Path to Distressed
Just getting my feet wet in this area, so forgive me if this is a simplistic question....
Looking at the major players in the distressed area, it seems like the founders of many funds started in law (Canyon, Oaktree, Aurelius, etc.), but that theme doesn't carry through to lower levels which seem to be dominated largely by people who started on the finance side.
Is this illustrative of a movement over time towards preferring those with more of a solid financial foundation?
Also curious to know.
I think when these funds were founded it was more necessary to have a legal skillset as an analyst. The people succeeding within top firms don't necessarily have a legal background by any means.
This is true.
Paul Singer of Elliott was also a lawyer btw
Like PE, everybody was still "figuring it out" in the 90s and so distressed investing was nascent and many people didn't know what the hell was going on.
Today, distressed is hyper competitive with too much capital chasing too few opportunities (the pool of companies to pick from are smaller and shittier and more existentially fucked than say Marvel Comics).
Very few if any analysts need JDs because you can learn all you need to learn about the legal side from real-time experience being a steering committee member (and working with the Wachtel, Milbank, Paul Weiss of the world as your advisor) and many big funds have dedicated legal distressed analysts who partner with the key investment team so work is not duplicative.
Unless you like wasting time or chasing degrees, it doesn't make that much sense to pursue a JD. If you were graduating in the 70s and high yield didn't exist, it kind of did. It was a first mover advantage at that point.
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