At one of the big 3 rx (alix/a&m/fti) and wondering what to do given what’s going. It’s been busy but not sure if better to stay put or move to a workout desk. What are my chances on the investing side (distressed)? 5 YOE NYC
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Based on the most helpful WSO content, transitioning from RX consulting at a top firm (like AlixPartners, A&M, or FTI) to a credit workout desk or distressed investing is a well-trodden path, but it depends on your goals and positioning.
Key Considerations:
Staying in RX Consulting:
Moving to a Credit Workout Desk:
Transitioning to Distressed Investing:
Your Chances:
Next Steps:
Good luck with your decision! Let me know if you need more specific advice.
Sources: Q&A: I grew up in Consulting and reinvented my brand 3 times, Credit Hedge Fund opportunities, How the hell do you stay healthy in sweat shop groups?, Gym - Bulking while in IB - possible?, Life Hacks during WFH | How do you avoid burnout?
As incoming at big3, why are you interested in leaving? My understanding is that comp at big3 routinely beats buyside save for very senior people
Probably WLB
Big3 work has been awesome. Graduated in 2021 so got some post COVID healthcare tail stuff then crypto and been agnostic since. The work is getting a bit repetitive now after 13WCF for the 10th time or 5th 3SM for v57 of the RSA or whatever.
I think the comp on buy side at the proper place on the margins beats rx consulting. Or like above said, on a WLB-adjusted basis it does.
Biggest reason for me though is want to switch from advisory to actually buy side for more skin in the game. You don’t just work on a situation for the duration of the engagement letter but see more full picture stuff. Super into loan-to-own turnarounds, and always have a call option to go back to big3 if PC/PE workouts don’t pan out as expected.
You will like the rx consulting work, good luck and enjoy
If you don’t mind, could I please dm for advice?
Of course
Workout and distressed desks (w/r/t BBs) are two different functions within the bank. Workout generally refers to the internal group that restructures loans originated by the LevFin team (although it can include other products like derivatives or REF). They're not investing in anything new, just "working out" loans on the balance sheet. Distressed desks are basically the traders and research teams that specializes in distressed credit markets (think DB or JPM).
I’m talking more direct lending or PE workouts / distressed investing of which there is plenty out there. Recaps/LME on investing side or negotiating an equalization or change of control. I’m not interested in banking and certainly not BB on the rx side.
Disagree with last statement, I’ve come across many credit funds who will absolutely not take the keys, and many credit funds who will only take the keys in particular situations….
Gotcha, I think I understand where you're coming from. It's not as developed as BB workouts, but I've seen direct lenders like Churchill and Blue Owl start to build out their workout teams so there are definitely opportunities moving forward. Everything is private-side for workouts, so the fund isn't underwriting with the intention to work out the loan. It's recovery over profit, which can be a little constraining and boring at times.
To your second point, I deleted the paragraph because I didn't think it was relevant to your question, but to add some context, I was referring specifically to public credit, which is what distressed investing is. Most funds that aren't willing to take equity are direct lenders that underwrote at origination that have rules against taking a certain threshold of equity into their fund. But, if you're a distressed fund in the public market that isn't willing to loan-to-own, that's sort of antithetical to the concept of distressed investing.
All the MFs have workout teams. Had a surprisingly low offer from KKR, BX I am in process of interviewing. There's stuff out there, but moreso looking for folks' thoughts on secular market trends. PC is blowing up. Everything is getting PIK'ed so there is no cash to honor redemptions.
I am super bearish on private capital markets. Do you think I should stay in rx consulting (100% job security, decent comp but I get worked like a fucking dog) and wait to see how PC/PE situation develops or just make the switch if I get the right offer?
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