Can someone shed some light on the difference between working on the portfolio side vs investment side of a direct lending MM firm? Curious to know the difference in comp, hours, work streams, and exits. Also, what the interview questions would be like.
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consultant1738, bummer your thread hasn't had a response yet. Maybe one of these threads could point you in the right direction:
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If those topics were completely useless, don't blame me, blame my programmers...
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Portfolio side - work on all activity for the existing portfolio. Incrementals for acquisition purposes, dividends back to the owner, maturity extensions, refis, etc.
Investment side - work on new deals only, completely from scratch. Underwriting new companies that you have never ever seen before and bring it from start to finish when the deal closes and funding has been sent out the door. You learn how to underwrite a company and examine their credit risks and strengths and how the company cash flows.
I'll add to this that it can be very firm dependent. At my shop, the deal teams that underwrote the original deal will stay involved with all incremental debt raises, maturity extensions, amendments, etc. and actually take the lead on this. The portfolio side will only really manage the more administrative/operational elements (RC draws, financial reporting, agent notices, etc. The portfolio team is also more heavily involved in fundraising and various LP requests, i.e. maintaining databases of performance of all portfolio companies, pulling stats on returns, sensitizing certain credits, etc. They are not involved at all with new underwrites (except tracking closing stats for internal purposes)
It's really something you would need to inquire about in an interview process as I know most of our competitors have slightly different situations as it relates to splitting workstreams between investment / portfolio teams once deals are closed. Generally, the larger the firm, the more the investment side is focused exclusively on new deals. If the firm has a smaller headcount, you're probably doing more portfolio work as an investment professional. Pros/cons to both situations
Is there a difference in pay between portfolio management and originations at the junior level?
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