Jumping from Buy Side to Sell Side - LevFin vs Private Credit Role
Need some advice on making a career move, I'm currently at a boutique private credit shop for 2 years now, doing very interesting special sits and direct lending deals. However, comp is pretty bad and we just aren't closing any deals at the moment, none of the deals we bring seem to close.
I believe I will have 2 offers on the table soon, so want some advice.
1st opportunity, a leverage finance role in an MM bank.
2nd opportunity, in another boutique private credit shop
Both will give a better compensation vs my current role.
Would it be wise for me to jump into the sell side levfin role and gain experience there? I like credit and special situations investing, and would eventually like jump to a private credit/ special situations mega-fund.
Based on the most helpful WSO content, both opportunities seem to offer their own unique advantages.
The leverage finance role at an MM bank could provide you with a broader view of the deal cycle, as well as exposure to the process involved in private equity, such as preparing the IM, management presentations, financing documents, and coordinating logistics. This could potentially make it easier for you to move into private equity in the future.
On the other hand, the role at the boutique private credit shop could allow you to focus more on actual investing and enhance your skills in security analysis, commercial/financial due diligence, etc. This could be beneficial if you're more interested in credit HF or distressed investing.
If you're looking at a credit fund that does direct lending and long term holds on leveraged loans, you might want to prioritize the private credit shop role. However, if you're more interested in distressed/special situations strategies, the leverage finance role could be a better fit.
Ultimately, the decision should be based on your long-term career goals and the type of experience and skills you wish to gain.
Sources:
From my understanding, if you eventually want to explore different opportunities in buy-side credit outside of just direct lending/private credit, LevFin will give you the most exposure to different types of credit deals and will leave a lot more doors open in terms of variety of opportunities when transitioning to buy-side. However, if you know for sure (which, who does really?) what you want to eventually jump to, which in your case would be special situations/opportunistic, direct experience with private credit would probably be a lot more valuable and viewed a lot better than LevFin experience. Being in LevFin/sell-side will give you a really great understanding of the process of credit deals and how these deals are structured, but you're better off being in an investment seat in the buy-side which will give you exposure to the thought process/analysis that goes into actually investing, which these buy-side/investment firms will most likely view as the more valuable experience.
From a personal standpoint I don't see why anyone would ever want to go to sell-side once they made it to buy-side, you're literally at the place everyone in the sell-side is trying to get to, why try to put yourself through that miserable lifestyle when you've already made it to the end-goal of said miserable lifestyle?
Thanks so much for your insights! Yeah, I guess something in me like the optionality of going to the sell side to open the doors to other potential roles out there. But my hours in my current firm has been really good guess there will be an adjustment if I were to jump.
Main reason why I'm entertaining jumping to the sell side is also because my current firm isn't doing too well on the fundraising end and many of the funds out there aren't hiring at the moment. Seems like a bad time and market out here in Asia with the flood of CS guys from what I heard.
Yeah, a really rough time to try to lateral somewhere else. Everywhere I know typically just hires within their firm to fill up open front office spots these days. Maybe the other boutique firm you mentioned has better luck fundraising? I'd also be very wary about job hopping too much for obvious reasons haha.
Some people like being bankers man, nothing wrong w that. Going to PE is a path, career’s aren’t linear, many folk go back to banking.
All else being equal my advice would be to take the Sell Side role. After a couple of years there you will have a well-rounded background in Credit/Lev Fin, and maybe deal flow will be better on the buy side.
Yeah after reading all the advice here, starting to lean more towards the sell side role for the depth of experience. Seeing they have a balance sheet as well I guess its also does have a buy side element to it? Seems like the only downside might be the hours but I'm still young and dont mind grinding it out a bit.
re; the 1st opportunity - does the MM bank have an actual balance sheet it can underwrite/originate deals with? Probably one of the biggest factors I would consider with making a decision here. If the MM bank does not have a balance sheet and cannot underwrite or originate debt (and is more of a "debt advisory" type levfin shop Ala piper Sandler, Baird, etc.) would for sure stay away. Even if they do have a BS, would take a look at how many deals they lead/co-lead versus just participate. Substantial difference in the experience you'll get signing onto another banks work versus leading the originating, structuring, and marketing of a deal.
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