Exit opps after DCM?
Interested in debt capital markets brokerage but Im curious, what happens if you get stuck at VP? Will you get kicked out if they dont want to promote you to partner?
It seems to me like making partner is quite unlikely so Im wondering what exit opps there are at the lender side. What kind of institutions are there aside from banks I suppose? Do they specialize in different parts of the debt stack, if so which are more interesting/rewarding to work at?
Equity side. Your deal exposure, ability to negotiate terms and knowledge of the deal flow process will make you a strong candidate for acquisitions, asset management, etc. this is a know your worth kinda thing, if you hold yourself high and perform and market yourself you could get a great equity side position,
Ye I guess so thanks, but Im less interested in the equity side of things and more so in the debt, hence why I would like to get inte Debt Capital Markets. As the advisor I will be looking for lenders for the acquisition or whatever it may be and these are the guys Im interested in knowing more about. What kind of financial institutions give loans, how are they placed in the capital stack and what is it like working for them?
That last point is usually why people move to equity ! I worked at a top debt UW shop and it was a grind. A lot of the “banks” you’ll end up connecting your shop with will be Freddie and Fannie and in there it’s just more underwriters and ICOMS. Then the banks, life Cos and debt funds will be fairly similar but I can’t say for sure. Those may be the companies you’d enjoy as they’ll target specific assets/locations/strategies to lend for. Debt overall is just a grind though.
Ooh, I must have misunderstood your initial comment, ok makes sense then.
- When you say debt is a grind, could you elaborate a little further? Longer hours? Boring tasks? If so, what makes equity more interesting/rewarding?
- I am not very "entrepreneurial" or "salesmanlike" but I do like the concept of deals, short deadlines, negotiation, etc so I figured debt would be the perfect place for me. Is that a reasonable conclusion? For example, what personality traits did you notice among successful seniors at your debt uw shop?
- Lastly, if you dont mind answering my initial question about what happens if one gets stuck as VP/Director in cre brokerage.
Hours are longer, and you’re on the clients clock, not your own. Timelines can become crunched at times with closings. I’m general the work (especially as an analyst) was pretty boring and menial. Lots of organization and the less interesting parts of the memos. I was only in UW tho not originations so that could be a bit different. Also you never get to go too deep into a deal and your capability is a bit capped.
On the equity side you really don’t have a ceiling cap. In my opinion, debt limits your potential to a certain point. If you work investments or AM or acquisitions, you can really learn the deal process and apply the same grind you would with debt to becoming a great investor and worthy principal. Then, I feel like the world and your strategy is your oyster and more fun.
My shop did about 1.5 billion last year I believe, and a large chunk of that was from one originator. He was just good at what he did and he knew his shit. It feels like he had a similar attitude to you My chief underwriter was a super antisocial dude who really knew the agency underwriting standards. But, for other shops or your own originations, most of the top performers are people persons. Lastly, the problem with the debt side is you’re not in control of the deadlines, and you don’t do very much negotiating because you’re always using tight guidelines that you can’t really move from and sometimes the pricing is entirely out of your control. Equity has a ton of negotiating in the bidding process and just on the day to day of managing a major asset,
If you make it to that level I don’t think you’ll ever be stuck. As someone with capital markets experience, you’ll always be valuable to the equity side for your background. But, the benefit of being a Vp or director is your earning potential isn’t all that capped, so you don’t have anything holding you back from working harder!
Massive thanks for the insights and elaborate answers. Bless you!
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