Leveraged Finance in Elite Boutiques (London)?

I know that EBs don't underwrite like BBs do but most of them have a Debt Advisory team where there is advisory across the capital structure including leveraged issuers and restructuring.

I've heard anecdotally that the role involves helping the company size up different loan terms from various banks and that you do actually do a fair bit of debt modelling. 

Was curious how the work and exit opps compare to BB LevFin teams that underwrite the loans? Especially with regards to exits to private credit/special situations etc.?

Thanks!

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Elite Boutiques (EBs) in London typically do not underwrite loans like Bulge Brackets (BBs) but instead focus on debt advisory. Their Debt Advisory teams provide guidance across the capital structure, including leveraged issuers and restructuring scenarios. Here's how the work and exit opportunities compare to BB Leveraged Finance (LevFin) teams:

Work at EBs:

  1. Advisory Focus: EBs concentrate on advising clients on structuring and negotiating loan terms with various lenders. This includes helping companies evaluate different financing options and terms.
  2. Debt Modelling: You can expect to engage in significant debt modelling, analyzing various capital structures and their implications for the client.
  3. Restructuring Expertise: EBs often have strong restructuring teams, which can overlap with debt advisory work, especially in distressed situations.

Comparison to BB LevFin Teams:

  1. Underwriting vs. Advisory: BB LevFin teams underwrite loans, meaning they take on the risk of holding the debt on their balance sheets. This gives them a more direct role in the financing process. In contrast, EBs act as advisors, which allows them to remain independent and avoid conflicts of interest.
  2. Deal Flow: BBs typically handle larger volumes of deals due to their underwriting capabilities, while EBs may focus on more complex or bespoke transactions.
  3. Skillset: BB LevFin analysts gain experience in underwriting and syndication processes, while EB analysts develop expertise in advisory, negotiation, and restructuring.

Exit Opportunities:

  1. Private Credit: Both BB and EB LevFin roles can lead to exits in private credit, but BB experience might be slightly more aligned due to the underwriting exposure.
  2. Special Situations: EBs, with their strong focus on restructuring and advisory, may provide better preparation for roles in special situations funds or distressed investing.
  3. Broader Buy-Side Roles: BBs might have a slight edge in terms of brand recognition and volume of deals, but EBs can offer a unique skillset that is highly valued in niche buy-side roles.

In summary, while BB LevFin teams provide underwriting experience and exposure to a high volume of deals, EBs offer a more advisory-focused role with significant debt modelling and restructuring exposure. Both paths can lead to strong exits, but the choice depends on your career goals—whether you prefer underwriting-heavy roles or advisory and restructuring expertise.

Sources: David and Goliath: The Boutique and The Bulge Bracket, David and Goliath: The Boutique and The Bulge Bracket, Elite Boutiques and Bulge Brackets, https://www.wallstreetoasis.com/forum/investment-banking/why-go-from-elite-boutique-to-bulge-bracket?customgpt=1, Debt and Structured Finance Brokerage Exit Opps

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Thanks! If I’m going to an EB for FT what’s the best way to break into PC then? Join the best group and try and prep technicals myself?

 

I think private credit (or credit investing in general) is doable from Debt Advisory positions, but most likely at smaller/ less prestigious firms. MF will usually target BB LevFin/ EB Restructuring candidates.

 

These comments are wrong. Have seen EB DA from EVR and Roths land the top PC funds (Brookfield, GIP etc)

 

Why should a serious PC in London hire H/V comps and Cap Table Merchant with underwriting skills below those at Corporate Banking.

Brookfield not in top 10 so irrelevant

 
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I am in the States but work with all the major DA teams at the EBs in New York and London. Usual exits are PC funds or buyside capital markets. You dont underwrite, but deal a lot with the Private Credit asset class. I have to admit, it is frustrating working with some of these teams because they will win the mandate (either through RX or M&A engagements) and then tell PC funds to give them a leverage read, structure and terms. We would ask for comps or pricing or structure guidance but we always get the "we are still very early on in the process." You would be better off at a BB LF platform where you do take on risk and underwrite.  

 

Thank you for the informative response. Is there any material disadvantage in the recruiting process for PC funds/MF Cap Markets coming from a DA background? Besides the fact that there is no underwriting experience.

 

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