Can anyone share information on the following groups, how they stack up against each other, and which headhunters cover them?
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I think you'll want to draw a distinction between the groups that do distressed / special sits buyout, and the more classic, flexible distressed and special sits investors who focus more on minority interest investments. There are some funds that do both as well. As others have said, you're missing a few funds here in the broader space as well: oaktree (global ops continues to predominate, less so special sits), pimco, GS MBD, the other MF credit groups (carlyle, kkr, bain in particular), centerbridge and fortress, the agressive distressed HFs (angelo gordon, aurelius etc) and other distressed debt funds (e.g. Canyon, Bracebridge, Monarch, Goldentree, HPS) and the bigger multistrat HFs which do distressed and sometimes distressed buyout (e.g. Elliott, Baupost, Davidson Kempner). As you can probably tell, there is a pretty significant diffference between these types of funds. In terms of reputation, I'll just say that not all of the megafund platforms are particularly good imo. Apollo Hybrid Value is one of the smartest groups on the street without a doubt, and while it's lost a few steps, BX tacopps still has a good name and brand. Oaktree is still a really solid shop, with a ton of scale (raising a new fund now as well) and a great reputation and process. The rest of the MF groups I wouldn't personally place in the top tier of distressed or special sits groups. The credit funds are hit or miss, and few do any of the buyout stuff. The multistrats that do this stuff are really smart, creative, and aggressive but the seats are hard to come by, especially focusing on distressed.
Since this is the PE forum I am leaving out the hedge fund types and sticking to the more traditional megafunds. Oaktree, Ares, Sixth Street, and Apollo are, in my opinion, the top players in the space. Obligatory some of this is secondhand and this info may be inaccurate or outdated.
Ares just raised a monster $7 billion second fund and is run by Scott Graves, who ran credit at Oaktree. Extremely impressive returns, lean team, and room for growth within the franchise, particularly in light of struggles at Ares Corporate PE. All special sits work is done out of LA.
Oaktree is involved in everything, particularly on the distressed side, just as a function of their size. They seem to be pivoting away from distressed and more into broader special sits in their opportunities flagship fund. Their dedicated special sits fund is much smaller but has great returns. The brand name alone makes it a great place to be as a junior. All special sits work is done in NY and LA I believe.
Apollo Hybrid Value is limited by the existing proficiency of their PE and Credit groups in the space (Some pools of capital within Apollo Credit are extremely opportunistic) but is a great place to be because of Apollo’s hairy orientation. Anecdotally have also heard that associates work across funds sometimes. I would prefer Apollo to BX Tac Opps, which is suffering from growth in other BX businesses as it is a catch-all for anything that does not fit neatly into other BX groups. I would also prefer Apollo to KKR special sits, which I believe is on its second or third iteration due to lackluster performance, and lackluster is being generous there. I believe the new PM KKR brought in is ex Oaktree and has good returns so far however. Hybrid value is based in NYC I believe.
Sixth Street was founded by the old GS SSG partners who spun out after 2008 and joined the TPG platform. Spun out from TPG a couple years back. Similar to Oaktree, they have very interesting deals and will invest in almost anything as a function of their size. They also invest across asset classes out of a monster flagship fund like Oaktree. I believe that their special sits team sits in SF.
I also want to highlight Bain Credit. Extremely sharp team split between industry coverage groups and a dedicated distressed and special situations group. Regardless of group, everyone works across the capital structure and asset classes on all sorts of opportunities. I’d still just put them half a notch below the above four. Bain Credit seems to operate semi-independently from Bain Capital due to their history as Sankaty Advisors (a credit hedge fund) which was acquired by Bain Capital several years back. Because of this, I have seen Bain Credit do LBOs and similar. Bain Credit is in Boston.
Very importantly as another poster mentioned, there is something to be said for working at the best group at your firm. At Blackstone and KKR, you will be second fiddle and that’s why I personally prefer the above five groups over them. With that being said, these are all industry leaders and an associate offer at any of them is something to be proud of.
It's not really about working at the best group at your firm. It's more about what deals you have access to which is impacted by what group you are at. That statement was primarily aimed at BX Tac Opps and not really KKR. For example, originally, BX Tac Opps was a catch-all for everything that did not fit into BX's other groups. However, as Infra and Growth were added to the BX platform and other BX groups grew in size, the Tac Opps opportunity set decreased considerably.
This is less the case for KKR as they relaunched and rebranded a Dislocation Opportunities fund during Covid. However, they are really not on the same level as they manage a fraction of what every other firm in this thread manages in their special sits pool of capital. The new group is also not very opportunistic and is much less risktaking, likely due to previous failures with the old KKR SSG.
