Private Credit/DL --> IB --> PE
I'm a high performing analyst at a MM private credit/DL firm where I was a summer analyst before, but I want to do PE. I graduated a year ago from a top 10-30 school (both overall and in terms of undergrad b-school ranking), with a low GPA (3.0-3.5) but otherwise stellar college resume (investment club leadership, other extracurriculars, PWM/other summer internships). Based on the typical path, I think I have to do IB first before getting into PE, although I loathe the idea of having to do so.
Which IB firms (names, sizes, market focuses, etc.) should I target? Which groups (M&A, industry groups, leveraged finance, restructuring, coverage, equity capital markets, debt capital markets, etc.) should I target? How do I best network/recruit into any of these? I only desire an exit to PE and preferably fewer hours relative to other firms available.
Do you think I can get into PE without doing IB first?
Thanks!
What type of private credit firm are you currently at? Particularly, do you invest across the capital structure (senior, uni, mezz, and equity) or just do senior debt?
Mostly senior, occasional (rarely) junior/uni or equity co-invest
It would have been easier if you also did uni/junior debt and equity co-invest as you'd be able to discuss deals you've invested equity and demonstrate your capability to think like an equity investor. I think it may make sense for you to try to make the jump to a LevFin group or RX group especially if you've been apart of any workouts or restructurings.
Middle Market IB, maybe Rx if you can pass the technical portion of the interviews. One of my friends from college went from Antares to a MM IB so it’s possible.
Why only MM? Could he not get anything better with his relevant experience?
Is he in or is he going into PE?
Believe so (MM PE in tier 2 city) but I haven't talked to him in a bit
Is a direct transition to PE typically not possible from a credit seat right out of school?
Bump
Depends on quality of the seat. The people who were analysts at Silverpoint and Sankaty have historically crushed it but Prudential and Antares, not so much.
View can be that training isn’t as rigorous as IBD.
Got it. Would a move back to IB make sense to get to PE then? Assuming not a Silverpoint, etc. type shop for analyst role
Have you spoken to associates at other buyside firms yet about your background? I wonder if an intermediate buyside step (mostly senior/unitranche > team that invests across the capital structure > PE) might work.
I've gotten mixed responses on IB first vs. PE right away, but none have suggested going in between in the capital structure first (although I also haven't posed the idea to them).
Yeah I'm in a somewhat similar position (will have solid equity experience by the time I start a new role but, depending on timing, not during the interview process), and what's been best for me (in case you're not already doing it) has been to talk to associates who didn't get hired through the IB on-cycle process (or didn't start out in IB at all). They generally have a better view of other paths to their role and can tell you what firms they found receptive vs not.
Honestly better off lateraling to firm that invest across the capital structure or atleast junior/mezz/pref equity rather than going to IB. Going to IB would be a step back.. you cant improve your GPA by going back to IB so what are you trying to gain? Talk intelligently abt your current deals and network
Thanks, helpful to hear
Quick question: why leave DL? Seen a few threads on here and it sounds like a great niche within finance (comp, lifestyle, the work itself, etc.).
All true, I'm just more interested in PE
Don't think you would need to do IB, but it will be more of a bespoke recruiting process. Try to network with PE clients that you have done LBOs with. That may be an easier route (vs. going to IB) and give you more of a personalized recruiting process than most banking analysts. Definitely an uphill battle, but probably a bit easier in terms of time commitment (save 2 years of having to do IB) and having to recruit twice.
Weird question given the circumstances, and I apologize for it in advance. If you don't mind me asking, what does comp at your DL shop look like for associates? VPs? Someone from my analyst class is going to a MF's direct lending arm and it sounds like associate all-in comp is in the $200-225k range, which is definitely on par with MM PE. Once again, sorry for the obscure question.
interested in comp as well ^
PM me
^ Interested in this also. Feel free to PM if you can or post a range if that's easier.
might sound like a silly question, but is there carry in private debt/credit roles? If so, is it only at the MD level and is it comparable to carry in PE?
Yes there is carry. Less than carry at a PE shop but still large especially if the fund is levered
thank you!!
Also curious- especially if transitioning to top IB RX group or staying at solid UMM/MF credit team?
Main consideration is keeping optionality open for PE and other career options
Bump, curious to learn more about the transition from credit to PE. Will be joining MF's structured credit team out of college and also have IB offer in hand.
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