Thoughts on Diameter, Farallon?

Question

Anyone have any insights into Diameter & Farallon. I know Diameter is credit focused, but how active are they in the distressed/event driven space? Any equity stuff or pure credit? $5-6bn AUM I think

I know Farallon runs a bunch of different strategies from distressed to L/S to risk arb, but it's not a MM right? Also it's in SF. 11 figure AUM-

Would appreciate any info on comp (@ junior levels + how it scales at a more senior role) and investment strategy/style

BankCredit993 · Accepted Answer

Both are solid shops. Diameter has absolutely crushed it performance-wise since inception. It's grown from $1bn to $6bn total ($1bn drawdown fund) within 4 years. Culture is tough i've heard. You work a ton, and you're also underpaid. But great name and experience to have on the resume. Lots of churn at the junior levels it seems. They're like your typical credit hedge fund. They run market neutral and so have a ton of CDS and shorts which you won't find in most traditional distressed shops. They trade much more than your typical distressed shop.

Lead Left · Answer

In my analyst class, the MM loan to own crap at SVP and Oaktree SS was much more sought after than places more focused on trading like Diameter or Anchorage, but to each their own...

This is generally because most IB analysts looking for bayside have no real intention of thinking like an investor. If you focused on making money and thinking outside the box, Diameter et al is the best seat where you can try yourself. The reality is most banking monkeys are just trained to work long hours and do whatever is asked.

BankCredit993 · Answer

Yep so Anchorage and KS for example have had mediocre, frankly bad, returns for the last 7 years. And as I mentioned York and BlueMountain have had to call it quits. I think comp is still pretty good though there.

Anchorage does have those titles but it's much flatter than Centerbridge. You have the titles but there are no 'deal teams', it's not like you're working for a VP, Director, MD chain of command. You're functionally either an analyst or a PM. You can be an MD and be a research analyst.

latitude4310 · Answer

This is ironic because the true HF types are generally much better seats, certainly at the mid and senior levels at least. The loan to own shops are essentially MM private equity, with rigid team structures, heavy diligence / investment cmte processes, and less flexibility in terms of mandate. As a junior you’re generally the model/memo monkey on a large deal team with less input into shaping the trade thesis or driving a restructuring process, and less ability to point to a direct P&L contribution.

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Thoughts on Diameter, Farallon?

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