Mid-Tier RX IB vs Top RX Consulting vs MM Distressed Credit?
Hi all,
Curious to hear people's overall thoughts on working at a top RX consulting firm (Alix/FTI/A&M) versus a mid-tier RX investment bank (Greenhill, Ducera, Jefferies, Guggenheim) versus a middle market distressed-focused credit firm (~$1bn in investments)?
Obviously don't have much info on the distressed credit firm but would be great to hear everyone's thoughts overall on the opportunities including comp, exits, hours, and anything else people may have insight on? Don't really have long-term goals planned out yet but probably looking to go to a top distressed PE/HF at some point.
bump
Mid-tier RX > Consulting RX > Credit fund
Any specific reasoning you’d like to share?
The hours and comp will be greater in RX IB vs RX consulting. In IB you charge fees (%) and collect fat bonus check and in consulting the work is billable by the hour. This is discussed elsewhere on WSO, if you want further detail.
The nature of the job/work performed between IB and consulting has some overlap. Broadly speaking, RX IB is providing capital structure solutions to distressed companies while in RX consulting, as you're on site with the client/management to literally turnaround the business, there's more of an operational tilt. This of course all depends on whether you're doing debtor or creditor side work. You'll need to check the deal flow of the firm/team to confirm what side they primarily work on.
As discussed elsewhere on this side, the path of least resistance to the buy side (PE/HF) is generally to do IB. However, since you state you'd like to go to a top distressed PE/HF, you need to look at past exits for those mid-tier RX IB firms. Personally, I cannot provide much input here. From what I gather, working at a "prestigious" firm leads to a "prestigous" exit offer to the glorious buy side.
If you already have a buy side offer perhaps that might be the best choice? Though, I would due diligence that opportunity as best as possible, such as speaking with former employees of the firm. Perhaps they are a small, nimble, distressed credit fund with great performance? Difficult to tell.
Super helpful. The comp will be higher at the RX IB vs RX Consulting & MM Distressed Credit so I'm also wondering why go to the sell-side at all if I'll just be taking a paycut in 2 years? If I jump straight to buy-side I could probably exit to better buy-side firms provided the exits at the Distressed Credit firm are good. Just some open-ended questions I'm considering.
I can't comment to the ease of moving upstream from a small boutique to a more well known distressed fund. I don't know how easy or difficult that would be. I'd imagine its very difficult nonethless.
If you're coming out of undergrad, don't focus on compensation. The differential is huge at the junior level. Focus on the learning opportunity and where that may lead/doors it may open. Again, heavily due diligence the buy side firm. If it's a medicore opportunity then I'd lean toward IB (the well trodden path).
Just wanted to say I absolutely agree with the other intern. I recruited RX last year and am headed to an RX boutique. Some of those mid tier boutiques you mentioned are great. Especially Greenhill RX-they've had incredible growth and they get on great mandates. Not easy to land that job either. Gugg/Millstein, Ducera are also good shops. You can't really compare a 'mid tier RX shop' to a 'mid tier M&A shop' just because RX is so much smaller to the point where many of the top/middle shops get on the same deals. Also the groups are small and do a lot of good work no matter where you go. This isn't true of M&A shops. "Mid Tier" RX is still really good and absolutely not easy to land.You'll get a better experience at the RX shops you mentioned. I recruited at most of them and they're definitely great with super smart people. Doing the consulting would make it a bit harder to transition into other distressed/rx roles and I am not sure if you'll get the same technical experience and understanding there (but they are great places). If you're going to a $1B distressed credit shop, it's probably shitty (though there are exceptions) and has people who aren't the brightest. In distress, it's best to start off at an RX group where you'll actually get a proper training program and good intro to the industry. That won't happen at a $1B shop. I recruited at a ~$4-5B distressed shop and I could tell that those people were not as bright as GHL/Ducera RX and that you wouldn't learn as much there. Good luck.
Definitely the credit fund or RX bank is superior if you want to go into an investing role
I know multiple RX bankers who have worked on the buyside and come back to banking because the pay is better.
Rx is generally a small world. You can’t really go wrong with any of the “mid-tier” shops as you mentioned. If you look at the top MDs, they generally all move around so it’s not like leadership is lacking at any of these places.
$1B AUM is sizable. Do they do distress for control? Privately negotiated deals? More liquid/tradeable credits? What's the fundraising history? Target IRR? Most folks from RX world? I'd say in terms of difficulty, $1B distress buyside is prob harder to land than Greenhill RX. The work is probably more interesting too. RX IB is great training if youre coming out of college, so is consulting (depending on where; the line gets blurry on lender advisory work btwn consulting vs IB). Both are hard to land, esp during the past few yrs. But distress buyside $1B AUM prob beats a Greenhill or Gugg RX gig.
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