I carry very high interest in distressed investing, M&A, debt restructuring and chapter 11 bankruptcy, and want to work with firms that offer platforms to gain experience in these areas. Off late, I grabbed couple of books and spent time reading them, burning mid-night oil.
(1) Do we have any idea if Private Equity and/or Investment Banking Firms offer such platforms? How deep can we gain experience in them if we work with such firms?
(2) How about hedge funds? I heard Fund Managers invest in distressed companies.
(3) What skills are demanded to pursue a career in this arena?
(4) Where are the guys picked-up from? What's the recruitment process?
banking - go work for a restructuring group. Houlihan, BX, Miller Buckfire, Evercore,etc.
PE - oaktree, apollo (maybe 30% distressed), centerbridge, cerberus
Hedge funds - silverpoint, monarch, avenue, sankaty. Also lots of opportunistic/event driven funds like baupost/york
How does that compare to LevFin groups? Also, do you know anything about CS LevFin?
Miller Buckfire.... HAHAHAHA
There are pros and cons of Lev Fun vs. Rx and even where you do Rx. It seems like HL gets a lot of love from HFs since they do a lot of creditor work and that fits with how HFs invest. The Laz/MoCo/BX/Roth guys do more debtor work so that is more attractive to PE guys.
On the Lev Fun side its basically running the debt schedules for LBOs. The big + vs. Rx is that you don't end up in a very focused silo,you can go to general LBO or Distressed post-IB. Also in the current market there isn't a TON of bankruptcy stuff going on so your deal experience is going to be limited in an Rx group depending where you are at. Apollo and Oaktree take non-Rx analysts all the time..
MB doesn't do much in terms of volume but works on some pretty interesting deals.
The creditor/debtor side angle is often talked about but I dont think it means much, in terms of the experience you get or recruiting.The game theory aspect of restructuring forces you to put yourself in the shoes of all the parties involved, regardless of which side you are on. The company's advisor spends a lot of time thinking about the goals of the creditors, and the creditor advisers each must be thinking about what the company's goals and best actions are, as well as those of other creditor classes. As for recruiting, BX R&R is often cited as a debtor shop but has the best HF placement of any investment banking group on the street.
Deal flow isn't anywhere near 2008-2009 levels of course, but there are plenty of industries in distress. Coal, shipping, lower end retail, plus energy is starting to heat up. As much as market cycles matter, there will always be certain sectors facing challenges plus some businesses that simply for some reason or another aren't competitive. Plus there are always a handful of failed, highly-levered PE companies. Even now there are a pair of huge ones from the previous buyout boom.
As you said you definitely don't have to be in a restructuring group to end up doing distressed investing, and likewise most restructuring analysts don't end up at distressed investing shops.
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