HL/PJT RX vs Apollo/Ares/BX (Direct Lending) – London
Hi Monkeys,
I have a summer offer from both RX and Direct Lending and don’t know which to choose. From what I understand, conversion chances at both are similar.
Thematically, I find RX more interesting and, long-term, I’d like to work at a distressed fund. However, I think the hours in DL will be more manageable, and there’s less exit pressure.
DL seems like a great option since it’s already buy-side and offers a more sustainable lifestyle, but I’m not sure if it’s the best platform for getting into special sits/distressed later on. However, I’ve also heard that people in RX in general see DL as an exit. I’m worried that by choosing DL now I might be closing off the more “classic” distressed exits that RX places into.
Thanks!
Sort of two interesting dynamics at play, and I can give you a sense of what goes through my head when looking at candidates when hiring for our fund (distressed)
I’ll start out by saying that I think the RX seat is more valuable IF you want to eventually do distressed (though full disclosure, that is my background so may not be a view shared by everyone)
I have generally found that kids coming from a RX seat are more technical and well versed in the things we care about. They tend to get in a lot more “reps”, and have experience dealing with both sponsors and funds in tough restructuring situation in their day to day mandates, which better prepares them for distressed seats. Most importantly, we know these places work them hard and people who survive and thrive tend not only be smart (enough) but give enough of a shit about their jobs to try. That aptitude and desire to be better is incredibly important and weirdly hard to find.
With that being said, buy side experience and “years” is important. Learning how to invest and how to assess whether a situation is interesting as an investment is an important skill and takes time in the buy side. But not all experience are equal, and we know that the rigour and type of underwriting isn’t a one for one match for what we’re looking for. PC is still an adjacent strategy to distressed so not all skills are transferable. So when we compare a 3/4 YOE guy from Ares/Apollo/BX direct lending (not special sits), to me they’re only marginally more valuable than a 1/2 YOE on the buy side who first did a stint at HL/PJT. I would also say as the YOE increases, the advantage of the YOE also diminishes. We’re also worried about people building the wrong habits from different strategies that may take time to unlearn. Of course all these things don’t apply to everyone, there are smart people in every type of seat, so this is just meant to be a summary of my presumptions when flicking through profiles.
I do think if you’d like to do distressed, starting with RX is much easier as that’s a much more natural narrative when you’re interviewing than when you’re pivoting from PC/DL. Careers are long and your priorities and what you want out of life can and will certainly change once you start working. Many of my buddies from my banking days ended up in PC specifically because they wanted better work life balance, but I’ve seen far fewer go the other direction.
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Ignore heading: incoming A1 in IBD.
For God's sake do not start on the private side unless you are extremely confident you will survive.
Always go for the IBD side first i.e. the HL / PJT and then move over once you have some experience.
Look I get the fascination behind buy-side but if it doesn't work out, it'll be difficult to get up and resume your career. I've seen it tens of times, people starting in buy side and it simply does not end well a lot of the time.
curious what u mean when u say things 'don't end well'. do these people you know end up getting fired? burnt out? would be cool to get some clarification
Bump on the above - what exactly might end up badly? If you start in IB only to exit one day to the buyside, why not start on the buyside immediately?
From those who I know who worked on the buy-side, they couldn't break into sell-side as easily if they left the buy-side firm.
From what I know, pay was lower than a lateral and the politics of the firm favoured incoming laterals instead.
Think you’re being way too absolutist about the negatives of starting from the buy side
In a vacuum, I think it’s a great option. The point I was trying to make (maybe not well enough) is that you could get pigeonholed, especially if you have ambitious to move up the risk curve
I think roles are pretty fluid across buy side / sell side, it’s just a matter of how well you’re positioning yourself (or how much of a uphill battle you may start with)
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