PE to Private Credit?
Has anyone made the jump from PE (buyouts) to private credit? Have you regretted it or found it to be a good seat generally?
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Based on insights from WSO threads, transitioning from private equity (PE) to private credit is not uncommon and has been observed more frequently in recent years. Specifically, individuals with 2+ years of post-banking PE experience, particularly in middle-market PE, have made the move to mega-fund (MF) credit roles.
This shift can be appealing for those who prefer the risk/reward profile and structure of credit investing over equity. Private credit roles often provide a more predictable work-life balance compared to PE, which can be a significant factor for those seeking a change. Additionally, the skill set from PE—such as deal evaluation, financial modeling, and understanding capital structures—translates well into private credit, making the transition smoother.
As for regrets, it largely depends on personal preferences and career goals. If you enjoy the operational involvement and equity upside in PE, you might miss those aspects in private credit. However, if you value a more stable and structured investment approach, private credit could be a better fit.
Would you like more details on the pros and cons of this transition?
Sources: For seniors who have spent your career in private equity, do you regret it?, For seniors who have spent your career in private equity, do you regret it?, Any career regrets after moving from PE to public markets?, Handling Stress / Burnout in Private Equity, Let's be honest about PE
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My friends who all made the jump from IB/PE seem to like PC a lot given less hours (50-60 hour weeks) but still making $300-400k+ while still making investment decisions and analyzing companies. Also just sounds like higher velocity and more deals seen since you have don’t have control and much more of a focus is on deal execution and how to structure deals (tranches of debt, pref, etc). Also growing asset class if you look at industry expansion and a lot of upside in this class.
Downside I can guess if you like working or doing standard deals then it’s hard to get back to PE (but correct me if wrong). Also kinda narrows the exits after to where Credit doesn’t have the same optionality that PE does. But you could counter argue that PE’s pyramid scheme leads to much more job instability and in the long run PC might have more stability and runway.
Curious what others think - and if possible to flip back to PE after.
helpful, thanks. Any color on what reasoning they gave for PC vs. IB/PE in interviews? Was it just what you listed i.e. more deal volume, execution emphasis, focus on structuring, and growing asset class or were there any other points they referenced?
If one buys into the PE's best days are behind them and there will be a flush out of talent/firms in the next 10 years PC will be fucked IMO...It's just a derivative of PE and IMO there has never been a true blow up recession since PC has become so prevalent which leads me to believe that many PC firms/funds will lose tons of money when PE has a bad 2-4 vintage year run. Again IMO we are in the early innings of this, 2017-2021 vintages who aren't above 1.0x DPI probably don't make more than 1.5x net which is horrible for locking money up for 12-15 years.
I understand there are downstream affects from PE to PC given that PE uses many of those firms to fund deals, but do you really see so many PE firms blowing up (or even just funds blowing up) that lead to so many issues in PC? I think people have been saying PE's best days are behind them for a long time and it's true it's becoming more commoditized, but there will always been opportunity, and therefore there will always be PC opportunity. Curious to hear what you think.
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