KKR/Blackstone Credit vs. MF PE
Asking for a friend... Curious how KKR/Blackstone Credit out of undergrad compares to RX or M&A at an EB or the private equity analyst programs at Warburg Pincus, Vista, Bain, etc. Assuming long-term interest is large-cap PE or L/S SM
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The mindset of credit is fundamentally different than that of PE. By no means is it lesser, but changing to buyout is hard because it’s such a different thought process.
It’s possible early in your career, but RX allows you to see M&A deals as well as bankruptcy and refi’s.
It’s good for L/S credit opps tho.
Also there’s a lot of self selection bias here, people who go into credit tend to like.. credit
Thanks for the thoughts. Curious, how is the thought process different?
Loans ain’t Stonks
It’s about risk. It’s called fixed income bc the maximum you can get is kind of laid in stone with minimal variablility (unless you’re making bets on rate hikes/ declines). And unless you’re buying secondary debt, yields are relatively stagnant. It’s so much more about downside, because while a stock can go in whichever way and possibly infinitely upwards, bonds kinda stay where they are, unless they’re going bankrupt in which your debt is worthless in some cases, im not getting into recovery analysis rn.
While PE buys ownership, credit is more of a spiderweb of covenants and rules that companies have to follow if they want to not go bankrupt, refi, or however they get back on track and investors get their money
That’s right but the deal process is fairly the same. Especially for sub debt / mezzanine funds, where you work on sponsor-less deals and have to do the DD for yourself (vs. at plain vanilla direct lending funds, where you just use the DD package of the sponsor).
I worked in private credit and am now in PE. The analyses are the same. However, you go a little deeper in PE (obviously), which you have to like. In private credit, you’ll mostly cover the „high level“ DD issues and won’t spend weeks on analyzing customer contracts and data like in PE. That’s one major point I don’t like about PE. If you have to work on a shitty deal in PE, that’s probably gonna hurt for a few months.
I know a guy that spent 5-6 years at BX credit team and then went to Hellman & Friedman to do PE. Everything is possible! He did a change of jobs in H1 2022 when the market was still good tho.
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