Classic banking banker looking to exit into distressed focused PE / credit HFs
Ignore title - I'm an incoming banker (class 23) at one of the top coverage groups at a top BB. Just recently discovered interest in the distressed credit space and have taught myself RX technicals and actively studying into both loan-to-own buyout and distressed credit space. If I had known this interest of mine earlier would have gone to a RX shop. Most of my group exit into top PE in the past two years but didn't see them going into any firms in the distressed space at all. Am I at a huge disadvantage? Especially compared to incoming RX analysts? What can I do to study better and convince the headhunters / these funds that I'm capable?
Plays
One idea is to have an appropriate intro re your initial headhunter zooms. My suggestion is to play the 2 chainz hit “I’m different” to give them a sense of why they’re wrong if they’ve already marked you as classic equity buyout
https://open.spotify.com/track/6J5sxraPPZ4b0CVOGAgpXj?si=FrvLhtUyQxCv5i…
Not sure sure about hedge funds but distressed PE is still PE. So, having the skill set of an M&A banker in building operating models and conducting a bottom up analysis is always useful.
I do think that having true M&A experience is useful though so I would push for those staffings over ECM/DCM. Since you’re at a BB coverage group, idk if that’s feasible.
I’d say that your background and pedigree matter less in this part of the finance world as long as you show the acumen for the work. An initial hurdle would be to communicate your preferences ultra clearly to headhunters and come across as a high value candidate they want to put in front of their most selective clients. If you’re not clear you may end up getting a bunch of private credit / direct lending stuff since not many ppl want that role, which is a huge pain in the ass to deal with.
The next part of it is to genuinely be good at analyzing a business quickly and building a model from scratch. Every shop I/friends interviewed at had a true pitch and it’s typically something that’s passed by their desks. These guys are some of the sharpest ppl you’ll meet and if they’ve seen the name before, it’ll be impossible to BS your way through like a banking or vanilla pe interview.
I think if you impress here, they couldn’t care less about your banking group. A lot of these shops also don’t go during oncycle (some do ofc) so you generally have some time to prepare. Although, given how few seats there are I’d treat every opportunity as end all be all. Good luck man.
I’d imagine it will be hard to recruit for distressed since you don’t / won’t have any experience in the restructuring process. Which is where a ton of value creation / destroying can occur.
I would just try to move to Rx after your first year.
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