Don’t like banking, is the grass greener on the buyside?
I'm currently a sophomore interning in BB CB and I'm going to an EB next summer. After a couple of weeks in CB I realized that doing tedious and executional tasks isn't something that's for me. I'm curious about what are my options if I don't want to do banking out of college? I like dealing with high yield credit and thinking about businesses from a value oriented perspective. Complex and niche scenarios also interest me so I guess an illiquid credit investing role (distressed/opportunistic) might be worth a shot? It'd be great if someone in this space can compare it to their experience in banking, really appreciate it!
I interned in levfin and RX and exited RX into an opp credit role after my analyst program. I think off the bat, I can say you will be doing tedious work at any firm at any junior level probably for 2 to 5 years. The more "niche" scenarios you deal with as you stated, the less you know as a junior person starting off, the more useless you are coming out of college, and the more you have to learn - so probably should temper your expectations a bit about the ratio of thinking to working at least starting off (since you will spend at least half your time doing busy work).
If you don't want to do banking out of college, there are a very few handful of credit shops that will hire out of college, even fewer that are distressed / opportunistic, and way fewer that will hire you without an internship or network. I had a few friends that went to Anchorage, Silver Point, Oak Hill, GS SSG back in the day, so definitely possible. Distressed space is really a club, very much know who's who in the community, so being at a reputable fund with scale and capital is pretty important. If you can't directly get a seat there, the handful of PE analyst seats at megafunds are equally good or better. Otherwise, I would probably stick to restructuring banking which is what I did, or stick with levfin or sponsors after that, etc. I think the nice part about it is that if you stick to it, it's a pretty linear step process, and once you're at a credit shop, it really just boils down to your skills.
what are your thoughts on Bain Capital Credit? Is their Distressed & Special Situations fund part of the "club" you mentioned?
Who would you consider to be a part of the distressed space club?
What I meant by that comment was that there are typically large firms that will control a process or are significant members of creditor committees in a bankruptcy. Those are the ones that directly engage advisors and counsel to drive negotiations. I'm not going to go ahead and list every single firm that fits that bill, but typically the ones that are in the news (Elliott, Apollo, Centerbridge, Oaktree, etc.) are the ones that have a seat at the table. If you don't have a say, you're more or less a passive investor riding the coat tail of those at the table or trading secondary (unrestricted and trading junior securities as opposed to loan to own / funding a DIP, etc.). I went the latter route mainly because I get to see more situations, have more flexibility, and much better lifestyle. As a RX analyst, I worked on a handful of deals representing the much bigger firms, and the juniors at those shops seemed pretty miserable not to mention higher likelihood of getting fired (though comp can go up to $500K as a first year associate).
No
It's all tedious at the junior level mate.
Equally tedious, and potentially for longer too - PE rarely has analysts, or few analysts, so you'll be doing all the junior-level grind work as an associate there too.
Lev fin is not very stimulating and very high on tedium/execution work given little modeling. I'd recommend RX banking for junior summer or at least coverage might be a little better
Yes
Hate to burst your bubble but investing - whether equity or credit - is much more tedious than banking. Banking is very transactional and thus high level and strategic. Investing sure has all the strategic thinking that you do banking but there’s 100 other tedious things you have to do in addition. You literally never clear your plate and have to get use to going home with 10 things to do tomorrow and the rest of the week. Can be tough to rewire that thinking/feeling from banking. That’s also why you see so many threads about people claiming to be burned out in PE.
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