Ideal Background for Distressed PE?

I was curious as to what the ideal background is for those who want to work for a distressed private equity firm? I know many tend to come from restructuring groups (HL, Evercore, etc.), but I was wondering if there were any other backgrounds that would enable you to work for a distressed pe firm?

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Leveraged Finance is a very common background. Alot of loan to own firms participate in credit origination. Special Sit's groups are essentially the same thing as RX at some banks.

Speaking to @masters comments: cyclical industries are often prone to distress. These industries can be commodity price dependent and can fluctuate with the price of the underlying commodities (e.g., oil). In addition, industries like manufacturing are typically low margin and capex intensive. These can be the bread and butter of some distressed firms. Furthermore, given technological advances and the growth of e-commerce shopping in the past decade, brick and mortar retail has seen a significant amount of distress as large, slow moving companies, such as Sports Authority, bear significant fixed costs from storefront leases, but have to compete with lower opex online competitors; fast moving fashion trends have decreased product life cycles and have increased the rate at which inventory becomes obsolete, which further erodes margins.

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To answer your question about other backgrounds that would enable you to work for a PE distressed firm, I've seen some guys get in coming from M&A. While it's not the obvious path, M&A involves the type of analytical work which builds skill sets that can apply to a variety of situations. While you may not have the specialist knowledge that you would have from a restructuring group, the thinking is if you have an M&A background then distressed investing shouldn't be something too hard for you to learn/pick-up.

 

Are you doing distressed arbitrage, or actually taking control of troubled companies, rebuilding operations and restructuring the balance sheet? I do the latter and got into it after being an operator and then learned the financial restructuring side.

Are you also asking about temperament? I cant speak to the arbitrage temperament, probably a gambler. The turnaround/restructuring person is usually an ADHD adrenaline junky who wants to be in the crisis, not just observing or betting on it. Probably similar to an ER surgeon.

Background for turnaround work; operations, finance, M&A, deep understanding of insolvency law, psychiatrist, etc.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
 
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Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.

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