Restructuring prospects, why you should not consider restructuring

Just finished up my 2nd year as a RX analyst at a top group. Heading to MF buyouts. Over the past 5 years, I've noticed a real uptrend in interest in the space both on WSO and from kids at my alma mater, and often I've noticed this interest for what I believe to be are the wrong reasons. I wanted to make this post to hopefully help some prospects with career discernment and figure out whether or not restructuring is for them.

I think the first thing, the most important thing, and the thing that everyone singularly focuses on are the exits, the elephant in the room. By now its pretty common knowledge that restructuring can lead to exits to non-distressed PE and HF roles. I know many kids are not actually interested in the restructuring or distressed space and just want the easiest way to MF PE. I think my response to that would be, firstly, PE recruiting is a lot of self-selection. Restructuring kids get those exits not because of exceptional experience or exceptional pedigree, but because almost every one of those kids went into restructuring wanting to go to the buyside at a select number of firms, myself included. If you are that kid and opt instead for EVR/PJT/CVP M&A or GS, you will get the exact same MF PE exit you would have gotten, if you are just as prepared and driven. In fact, it will be easier for you to articulate to the recruiter why you want MF PE buyouts or whatnot, whereas some recruiters tried to bucket me into distressed roles at the beginning of the PE recruiting process.

I think where the real weakness of restructuring appears is when you look at the experience and culture of the groups in which you are working. Restructuring is extremely varied, so no two analyst years will be alike. This can be both good and bad, as you get a wider range of exposure to different processes but you also do not get to specialize in something like you do in M&A. When I think about building out a skillset, I think about specialization. Especially when PE buyouts is so similar to M&A, I do think that there is some benefit to picking M&A over RX in that context. The experience you get in restructuring is great, but it is just far less applicable to PE buyouts than M&A is.

In terms of culture, I can handily say that almost all top restructuring groups have worse culture than their M&A counterparts. I know this is true for EVR, PJT, MOE, possibly LAZ, and almost every HL office. For better or for worse, restructuring attracts a very different type of career banker than M&A (in my opinion). Your seniors are more abrasive and less charismatic. As a side note, on the plus side, however, you do get an extreme amount of senior exposure in restructuring which I doubt you will get in any other banking role. I have experienced and heard of much more toxicity in RX than I ever have heard of in M&A. I am a thick-skinned individual compared to most of my fellow analysts but there truly are complete dickbags in this industry. The hours are also much worse at the firms I mentioned above within RX as compared to M&A. The hours and culture also gets worst at "2nd tier" firms like GHL and Ducera. I would also expect get RX hours to get much worse as we enter 2024 and after. Finally, within your own analyst class, you will interact with a much more diverse group of peers if you pursue M&A. This (I assume) becomes really important as you progress throughout your career as you stay close to your analyst class. Kids in M&A are there because they want to pursue strategy, corpdev, PE, HF, consulting, VC, long-term IBD, or don't even know what they want to pursue yet. In RX, 9/10 kids in your analyst class want to go to the buyside, either in a PE or HF role. And this isn't to say anything negative about RX analyst classes. I love my analyst class. They have been my best friends for the last two years, and I don't foresee losing contact with them in the near future. However, all of us are relatively alike, relatively hardo, and share similar career ambitions. If you do want to be in a more diverse environment, perhaps consider M&A.

Finally, I think as a result of heightened interest, RX recruiting has also gotten a lot tougher. Due to small headcount and limited capabilities, we only interview very few kids, even from our target schools. If you apply, even if you have a great resume, you may not get an interview. Even if you do get an interview, you will go through 2 rounds of RX technicals and basic behaviorals to cull out the herd before the superday. Unlike 5 years ago, answering all RX technicals correctly (with some interviewer assistance) is table stakes if you want the offer. If you are not intuitively good at these logic/mental-math problems, you will not do well in these interviews. I am constantly astounded by how many kids are bad at logic and mental math while giving these interviews, so please be honest with yourself. Beyond that, we look at your behaviorals, what school you go to, and how much we like you to make a decision. A lot of this last portion is based on what seniors decide, and has a bit of nepotism layered in. Every year we have kids at the superday who ace every technical and still don't receive an offer. I think this is the biggest misconception in restructuring recruiting. These days, you can't just be a technical-only candidate and expect to get an offer. There's just too much competition. I believe that we are also starting to build out diversity programs, as are most firms, so many of the spots may already taken by the diversity process before your superday even occurs. Restructuring class sizes never exceed 10 for even the largest offices so there are a very limited amount of spots. There are probably 300 top-tier M&A seats while there may be under 50 in restructuring.

All this was the long way of saying that restructuring may not be the way to go. Feel free to ask me anything you want. I reserve the right to ignore dumbfuck questions.