Quick question distress
Senior at H/W/S. Finished summer at C/B, did not get the return. Realised I’m more interested in credit.
Which credit hedge funds hire out of undergrad for distressed credit / special situations / flexible mandate across cap structure ?
Based on the most helpful WSO content, here are some credit hedge funds that are known to hire undergraduates for distressed credit, special situations, or flexible mandates across the capital structure:
KKR Special Situations Group: Known for its exclusivity, often targeting top-tier schools like Harvard. They focus more on PE-type sponsor deals and rescue financing rather than public distressed credit.
Silver Point Capital: They have a reputation for hiring high-caliber candidates, often from Wharton and other top schools. Their process may not always be heavily distressed credit-focused but is still a strong option.
Blackstone GSO (now part of Blackstone Credit): While they don’t frequently hire undergraduates, they do place incoming analysts into groups like Customized Credit Strategies (CCS), which invests in leveraged loans, high-yield bonds, and equity tranches.
Barings LLC: Offers summer internships and two-year analyst programs across private credit, public debt, real estate, and private equity. They are a growing name in the credit space.
Apollo Global Management: Known for its expertise in distressed and opportunistic credit. They occasionally hire undergraduates, especially those with strong academic and internship backgrounds.
Oaktree Capital Management: A leader in distressed debt and special situations. While they typically prefer candidates with some experience, exceptional undergraduates may have a shot.
Canyon Partners: Focuses on distressed and special situations, with a flexible mandate across the capital structure. They are selective but worth exploring.
Davidson Kempner: Known for their expertise in event-driven and distressed strategies. They occasionally hire undergraduates with strong credentials.
Elliott Management: A top-tier activist and distressed fund. They are highly selective but offer opportunities for those with a strong interest in distressed investing.
Farallon Capital: Focuses on special situations and distressed opportunities globally. They are known for hiring top talent.
Tips for Breaking In:
Good luck, and remember, the credit space values analytical rigor and a strong understanding of the capital structure!
Sources: Best Credit Funds That Hire out of Undergrad, Undergraduate Opportunities - Credit Funds, Credit Hedge Fund opportunities
Very few if any I think - some of the bigger AMs credit strategies will (Oaktree, BX, KKR etc.), but can argue if they’re what you’d consider “HFs”
None of the “tier 1” HFs firms have the resource or time to train up a new grad (vs the large AMs who have scale)
I think the most well trodden path is still RX->distressed HFs if you’re serious about it
Ive heard DE Shaw and Bracebridge Capital are known to take undergrads but I don’t know how active they are in the space
There are a couple paths to a public credit hedge fund seat right out of school or shortly thereafter. Though IMO I would never hire anyone out of school…negative ROI for 5 years and can probably get better work product out of an AI for first few years (yes, I truly believe AI can and should reduce employment in sector).
That all being said, the following places are your best bet.
Hedge funds: Silverpoint, DE Shaw, Bracebridge, King Street, Goldentree. All are solid seats though silverpoint has horrendous wlb and much tougher internal advancement these days / run more like hierarchical firm vs nimble hedge fund. Rarer for last two to hire out of school but have seen happen
Diversified alt managers with PE background: APO, BX, ARE, TPG, Bain Capital, KKR, Brookfield / Oaktree, Vista, OWL. all have teams that do stressed / distressed credit in public cap structures (though many teams do public + stressed private / cap solutions). Some teams are good, some are not good by any objective measure such as Ares or Blue Owl — complete disasters and no amount of marketing at sports tournaments can cover up the discounts at which their BDCs trade to NAV. If they have gotten their par direct lending so wrong, there is no hope at all for their teams doing stressed/distressed…
Top tier traditional Long onlys that are very active in distressed: Capital Group, Fidelity, Pimco, Prudential, Franklin, Blackrock, Lord Abbott, TCW, Invesco. All are solid though cap group probably a clear notch ahead given how concentrated they run. Not sure how easy promotions are to come by but comp for guys 7-10 years in is easily in the 7 figures at cap group. All or most listed here hire undergrads in investing seats per my knowledge. it’s very easy to move over to SM or pod credit seat (if you’re good / have good reputation / build network) though not sure why you would unless can’t navigate politics / promotion path
Desk analyst at strong HY/loan/distessed desks such as Barclays GS RBC Jefferies DB Citi BofA jpm and probably few others i left out: probably best path to a buyside credit Hf seat 2-3 yrs out of school. You get to know literally everyone in the industry very fast and have the chance to show how smart/connected you are to relatively senior buyside guys nearly everyday on calls. Some desk analysts are clearly bad or socially awkward. Some clearly just work on flow credits so not very good coverage for them or learning. But for many Others they are truly amazing and could easily move to buyside if they wanted to but for whatever reason stay / advance
Tysm. Do you know what first year analyst comp looks like for DE Shaw, Bracebridge, King Street?
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