Direct Lending Offer Help

Hi

I have a Direct Lending Analyst offer at an investment arm of a large insurance company (Manulife/Metlife) and at an Asset Manager (TCW/Barings/First Eagle) that raised a BDC to do direct lending. Both offers are for Middle Market Direct Lending. The insurance arm invest in 1L/2L/Uni/Mezz/Pref and the Asset Manager invest only in senior secured. If end goal is to do credit across 1L/2L/Mezz/Uni should I even consider the offer from Asset Manager shop doing just senior secured? Anyone have experience investing at an insurance investment arm?

Comments (19)

Most Helpful
  • VP in PE - Other
Jun 28, 2022 - 11:05am

Why are you takin Analyst offers as an experienced Associate?? Some thoughts:

1) some people will say they are doing cross cap stack but really do more 1L. For example may put in a slug of pref on top of doing a 1L; technically, 2L is also senior secured and most BDCs will do some of that. Guys like TCW will do stretch senior so I'm not sure it's all that diff than uni at the InsuranceCo. What % of their book is mezz at the insurance co? If that is the only reason for taking the insurance co, do your DD and make sure it's more than just a small slice of the pie.

2) Not sure about Barings, but TCW and First Eagle are good names. People here don't talk about insurance companies but it can be a LT gig depending on the strength of the platform.

3) Look at career progression - are the Manu or Met groups new? Which shop is more crowded at mid and senior levels. Where is it less competitive to be promoted?

4) Once you make VP, where will comp be higher. Not sure if there is any carry type incentive at insurance co given their structure is different - but you can always switch jobs later

Jun 29, 2022 - 12:51am
TripleARated, what's your opinion? Comment below:

Would it be possible for you to PM me since you are anonymous? In process at investment arm of insurance co as well and have some questions

Array
Jun 29, 2022 - 11:30am
AKBOS, what's your opinion? Comment below:

Barings is the asset manager for an insurance company - MassMutual - although they have raised a lot of outside capital inc. the BDC, my guess is 30-50% of their DL capital comes from the parent

  • Associate 1 in CB
Jun 29, 2022 - 3:24pm

Do insurance cos usually lead deals or even do direct deals? I know many insurance cos provide balance sheet for funds (someone mentioned MassMutual and Barings, I believe they also do for Jefferies) or are LPs in funds. I've also seen companies like NW Mutual come into deals for a small ticket. They don't get great visibility into process and usually get spoon-fed diligence. Not sure if this applies to all insurances co tho but also something to consider.

Jun 30, 2022 - 4:27pm
AKBOS, what's your opinion? Comment below:

Short answer to your question is yes. These firms all have tons of PE LP investments that they can leverage to get looks at the debt financing side.

  • Barings has external capital too, yes they lead deals
  • Another example would be Apogem (used to be known as Madison Capital) which is a subsidiary of NY Life and leads lots of MM deals
  • Principal Financial trying to build something similar
  • Northwestern Mutual has a team, The Hartford has a team, as do others
  • Per this thread Manulife/Metlife doing the same
  • Varagon received big anchor investments from AFLAC & AIG to do the same
  • 2
  • Associate 1 in CB
Jul 1, 2022 - 1:48pm

You didn't answer the question. The question is whether the lead deals. Of course they come into deals.

Separately, many of the examples you gave are separate teams and not the teams within the insurance cos. These anchor tickets are usually under SMAs or co-investment so they're not getting direct access to the deal.

I'm just trying to figure out the difference in experience/lifestyle. Personally I don't mind being at a place that's not leading deals and just coming in for small ticket holds. Friend works at a firm that does ~$20MM on every deal and get spoon fed diligence and won't be chased around by sponsor to sign paper in less than a week. He's always golfing on weekdays so I doubt he works much.

Jun 29, 2022 - 3:36pm
Smoke Frog, what's your opinion? Comment below:

I have a few friends who work in the investment arms of insurance companies.

An absolutely sweet gig. Decent bonus, mediocre bonus, but easy hours and no real pressure. The attitude is like oh, Goldman is committing to this deal? Diligence must be fine then.

A friend who works there called it corporate welfare lol.

  • Associate 2 in Consulting
Jun 29, 2022 - 4:26pm

How would you define mediocre bonus? 50% of base? I work in the PC group within a PE fund and would happily give up more comp for the chill lifestyle.

Jun 30, 2022 - 9:51pm
Overall-Strategy, what's your opinion? Comment below:

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