Special Situations M&A / Distressed M&A thoughts?
What are people's thoughts on joining a Special Situations M&A / Distressed M&A team at Banks / Boutiques? The current global environment is heading towards a recession and good book M&A activity is likely to reduce so I was wondering what people think of joining a company like Alvarez and Marsal, Teneo, FTI Consulting given the current environment?
Anyone have any thoughts on this?
I’m not sure if your question is clear? Like are you asking whether you should join those firms or do nothing at all? What are the options you are comparing to? Markets go up and down. If you are making a short-term investment in terms of where you will see the most deal flow over the next few months, yea maybe it’ll be in restructuring / distressed m&a but who really knows or can predict things like that. Probably better to figure out if you want to do that for a few years at least or over an entire career
I think I am just trying to understand that given the current market environment with good book M&A deal flow slowing (and potentially lower bonuses), is it worth moving to a shop that does special situations M&A as deal flow in that area will be high in the next few years (equating to higher bonuses, potentially)? There is always an opportunity to move back into good book M&A after doing a few years in special situations.
Idk it’s hard to predict. During Covid / 2020/2021 regular way m&a teams seemed to have done very well. I’m not sure if anyone predicted that. The best is probably to find something that you are good at and like and can do for a longer term career. The major paydays are later on, better to set yourself up for a good future I would think than just an extra few thousand dollars in your early career
Honestly, what's the point of working in distressed M&A--it's almost an oxymoron? Also, don't the restructuring advisors also do m&a analysis--seems unlikely they'd hire a separate bank to advise them on m&a when they've already retained a restructuring advisor especially since they're budget constrained?
From a practical standpoint, distressed m&a seems very impractical because distressed companies have already lost a ton of value, and you're usually dealing with mm or lmm companies that are financially strapped, so how are they going to be willing to pay high fees for m&a advisers?
On the other hand, if you work in traditional (non-distressed) M&A, companies are usually buying and selling in order to expand, so they're less sensitive to deal fees they pay to advisers
I don't think you understand the dynamics within distressed M&A. I'm not going to dive into much detail other than highlighting a few points:
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