Private Debt to Hedge Fund
Context: am a second year associate at a MF focusing on Direct Lending across European tech / hc companies. Having always been interested in HF's and the idea of running my own book but stumbled into private credit as I got a great role post ugrad.
Now that I feel I have more or less mastered PC investing over the years, I want a new challenge and feel a strong pull towards public markets investing and in particular, event-driven or arbitrage strategies. Would it be possible for me to transition into a distressed credit hedge fund or something along those lines?
Cheers!
Hey there! Based on the most helpful WSO content, it seems like your transition from private credit to a distressed credit hedge fund could be feasible. It's not uncommon for folks to move from private credit platforms to public credit hedge funds, especially if they have a solid foundation in credit investing, as you do.
However, there might be a few extra steps you'd need to take to be a competitive candidate for a public distressed seat at a top fund. For instance, you might need to familiarize yourself with different types of credit strategies that hedge funds deal with, such as distressed, relative value, and capital structure arbitrage.
Also, keep in mind that while a credit research background could be sufficient, having experience in restructuring (RX) could give you an edge.
Lastly, it's worth noting that transitioning to a new role could come with its own set of challenges. For example, you might face difficulties or disadvantages without having an investment banking division (IBD) background.
But don't let that discourage you! With your experience and drive, you could very well make a successful transition. Good luck, and remember, every monkey has to start somewhere!
Sources: Transitioning from High-Yield/Performing Credit to Distressed HF, Q&A: Currently at a Credit Hedge Fund, Private Credit -> Public Credit Exits?, Credit Hedge Fund opportunities
yes, I also did fairly the same. Was a second (almost third year) analyst at a MM direct lending/mezzanine fund and are now working for a smaller European activist hedge fund.
I don’t see why you shouldn’t shoot your shot. Some names in the space to look into: Davidson Kempner, Farallon, King Street, Silver Point, etc.
Many mid-senior guys in Public credit are trying to figure out how to transition to private credit so I’d be very careful with your decision.
Outside of a few funds that can hide 4-7pc returns behind prestige, distressed funds are not having a great time with capital raising.
Next two years should be interesting for distressed but after that, your career prospects are probably better elsewhere.
Why only next two years?
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