I am deciding between a ft IB analyst position at the BB I summered at or at a small but growing HF. The firm is launching their first hedge fund that specializes in muni credit and they expect it to grow to around $1bn in time.
I understand a muni credit fund is a pretty specific area to start out your career but I really like the potential of the firm. If down the road I decide that I don't want to do munis anymore, would it be possible to switch to a corporate credit fund? I know the metrics and industry dynamics are different, but I believe I would be able to make the switch because I have worked with corporates in the past. I also believe that if you can work at a credit fund you can transition into another type of credit fund because you get the basic idea.
Am I wrong to think this? Would I be stuck in munis forever if I took that job?
Appreciate any guidance.
Interesting situation. I'd say its probably pretty hard to go from a muni fund to a corporate credit fund down the line. Maybe if you actually had meaningful corporate credit experience in the past i.e. several years, which I'm assuming you don't given you are talking about your first real full time job. No one is giving you credit of corporate credit work as an intern, especially when you are talking about potentially years from now.
Usually, I'm all about upside but given its a BB (top firm/group?) vs. a super specialized and non-sexy sector (muni) my inclination is to go with the BB. Assuming you do well, PE and HF are just a few years away and you'll have a much more blue chip resume, which definitely helps throughout your career.
I can comment on the lower end of the market, given I work with some distressed stuff:
I see it as likely if you 1) put in some hustle, 2) get relevant exposure, and 3) time your move correctly.
1) is self explanatory. Its a tough jump even with 100% relevant experience. Will need to be patient.
2) Im talking distressed. If you invested in Detroit, Puerto Rico, and intend to do something with Chicago - then credit managers will look at you. As long as there is a muni/sovereign distressed situation, and you can show that you are capable of forming an independent opinion, then you will get hired.
3) Timing is important. Now would be a great time to move given a lot of funds are trading around PR bonds. Maybe when Chicago goes under you will have another opportunity? Perhaps see if you can get sovereign exposure as well (South America has some interesting distressed situations that people are looking at as well).
Munis are WAYYYY different than corporates. Your modeling skills won't be the same and you won't develop the the same skillset
I would do IB if I were you. You know the skill set you will develop there, you are guaranteed to get the looks you want if you work hard, and you keep your options entirely open. It is obviously possible that you can lateral from muni to corporate, but why bother to take that risk? Also, you say they hope to get to $1 B over time - understand the implications of working at a small shop and take these into account (time spent fundraising, will they actually mentor you, etc).
Bottom line - is it possible to make this mind of jump? Yes. Is it worth it if toy have a BB offer on the table? I doubt it.
Full disclosure, I started on the buy side out of UG, so would like to think I gave a more unbiased opinion than some on this topic (who knows).
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