As to why I prefer Bain Credit and Apollo. Like I said above, Bain Credit seems, from the outside, to operate in an independent manner, likely due to its roots as Sankaty Advisors. I don't think they answer to Bain Capital PE or RE when chasing after deals and such, and the structure of the teams and work there is much more opportunistic, whether you are on an industry coverage group or the distressed team. If you join BX Tac Opps, you have to navigate between PE, Growth, Infra, GSO, RE, etc, and if you join GSO, you are never touching anything opportunistic. All Bain Credit associates, regardless of team, get to be opportunistic.
For Apollo, quite frankly, I just have a lot of respect for the people there and the deals that they have done, much more in recent times than I do for tac opps. They likely suffer from the same issues that BX does and I am just favoring them with personal bias. The numbers do seem to back them up however. Blackstone Tac Opps funds have been shrinking and Apollo HV is growing. If you just look at some of the deals that HV has done, they shows Apollo's ability and willingness to get involved in hairy situations that make for great special sits investments that perhaps other funds are unwilling to do.
This is really just splitting hairs and if you get a Blackstone tac opps offer, take it. If you like the BX team better than Apollo, take BX.
Just a few quick notes / add-ons to this (ignore the outdated title, did 2 years in RX and am at a credit HF now, but considered many of these groups and have friends in several, especially the West Coast funds):
Think its worth noting that Oaktree's Special Situations Group is a bit different from Opportunities and the other names on this list, in that they primarily do distressed for control or control buyouts for hairier MM situations rather than the minority equity deals a TacOpps / HV might do, or the broader public distressed / special situations mandate that Opportunities has. Echoing your point that the fund is much smaller as a function of this (latest fund was closer to $2bn, compared to $16 for Opportunities), and anecdotally have also heard returns have been good and the team is super sharp.
Sixth Street, similarly, is split up into an opportunistic strategic capital fund that does more mezz / minority equity type deals (Spotify and Airbnb pref and the Spurs deal) and a fundamental strategies fund that does larger scale public deals, with a flagship TAO fund that can invest across strategies / asset classes. Nothing but good things to say about them.
Regarding KKR's relaunched SSG, they're investing out of a similarly sized fund to the other names on the list - the $4bn fund they raised during COVID was a comparable size to the $4.6bn fund HV raised earlier in 2022 and the $4.8bn fund TacOpps raised, which just goes to show that despite abysmal performance, all you need is to reshuffle your PMs and leverage the name brand of a KKR and LPs will fork over capital. Wouldn't go so far as to say the new group isn't as opportunistic - they did the Coty and US Foods prefs and made out well buying into stressed/distressed 1Ls / 2Ls during and after COVID. They've also done a few outside-the-box deals (music royalties, etc.) Given impressive returns for the fund thus far and the lean team relative to AUM, I'd personally equate a seat in the rebranded group to that of a TacOpps, Sixth Street Strategic Capital, or a Bain Special Sits seat, although I'd still take a seat at HV, ASOF or Oaktree Opportunities over all four. Curious to see how performance / PM retention looks over the next few years.
Regarding TacOpps, while fair to say that the opportunity set has decreased since the days they were doing every esoteric or bespoke deal that came Blackstone's way, I'd still have them up there with the other names you mentioned - they've cemented themselves as a minority equity shop for the most part that still dabbles in CLOs, infra, and other unique investments, and the cannibalization by other BX groups is largely overstated these days. I don't have color on returns but this is definitely still regarded as a top group in the space.
Bain SS is interesting as their mandate really is a mixed bag, and they do everything from control buyouts and pref to CLOs, CMBS, NPL (Greece deal was a notable one) and real estate/infra. Smaller check size for the most part but they do more deal volume than most other names on this list, which in combination with the mandate makes them one of the more interesting names on this list. Have heard that associate openings are rarer given they have an analyst program, and don't personally know anyone here, but want to echo what you mentioned about Bain Capital Credit as a whole being independent from the PE business, which helps to make this a highly coveted seat.
Agreed on your takes for ASOF and Hybrid Value, although I will second your point about Apollo's credit and PE arms limiting the kinds of deals that HV can do to an extent. The focus for HV is primarily hairier minority equity deals (Albertson's comes to mind), and this, in addition to the Apollo platform and recent returns puts them a tier above Bain SSG, BX TacOpps and KKR SSG in my opinion.
Again, in my experience, these are all highly coveted seats for top RX candidates - the decision for prospective associates seems to come down to preference for strategy (buyout vs. public distressed vs. minority equity, etc.) and geography.
What are the typical exit opps after 2-3 years associate at a place like this? (Apollo, Tac Opps, Oaktree, Sixth Street, Ares)?
God shut up. This IS the exit opp. You don't go into something like this thinking about how it sets you up for what's next. If exit ops are something you care about then you're likely someone who needs them because they'll wash out. Either you make it and stay (maybe moving between firms at the same level or getting a required MBA), or you wash out and keep moving downstream until you succeed or you're out of the industry altogether.
Like literally, by the time you have apollo + IB on your resume, what do you think exits are? Nearly anything within finance will be open to you, and just about any non-technical role outside of it. Theres your answer. Now go away and think before you ask any more obvious questions