Credit/PE Secondaries

Based on the most helpful WSO content, transitioning from a LevFin underwriting role into credit or private equity secondaries is definitely possible. Here’s what you need to know:

Transition Feasibility:

1. Skill Overlap: Your experience in LevFin underwriting provides a strong foundation in credit analysis, financial modeling, and deal structuring, which are highly relevant for secondaries roles. These roles often require a deep understanding of credit instruments, portfolio analysis, and valuation, which align well with your current skill set.

2. Recruiter Interest: The fact that a recruiter has already reached out to you for a secondaries role indicates that your background is attractive for such positions. It might be worth revisiting this avenue or exploring other recruiters specializing in secondaries hiring.

3. Positioning: Highlighting your deal experience, ability to assess risk, and familiarity with credit markets will be key when positioning yourself for these roles.

Resources for Preparation:

1. Modeling and Case Studies:

   • Review case studies specific to secondaries. For example, a private credit secondaries case study might involve analyzing the potential purchase of an LP's position in a credit GP, as shared in WSO threads. This could include tasks like assessing historical returns, applying discount rates, and understanding qualitative factors like GP performance and asset maturity timelines.
   • Practice Excel-based modeling, focusing on portfolio valuation, IRR calculations, and sensitivity analyses.

2. Educational Resources:

   • Books and White Papers: Some recommended readings include:
     • An Introduction to Private Equity Secondaries (CAIS)
     • A Liquidity Cushion in Troubled Times: The PE Secondaries Market (INSEAD Knowledge)
     • Navigating Secondaries: A Guide to Changing Currents (Landmark Capital / Ares)
   • These resources provide insights into market trends, transaction structures, and key considerations in secondaries.

3. Trends to Study:

   • Familiarize yourself with recent trends like single-asset secondaries and continuation funds. Notable transactions include BC Partners’ continuation fund for Springer Nature and Hellman & Friedman’s transfer of portfolio companies to continuation vehicles.

4. Networking and Forums:

   • Engage with professionals in the secondaries space through LinkedIn or forums like WSO. Participating in discussions and Q&A threads can provide valuable insights and help you stay updated on industry practices.

By leveraging your LevFin background and preparing with the right resources, you can position yourself effectively for a transition into credit or private equity secondaries.

Sources: Learning recs for secondaries, Private Credit Secondaries Case Study Insight, Pitchbook: PE Secondaries to Boom in 2023, Q&A: PE Secondaries Principal