MM IB vs Secondaries vs Private Credit
I’m fortunate to have 3 analyst position offers and am currently deciding. Would love to get some opinions from people in the industry, especially on secondaries and private credit. Currently leaning towards MM IB. Below are my considerations, curious if they make sense! Thanks!
3 options:
MM IB (William Blair/PWP/Guggenheim)
Secondaries (top 3 player, 50/50 between GP and LP led)
Private Credit (Apollo/BX/Ares)
MM IB
Pros
- Optionality (potentially same options + PE)
Cons
- WLB, and not sure if I want to get into PE
Secondaries
Pros
- Fast growing industry
- Great returns
- Probably good chance of getting promoted over time + getting carry?
Cons
- Basically no exit opportunities? From what I’ve read, it seems like you either stay at the same company, or move to another one, but you’re kind of stuck in secondaries?
- Low transferability of skills? Although might less the case with GP-led?
Private credit
Pros
- Like credit thought process
- Seemingly best Pay/WLB ratio?
Cons
- Industry in decline?
- Lower chance of getting promoted?
- Small chance of (meaningful) carry in the future?
Based on the most helpful WSO content, here's a breakdown of your options and considerations:
MM IB (William Blair/PWP/Guggenheim)
Pros: - Optionality: MM IB provides a strong foundation for a variety of exit opportunities, including private equity (PE), corporate development, or even transitioning to buy-side roles like private credit or secondaries. - Prestige: These firms are well-regarded in the industry, and the experience can open doors to top-tier opportunities.
Cons: - Work-Life Balance (WLB): Investment banking is notorious for long hours, and MM IB is no exception. - Uncertainty about PE: If you're unsure about pursuing PE, the grind of IB might not feel worth it in the long run.
Secondaries (Top 3 Player, 50/50 GP and LP-led)
Pros: - Fast-Growing Industry: Secondaries are becoming increasingly popular, especially with the rise of GP-led deals, which offer more complex and transferable skills compared to traditional LP-led deals. - Strong Returns: The secondaries market has shown consistent performance, making it an attractive space to build a career. - Promotion Potential: At a top player, there's a good chance of upward mobility and earning carry over time.
Cons: - Limited Exit Opportunities: Secondaries can be a niche field, and many professionals either stay within the same firm or move laterally to another secondaries-focused role. - Skill Transferability: While GP-led deals may offer more transferable skills, the overall skill set might not be as versatile as IB or private credit.
Private Credit (Apollo/BX/Ares)
Pros: - Credit Thought Process: If you enjoy analyzing credit and structuring deals, private credit can be intellectually rewarding. - Pay/WLB Ratio: Private credit often offers better compensation relative to hours worked compared to IB. - Prestige: Firms like Apollo, Blackstone, and Ares are top-tier in the private credit space, which can bolster your resume.
Cons: - Industry Concerns: There are discussions about private credit facing potential headwinds, such as increased competition and economic pressures. - Promotion and Carry: While pay is strong, the path to meaningful carry or senior roles might be less clear compared to other fields.
Key Considerations:
If you're leaning towards MM IB, your reasoning makes sense given the optionality and foundational skills it provides. However, if WLB or a specific interest in credit or secondaries appeals more, those paths could be better suited to your preferences.
Sources: Credit Hedge Fund opportunities, M&A Pros and Cons, Top Private Credit vs IB for Developing Investor Skillset?, Books on Private Debt/Mezz/Etc..., https://www.wallstreetoasis.com/forum/investment-banking/pros-and-cons-ib-vs-pm?customgpt=1
If you want to do either secondaries or private credit for a while, go for those, but IB would likely give you more flexibility (especially if you want PE eventually)
Those IBs won’t give you the flexibility you’d think you’ll have. Personally MF credit listed here make it a no brainer
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