Want to be involved in some form of research, enjoy economic research, modelling, fundamentals analysis, etc. but just not interested in equities. So looking at credit but where are the opportunities? BBs seem to rarely recruit for them, e.g. GS lumps together their credit functions under FICC and almost never hire for research, BofA/ ML I've seen I think one posting for an SA in the last 2.5 years. Even if I look at traditional AMs like Fidelity, Bernstein, etc. they only recruit for ER. Heck I would even consider Bloomberg but again they seem to only hire for ER.. Is there really only ER for research (other than the rare macro strategy for which I would need to be in an Econ PhD track to be competitive...)?
Not eligible for SA so only SASC or new grad Analyst/ Associate would be possibilities.. but have no idea where to look.
Based on the most helpful WSO content, here are some insights and suggestions for starting a career in credit research:
Global Credit Rating Agencies: These agencies, such as Moody's, S&P, and Fitch, are excellent starting points for credit research. They offer roles where you can gain exposure to both top-down and bottom-up analysis, working closely with lead analysts. This environment is collegial and provides a solid foundation in credit analysis, especially if you focus on teams dealing with non-investment grade issuers, as they offer more complex and insightful work.
Commercial Banking Credit Risk Roles: Positions like credit analysts, underwriters, or portfolio managers in commercial banking can be a good entry point. These roles involve fundamental credit analysis and can lead to opportunities in larger institutions or specialized credit funds.
Distressed Credit and Credit Funds: Some credit funds hire undergraduates as research analysts. For example, firms like Apollo, Liberty Harbor (under Goldman Sachs), and Aurelius Capital offer opportunities in distressed credit, mezzanine, and direct lending. These roles often require networking or prior experience in related internships, such as leveraged finance.
Leveraged Finance (LevFin): Transitioning from credit research to LevFin is a logical step, as it provides exposure to deal-related activities and can open doors to private equity or other buy-side roles. This path is more aligned with credit markets than equity research.
Networking and Niche Opportunities: Since credit research roles are less frequently posted compared to equity research, networking is crucial. Reach out to professionals in the field, attend industry events, and leverage alumni connections to uncover hidden opportunities.
Alternative Paths: If you're open to exploring related fields, consider roles in corporate credit risk at major banks (e.g., J.P. Morgan's CIB Risk Program) or macroeconomic research teams at asset managers. These roles may align with your interest in economic research and fundamentals analysis.
While opportunities in credit research may seem limited compared to equity research, focusing on these avenues and actively networking can help you break into the field.
Sources: Global Credit Rating Agency ---> Backdoor to High Finance, Q&A - Commercial Banking Credit Risk SVP in Southeast USA, Best Credit Funds That Hire out of Undergrad, CIB Credit Risk J.P. Morgan, Credit research to equity research
Look harder. I was in the SA process for fixed income research at Fidelity and Barclays when I was recruiting so they definitely hire out of undergrad. Likely most come from their intern pool however.
CreditSights
Seconded on CreditSights, could also look at rating agencies -> buyside credit research
Investment divisions at insurance companies sometimes hire juniors
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