1st Year CLO Banking

Hi folks, just looking for a bit of career advice from you all. Essentially I am starting my first year as a CLO Structurer this summer and am slightly concerned about being pigeonholed and a lack of career mobility from my current position. I did not participate in on-cycle recruiting and while many of my peers have secured jobs for after their 2 year analyst stint, I did not.

CLO Structuring is a very niche area of finance and my growing concern is that after 2 years here I will be obligated to stay in this area even though it is not my end goal (which is either more traditional investment banking or restructuring). I’m curious to hear from both people who work in CLO Structuring, or know those who have moved to different career paths from this desk and what that looks like. I’d like to take initiative and not get comfortable in my current role just to find out 2 years down the road that it’s too late to move on.

Also I would love to hear from people currently in CLO Structuring about the benefits of this team at a typical bank, where that career typically takes you, comp, etc. Any advice is much appreciated, and I don’t mean to sound ungrateful for the position I’ve been put in as I’m ecstatic to have broken into finance period, I just also want to consider my future and be on top of the ball. Thanks for any advice you can share!

4 Comments
 

Based on the most helpful WSO content, here's what you need to know about starting your career as a CLO Structurer and potential career mobility:

Career Mobility and Exit Opportunities

  • CLO Structuring Pathways:
    • You can transition to syndication, where you sell the tranches to the market.
    • Another path is moving into origination or exiting to the buy side, either via an asset manager or as a CLO investor.
    • Syndication may also be a viable path as you grow into the role after working as a structurer.

Compensation Insights

  • Compensation for CLO Structuring:
    • Analyst: $140k to $250k USD
    • Associate: $200k to $400k USD
    • VP: $250k to $600k USD

Benefits of Working in CLO Structuring

  • Analytical Role: The role is highly analytical, focusing on Excel files rather than presentations or logo rearrangement.
  • Exposure to Leveraged Loans: You get to work with leveraged loans, which are increasingly popular in LBOs due to cheaper capital costs and fewer covenants.
  • Interesting Work: If you enjoy the leveraged loan space, the work can be quite engaging as you get to look at a variety of companies.

Industry Outlook

  • Regulation Impact: Recent CLO regulations have been challenging, making managing CLOs less attractive unless the firm has a strong balance sheet.
  • Market Trends: The popularity of using bank debt in LBOs has increased, benefiting CLOs unless smothered by regulation.

Career Advice

  • Proactive Career Management: It's crucial to take initiative and not get too comfortable in your current role. Network within your firm and the industry to explore potential exit opportunities.
  • Skill Development: Focus on developing transferable skills that can be valuable in traditional investment banking or restructuring roles.

Additional Insights

  • CLO Sell Side Experience: Working on the sell side of CLOs can be rewarding and offers a different perspective compared to traditional investment banking roles.

By understanding these aspects, you can better navigate your career in CLO Structuring and plan for future transitions.

Sources: The CLO Sell Side experience, The CLO Sell Side experience, Q&A: Corporate Banking Associate, Life as a CLO Analyst + Career Progression, Unpacking Corporate Banking at Citi/BAML?

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

You haven’t even started your job yet. How do you know that you won’t enjoy ClO structuring? You can always move to other securitized products (ABS, MBS etc) or to the trading / syndicate side of things.

What type of bank are you doing CLO structuring at? I’ve personally seen folks from very niche groups at BBs still being able to move to IB but it can be quite difficult if you’re coming from a lower tier bank and then have irrelevant skill sets

 

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