Direct Lending at First Eagle / THL Credit

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2.) being on the BSL side for buyside is not ideal. Returns are worse and terms are shittier. Would advise you to build your career on DL side far before ever wanting to be a BSL investor (CLO money is not fun to manage). Speaking from experience. 
 

Ill give it a stab since I've worked with First Eagle / First Eagle Alternative Credit on a few deals (I am sell side)

1) Pretty strong platform with a lot of capital deployed. Household name in credit; their direct lending arm is more focused on middle market stuff, but they do play big in BSL transactions as well (tradeable credit). First Eagle also acquired Napier Park recently so they are getting pretty passive in credit. 

2) As you know, there's a lot of overlap between sellside and buyside lev fin credit. I think one element is the financial modeling (LBO modeling acquired on the sell side) that you'll be missing going straight to DL. In DL/Credit, you are running deleveraging tests (which the sellside and/or sponsor will already give you one case and you just sensitize it). Plus being in sellside LF gives you more optionality if you want to do other buyside roles eg. PE/HF/VC/GE etc. You don't see that many exits from DL to buyouts PE. 

3) It depends - I believe First Eagle holds it typically, but more and more DLs are actually giving a large commitment and syndicating it to others thereafter. A big factor is the sponsor's preference - especially when you have to get a majority vote to vote for stuff like amendments etc for a sub 75mm EBITDA business.

4) It depends honestly - at my bank, the U/W process is very stringent as we do a lot of event driven deals and there is a possibility of losing a lot of money given how aggressive we go. Negotiating grids and flex packages are getting more challenging these days given mkt backdrop. But i know other banks are very loose with their process and thats how they get hurt. 

If you're long term goal is to be a buyside debt investor, starting at a direct lender would be best. Certainly, you could make the transition from LevFin to buyside fairly easily, but in terms of developing the core skills of a credit investor you'll learn a lot more by being the one taking risk on the books. At banks, LevFin is highly focused on structure and execution, less so on the credit underwriting of the business. 

In terms of what you'd miss out on not going to a large bank:

1. Brand recognition that can stay with you for the rest of your career and open doors beyond niche credit investing roles

2. Tried and true training program

4. Building relationships and networking with fellow analysts and others at the bank 

5. Volume of transactions you work on and broad view of market execution. The major balance sheet banks have a wider view into the market in terms of what's getting executed than anyone else, and you learn about what type of deals clear the market, which ones don't, and how the market changes (e.g. HY market shutting down during COVID) 

My recommendation is to go straight to buyside if you're given that opportunity but the above is some of what you'd be giving up. You also don't have to deal with the substantial headache that is the compliance and risk departments of major banks so that alone frees you up a great deal to work on more valuable skillsets.