Should I go into private credit out of undergrad?
Incoming SA at a MM, and I am really interested in going into private credit / direct lending in the long term. I am fairly sure that is where I want to be longer term, so I don't care as much about getting siloed into debt. Are there any other potential downsides to doing so straight out of undergrad versus doing 2 years in IB? Would comp scale differently one way or the other? Am I losing out on valuable skills that would make me a better DL associate? I know this has been discussed some around private equity, but not sure how things might change on the credit side of things.
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You're welcome.
I think it's fine if you feel like you are competent at modeling and proactive and hungry. I have found that (some) analysts from undergrad are not as strong technically and not as hungry (putting together data lists, going through materials, setting up meetings, moving things along) as associates, but it depends on the person.
Do you know what that recruiting timeline would look like? Would that be going on right at the end of the summer when I would be accepting a return offer or is it earlier / later than that?
Probably earlier but I'm not really familiar with undergrad recruiting.
I think this hits nail on the head...
Analysts coming out of undergrad generally display somewhat lacking ability in the soft skill department - which typically gets developed through drinking from a fire hose in an IB culture environment. Just know that no one on the buyside takes time to teach you this stuff, as most are used to taking it for granted given the traditional pipeline.
Unless it is a major brand like Ares/GSO/KKR, I would suggest just experiencing banking if only for just a year or two
I interned my sophomore summer doing private credit and I loved it. I learnt a shit ton about how businesses run/industries in detail, with a big focus on downside scenarios. I’m now working at gs tmt and if I could back, I would had taken private credit. I truly enjoyed the work and the people I worked under. Being young I followed what I thought would give me better exit ops instead of seeing what was in front of me.
Good to hear man, I'm on a similar road but happy with what I'm doing in Credit so will likely stay on this side of the leisure.
Conclusions on value of 2 yrs in IB: learn how to synthesize data from 1 document to another (PDF/Excel to Microsoft Office application (Excel, Word, PPT). And learn process, especially administrative heavy functions cited (book meetings). Yes there’s more value to IB, just clarifying points mentioned. I’d argue the skill set in IB to direct lending / private credit isn’t that complimentary beyond how to model in Excel. Beyond that, theres big knowledge gaps to fill. Incredibly do-able, just will take time and right mentorship/guidance. Less opportunities for innovation and creativity in IB vs Direct Lending IMO
Sure. Great career.
bump for updated thoughts
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