Specialized lender in Asset backed lending a way into a mega fund?

Hi guys

Thought I’ll see if anyone can give some useful advice/input on an opportunity that has presented to me.

Bit of background first:
- at a BB in a Securitized Products desk as an associate.
- Before that, was in PWM at the same BB, on the structured lending desk.
- A specialized lender (a private credit firm) on their asset backed finance team approached me to join the team. They primarily do senior loans backed behind accounts receivables, inventory, PP&E and real property. etc. mid market companies is their focus with revenues over 20m+
- They can do mez + equity as they aren’t a bank. They typically don’t securitize into the public market.
- They pay a bit less, but it’s technically a buy-side role (???) and figured it’s a good way into actual investing.

The goal is to get into a mega fund in one of the structured finance arms.

Question: Would going into a specialized lender (a smaller buy side shop??) path the way into a structured finance arm of a bulge bracket Private Credit shop?

Any input would be greatly appreciated! Thanks all

Most Helpful

I'm in this field. What are you doing on the structured lending desk? Structuring? Warehousing? From what I've seen, securitized products industry is a lot more practical and pragmatic compared to other finance industries. I don't think you will have any issues breaking into any buy-side shop at this point. Your best chances will be at funds that have structured lending groups (also depends are you on the warehouse or structuring side, both are important but structuring has a slight edge because it's capital markets based). If you want to diversify your skillset and already have structuring experience, you should move into a strong ABS group in your bank. Not all funds play with CLOs, and having some ABS under your belt will be extremely valuable. 

Quick answer to your question - don't make the move. I think you will be bored moving from structured lending at a BB to a shop that does senior loans backed behind accounts receivables, and this will be a step-down in experience and tier ladder. I covered auto loans for many years, and yes it was fun following the story of the American car consumer for a while, but I did think I was getting dumber working on the same cookie cutter super simple structure over and over again. Change groups internally (make sure the group you are switching into has a good reputation in the field, is a structuring role, and has some nice people), and after some time you can go into buy side.

I have to ask, people at assoc + VP + levels tend to have it really good at most banks. Pretty good work life balance relatively speaking and you get paid well. Why move to buy side?


Thanks dude - appreciate the input.For context- I’m on the structuring/ origination side.The reason why I was interested in going to the buy side is: What I’m finding is that my group has a specific risk tolerance that limits the types of deals we can do (I.e typically only senior loans on mortgages or car loans). We don’t touch esoteric asset classes which sucks.Mez or equity is out of the question as well so what happens is that we end up competing with other BBs for low margin senior tranche trades.Although the place that’s offered me a role, typically does senior, the asset classes seem to be broader, advance rates are higher and even ability to go lower on the cap stack seems exciting. This obviously means higher margins as well.Again it’s a smaller shop, and dosent have the “prestige” as a BB but again the prospect of looking at senior (or mez or equity) tranche deals outside of prime mortgages or auto loans. Would it be worth it??


Not the original responder - however I work in the space and recently moved from an ABS banking group (lending + term ABS underwriting) to a credit fund with a "Private ABS" / SpecFin strategy. I would definitely recommend making the move. I found sellside work to become incredibly repetitive after a few years, while deal flow is far more varied (across asset class / structure) and intellectually stimulating (more granular analysis, higher risk tolerance) in private credit. If prestige is a gating issue, there are a ton of noteworthy funds that invest in this space - Angelo Gordon, Apollo, Ares, Atalaya, Atlas, Fortress, KKR, Silver Point, Victory Park, Waterfall off the top of my head.  


I don't think it is worth it. In your shoes I would go into another financial institution that underwrites riskier deals. Do 1-2 years there, and then start reaching out to bigger funds. Once you move to a smaller shop it'll be more challenging to go back into banking within ABS and your competition will be a banker that is working on risky stuff and now wants to move to a bigger shop. 


Either / both. Currently in a very sweaty group, been working until 2-3am everyday for the past month and August should be slow.

I would very much like to join a group that has fewer hours but similar pay, especially if still related to finance.


Interesting fields, I have not heard much about these roles either.

Worth looking into OP!


Do many credit funds take people from these types of places?


Guessing you're talking about a place like MidCap Financial? Those roles are somewhere in between Corporate Bank (lending) roles and working for a Private Credit fund. In terms of comp, WLB, prestige, etc. 

The spoils are just a lot better and the work more interesting at a fund-structure type of credit shop. 


Guessing you're talking about a place like MidCap Financial? Those roles are somewhere in between Corporate Bank (lending) roles and working for a Private Credit fund. In terms of comp, WLB, prestige, etc. 

yep exactly like midcap (midcap is owned by APO) - Just curious if it’s even possible to move into a larger fund from these places. For example, KKR does asset backed lending, would it make sense to hire people who have done a stint at a specialized lender?


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