Option 1:
- BB underwriting (credit risk) team, focusing on leveraged finance transactions
- Approve transactions or recommend alternative structuring to improve risk ratings
- $115k base, 20% bonus
Option 2:
- MM credit portfolio management team (also credit risk), focusing on sponsor-backed names as well
- Annual reviews for covered names; approve/process waivers/amendments for loans in the portfolio
- Potential to do some underwriting for overflow names
- $100k base, 50% bonus
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What should I pick? I want to eventually get into corporate banking or leveraged finance as the next step in my career. Neither of these options seems to focus on modeling. Which one positions me best for that next move?
Salary seems to tilt toward option #2, but on a tax-affected basis, it's only about a $6k difference.
If you want to move into corporate banking or leveraged finance, I'd go with Option 1. I previously worked in LevFin at a BB, and people in LevFin value transaction based work experience, (i.e. people who understand the nuances of the entire deal process) versus glorified credit surveillance (what the other role sounds like).
LevFin and Corporate Banking are DEAL based jobs and working in a transaction based role, especially one that focuses on underwriting levfin transactions is a relatively seamless transition. Also, what is the BB's view on internal moves? If they're open to it, it's not too hard to transition internally to a levfin group after a year or two. A lot of people at my old BB got in that way.
^^ Thanks to both of you guys. I think internal mobility is promising for the BB. I've been struggling with the idea, but it sounds like Option 1 provides more transferable skills and experience. It's not as high of a salary as I was expecting, but I'll do it to bridge the gap to my final goal.
Thanks again -- I think I can make a clearer decision based off of that information.
I'd go with option 1 given your goals and the fact option 2 is loan portfolio management not fixed income.
1 is deals. 2 is quarterly reviews & admin work.
Would take 1 any day of the week, especially if you want to be a credit/HY/distress investor.
When you all consider deals though, does it matter that it's from a credit risk standpoint and not an active structuring-type role? Maybe I'm just skeptical because I wouldn't be leading the deals so-to-speak, but just being apart of the approval process doing credit analysis and the modeling is light at best (we would interface with the team that handles the model to have them change certain assumptions if need be).
Some further details on it:
What is your background in terms of school and work experience? Also, are these compensation figures that you have been offered or your own estimate based on your research? I assume these are AVP/Associate positions.
Credit Underwriting v.s. Portfolio Monitoring? (Originally Posted: 06/01/2016)
I am deciding between two options and I am not sure which one to choose.
Background: - I have been working for a non-bank in the commercial lending department as a credit analyst/commercial underwriter for the past 13-16 months. I currently make $52K base + 5-15% bonus. - This company is a wholly owned finance subsidiary of a very well-known auto manufacturer (Ford/GM/Toyota/BMW)
The other option is a Commercial Loan Portfolio Monitoring position at a regional bank (think BB&T/BBVA Compass/M & T/Regions Bank). I would be monitoring a loan portfolio for changes in credit quality, profitability, etc. - Pay is $57K base + a fixed discretionary bonus of $5000.
I am not sure if I should stay in my current position or move to the regional bank. In my current role, I am completely driving and structuring new LOC's and loans. I eventually want to head to business school in 2-3 years, or try to land a role as an AVP, Credit Manager, or Relationship Manager at a small bank. I would also consider Corporate Banking if possible. I am located in a big city in the South.
Also, how are regional banks viewed?
Anyone?
portfolio management on a loan book is horrible.
Underwriting is constantly intellectually stimulating, at least if you're working somewhere with a decent transfer of deal flow.
My experience is that underwriters are paid substantially more.
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