M7 -> RX?
Hi all!
Seeking advice from some monkeys wiser than me.
I spent 2 years in MM IB -> 2 years in PE and start at an M7 this week.
Honestly, I didn’t quite fall in love with PE the way I thought I would, and so far, at least at this level, banking pay still seems to whoop PE. I know that tends to change at the senior levels.
I’m not quite ready to move to corp dev, or fang, strategy…. The things that I know will give me less pay, but more free time to enjoy life, spend time with my girlfriend, etc.
I’m still younger and have some fire in my belly to keep going while I feel this energy. For that reason I’ve been looking a lot into restructuring. While I know a lot of people say it’s glorified…. And you’re just reading through debt documents, the work genuinely seems fascinating to me, and I would get to keep IB comp. I also genuinely love the idea of trying to help debtors / creditors out of extremely complex situations.
My school sends a ton of peeps to BBs / EBs.
I really would like to gun directly for an RX role at an EB. Would appreciate tips from anyone who has done this before. Also to those actually in RX or with experience in the area, do(did) you like what you do? What was it actually like?
Did M7 -> RX banking. At my school (one of the 4/5 schools known for IB recruiting), we were encouraged to choose between M&A and RX for a given bank early on in the process. Pretty similar recruiting process relative to regular way banking other than the additional technical prep required.
My approach was to talk to the RX groups at the banks with a good reputation in the space, while also casting a wide net with other groups at banks where RX was not an option. I would advise against exclusively talking to RX groups if you are open to IB in general, as there are limited spots and I’ve seen people strike out with this approach.
Lastly, get involved with your school’s credit / RX career group if one exists.
This was very helpful thank you. I really would like RX as I’ve already done M&A and want to try something new. Hell, I’d prob even do levfin. How has the role been since? Do you like it? Are you happy you chose RX? Assuming the WLB is similar to M&A. Congrats btw.
Changed my title since it hadn’t been updated in awhile. I enjoy the work a lot, find it a bit more varied and interesting than some of the other groups / products and the generalist aspect appeals to me.
The WLB will be group / office / deal dependent to an extent, although would say it’s comparable on average to M&A (although picks up at different times in the cycle).
Re: technical prep, Moyer is the best resource, and there is an HL DM&A case study that floats around as well. This is where your school’s RX group can help, as they may have a question bank they can share.
Also what was your approach to technical prep for RX? For regular M&A I just used the BIWS guide.
I lead the RX prep group at my low-target school. #1 tip I have is to read the guides on restructuringinterviews .com (wouldn't let me post a link). Those are great for navigating whether you actually will enjoy the daily work in RX and will help you truly understand RX from a basic level. After you read those, Moyer's is such a great read. That being said, there are a few chapters that are not necessary for RX recruiting (think the chapter over distressed investing arbitrage opportunities).
Seen lots of undergrads recently getting lured into doing RX just bc the current interest rate environment means there will be deal flow there for the next couple of years. Realistically, the market could shift back to favoring M&A deal flow by the time you start full-time. Do it bc you want to explore distressed debt or work on complex, unique deals. Best of luck!
Why not explore other buy-side opportunities? Direct lending/PC roles at some firms offer much more comfortable working conditions and better work-life balance. At my current firm, the hours are quite favorable (9am - 6/7pm, given slower deal flow this year), and even the demanding periods are significantly milder compared to investment banking.
The compensation is also attractive; I'm projected to earn 300k in my first year, with the potential for a larger bonus.
Oh wow. That’s actually extremely dope. Didn’t think about that. Are you at a firm like an ares? Is it common to get a credit offer out of b school?
Yes, a firm similar in type to Ares (Antares/Golub). I'm not entirely certain about their openness to associates post business school, but I don't foresee any potential issues, especially considering you have two years of PE experience. I would assume that you would be a competitive candidate (you might want to inquire further since I'm not highly acquainted with the subject).
Would you recommend any specific materials to prep for such a role?
My interview was for an associate role, and it was off-cycle, so it might be somewhat different from what you might encounter. Let me get back to you when I'm home later, and I can send you the case I received, my work, some materials a friend of mine shared, and some older documents from my drive.
I’ll pm you.
I know someone that did an MBA at Columbia, didn't have any IB background and was able to secure an RX role at a top tier shop. Check if your school has a restructuring club. If you want RX, start reading RX books (there is one out there that is considered the RX bible). Your back-ground should definitely give you an advantage for breaking into this space.
Thank you very much! Really helpful. Someone else might have also dropped the book / case you’re referring to above. I appreciate it.
Former MBA to RX associate here. If you’re decent at interviews, you should have no problem getting an RX seat with your background. You really don’t need any RX experience, but I think RX tended to have more people with finance or law backgrounds.
My advice would be to make clear that you’re looking to do RX with all of the EBs that have a group, and get involved with the RX and banking clubs at your school. The clubs should be able to guide you through the process. I’d also advise recruiting at other banks that don’t do RX as a backup. I only applied to RX shops, and while I was successful, the process was too close for comfort. There are some spots for laterals at the end of the summer, and if you’re set on RX, the best place to lateral from is another bank.
