Currently a 3rd year analyst in a coverage group at a middle-tier BB in NYC. I have been interviewing for an Analyst position at a distressed debt trading desk. I have a strong interest for distressed debt.
Few questions for all you guys out there:
-Can someone give me an idea of the day to day in this kind of role?
-What kind of technical questions should I expect to get? Also, can someone please provide a link to Moyer's book?
-What is comp like for this type of position? Given the new Associate bases across the Street, if I were to make the switch, I don't want to feel like I am falling behind on comp next year. The headhunters mentioned there is P&L responsibility but I'm not sure how this works given that this is not a sales or trading role - is this even true? I'm very excited about the opportunity but does this kind of switch even make sense career wise?
- Is the skillset development here similar to that of your counterparts at DD HFs?
Any other information, would be greatly appreciated.
In addition to the above:
This seems like a higher-risk career path, but does the potential upside justify the risk when compared to IB?
@oreos can probably help here
I have a PDF of moyers book. Pm me your email
sorry don't know how this works but I'd like the pdf's as well if possible.
Day to day: - dealing with stupid one off requests from sales people and traders - general credit research, modelling, valuation, evaluating RXing plans, reading docs, looking for your value add (important! so easy to just become a sales person who actually knows the definition of EBITDA and what leverage is) - calls will clients will eat your days, have three or more, coupled with internal morning meetings etc and you have little day left to be an analyst. so you stay late. but client calls are the best learning experience aside from if you have any good snr analyst are left at your bank - you likely wont write reports for external purposes (since you're a desk analyst), but you'll be writing quick one pagers / pitch sheets for sales
Qs: - same as what people mention for RXing interviews - maybe some technical trading Qs, eg about the mechanics of shorting and, for example, why its difficult to short into continental European real money - link is on this site somewhere
Comp: - difficult to generalise, but can vary hugely, remember, when you're having fun, the rest of the bank is hurting - you will eventually have your own "portfolio" that is if you desk takes prop positions (i don't care what people say, this still exists, i know desks which have £100+ "inventory" in illiquid distressed names. but these are isolated cases). you need to keep track of this, unlikely that people will for you and likely that come comp time mgmt will make up a lower number of your "returns" to fuck you.
vs. HF? - not as in depth, you haven't the time to dedicate to know everything about an industry etc. like you would if you were putting real cash to work - i end up picking a few names i like and go deep on them, but otherwise its just not worth it - less exposure to the negotiating / structuring table unless you have a big big position - but otherwise pretty similar, and you'll learn through talking to clients how much mediocrity there is on the buy-side (and some very smart people too)
on your question in your comment: - i would try to jump from IBD to the buy side, you'll be very employable as an IBD guy (assuming not at BNPP etc.) and most DD funds hire from M&A and RXing now anyway. however, if you're not getting traction, it may be a good stop off, and will give you a better picture of the market and the funds you want to work for before you move (very important! there are some funds i just wont work for now i know how they operate and the guys there). - you'll also learn trading dynamics which is useful
Hope that helps, may add as and when things come to mind.
Always happy to read some insights about the distressed space, thanks! +1
Which distressed funds would you want to work for, and which ones would you avoid?
Guys i'd like to work for are the likes of Sothic, Anchorage, Makuria, CarVal, Whitebox, SVP, Warwick.....
*heard people discounting their IRRs, no joke, one guy (snr guy) at a distressed fund was like i have my IRR of 35% in year 5, then i have to discount that back to year 1..; another is not understanding that their job is to take risk and price it, often hear people wanting to wait until the situation has become clear and then they'll invest - assuming that the price wont move; and just some people suck, don't look at cash flows etc, don't look at working capital etc...
@"Oreos" Thanks for the insight! Can you address my follow-up question: this seems like a higher-risk career path, but does the potential upside justify the risk when compared to IB?
Also, out of all the BBs, which have notable DD desks in NYC?
i'm LDN, not sure about NYC, but it'll be the usual suspects (GS, MS, Citi, DB, BAML), then the odd unusual one, for example BNPP over here started something.
@"Oreos" Thanks for the insight! Can you address my follow-up question: this seems like a higher-risk career path, but does the potential upside justify the risk when compared to IB?
Also, out of all the BBs, which have notable DD desks in NYC?
Anyone have a copy of Moyer they can email me? Lemme know if there's something you want that I may have.
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