Performing / Opportunistic Credit fund vs. LevFin at an IB?
Have an offer in hand for a performing / opportunistic private credit fund in NY that invests throughout the whole capital structure (senior, mezz, and equity) that looks at healthy companies as well as stressed investments. Role would be deal execution as an analyst on the investment team. Also have an offer at a LevFin group at a mid-tier BB. Which would provide me more optionality down the road? Potential interests would be special situations distressed private equity / credit (loan to own)
Take the private credit fund. Sounds like a great role.
Could I PM you?
Thanks for the advice! And yeah for sure
Depends on BB. I think CS/BarCap would be worth considering over the credit fund since they place very well to buyside across private equity/credit/distressed. other mid-BB LevFin teams don't really model, so while they still place decently well in credit, it's much harder to switch to the equity side.
but if you like the fund (and it's legit) take it and don't look back!
CS/BarCap are the only two that model? Is that factual?
Caveat of mid-BB. Pretty certain both Citi and BAML LevFin are more capital markets roles, same as MS and GS. Unsure about JP, but DB and UBS model as well.
Some GS LF groups model, some don't. Same goes for LF groups at other banks. Also would consider the volume / type of deal flow each industry gets. Industrials and TMT are considerably more active than others in the financing space, so you see much more sponsor activity and get more opportunities to work on LBO-type situations. Just food for thought.
I would rate the fund more than lev fin roles. Cross capital structure with a flavour of distress is more than what you would get at a traditional lev fin role. If they've large AUM that's a plus (if you're too small in the space then it becomes either LMM focus and minority plays in distressed).
You may want to consider the BB role over the fund role (i) depending on their niche (i.e. do they play in the safer, BB-rated space, or have they have a record of dabbling in very tight situations - I highly regard CS Sponsors in this space, anecdotally, from the deals I've seen them on), (ii) the experience (are they modelling heavy or are they more cap mkts focussed), (iii) exits - have ppl from those teams went to PE firms (ofcs dependent on whether this is desirable).
Depends on the firm. It's like going into PE right away instead of doing the IB stint- there are pros and cons. Lets just look at JPM for example. Best Lev Fin on the street, and going there puts a great name on your resume forever and you can leverage this name to go to PE and distressed debt hedge funds (I personally know people who have gone to either from their lev fin team). However, considering it is mid BB it might not have the same brand recognition and wont get you as far as a BAML or JP Morgan. At the end of the day going into IB gives you more credibility and options, while going into the fund will fast track that career path if its certain that you want to do that- again tradeoffs
Agreed, definitely a trade-off. Leaning more towards the credit fund given the exposure as an analyst, fully knowing it may reduce my optionality down the line, but will allow me to develop an investor skill set much sooner
+1 on your thought process here. IMO at some point everyone has to specialize - if you're pretty confident that your interests won't change before September (when you would recruit for the same kind of roles for on-cycle as a first year IB analyst) I'd definitely take the credit fund offer. You'll probably enjoy the next 2 years more too.
Agree with the common sentiment to go with the private credit fund. Seems like an invaluable experience out of school and more than you would experience doing levfin at a BB
Private credit especially in today's market would be incredibly interesting. Going to have a ton of stuff to do and it'll be a (hopefully) great learning experinece.
Agreed, I was attracted to their relatively broad mandate investing across the capital structure. Thanks!
Another big positive of the credit fund - you won’t work crazy hours like BB Lev Fin. Your hours should be 60-65 hours, you’ll get paid well (90-110% of BB Lev Fin depending on shop) and you’ll learn more tangible investing skills early on. If you see yourself in this role for the long-term, this is an awesome opportunity.
Agreed, fortunate enough to have good comp (fairly in line with IB) with the hours you mentioned per the analysts at the firm currently. Looking forward to it and appreciate the insight!
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