As for the work, I have mixed feelings. I think if you research distressed stuff, and you like that, you’ll find that you enjoy some aspects of the work. Looking at weird transactions is cool and there’s an interesting mix of finance and law that you’ll get into at the associate level (most RX groups have associates doing work on the docs and the model). At the end of the day, it’s banking, so if you didn’t like banking before biz school, you’re probably not going to like RX banking. I’m not sure I know anyone in my old group who isn’t looking for a way out although exit opps at the associate level in RX are fine. I’m sure none of this surprises you, but it does merit mentioning: most people hate banking which includes RX.
Feel free to ask away.
That was a very solid, informed and honest response. I really appreciate it. I see you’re a certified PE professional. Did you move over to buy out / distressed credit kinda work? I noticed another user above talked about moving into credit and that also sounds fascinating. Like you said the answer doesn’t surprise me haha. We all know banking sucks, but we all know why we do it. Are you comfortable with me asking RX assoc comp range? No need to give exact numbers. Sure they’re inline with M&A.
I moved out to infra PE, but you can do a lot of the same stuff as the analysts (you just have fewer shops that are open to less traditional backgrounds). That would include buyout, distressed credit, private credit etc. I’m not sure if it’s changed, but I thought street base was (starting at stub) 180, 200, 225, 250? Then I think stub bonus is like 60-80? And then bonus is 80-100% of your base. All of this is obviously group and year dependent.
Ultimately, banking got me where I needed to be, but, for you, I’d just think about what banking is getting you. Given that the vast majority of associates leave, what’s your exit plan and why wouldn’t you just try doing that straight from b school given you’ve got banking and PE experience. You don’t have to answer me (a random dude on the internet), but I’d just think hard about it because if you didn’t like PE or banking before, biz school might be the right time to reset.
I can offer a different perspective. I'm on the credit side (buyside) and dabble in distressed from time to time and have used several restructuring banks and been though multiple pitches. I also have a couple friends at the director/md level on the restructuring banking side. First of all, I'd imagine you will be able to get a seat given your background. Restructuring are interesting and there is definitely an intersection of law/finance/negotiating/strategy. That said, theses processes typically aren't some crazy puzzle that needs to be solved with tons of creative solutions, certainly not from the bankers. Its not like the bankers are thinking of unique situations that someone on the credit side hasn't seen before. For the legal side and docs, I haven't been in a banking seat but I'd imagine a lot of the real doc analysis is by the law firms. Yes you will read the doc and yes you will know what to look for but attorneys are still involved and doing the real legal analysis. Really, if anything, the law firms have much greater influence in terms of strategy and negotiation than the bankers. In my experience, the rx bankers primary role is to act as a liaison between the company and the creditors. They will get to do deeper diligence than the creditors so they aren't restricted/wall cross (ie can't trade bc have nonpublic info) with access to management and relay that info to creditors (eg giving updates on segment performance and outlook). Sometimes the bankers will look for new money providers. I haven't seen the perspective from the company side, but I'd imagine the sponsor is really driving the process/strategy. Long story short, its certainly interesting but I think there is a bit of over glamorization. Also, unlike a coverage banker or even M&A/levfin banker, restructuring is so lumpy in terms of deal flow. Its also often extremely time sensitive and high pressure, so its probably a very intense work environment when on a live deal. Probably more so than other parts of banking being in a top group is highly critical to get good engagements.
I think it would be great experience and could open doors to special sit funds, credit funds, etc. If you wanted to be a career banker, rx is likely more brutal from a wlb perspective and overall stress than other banking. Just trying to flag these points so you can make a more informed decision. Good luck.
You have it wrong. The bankers will typically look through the credit docs with a view to come up with strategic solutions and then the lawyers will do the legal diligence to confirm its possible.
Sure, there are lawyers who have the ability or interest to do the analysis as well but that is not their primary role in restructuring.
I work in distressed credit and am a former Rx banker
I am certainly not going to disagree with what you have experienced; however, I am someone in a similar seat and that is my experience. In the restructurings I've worked on, the bankers have done what I've outlined. Of course that is not to say that that is always the case. There are likely times that you outlined as well where there is a greater demand for analysis/creativity. This isn't a right or wrong, if anything it highlights the range of experiences in the banking seat. Given that you're now in a distressed credit seat, I'm sure you can attest, the investors aren't really relying on the bankers as you clearly have a view of what you want to do and if anything are more informed than the bankers. This is not a knock on the bankers, the role serves a purpose. Also, I was likely not clear/you didn't understand what I was saying in terms of strategy - I was speaking legal strategy and negotiating tactics, certainly not the underlying financial analysis.
Thanks so much for taking the time to type this out. This was beyond informative and gave me a better idea of the actual work!
Yea, no problem. To be clear, this is just what I've experienced. I'm sure there is a wide range and I'm only painting part of the picture. Get as many different perspectives as possible and that should ideally give you a more complete view.
In a similar position to you at a MM bank, did you do 2 years in MM PE? Or UMM/MF? The post is incredibly insightful
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