I've been a frequent reader of WSO for the past few years and I thought it might be helpful to anyone interested in a similar career path as mine. I definitely gleaned a lot from others here so hopefully I can answer some questions people might have. Background: 2nd Year Research Analyst at a top 5 event-driven/special situations hedge fund focused on stressed/distressed and catalyst-oriented/situational opportunities (restructurings, bankruptcies, spin-offs, etc.) in both public and private securities across the capital structure. Joined directly out of undergrad from a "non-target" school. Previously was a summer analyst at a BB in Structured Credit Trading and also at a $8B+ buyout fund in NYC. Declined my offer at the BB I was a SA at and almost graduated without a job as a result. By some stroke of divine intervention and some hard work, landed my dream job and haven't looked back since (sounds corny I know.) Happy to answer any questions.
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I am curious - since I've always had a Buffett "value" approach to investing - what do you look for when looking at distressed investments? I worked for a portfolio manager back in college, and he loved distressed investing, which I didn't and still don't understand. His philosophy was there was always something big right around the corner, and his investment style was swinging for the fences (failed on a lot of investments but hit the homerun every once in awhile that somehow averaged out returns. I'm curious as to what you look for in those investments - is it just high probability of funding, and hence payout? Stock issuance? (on another note, I find it crazy interesting that managers (CEOs, et al) are more reluctant to issue stock when their company is distressed because either they own a lot of stock or they have that mindset that "it was x% higher just one month ago!" yet their reluctance doesn't help their course into bankruptcy.
Sorry if I didn't make sense there. I'm a few whiskeys in and speaking out of my ass.
Lol, most distressed companies can't issue stock because they are distressed. What fucking idiot would buy equity if bonds are at 60.
Not that this is my AMA, but what we do is try to identify the problem and see if there is a feasible solution. Is it a bad business? Then don't invest. Is the company just capital-starved? Then give it money on terms favorable to you. Poor management? Kick them out. Bad balance sheet? Bring them a restructuring plan to fix it. Etc... (and usually a combination of some of those)
Was debating whether or not to comment on this, but here it goes. Congrats on landing where you are - seems like you worked your ass off to get there so good to see that. Just a word of advice though - try to not come off as as much of a douche. Realize that you know a lot less that you think you do, and to always stay humble in this industry. Your posts read like a frat bro made some final edits to a marketing deck. Here's to hoping you aren't the non target kid with a very similar background that's at my fund.