Private Credit vs LO AM: Help me decide

Based on the most helpful WSO content, here's what you need to know:

Compensation and Progression:

1. Private Credit/Direct Lending:

   • Compensation: Typically sees a 10-15% increase year-over-year until promotion, which resets base/bonus. Larger platforms with hundreds of billions in AUM ensure relatively stable compensation despite market conditions due to the sheer amount of management fees generated.
   • Progression: The compensation structure is stable, and there is potential for significant earnings, especially if you move up the chain. However, the progression to MD/Partner level can be challenging and is not guaranteed.

2. Long Only Asset Management (LO AM):

   • Compensation: Comparable to middle-market PE or MF PC through the middle ranks but caps out lower at the senior end. The work-life balance is generally better, with work weeks around 50-60 hours.
   • Progression: The progression can be steady, but the compensation at the senior level might not be as high as in private credit. However, the predictability and stability in LO AM can be appealing.

Work Hours:

1. Private Credit/Direct Lending:

   • Hours: Typically ranges from 50-70 hours per week, depending on deal flow. Work-life balance can be demanding, especially towards deal closings.

2. Long Only Asset Management (LO AM):

   • Hours: Generally better work-life balance with work weeks around 50-60 hours. The nature of the work is more predictable, and the hours are relatively stable.

Summary:

• Private Credit/Direct Lending offers potentially higher compensation and a dynamic work environment but comes with longer hours and less predictable work-life balance.
• Long Only Asset Management (LO AM) provides a more stable work-life balance with predictable hours and steady compensation, though it may cap out lower at the senior end.

Choose based on your priorities: if higher compensation and dynamic work excite you, go for Private Credit. If you value work-life balance and stability, LO AM might be the better fit.

Sources: Private Credit / Direct Lending Comp, Restructuring --> Direct Lending / Private Credit, Private Credit Endgame, Private Equity vs. Private Credit, Q&A : Credit (DL, SSG)