PE --> Special Sits Credit: Lifestyle and Transition?
Having a few years of PE under my belt, have been thinking / talking to some Special Sits / flexible capital funds. Talking about the funds that likely focus more on credit, but will invest across the cap stack with some structured deals as well. Not specifically focused on distressed.
Since I'm pretty far from having direct experience in the space, really curious on overall WLB vs vanilla PE:
- As anyone knows, the long hours in PE are driven largely by continuous bid processes / timeline, as well as the need to uncover every rock in the business, resulting in some pretty bad stretches that are driven more by necessity than true intellectual purpose. Then, you also spend a ton of time on your PortCos (sale processes, underperformance, add-on M&A).
- I'm trying to understand how this maps to the SS/credit world, which is honed more in on the investing and digging into true value drivers and downside protection, than the things you "have to do." I imagine long hours can be driven by: event-driven opportunities, wider breadth of investing (looking at broader cap structure), and some amount of deeper fundamental research (hairier situations) and leaner teams. My hypothesis here is that a Sr. Assoc / VP may work on average fewer hours per week (or at least slightly more predictable), given more of the time is spent evaluating ideas rather than getting randomly blown up by process-driven bullshit, like where your weekend blows up randomly due to some random DD finding that the Partner now wants a 20-pager on
I've realized that a lot of the things I liked about PE revolved around really thinking thoughtfully and carefully about investment ideas, modeling them out, and trying to find the 1-2 things that would make or break the thesis. I didn't like being constrained to sector-specific buyout, and really didn't like spending so much of my time on things that were necessary but didn't move the ultimate investment decision, nor spending too much time on the Ops/PortCo side.
My only concern is that some SS groups get major shit for being huge sweatshops. I'm in the phase of life where I still like doing deals and can work hard towards outcomes, but am sick of constant midnight / weekend grindfests on things that don't appear to move the needle. Am I being too naïve?
Ignore my title. Seem like fair and valid points to me. Are you thinking Special Sits like Bain or like Monarch. They are very different beasts
Thinking less of the distressed style (which is what I believe Monarch does). Moreso firms that selectively play distressed, but also give growth capital (pref or sub debt), asset-based financings, selective publics, etc. I imagine the more you lean into distressed opps the worse life is
Bump
Would love to hear some thoughts on Sixth Street Fundamental Strategies (Public Stressed / Distressed Credit all the way to common equity)
Any info? Saw they changed names to be under Global Opps now too. Have also seen 3 associates leave in the last few months… something up?
Global Opps was f.k.a "Stategic Capital" Fundamental Strategies still remains under same name.
Have been in SS for 4 years now, at firms that also have dedicated PE teams/funds.
Generally speaking, SS has longer and more intense hours on average. This is mainly driven by the limited investing opportunities across the market (so competition is fierce) and higher cost of capital (than plain vanilla direct lending) comes with the expectation that you offer speed of execution (particularly in the more complex/stressy situations). Additionally, if you also cover public markets, hours will be even longer as you'll be expected to constantly track/monitor your names.
That being said, when PE is sprinting and nearing final IC submission, they crunch longer hours with much more intense DD.
As above user. Just adding that SS has a lot more time spent in structuring // arguing back and forth with other creditors and where applicable, sponsors. Have spent my entire week on calls...
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