Is Restructuring Dead Right Now?
As the title says, is restructuring dead right now? Who is gobbling up the market shares? I am joining an RX group next summer, and should I be worried about FT offers?
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Yes, you have zero chance of getting a return offer. Might as well not even go through with the internship.
It’s very slow right now in terms of new business given the extremely limited set of distressed companies out there currently
However, at the analyst / associate level you should not worry about FT spots. There is always a need for juniors to grind out profiles / marketing decks even in slow times.
also as we’ve seen over the past 18 months, the market can change quickly if there’s some sort of catalyst
how was the return rate for PJT/HL/EVR this past summer?
High, at least for PJT
High for evr believe they cut 1 of 8-10
I’ll give you $300 if you use the phrase “gobbling up market shares” in a networking call
It’s LTL management, a subsidiary recently created specifically for j&j’s talc claims (the case is ongoing)
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Lol a 18 months ago, people here were begging to get into RX groups.
Pray that JPow goes Volcker style (unlikely) and you'll have rx deals up the wazoo as we get a far worse financial crisis.
Restructuring consulting is absolutely dead
This. The lull is definitely nice though.
found the person who doesn't work at A&M where the bonuses are tied to utilization :'(
Hey, I'm joining an Rx Consulting Group full time next summer and would love to ask you a few questions if you don't mind. PM me if you are available. Thanks.
I've never been keen on PMs as I find it means people who come across the topic few months / years later don't benefit.
I can almost guarantee you're not joining my office / group so any questions I should be able (to try and) answer can be asked in public imo so feel free to post and I'll do my best.
100% I don't know why these high schoolers feel the need to privately message someone to ask a basic question
You are one year out of college and I legit said I'm joining an RX consulting group next summer but regardless I've just had people ask me to PM them when I've had questions in the past. Doesn't make a difference to me. But any insights anyone has would be appreciated.
What are your favorite and least favorite aspects of the job? I know some of your primary functions are 13 week cf models and operating models but what else is typically during any given week? And what would you say is the best way to prepare for a full time role without prior consulting experience?
Thanks!
my favourite aspect probably the modelling - something i've always liked. creating a nice model that can be easily updated, provides lots of insightful output analysis that feeds into a presentation and looks complicated enough that once built you can let it run and easily update it but people still think it takes ages, allowing you to chill ;-)
as a first year graduate out of college your tasks will most likely revolve around supporting various sections of either 13wk cf or BP. highly unlikely that you will be allowed to run with the whole thing but it depends on size of client i guess. maybe theyll let you handle a business unit or something but you will have someone to oversee and guide you for sure. you might be asked to support some high level analysis around various tasks that the senior managers / directors are doing. for example helping forecast the different cash costs of different types of financing options. again will depend on project.
i asked that question myself and was told to just relax and prepare for a tough time! but i still read some various books on operational / financial turnaround i brought from amazon. i didnt buy it myself but the fella Jeff Sands i believe has some interesting materials. Other than that try brush up on general modelling / excel / ppt work. Being quick would bevery helpful. Knowing your 3 statements would be very helpful too. you could start reading up on whatever codes are pertinent to your country (chapter 11 if youre in USA) but it wont make or break things - theyll explain it / have training sessions / wont be testing it. just for your own understanding if youre a keano.
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Can I ask which firm you are joining?
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All the summer associates in my MBA class in RX got return offers. 2 at Lazard, 1 at HL, 1 at Greenhill
poor kid going to greenhill
Booth?
Definitely Booth
how can you tell which of the m7 b schools they attend ...
lol I worked through Thanksgiving
Are you on my team?
No, it's not dead by any means. Rx is definitely at a very low point in terms of deal flow, but if you're talking about going into a good group they are going to have nonconventional stuff coming in in addition to "normal" deal flow channels.
Rx groups are also treated differently from a staffing perspective than typical M&A groups. You aren't going to see big swings in staff levels with a decline in Rx deal flow like you might in M&A groups (i.e. less layoffs, headcount reductions, etc.) because banks that have Rx groups know that it's a counterweight to their M&A side and know that Rx volume can markedly increase at the drop of a hat, and they need to be prepared for it. Plus, these groups always need Analysts coming in to keep the group composition properly structured, and Analysts are incredibly cheap and integral to maintaining the group structure. If they downsize it'll be at the senior VP level first probably.
And from a macro perspective, Rx makes most money in sudden bursts of activity with a few years having huge spikes in fees. Banks know that and are willing to fund those groups more to be prepared for those years. And given how crazy M&A markets are right now with extremely aggressive lending due to the pent up need to invest capital coming out of the pandemic, that always can give you confidence that a lot of those deals will come back to benefit Rx.
I wouldn't worry about it at all. If you're focused on making a career in Rx / distressed investing, you'll be fine.
Well maybe RX but less so distressed
Not anymore! @ the Omicron variant
Yeah dude the ligma and sugma variants may cause another wave of lockdowns. Let's hope not though
it must be a weird feeling to have bleak career perspectives when the economy is doing well, and vice versa
How can someone so bright to get into pjt restructuring ask such a silly question? Unless…you just wanted to humble brag about your offer. Well played intern.
Where did he say PJT
It’s important to bring up while there may not be that many full on chapter 11s nowadays, there is still plenty of out of court transactions and liability management
Not dead and your offer won't be impacted contingent on your performance but yes, it's less busy now. Have a lot of RX banker buddies who have great lives at the moment.
Management teams will always fuck up, equity will always get greedy, lenders will always get fucked -- there will always be RX work
human beings are always doing dumb shit, dw.
Yes, it's pretty slow right now. No, don't worry about your FT offer.
Is there expected to be any uptick in RX business in 22? I read that there is a lot of dry powder expected to be deployed over the course of next two years due to pent up demand that the focus will likely continue to be on M&A and growth instead.
Is anyone anticipating a slowdown?
Don't know when it'll happen, but there have been so many shitty deals done over the LTM that there is going to be a pick up in RX volume w/in a couple of years. Capital had to sit out for over 6 months while rates got schwacked, COVID lockdowns and markets open back up, direct lenders chasing yield by putting new money into companies that were dogs pre-COVID while their business fundamentals haven't changed. When I see par refinancings of liquidity constrained companies w/ negative Adj. EBITDA and significant cash burn, in industries that have had sustained headwinds w/ no sign of let up, w/ the kicker that some of these direct lenders are even throwing pref dollars at these trainwrecks to further chase yield (and create an absurd cash interest burden that the company will never be able to service for any extended period of time), I am not optimistic that things are going to hum along smoothly for the foreseeable future.
What do bonuses look like
Anyone know how the JEF RX team (the new PJT / EVR hires) are doing and if they have a good pipeline?
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My friend at PJT will have to work on Christmas
You'll be fine but know this.... buy-side distressed is a dead-end career path.
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