*URGENT* American BB vs. Credit MF

Hi all,

I currently work as an associate at a European BB based in continental Europe

Currently got two exploding offers as follows:

  • associate role at an American BB in London in IBD  

  • associate role at an American MF in my current country in their Credit team

Few data points:

  • base salary is slightly higher in absolute terms (i.e. not CoL/tax adjusted) at the BB (c.5% delta)

  • total comp higher at the MF (+15-30% depending on how good of a year it is for the BB)

What do I want to do in the long term? Idk yet, I like my current job but don't fancy becoming like some of my MDs (totally dependent by clients/with limited personal life)

Have always been curious about the buy-side given the breadth of additional skills I think I'd get there, but more on the PE side - dont know much about credit/people tell me its basically a LevFin job with a bit more diligence/modelling work but with 0 portfolio monitoring and low interactions with processes (i.e. you basically are part of the financing stream only)

What do you think? How does a long term career in PC compare to PE and banking?What are the exit opps from PC? Easy to get into PE or back to banking in case I dont like the job? Or better chances to land a PE role if I remain at a BB one/two more years?

Thanks a lot in advance!!

Comments (18)

Jul 21, 2021 - 5:09am
Hellogarden, what's your opinion? Comment below:

well, it depends on what kind of Credit team this is - CLO, Senior/Unitranche, Performing, Mezz, PIKs, Special Sits, co-equity investments etc.? ....

the more you are moving lower within the capital structure, the more DD work is required. CLO is structured credit and a different animal. Performing teams usually spend 2-3days DD on a name given that the process is relatively short. Mezz/Co-equity/Special Sits have a strong PE-like DD process - you receive all DD materials (sell side + buyside) and do your own work to formulate a view on the business. this reference to a LevFin job is completely ridicilous, it is like saying PE is the same as M&A.

It is true that portfolio monitoring is less part of the daily work, but nowadays, most PE's firms have their own Operations team. 

Just anecdotally, there have been recently a lot of move from SS/Mezz guys from MF credit arms to MF PE arms. might be worth taking a look.  

Jul 21, 2021 - 8:04am
F1e3Morgan, what's your opinion? Comment below:
Hellogarden

well, it depends on what kind of Credit team this is - CLO, Senior/Unitranche, Performing, Mezz, PIKs, Special Sits, co-equity investments etc.? ....

the more you are moving lower within the capital structure, the more DD work is required. CLO is structured credit and a different animal. Performing teams usually spend 2-3days DD on a name given that the process is relatively short. Mezz/Co-equity/Special Sits have a strong PE-like DD process - you receive all DD materials (sell side + buyside) and do your own work to formulate a view on the business. this reference to a LevFin job is completely ridicilous, it is like saying PE is the same as M&A.

It is true that portfolio monitoring is less part of the daily work, but nowadays, most PE's firms have their own Operations team. 

Just anecdotally, there have been recently a lot of move from SS/Mezz guys from MF credit arms to MF PE arms. might be worth taking a look.  

The team used to be focused on Mezz/Pics/More complex structures but is now focusing a lot on the more senior direct lending deals (i.e. SS/Unitranche) for AUM deployment push.

Main concern I have is for the job to become repetitive for me and with little exposure to company's management/operations or many counterparties like in banking or PE.

What do you think?

Most Helpful
  • Principal in PE - LBOs
Jul 21, 2021 - 1:27pm

I'm confused, if you're an associate in banking, lateraling to another banking role… why are you comparing the private credit role vs. banking/PE. Realistically PE isn't in the cards for you unless you launch a bit of a coup.

Your math is banking vs private credit.

Banking as a business is structurally challenged outside of the M&A advisory boutiques. They are getting bludgeoned to death.

Questions are more:

Buyside vs. sellside?Banking/advisory/client service vs. buyside/investment professional/credit


Private credit has basically cannibalized the sponsor levfin market of 10 years ago, but within much more profitable homes with better culture and better alignment.

More of a personal preference, but I wouldn't touch a BB bank with a 10 foot pole. The elite boutiques are great places to build a career if you have the sales and deal making skills/desire. Private credit I imagine can be quite dull as you're not really doing any primary work/diligence.

The one exception I would say is GS TMT, given that seat for whatever reason has a ton of exit ops throughout seniority levels… mostly to the tech world.

Jul 22, 2021 - 10:00am
capex fairy, what's your opinion? Comment below:

Classic America-centric response from WSO. PE recruiting is significantly less structured in LDN than NYC, and plenty of people break in as an associate. EBs are also significantly worse in LDN than NYC - wouldn't take any EB over any respectable BB. Worse deaflow and not nearly the same compensation premium as in NYC

  • Principal in PE - LBOs
Jul 23, 2021 - 1:17am
capex fairy

Classic America-centric response from WSO. PE recruiting is significantly less structured in LDN than NYC, and plenty of people break in as an associate. EBs are also significantly worse in LDN than NYC - wouldn't take any EB over any respectable BB. Worse deaflow and not nearly the same compensation premium as in NYC

Probably because all these European are wanker social climbing status whores. They love to work at one of the European BBS (short for bankrupt banks).

More worried about how much social currency they get out of telling people where they work, than they actual merit/rationale of working at such place.

  • Associate 1 in PE - Other
Jul 21, 2021 - 5:12pm

Just on the comp point although this should not be your main criterion: comp potential in MF credit will be significantly higher than in BB M&A especially once you factor in (1) co-invest which is usually levered and (2) and carry, with the latter partly structured as annual payout once eligible due to the nature of cash flow of credit investments (i.e. valid for the more senior lending strategies).

Blackstone Credit and Ares are the top places (please correct me if I am wrong) in Europe - BB M&A does not even compare in my view, but of course depends on what you like doing. Diligence will be very thorough at any successful / reputable credit fund, but your job in a credit fund of course won't be about implementing growth strategies alongside management / implementing the investment thesis (in most cases unless you are looking at a distressed case) if that is something you are looking for.

Jul 22, 2021 - 3:29pm
Mephistopheles, what's your opinion? Comment below:

I am true cross cap structure and can do lead equity or debt. Hands down I would take the credit fund gig. Moving to the other side of the table is more important than picking what part of the cap stack you want to sit in. At least in my opinion. I am American, but made the jump as an EB Associate. 

Jul 22, 2021 - 4:37pm
Pan European Monkey, what's your opinion? Comment below:

Mind if I ask what kind of fund you work for? This seems like my dream - I would love to be at a fund that can do the 40% LTV+ part of the capstack (2L, mezz, pik, preferred, common) but not always do Equity only - think it's where youncan get creative on how to structure deals and make good returns with some solid downside protection. Happy to move this to PMs if this is getting too personal. Unfortunately in Europe you mostly have unitranche boring stuff and maybe they chuck a bit of equity co-invest to the direct lender to boost returns a bit.

Jul 22, 2021 - 6:54pm
Mephistopheles, what's your opinion? Comment below:

I'd rather not elaborate any further as the universe of funds like this is tiny. However, in search of return, many SaaS growth equity funds are beginning to pursue this strategy. I think cap stack flexibility will be key to achieving strong returns in a market where banks are offering obscene leverage and traditional equity players are using laughable valuation multiples. 

Jul 22, 2021 - 6:08pm
F1e3Morgan, what's your opinion? Comment below:

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