Tech IB Analyst Interested in Distressed
Would it be harder not coming from an RX background? What are distressed debt firm modelling tests like? Assume they don’t give you the traditional LBOs
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Are you sure you want to get into distressed. It sucks
How come?
Think about it
You are spending your days with failed companies. People losing their money, losing their jobs, courts, litigation, people screaming on calls with lawyers
Now think about it again
Tech is going to be distressed very soon lol
WSO’s obsession with distressed has always dumbfounded me.
Yes, let me fight for the absolute sweatiest seat in finance so I can spend my 20s underwriting corporate autopsies and calling it “value creation.” Almost every single worst culture / WLB PE seat is distressed or value investing seats just due to the hairy nature of the deals.
I worked on a near-distressed company pre-buyside. The most commonly talked about "levers" are layoffs, asset sales, or quasi-legal maneuvering. If that’s your thing, fine, but it's very ghoulish IMO. But you do have to be fairly detached from the ground reality of what those “value creation initiatives” actually mean to the people experiencing it.
In growth and venture, at least you’re backing teams trying to build something. You leave calls talking about upside, not survival math. That just feels better on a human level IMO.
And it’s not like distressed comp is 2x or returns are magically superior. You’re just choosing to stare at broken businesses all day and calling it a personality trait. Would just stick to Tech, tons of alpha in growth and venture land with AI, not all growth firms use debt aggressively (or even at all). Also distressed is also at heavy risk with AI, you are investing in the worst companies in the world; a massive disruption isn't going to help them. AI's effects is not limited to tech to any extent.
Any thoughts on rx/distressed experience limiting exits to/opportunities in tech and tech adjacent space?
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