Found out for full time group placement that I’ll be in leveraged finance at my BB. I really wanted to be in coverage cause my eventual goal is PE/buyside.
Know that lev fin market is basically dead right now, so is it still seen as a good stepping stone to the buyside?
Any insight or thoughts welcome…
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If it’s BofA, yes.
OP here. It’s not BofA.
If levfin is dead then I don’t see coverage doing anything groundbreaking either
Leveraged Finance is not the traditional route for PE, most MF will not consider LevFin people for investment roles.
Reason is that LevFin people lack financial modelling and the commercial aspect you gain when working in a sector team. 99.9% of the time the LevFin team will not hold the pen on the model, it is always the sector team whilst the LevFin team only creates downside scenarios of key line items where they see if repayment of debt still meets the thresholds. You are rarely part of the value-creation aspect of businesses and therefore lack an understanding of how businesses really work and how to improve them. Everyone knows this, and therefore all the larger funds tend to recruit solely sector teams.
That being said, you can still move into buy-side roles such as direct lending. If your goal is really PE, then try and convert your summer and then try and switch to a sector team.
what about levfin groups that model? How comparable is the depth of their modeling to that of coverage groups?
Bankers also lack understanding of how businesses work :)
If your lev fin group is very strong and known to hold the model then yea traditionally they can exit into pe But with that said like the above poster coverage groups are most of the times better
Thanks. DB levfin does modeling. I like the industrials space and am deciding whether to go for levfin or industrials coverage. How would you approach it?
LevFin is one of DB's top 3 groups and top 2 groups if you aren't interested in Real Estate. DB's strongest group's exit and deal flow-wise is LF/FSG since they are primarily a sponsor-driven business. Try to get into sponsors or levfin if your goal is to maximize exit opps. However, if what you are interested in is Industrials and not in LF/FSG try to go for Industrials since you'll enjoy your time way more.
LevFin at a bank with a solid LevFin team has a good shot at PC exits, has to fight harder to get into PE from the seat. The average coverage group at most BBs tends to be better, but in some places that's not the case(BofA for example). If you are at MS or GS in particular, I would run to anywhere else: those groups don't do any modeling and really don't have great exits. Not 100% sure about the rest of the BBs so not commenting but your experiences will vary drastically based on group.
Every single pension fund is hiring in Credit
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