Navigating Distressed HF space and recruitment

Was in the same seat as you so happy to help.

• The headhunters to focus on for distressed HFs are Robin Judson + DSP as main priority then definitely speak to SG, SearchOne, Henkel, Amity, CPI, GoBuyside (they've done Caspian before which is also a known to takes kids out of undergrad etc.)
• On-cycle funds are typically the large megafunds you think of (Sixth Street, Oaktree, GSO, Centerbridge, etc.) but generally speaking the ideal non-two and out seats are off-cycle HFs that may end up just aligning timing wise with general recruiting your class goes through
• I went to a larger fund and I have friends at smaller funds, from Caspian to Marble Ridge to Riva Ridge. I generally think that it's better to start at a larger fund and go downstream, not too hugely dissimilar from private equity. The caveat is joining that is known to be 2-and-out as it just becomes annoying to have to recruit to another firm if you can land an ideal seat without needing to fund-hop.
• On the mega-fund vs. pure HF; there can be huge cultural differences and ways that firms are different. I'd recommend reading the below threads, #1, #2 and #3, for further info but generally speaking lower overhead / smaller investment team of pure HFs are a big advantage when you think about advancement / compensation / cultural factors
• The more actual deal experience you have, the farther you can speak to your knowledge which will go a long way with them trusting your capabilities. If you are coming into an interview with absolutely no deal experience and only pitches, i don't think you will get very far in the interview process (you shouldn't worry about this though being at RX EB)...interviews happening Jan-April your first year means you should have at least 1 or 2 deals you can succinctly speak towards as a 1st year analyst
• I never thought it was totally necessary to go balls-to-the-wall with a brand-new templated distressed credit pitch while interviewing (as a banking analyst...if you have buyside experience definitely expect to be asked about pitching a credit no-questions asked), but it was certainly necessary for you to be able to take a view on your active deal experience capital structure. A lot of times, you don't even need to pitch a credit as RX analysts are just given leeway to speak about their deal experience...and given the analyst will have private info they should be able to better articulate why a certain bond/loan in the structure may be trading rich or cheap to what you think value will be (without revealing MNPI of course...worst thing you can do to a fund is accidentally restrict them).
• With that said, me and my good friends personally did prepare a topical other credit pitch that followed the mold of long/short of a "yieldly note". The process really starts to roll when you are doing case studies for certain firms and borrow all that work to pitch to the next firm in the in-person interviews. That is hugely understated advantage of doing a broadly-targeted interview process. I remember work I did on shorting Jack Cooper secureds as a case study became immensely helpful in in-person interviews when they asked me about a credit I currently think is mispriced
• if you want to pitch, stick to a publicly traded company as then there's no public-information gap. You don't have to focus on hugely complex structures as well (i.e. I remember kids at interview at my fund getting WIN pre-Aurelius decision as a case study which sucks when you are a 23 year old trying to decipher that all)