Hi, currently doing a banking stint, but signed an offer for a reputable sourcing-focused growth equity firm. I was wondering how difficult it would be to switch to distressed/special sits buyout, credit later down the road at an associate level?
To answer the obvious question of why I'm interested in basically the polar opposites - as it doesn't make sense. I find the idea of distressed more intellectually interesting and complex, but more interested in the industries and type of companies worked with in growth. Wondering if anyone made such a switch before or were making similar decisions?
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Have you thought about value software / tech investing? It would provide the intellectual stimulation of more complex situations (carve outs, sophisticated structures, etc) while still focusing on tech.
FYI, a lot of targets in this space aren't classically distressed (when compared to situations in other industries) since tech has binary risk if a company's product is doing poorly.
Could you provide some examples of what you mean for this kind of shop - particularly the value part? Do you mean like SL, FP, Vista-type traditional tech-focused buyout shop?
Part of my problem with many of these types is location-wise, I need to be in NY (not very flexible here)
SL and FP both have a PE presence in NYC
Might get downvotes here but since you're a first year it may be easier to just recruit for distressed and then renege on old fund.
I agree with the above comment. Would ditch the growth equity shop and just recruit from banking. Will be way easier than explaining the growth equity to distressed switch and also way faster than getting the intermediate roles that probably will be required to bridge the gap between the two. If you stick with the growth gig, you will have to overcome the stigma of having worked in a sourcing role and won’t have the requisite knowledge relative to seniority / age and presumably pay that you desire as an older associate.
That being said, all of that can be overcome with good pedigree (college, bank, etc.), nepotism (parent that works at X fund), or strong network that vouches for you and presumably your ability to prove you know more than your target school restructuring analyst or megafund kid.
I’d disagree. Bird in the hand.
While the work will be very different (underwriting good products / management teams that will scale in growth, vs underwriting good businesses and likely replacing management in distress), recruiting into distress credit or PE from a PE role will be easier.
If you are able to line up a distressed PE job in the near term, then go for it. Otherwise, I wouldn’t ditch anything. Go learn about investing at your growth equity opportunity and then maybe look to lateral to distress in a couple years.
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