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!
Hi Analyst 2 in PE - Growth, don't worry, the WSO Monkey Bot is here.... I'm hoping one of these links will help find your answer:
More suggestions...
Fingers crossed that one of those helps you.
Bump
Sixth Street
Bain Capital Credit, Apollo Hybrid Values, Ares Special Opps, Blackstone Tac Opps, and KKR Dislocation are prob good places to start your search.
What’s comp like at places like these?
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
Whats the scoop on MS Tactical Value?
Marathon, Centerbridge, and Blackrock all have pretty large vehicles here. GS West Capital is a massive vehicle as well.
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?
In my experience, special sits groups rarely every correlate to good culture. Maybe my experience was just one-off with the people I worked with, but it was definitely the most demanding, sharp-elbowed culture I worked in
Can you elaborate on this? Interning at a MF PC shop next summer and I’m interested in the Special Sits group.
Thoughts on Hayfin?
Small uninteresting SS strategy. Mostly HoldCo financings in the low teens. More like a 2L type place.
can you elaborate a bit more?
bump
Dont forget PIMCO special sits, they they under the radar but do a lot of PC and PE into interesting areas
And Beach Point.
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.
How do you feel about Bain Capital Credit? I see them mentioned often on this site (seems like top tier from what I have seen)
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)
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.
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.
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.
Bain Cap Credit should probably be added to tier 1 on this list — regarded similarly to Apollo hybrid value and sixth street
Name one deal
I actually second this. From what I’ve seen, Bain Cap Credit is filled with incredibly smart people, they invest well, and they are having no problem consistently fundraising
On Apollo, in Europe team head left to lead Ares SSG and turnover is crazy high. No deal done due to US committee just not understanding/liking Europe. Would def separate US and Europe for all these firms.
Agree on HPS but same geographical differentiation should apply.
All of your GE investments from 20/21 are about to become spec sits, so just sit where you are and soak it up!
(sorry couldn't help it lol)
Anyone familiar with Charlesbank's Special Sits/Credit platform?
Interviewed with them a few months ago. Very smart guys, do a hybrid of public and private investing. They get great looks because of the PE platform, basically if they lose a deal on the PE side, they try to get back in on the credit side.
that’s helpful. how far did you made make it in the process (// anything to share on comp, culture, red flags etc?)
Owl rock cap
Anyone’s got a clue on comp for such roles at the Associate 1 Level? Both NYC & London would be helpful!
Depends on shop but in US in LA / NY / Boston, 350+ at high end with some stragglers as low as 250 for the larger players from more AM backgrounds mentioned in this thread.
BlackRock private credit has a past in Special Sits from its heritage in Tennenbaum Capital Partners, which started as a distressed shop. They do execute hairy deals and have dedicated special situations money but BlackRock is definitely in more of an asset gathering mode in the alternatives platform
Fortress and HPS are also similar interesting names that due true PC as well as Special Situations
The Tennenbaum team doesn’t do real special sits anymore, and are special sits in legacy only, and are primarily a private credit team now. Not that there are really going to be that many Tennanbaum employees left once their earn outs best.
If you are at Blackrock in the specials sits box, you want to be on the Dave Trucano team which has raised real opportunistic Capital and has a credit hedge fund that plays in distressed.
HPS and Fortress are team dependent.
Ya exactly, a number of MDs have left due to comp and lack of a dedicated special situations fund in the platform. Mostly just meant to say that they are willing to do a bit harrier direct lending with IRR targets of 13-20% where they would compete with people like Fortress, UBS O'Connor, etc.,
Atalaya is legit, growing platform at ~$10B AUM
Very familiar with them. They don't do corporate special sits but they do some higher yielding stuff than your plain vanilla 1L sponsor lending.
Believe your information may be dated. When I was in banking not too long ago, I interacted with their corporate team quite a bit and a close friend from college used to work there. Per their website, looks like they have a separate corporate platform:
Ares SO is top notch from what I have heard
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