Ways into Private Credit UK
Hello everyone, as I will be starting my undergrad degree next summer at a target and I really want to end up in the private credit market one day, I am wondering which IBD group historically placed best into Debt Funds in London (and where you learn the most about evaluating credit investments).
Should I try to break into regular Coverage/M&A teams or is it better to focus on products like LevFin, Restructuring or Debt Advisory? If you would rank those teams against eachother, how would that ranking look like? Does it even matter as long as I get a strong brand name?
I am somehow impressed that you have made this determination so young, but if you're sure then more power to you.
You're probably aware that most of your applications will be for IB SA positions regardless, and for those interviews I don't think you should be positioning yourself who ony wants to work on credit (either buyside or sellside) - team selection is a problem a long way away for you. In particular, I strongly encourage you to take the best brand name you have an offer for.
That said, for Private Credit recruitment at the junior level (it changes as you get more senior), you shouldn't worry too much about team. Even coverage or M&A should be fine. If you can, however, I'd choose LevFin as the most directly relevant. Restructuring / Debt Advisory are also relevant, but keep in mind that Restructuring in particular can be a little niche if you decide you want to do something different.
I’ve been in the field for a few years now and most of our guys came from a Lev Fin background. It’s relatively more plug and play as you’ll know the loan product and credit docs in your day to day. There’s also a bit of “underwriting” needed too in LF if you work at a balance sheet bank. I put that in quotes because it’s underwriting light in comparison. Second to LF, we look at guys in debt advisory too. In London, Rothschild is pretty active but you can’t go wrong with any of the EBs. Restructuring as the above poster mentioned is a bit niche so I guess it depends on where in PC do you wanna be in. I’d say go for LF / Debt Advisory to keep options open if you end up wanting to pivot to something else (eg PE)
First of all, I would like to thank both of you very much for your detailed answers!
Would you say that the respective strategy of the fund determines what type of people they look at or is more about personal qualities and less about the group?
Obviously, starting in RX works pretty well to get into distressed debt funds, but what about opportunistic funds that invest in senior/junior/mezzanine debt? Since LevFin is quite similar to direct lending/unitranche, is it even a good foundation for those riskier types of debt or are there better groups for that?
Am I overthinking and the exact type of products/transactions is not that important as long as I get a generous understanding for the credit market or is it something to consider?
You are thinking about it properly. If you want to get into distressed / loan-to-own strategies, it makes sense to start off in RX IB team or a distressed trading/research desk on the S&T side. Keep I mind, these strategies are more public markets oriented than private credit.
As for opportunistic private credit, Lev Fin should be fine (by way of background, I am in opportunistic credit in NY). The reality is we will teach you how to be a good analyst in opportunistic credit but we would want you to have a strong foundation in credit. Of course, this all depends on the fund. Also you should target LevFin groups that focus on sponsor activity (B3s) versus a corporate flow team (like JPM SLF). We also see a lot of flow from Rothschild and HL London so you may want to look into those teams too.
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