Distressed Credit Experience
How do you all view being a Distressed Desk Analyst after 2 years in IB as prep for a buyside Distressed Hedge Fund? What are the Pros and Cons and how do you think this experience couples with 2 years of IB?
Based on the most helpful WSO content, transitioning from a Distressed Desk Analyst role after 2 years in IB to a buyside Distressed Hedge Fund can be a solid move, but it comes with its own set of pros and cons.
Pros:
Cons:
How It Couples with 2 Years of IB:
To maximize your chances of a successful transition, focus on building a strong understanding of distressed investing fundamentals, networking within the buyside community, and showcasing your ability to think critically about long-term investment opportunities.
Sources: Q&A: Credit hedge fund analyst at MF, former BB trader, Top firms for distressed investing. Solving for brand and deal experience more than ability to growth within the organization., https://www.wallstreetoasis.com/forum/real-estate/lets-talk-about-the-pros-and-cons-of-our-gigs-in-re-finance?customgpt=1, Q&A: Credit Analyst (Multi-Strat Credit Fund) >$5bn Fund, Distressed debt / special sits investing - On the job
Sort of see it as either/or situation between desk analyst and IBD
Don’t typically view desks analysts as the most technical, but they’ll typically develop a better feel for the market given they’re in the flow more. Problem is they typically are too stretched to spend real time on any single situation for the depth of work we’ll need, not really a fault of their own but simply a function of the seat
Whereas IBD analysts (Rx specifically) have a lot more of the technicals but almost no feel for the market
I would say we more typically prefer to hire the latter because the market feel is “easier” to teach and also develops naturally as people spend more time in the seat. So if you’ve already done an IBD stint there’s limited value to the desk analyst role given it’s not a true buy side role imo
But there are funds that more more liquid and may be fine or even see the experience as additive, but probably not the typical distressed funds
If you are good, you will have alot of shots to go to distressed hedge funds. Maybe the same as if you were in restructuring banking though some ability to "level-up" more. Just make sure you are on a desk that is enabled to take risk in addition to has reasonably good training given some places just throw you in the deep end. Also on exits, once you get to more P&L tied seats (VP+) the pay / comp differential at certain levels can smooth out in some form so you can afford to be picky on exits.
Recent exits (past 3-4 years) for distressed desk analysts I can think of include: Redwood, Apollo Opportunistic Credit, Apollo Credit, Paloma, Millennium, Citadel, King Street, Columbus Hill, Carronade, Oak Hill Advisors, Brevan Howard, Wellington, Capital Research, JPM Special Sits, Hudson Bay, Diameter, Sculptor, Jain Global, Arbour Lane, Searchlight, Goldentree, PGIM, Oaktree, Bracebridge, VR Capital, Arini, Sona, Mudrick.
Also on point above main distressed funds that I can think of that don't take distressed desk analysts include SVP Global, Silverpoint, Davidson Kempner, Monarch, Elliott, and Nut Tree. Though in fairness the last two don't really take people without buyside experience either.
Any thoughts on Attestor or Angelo Gordon?
Believe both are open to desk analysts - Attestor used to have quite a few DB guys before the Fidera spin out, though I think most people who go there have buyside experience. Angelo Gordon includes wanting experience from either desk analyst seats or buyside for their Europe positions.
https://www.linkedin.com/jobs/view/4330541019/?refId=8QyXhXcaW%2FBI2kEc…
I agree with what you said but just to be clear, I was responding specifically to the question that OP posed which is tacking on desk analyst stint after having done IB, or in other words, for a relatively “junior” individual
There are tons of former senior desk analysts all over the street in various buy side shops that have done extremely well, and several at funds they’ve started themselves, so it’s definitely a well trodden path
But as a relatively “junior” person, which the question is addressing, I don’t necessarily see any role they wouldn’t already be able to at least get a look at with just the Rx experience (or just desk analyst experience). Basically, the two roles are not natural compounders in my view and the latter doesn’t always get viewed as buyside experience especially if you’re in a junior / non risk taking role
thanks for the thoughtful answers. to be clear I am not in a RX group. I am in a regular coverage IB group so want to get more technical experience in distressed debt as I haven't been super technically savvy in the interviews I have had for buyside firms (been studying on my own but am in a sweaty ib group so honestly don't have much time to study). I was considering moving to maybe a third year in Lev Fin and then maybe a couple years on distressed desk to really milk the sell side and learn as much as I can / make solid connections before hopping to a distressed HF. Lmk if you have any further thoughts - appreciate it
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