Different RX Exits

I’m a first year RX analyst that signed an offer to join a distressed shop during on-cycle. You’ll get looks at both traditional PE (albeit skewed to more value-oriented funds) and distress / SS shops if your group has good dealflow and historical placements. RX analysts are top candidates for distress / ss funds emphasizing illiquid / primary investments (Oaktree, HPS, Apollo HV, etc), and you’ll be in the preferred candidate pool alongside distressed / HY trading analysts for liquid credit roles (Diameter, Silver Point Public, Apollo Opportunistic, etc). The tendency to exit to credit roles is mainly due to 1) self selection and 2) HHs wanting to pin you to a specific mandate to make their jobs easier. If you recruit for PE, you’ll have to commit to it with HHs and you’ll have less of an edge in recruiting compared to M&A analysts (i.e., candidates at top rx groups may be more technically sound on average, but there’s still a lot of value in having repetitions of multiple structured sale processes with sponsor counterparties). PE exits for rx people in my class and prior years include Apollo, Centerbridge, Ares, and Sycamore to name a few.

Comp ranges anywhere from $270-400 all in, and distress / SS seats generally match UMM / MF PE comp. It’s hard to put a definitive number on comp since it’s case by case but there’s threads on specific shops you can dig through. 

For WLB I’d argue it would be an exception to the rule to find UMM / MF PE or distress / SS shops with good WLB. It’s a competitive space with type A people, but that’s not to say every place is a sweatshop. Again, hard to generalize. Public seats may have more predictable hours since you’re tied to the market rather than deals and inevitable deal sprints, but Silver Point and Diameter for instance wouldn’t be considered to have good WLB. 
 

Long-term career is the hardest to pin down, and there’s pros and cons to both. I’d argue that being in distress / SS gives you a specialized and valuable skill set that you can apply to HY credit and even public equities to an extent, but the distress / SS investable universe will be structurally small (and much, much smaller than PE’s) and the industry is very cyclical (see ZIRP). PE is arguably crowded but for good reason - it’s an asset class that nobody really sees going away, only growing. You’ll also build skills that can prepare you to operate businesses, become a sector specialist, slice and dice data, and identify key drivers which can be helpful for public equities. Ultimately the question comes down to what you find more interesting - right side of the balance sheet, understanding credit documents, and structuring downside protection; or left side of the balance sheet, effectuating strategic changes, and identifying and executing operational improvements.

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