Credit funds
Lots of threads on here about long/short equity funds, but wanted to learn some more about credit funds. What would the day in the life of someone who works at a fund that focused on high-yield bonds and senior secured loans look like, maybe compared to a long/short equity analyst? What are the differences between the credit groups of mega funds (GSO, KKR Credit, Ares) compared to more boutique hedge funds like Oak Hill Advisors, Goldentree, and Exodus Point? Lastly, would it be possible to join these firms straight out of undergrad, and if you can how hard would it be to potentially switch to something like Private Equity or long/short equity after a few years? Thanks in advance for any insight
Bump
lol double bump
Private credit lifestyle is more chill than l/s equity, esp if the comparison is between private and public. As for between mega funds/boutiques, at the end of the day your experience as a junior will differ mainly by the amount of responsibilities that you’re given (your learning) and the team that you work with. The companies you look at will probably be somewhat similar.
i think you should clarify which kinds of credit funds you're talking about. A lot of credit funds are just another deal team (ofc from a credit angle). But you also have funds that are engaged in liquid credit trading (aka BX LCS).
Sorry, you're right I should have been more clear. I am more talking about the latter (liquid credit), not private credit.
would be interested in hearing thoughts on on the MF PE liquid credit arms (know there's bx, kkr, ares, etc.). What's the experience like and how does comp differ from their more conventional PE and PC/DL teams?
These are great seats from WLB perspective with interesting work and lean teams. Your comp caps out lower at the senior end, but through the middle ranks you generally get paid equal to MM PE or MF PC (but touch lower than MF PE) for 50-60hr work weeks. It's more comparable to a LO Equity AM type of job, except you traffic heavily in quasi-private/crossover primary deals given the nature of credit markets and idea velocity turns quicker (investment horizon is usually 1-3 years). Relatively predictable schedule as liquid markets have a rhythm to it, generally at your desk earlier in the morning but also out by 6-8pm latest (ok, maybe 10pm if you're really jamming). But workflow is autonomously driven like a public market seat, not top-down deal team structure like on the private side. Typical team is like a senior analyst riding solo or maybe one junior that helps with materials. You can be presenting ideas in IC and lead underwriting as early as 5-6 yrs of experience (you wouldn't hear a peep from an equivalent Associate in IC on the PE/PC side).
Senior level is where trajectories diverge - if you're able to swing becoming a senior PM, you can clear into 7-8 figures but there are few spots at the top and the top dogs rarely leave (because it is a great, stable job). There can be 10-20 Partners/MDs sourcing deals for MF PE or PC, but only 3-5 PM seats open on the liquid side. This creates frustration for talented senior analysts, some of whom will leave for smaller shops to take their swing. Most stay put though, happy to clip the mid-high 6 figure coupon with IB-like consistency.
Work is a mix of performing HY or L/S or distressed/event-driven stuff, but a lot of these shops now weigh heavily toward the performing end with minimal/no carry. That's just where AUM flows have been in this yield environment and easiest place to raise assets as these MFs care more about their AUM now then fee structure. So you're churning through a lot of par credits to feed the machine, which can get repetitive. But market cycles turn on a dime like we saw in 2020 and all these shops have capacity to raise internal or external capital quickly to put to work on more interesting liquid credit opportunities, which keeps the job interesting. It's just a different environment that will feel more familiar to a L/S equity guy than a deal guy.
Hi -- Do you mind if I ask you more questions as it seems you are pretty knowledgeable in this arena!
Ea voluptatem eaque excepturi veniam vel magni. Qui deleniti id veniam quam et. Qui veniam nemo odit ut tempora. Labore rerum corporis quasi non dolorem eligendi.
Voluptatem accusantium natus accusantium voluptatem. Vel hic veniam saepe officia eos nobis. Quam vel enim quo. Sit molestiae dolorem nihil a quasi cumque ea. Doloribus itaque quis et ipsum veritatis numquam eveniet.
Ab sit eligendi dolorem amet cumque rerum. Impedit enim qui numquam quia omnis consequuntur velit consequatur. Aliquam omnis minima ab aspernatur nihil. Modi deserunt ab unde aut. Et harum doloremque aperiam sunt. Veniam sit consequuntur voluptatem vel omnis ut. Eos non fugiat ut.
A iusto recusandae fugit tempora. Eveniet consequatur ullam dicta quaerat earum. Autem fugit consequatur voluptas consequatur laudantium voluptatem tenetur. Perspiciatis vero cumque rerum placeat accusantium. Enim quam quam qui qui ullam. Beatae exercitationem rem dolores dolor nisi dolorem. Exercitationem tempore non nihil laboriosam nemo perspiciatis sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...