate information instead of having 10+ smaller threads. Feel free to post anything related to this industry (comp, hours, firm culture, recruiting, general career advice, etc.).
Ill link a couple of the other threads below so people have them as reference and to reduce repetition.
Comp: https://www.wallstreetoasis.com/forums/credit-funddirect-lending-salari… https://www.wallstreetoasis.com/forums/private-creditdebtdl-comp-variat… https://www.wallstreetoasis.com/forums/credit-analyst-salarycareer-path
Workout groups: https://www.wallstreetoasis.com/forums/distressed-debt-workout-groups-o…
some other questions: https://www.wallstreetoasis.com/forums/private-credit-questions
Thanks for making this thread. I have a few questions that I haven't gotten clear answers to from the previous posts:
Does Private Credit/DL recruiting generally follow the PE recruiting timeline, where the big shops recruit way in advance and other opportunities come up "off cycle"? Or are most opportunities on an as-needed basis and interview close to the start date?
What do the technical questions look like in these interviews? Should we be using the same prep guides as our peers recruiting for PE or something else? The only threads I could find were a bit vague and just referenced brushing up on "basic debt" and LevFin stuff...is that sufficient?
Any insights would be appreciated, thanks.
Currently work at MF credit as an associate. Mostly off cycle. Know that KKR, Carlyle, Owl Rock, HPS, and Apollo do off cycle. GSO might be on cycle although I’m not positive.
In terms of what to expect for interviews, it’s similar to private equity. Expect to meet the whole deal team and to have at least one case study. Having some precursory knowledge in credit is important, but they also don’t expect you to be an expert coming in. Just need to understand how to talk about a transaction and what makes companies good credits. Some companies that make good credits are not good equity stories and vice versa. Happy to answer any questions people may have.
I think it’s time to start a new forum....
WallStreetOasis.com AndyLouis
Worked @ SEA-Based PC/DL firm here.
Hours are a still bad by all means, 70 are minimum and it could get to 100 including some all nighters on Sundays. But its mostly about reading endless legal documentations and strategizing on covenants.
Modelling are done usually in templates and it is less complicated (most of the times) than PE or IB transactions model.
My firm recruits wide range of people since we do other things beside DL. We have appraisers, ex-banking credit risk, ex-big4, and there are ex-gov officials as well. We recruit almost exclusively from previous interns and/or personal recommendation from someone within the firm.
Culturally speaking it's pretty good in my group, Partner is really looking after his team. Although the firm as a whole could get really toxic regarding office politics.
Comps are touchy thing, the partner has a exit-clause of not paying us bonuses if some metrics and/or situation(s) aren't achieved. All-in comp is probably equal to MM IB, better bonuses tho if i might said so myself (but then.. i didn't get mine this year).
Would be interesting to see people comment on their general experience working for, with, or against certain DL shops. No particular subject of interest here, just generally curious to see what others have to say about certain shops. Here are a couple of observations I've had first hand or heard anecdotally from people in the space about certain shops:
Golub: not afraid to stretch on leverage for high quality assets. Was on a tear pre-COVID with large one-stop facilities (>$500MM). Heard hours can be long here and that the shop has a strong reputation within the space.
TwinBrook: have seen them make some arguably aggressive leverage reads for just OK companies. More curious than anything to see how their overall portfolio is holding up and if any layoffs are in order like at Antares.
Owl Rock: If your'e a 1L lender in a deal that has a 1L/2L financing structure and ORCA is in the 2L, good luck trying to get concessions from them. Tough to negotiate with and heard they're looking into buying up 1L in their 2L deals.
HPS: deals here tend to have a fair amount of hair on them from what I've seen and as a natural byproduct a fair amount of yield. Would like to know more about these guys quite frankly in terms of what they look for in a deal, how they box the higher risk they seem to take outside of higher pricing.
Want to clarify the Antares layoff comment as I used to work there and know many people there. Antares portfolio is holding up fine for now as are most of its competitors, lets be honest they all mingle in the same deals/industries. The layoffs were primarily driven by the prevalence of unitranche and internal PE syndication arms knocking the wind out of Anatares own cap markets group sails. Additionally, they added a PM group that handles post close portfolio monitoring. , and brought in enough that they didnt need as many (more expensive) credit juniors. Also were super top heavy at the SVP level and trimmed the fat there. I would guess these layoffs wouldve happened with or without COVID, it probably just sped them along
Hopefully I can offer some useful insight here. As a first year in banking who was completely unprepared, I interviewed and got to the superday for GSAM's PC group with no offer as well as a first round at a large credit fund (OR / Ares) which I didn't get past.
The GS interview was pretty tailored to my M&A background which made it a lot easier and thus probably why I wasn't grilled too hard on the credit mindset etc and at the time the group seemed to be in a growth phase so they openly said they were looking for all types of backgrounds - these were a great group of people and I messed up my case study memo after spending too long on a debt paydown model.
With the OR / Ares one, I basically was grilled on macro credit environment questions and was able to provide shitty soundbites on what I read on bloomberg the last week. Recruiter told me there would be a lot of accounting questions but I didn't get any and was thrown a lot of the broader credit environment questions I wasn't prepared for at all.
Seems like for interviews be prepared for understanding and distilling the current credit environment (more important now in COVID than ever) and having your deal / technical capabilities down the same way one would prep for any PE interview. Focus on the credit mindset and learn how to evaluate downside risk in a way PE investors such as myself wouldn't normally be asked in an interview
Usually 10-15% of fund profits for senior credit funds with a 4-6% hurdle rate and 20% of fund profits with 8% hurdle rate for mezzanine funds