Choosing RX over M&A -- anyone recommend this?
I realize that just because RX will most likely be busier than M&A over the next 6 months, that's not a reason to choose RX as a career path... but do some of you think there are reasons that RX is, in general, a more attractive career path than M&A?
Also, if one is doing an M&A internship this summer but might want to transition to RX, is this a seamless transition with respect to recruiting for a FT RX job? Or will RX groups want to see that you have modeling skills/experiences that are specific to RX?
From what I’ve heard, Rx works seems less repetitive than M&A and more complex due to the number of different outcomes and parties involved. No first hand experience in it though. Hopefully some generalists out there can give a better answer!
Thanks. Yeah, when you say "more complex," that's what I had heard... which is why I was wondering if you needed to demonstrate certain skills/experiences when interviewing for a position in RX.
Do what you are interested in
Yeah, I hear you. But having done neither, it's tough to determine what I'll find more interesting. That's why I'm trying to gather info/opinions from those who are actually in those fields, or have been in them in the past.
Sounds like a mixed M&A/Rx program would be great for you!
I’ve only heard positive things from RX bankers aside from occasionally getting swamped. Good but also mixed reviews for M&A
Hmm... thanks.
less spots in rx, recruit first and then ask
Got it, thanks!
Could they potentially hire more in the current environment?
In a similar situation, Have a SA at BB (GS/MS/JPM). Interested in Rx (not just due to current situation) but did not get to interview last rounds with the firm that is strong in Rx due to exploding offer and figured the "Bird in hand is better than two in the bush".
Best way to go about recruiting for RX without annoying current BB and group?
Exact same position, also curious. Will there be more FT spots or will it just be infinitely more competitive?
I do both M&A and Rx. when working with Rx team, I have the perception the clients give you more credibility as they are going through something they never (almost) experienced before. furthermore, it’s more technical than M&A and the analysis you run are more concrete and less “let’s massage the wacc so we get +10% in the DCF”. having said that, M&A trains you in a great way too, especially during sell side mandates. overall, i believe at jr level they are pretty similar and you should go with the best team in term of exit ops
Thanks, helpful.
But if you had to choose one, just based on the actual work... is there a clear favorite for you?
for everyone’s edification - what are the types of analysis/more technical aspects of RX modeling during a process? most people know of M&A accretion/dilution models etc. but RX modeling and analysis is much less talked about
No two restructuring processes are the same. From my understanding, the more technical aspects of modeling include parsing through term sheets in ensuring adequate consideration of covenants as well as sensitizing the company's capital structure for various adjustments. Specific care and focus will be spent in assessing the prevalence of maturity walls, the company's liquidity, and the various interests of creditors.
Every assumption you make will potentially be brought up in court for your MD to justify/defend. Brings a new level of scrutiny to your modeling, instead of an M&A process where it is often not questioned/analyzed on the same level.
I work at one of the firms mentioned below that's generalist between RX and M&A, and I can tell you firsthand, I HATE RX. I absolutely dread getting staffed on RX projects. Don't think RX is more technical quantitatively, it's more technical in terms of reading legal docs. You'll also make a ton of cap tables (not hard). Yes every RX is different but so is every M&A deal imo, especially if you only work for 2-3 years on the sell side. Just my opinion. RX is not for everyone but some people do really like it
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Cool. Thanks for the input.
Can anyone explain how you actually recruit for RX? I know it's kind of a stupid question, but when I was recruiting for SA I felt like I was just generally recruiting for 'banking' and I ended up doing all my interviews with M&A teams. Do these places post different jobs for RX? Did I miss something when filling out apps on all my portals? I feel like I was just shoved into M&A rather than actually choosing it
You have to recruit separately for RX team at HL, Evercore, Greenhill, Gugg etc
Moelis and PWP have generalist program, so if you go there you'll get both M&A and RX exposure
Lazard from what I heard has generalist internship then you get placed for FT
I've only done 1 RX deal, but it was very interesting. Sell side can be repetitive for some, but I love it. I think if you're more interested in how markets operate (i.e interest rates) than RX may be a better fit. I've talked to some analyst at HL and they made the switch form CF to RX and love it. A lot of rules are involved, but definitely interests people. Also, you don't really have to worry about the deal falling apart, RX deals need to get done in a set amount of time ordered by a judge. There is also distressed M&A in RX if M&A is still of interest to you
Evidently work can be seen as more interesting to some people, but also a more specific/niche field. At the end of the day it's down to what you value - will an EB RX gig get you that top PE exit that you wanted? Possibly, but it's gonna be harder than a top M&A group, where your optionality set is much bigger.
disagree with your conclusion. EB RX gigs give you more optionality in opening up an easier path to distressed recruiting (which is doable but much harder from an M&A seat), while still giving you the same options of buyout PE, growth equity, corp dev, etc.
It is difficult to make a direct comparison for PE/non-distressed recruiting since at the end of the day, EB RX analysts self-select to distressed funds. Still, your work is intrinsically not geared toward PE sponsors, modelling and admin work for conventional acquisitions (for conventional PE recruiting). Other than PE, I think it's in general a stretch to argue a RX group is at the same level of exit optionality (L/S equity HFs, corp dev, industry-specific stuff) compared with an M&A group of the same pedigree. After all, your work is geared toward a very specific product at a very specific period of a company/investor's lifecycle. Then again, there's nothing conclusive anyone can say since the dataset is skewed away from non-distressed options due to self-selecting.
agree that there's a self-selecting effect. I meant more just that from a pure optionality standpoint on what's being presented to you, my peers in RX have not found that recruiting efforts to PE, L/S, corp-dev, etc were made more difficult due to their RX background. On the other hand it's more of an uphill battle to join a distressed shop from an M&A background - not impossible, of course, but there's a strong preference for RX analysts due to the relevant background experience.
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