Hello everyone,
I am very bored at my job. I did private fund debt (bridge lending) and REPE. Took a job at a BB doing debt AM. Is it me or is this the most boring job in the world? Teams are very split up, no one seems very competent, and software is doing everything for you. Financial modeling skills are basically not needed. There are way too many people assigned to one simple task. I am a bit discouraged and would be curious to hear other experiences. Feel free to DM.
How much is comp and what are the hours like?
Comp is good. Hours are usually 9-whenever you’re done with work usually 6 if there’s a rush on a deal or something you’ll be working later
Can you define good specifically as that would allow for a better cost/benefit analysis of the position.
Not enjoying analyzing why a Borrower tripped their DY covenant from 10% to 9.99% and DSCR from 1.25x to 1.244x?
Lol talked to someone at New York Life that is doing the same thing and it sounds boring af. Would rather not have a job actually lol. Just quit.
That's agency lending. The most boring and restricted. Thankfully, I do not do that.
Debt am as in doing quasi servicing, funding draws, covenant testing, negotiating mods, etc? It’s not my cup of tea but some less-production-minded folks like doing that work. Did you not understand what the role entailed when you took it?
No. During the interview process, they made it sound a lot more complex and exciting.
Yes it is boring because you’re supporting loan servicing and not production, i.e. not debt & equity placement, investment sales. Do not quit, just start interviewing on the side. It is a tough market and debt am is relatively safe, your production team is probably having a tough time, but you could also possibly find an opportunity to lateral internally.
I recently moved to debt am and can’t stand it. The work I inherited is all wrong and low quality, people are constantly not on top of their loans, and I can’t enforce the loan agreement because “strategic relationships”. Furthermore, there are a million partner groups such as servicing and it takes forever to get simple items.
100% the best career if you want good comp and low stress + hours.
Start a scalable side business
Any specific business models in mind?
Hmm.... no can't think of any..... sorry...... :)
This is coincidental, but last night I was reading "The Creature from Jekyll Island" (old book from 1994 about the federal reserve & banking system, highly recommend) and the author spoke about the very first instance of FDIC intervention in the banking system - when Unity Bank in Boston became insolvent. The things you listed in your post mirror several of the same reasons why Unity Bank failed.
Take a read:
"In 1971, Unity Bank and Trust Company in the Roxbury section of Boston found itself hopelessly insolvent, and the federal agency moved in. This is what was found: Unity's capital was depleted; most of its loans were bad; its loan collection practices were weak; and its personnel represented the worst of two worlds: overstaffing and inexperience. The examiners reported that there were two persons for every job, and neither one had been taught the job."
With that said, what bank are you at so I can withdrawal my deposits?
There are some very smart people (myself being one of them). However, there are so many compliance controls and not much creative thinking because of it.
The best underwriters and acquisition analyst / associates I’ve ever met all started in debt asset management. Learning your way around docs is incredibly important and many people don’t get exposure to this early in their career. Especially in a time like now when you’re in docs all day dealing with workouts etc - you’ll do circles around your co workers if and when you decide to move to a deal team or equity asset management team.
10000000% agree with pudding. If you don't understand debt, you can't do equity very well. Equity can switch to debt and struggle. Debt is killer when they switch to equity. Everyone early on says "REPE SO COOL LETS DO SOME ACQUISITIONS" but if you don't get the nuances behind the debt and waterfall and how to structure it, you're useless.
I agree that having a strong handle on credit and docs is critical for any investor. What I don't get is how this is any different than me structuring every aspect of the docs at closing and constantly negotiating and making asks of the lender AM team during the hold. I'm doing everything the loan manger is and ten times more on my side of the table.
It really comes down to the type of assets you are dealing with and the strategy of the lender.
Levered debt fund AM (where I am) we are doing a lot of the same stuff as equity people because we lever the loan and therefore end up as borrowers trying to negotiate the best deal for ourselves. It is also why I make as much money as equity AM people. And before anyone accuses me of being in PM (which I pseudo am) and not knowing what my own job is, while my job is moving more towards managerial/relationship duties, I still handle day-to-day AM responsibilities for 50 assets. This morning I negotiated a loan modification, approved HUD statements for a condo inventory loan, sat in on a term sheet call for a new deal, and still had time for coffee with my Ops team, and a broker lunch.
I'm on a lean team and cover a lot of ground, which is a big part of why I'm treated well vs. being at a large place that is very segmented, which it sounds like the OP is facing.
If you are talking core life co or agency lending, then AM is way different and more servicing/reporting oriented. Not that those people don't work hard, but the situations that you come across are way more vanilla than in high yield.
You guys use note on note and MRA structures?
Agree; my day is more or less the same. Just larger teams.
How do you manage 50 assets without losing your mind?
I'm a bit of an anomaly. Most places limit their debt AMs to 20 or 30 deals. But while we are a very heavy AM focused group (our specialty is heavy transitional/construction lending), we aren't huge on the reporting side. Blackstone/Starwood put together 3 page asset summaries for every asset each quarter and will spend hours and hours in meetings pouring over them with senior leaders. I hold a 1 hour meeting monthly where I prep a single page of notes highlighting important updates on the portfolio: this loan is paying off, we are modifying that loan, this property just signed a big lease, etc. I'm not spending 4 weeks a quarter re-underwriting my deals and trying to make every dollar in my budget balance. I'm also not a bank (looking at you HSBC and CapOne) that is writing default letters because a borrower missed the deadline to send financial statements or because they are 3 days late on a construction milestone. And I'm not Rialto and super aggressive in trying to manufacturer defaults so i can have leverage over my borrowers.
My portfolio also has a lot of repeat borrowers that pick us because they know we will do what is right for the property and will be flexible vs. some of the other groups that are all process or just say "no." The mod I just negotiated was for an office owner in Miami. They need an extra 3mm for TI/LC and carry to get them through to move-in of a new tenant. We signed a 6 page upsize for the $3mm in 2 weeks. Our LTV is going from 63 to 65%, I'm holding pricing, took a 1% origination fee on the full 3mm and a 50bps exit fee on the drawn balance. I made a recommendation the afternoon of the initial call, got committee approval instantly and had draft documents out in 3 days. It took us 2 weeks only because we had to upsize the IRC and get a title continuation/upsize endorsement.
Some lenders make it harder, we try and make things easier and more efficient.
Curious how you got into the debt space to begin with?
Right place right time; worked for a respected bridge lender who started a private equity fund my first week on the job. Ended up becoming a senior in that division and doing lending too.
My original background is in construction/development. Lender worked with us a lot, and I had a finance background. So, they said come work for us.
1st be thankful u have a great job/pay and a good amount of free time cause many would kill for ur role but with that said it seems u could recruit for the few funds hiring that do more complex deals. A lot of shops focusing on special sits hiring associates/vps for example
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