Leveraged loan investing?

I’m curious, how is the work at the junior level different in leveraged loan investing (buy side) vs levfin (sell side)? Are you still directly involved in the transaction process on the buyside? And finally, what would some exit opps be from doing lev loan investing at a relatively no name fund (<$50bn aum)? Would it be possible to lateral into a larger fund like Carlyle/Ares, or move to the private side aka direct lending?

 

Direct lending will tend to be a lot more DD heavy than pure leveraged loan investing, and the hours probably a lot more. I have a friend working at a fund on the liquid loans investing side who works 8-6/7 everyday, no weekends and clears >100k base + good bonus, while others in direct lending earn the same but work much longer hours with weekend work.

It’s pretty common to see moves on the debt side from no-name funds or corporate and commercial banks into big funds.

 

Used to do this for a hedge fund. Pretty great gig - paid $200k once you had experience and hours were pretty much 8-6 as stated above. Easiest move is to a CLO manager, other than that it depends on what the credits look like. I was working on mostly stressed names, which got me more interest than I would have had I been focused strictly on performing first liens. I got lots of interviews at direct lenders, but had more limited success trying to move upstream to more brand name shops

 

Do you find the work directly transferable to direct lending? And if you don’t mind me asking what kinds of funds did you interview with, like the Golub/Owl Rocks of the world?

 

Moderately transferable. You get more in the weeds with direct lending because you have more access to information and management (though still less than the equity side), and you need LBO modeling vs mostly three-statement and cash flow projections that you do on the syndicated loan side (covenant analysis is applicable to both). Overall the core skillset of credit analysis, risk mitigation, legal nuances, etc. is pretty similar across both and I think the rest can be picked up easily.

Definitely the Golub / Owl Rocks of the world, as well as several of the other big BDCs

 
Most Helpful

This site does not talk enough about the great lifestyle afforded by choosing a career in leveraged loans. It’s intellectually stimulating (in the right seat), but also pays a good amount when you factor for the hours required. I would not deter you from a job in leveraged loans. You’ll learn a lot. Get paid well enough, and you can spin it into an M&A PE etc job if you really want to

 

Thanks everyone for your input. When assessing a LL investing opportunity, what should I be thinking about to determine whether it will actually be a solid seat? For starters I’ll look at exits of previous analysts. But what are some other things to consider (# of names/analyst, etc)

 

Buying loans is the exit.  If you land at a good shop that pays well, you just sit there and milk it...or quit to start your own shop.  

There's no reason to churn seats unless you hate it. 

Array
 

Totally, makes sense it’s just I’m early in my career so I want to know I can leave my options open. Also I like to look at prior/post exits to get a sense of the talent pool, I want to work for smart people. Anything else I should be thinking about when assessing a fund?

 

Occaecati dolorem sit maiores odit. Aliquid cupiditate et mollitia odio. Aut voluptatem voluptatem necessitatibus dolores. Iste sunt quos iure unde. Et iusto sed quia mollitia. Accusamus cumque soluta laudantium culpa dolorum pariatur est voluptates. Magnam cumque ullam sit enim alias.

Natus omnis dolore libero unde illo. Eveniet qui esse est eius quo. Et est iste sed corporis. Officiis praesentium nostrum ab sint. Beatae delectus necessitatibus dolor repudiandae nam officia.

Ducimus distinctio fugiat impedit totam laborum. Voluptas nesciunt error nam dignissimos fugit quis dignissimos. Commodi illo maiores sit quo iusto rerum. Quibusdam vero adipisci qui magnam sed blanditiis.

Career Advancement Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Warburg Pincus 99.0%
  • Blackstone Group 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

March 2024 Private Equity

  • Principal (9) $653
  • Director/MD (21) $586
  • Vice President (92) $362
  • 3rd+ Year Associate (89) $280
  • 2nd Year Associate (204) $268
  • 1st Year Associate (386) $229
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (313) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”