3 HF

Hi all

Wanted to get some opinions on 3 offers i got.

Have the choice between 3 credit HF:

1 very large fund focused on credit. team i am potentially joining focus on liquid credit - targets mid teens returns.

2 large HF. focused on private credit i.e. mezz / direct lending to SME / primary stuff - target mid teens returns

3 smaller HF focuses on distress / with an ABS angle. all 3 based in Europe. target higher returns.

Wanted to get the views from the forum on the strats. All teams are lean and offer room to grow.

Sorry, dont want to give too much info on the funds. I have my own view and a better fit with one of the teams but wanted to see what the forum would think of those offers. thank you!

 
Best Response

Not much input, just what I would personally do due to subjective reasons.

Since I'm not really interested in liquid credit I would not take up the 1st offer. Mezz debt and private placements are interesting, but I'd rather go in to distressed debt if I went for the credit side. So 3 is the most appealing to me, but it depends how substantial is the ABS angle (i.e. whether it's a sole ABS shop or a 'multi-start' one so to speak). Also, the differences in pay, career progression, name recognition/'prestige' would play a role. Now I'm assuming all are fairly commoditized credit HF options.

 

If Europe, their ABS angle will likely be the pubs sector (Punch, ETI,....), not real ABS. Ask them, they want you, you should be able to quizz them on the strategy.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
Oreos:

If Europe, their ABS angle will likely be the pubs sector (Punch, ETI,....), not real ABS. Ask them, they want you, you should be able to quizz them on the strategy.

for me it'd be 3,1,2. but depends on your mentality, do you like doing deals, or trading or just getting the bottom of a situation?

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

Depends whether you're more of a macro person or a corporate person. I assume #1 is a mix of government bonds/IG stuff? Which is driven by macro developments. On the other hand, with mezz you need to understand businesses as you say, which to me personally is much more interesting. Some may say the field is fairly niche, but at the end of the day it's still all about understanding the company - same goes if you're an equity guy on the SS, the BS or you're doing distressed debt at a mega fund - there is still significant overlap.

 

Deals vs trading then. If you're originating mezz it'll suit a deal / banking mind set. But you may want a change to a more short term trading mindset.

Also bear in mind that you can count the bonds that are actually HY but not distressed on your hand in the European market at this point in time.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

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