Anchorage partner recently moved to join PJT; it seems there's a handful of buyside distressed guys in my network moving back into the sellside.
Is this a result of lack of distressed opportunities vs decent deal flow? Better fee margins / pay structure? Internal politics at these funds? Better monetizing one's personal network? Any insights would be appreciated!
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Don't know anyone who made the move so can't give any first hand accounts but would imagine from a risk adjusted EV of comp perspective it makes sense to go back to RX. At the partner or even senior analyst level in a HF you'd probably be getting paid out largely on the basis of returns which have been pretty well documented on this forum to be pretty poor for distressed post GFC. Conversely, in RX you'd be getting fees solely on advising on the mandate and even though RX activity is down, there are still situations around. Also I'd imagine the firm can set up a reasonable floor for comp even if Rx activity decreases further given the level of m&a activity generating massive fees for banks as a whole (maybe there is a similar analogy on the credit HF side with setting up CLO arms and the like but plenty of ~1-4bn distressed HFs that just don't do that and basically have no path to growing AUM significantly). You also have pretty much zero risk of a boutique like PJT or EVR that does RX just no longer existing or massively downsizing vs a fund like York essentially dissolving its HF or Anchorage losing ~50% of its higher fee HF money. So I feel like unless you genuinely couldn't see yourself doing anything other than investing it seems like a rational choice for those that just want a high paying and interesting/engaging job. Would imagine major trade off for those that are indifferent to investing vs advising is just harsher lifestyle so if that's not a dealbreaker I could understand why people would jump.
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