What are the best Special Sits/PC firms?

Hi fellow monkeys,

I'm looking to make the switch to special sits/pc because I've realized that I don't like growth equity investing after a couple years at a top growth equity firm. I have talked to some people in the pc space and it seems like the investing mindset in special sits/pc is a lot more in line my own mindset.

I'm really looking for firms that can invest anywhere in the cap structure, get into "hairy" deals, and have the best comp/culture. Have liked working at a big firm. I'm used to working long hours and don't mind them, but I would prefer to work with people who aren't miserable all the time. I would appreciate details on comp/culture. Thanks!

Comments (42)

16d
WSO Monkey Bot, what's your opinion? Comment below:
  • Associate 1 in PE - Other
14d

Bump

  • Associate 2 in PE - Other
13d

There are a ton, but here's a few sizable / notable ones:
 

Apollo Hybrid Value

Oaktree Opportunities

Ares Special Opps

Blackstone Tac Opps

Fortress

Morgan Stanley Tactical Value

Brookfield Special Investments

KKR Dislocation Opps

HPS

BC Partners Credit

Sixth Street

Atalaya Capital Management

Monarch Alternative Capital

Angelo Gordon

Marathon, Centerbridge, and Blackrock all have pretty large vehicles here.  GS West Capital is a massive vehicle as well.

  • Prospect in PE - Growth
13d

Unrelated but if one was to go from MBB --> GE, would the PC arms of banker-only shops be less willing to hire you b/c of the consultant background? Or would the GE background/track record make up for that?

  • Associate 2 in PE - LBOs
7d

I work at one of the funds mentioned. In terms of performance and reputation, the tiers I'd personally put them in are:

- Tier 1 is Ares Special Opportunities / Apollo Hybrid Value /Sixth Street. They all have a strong brand + track record and have done creative, high-profile deals.

- Tier 2 is BX TacOpps / Oaktree SSG / HPS. All are different but BX TacOpps and Oaktree SSG deal with mandate conflict/overlap with other funds internally. BX is the OG in this asset class but has had mixed results recently when you take out their growth deals, their fund size has decreased, and they have a reasonably high degree of turnover given the uncertain path to making SMD. HPS does a lot of interesting and uninteresting deals. They do some deals that are creative and splashy but they also do sponsor prefs that are all PIK and toothless for 12% returns, plus they have a weaker brand name than Ares/Apollo/Sixth Street, so I put them in Tier 2.

On the others, Brookfield is fairly new, KKR is a reboot of a previously failed strategy, Atalaya does much smaller deals than the rest of these players. I haven't come across the rest - they might focus on a different size range than I traffic in.

  • Intern in PE - LBOs
7d

Curious to hear about this as well. Also, is Special Sits specifically a part of Bain Cap Credit? They have their own website fwiw (https://www.baincapitalspecialsituations.com)

  • Associate 2 in PE - LBOs
7d

I've never come across them to be honest. I just looked at their website though, which says $28bn deployed on 850 deals. That implies an average check size of $30mm, whereas the other GPs I mentioned are doing deals above $150mm. Also, they have $16bn of AUM and 105 dedicated team members - that's not a good ratio from my perspective. It implies that at Bain special sits, you'll get paid a fraction of what you'd get paid at the other GPs. But again, I'm going off of numbers from their website, so there's a chance I'm wrong. 

  • Associate 2 in PE - Other
7d

I work at one of the funds mentioned. In terms of performance and reputation, the tiers I'd personally put them in are:

- Tier 1 is Ares/Apollo/Sixth Street. They all have a strong brand + track record and have done creative, high-profile deals.

- Tier 2 is BX TacOpps/Oaktree/HPS. All are different but BX and Oaktree deal with mandate overlap with other funds internally. BX is the OG in this asset class but has had mixed results recently when you take out their growth deals, their fund size has decreased, and they have a reasonably high degree of turnover given the uncertain path to making SMD. HPS is does a lot of interesting and uninteresting deals (e.g., sponsor prefs that are all PIK and toothless for 12% returns), so the mix of exposure is what bumps them down to Tier 2 along with the relatively weaker brand name as compared to Ares/Apollo/SSP.

On the others, Brookfield is very new, KKR is a reboot of a previously failed strategy, Atalaya does much smaller deals than the rest of these players. I haven't come across the rest - they might focus on a different size range than I traffic in.

The Ares track record is pretty short since ASOF is a 2017 re-boot after their old special situations franchise shit the bed, but they now have crushed it and have one of the larger pools of Capital dedicated to strategy as a second time fund so should be in that bucket with the deals they have been doing. 
 

I would split Oaktree by team, their opportunities strategy should definitely be tier 1 since they do privates out of that vehicle (which is the largest in industry), but special sits tier 2 or 3.  Probably declining in prestige but still tier one.

  • Intern in IB - Restr
3d

Would consider adding BC Credit here to a 3rd tier here - think their group is worth mentioning. On the smaller side, but their latest opportunistic capital fund was oversubscribed, and they've been in a few interesting situations in the last few years where they've fared well. Newer team with less name brand but the guy in charge was a decently big hitter at Apollo and he's done a good job thus far at building out the group.

KKR probably should be in tier 2 as well, along with BCC - old special situations fund was a dud like you mentioned, and some senior people got pushed out, but this latest fund raised $4bn in a few weeks during COVID and I've anecdotally heard performance has been very impressive. Some of their investments are a bit niche and fall outside the box of typical special sits / hybrid value-esque investments, but the KKR name brand is still there and performance on the 2.0 fund is comparable to the other groups in the tier. 

Also worth mentioning that TacOpps and Hybrid Value are mainly structured equity groups these days (don't think TacOpps is doing much growth anymore), while the other names on the list are still primarily credit-focused. Oaktree Opportunities is also the flagship liquid distressed group at Oaktree - SSG is a bit smaller and does more loan to own or distressed buyouts, so would probably have the flagship group higher up on the list and consider moving SSG down.

  • Intern in IB - Gen
46m

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