Opportunity for debt team in rising interest rate market/possible recession?

Currently an AM analyst at a developer and I'm being offered a senior analyst position for the debt team at a LifeCo. Would be about a 15-20% base increase with closer to 30% overall pay increase. Exposure from one asset class to all asset classes, and gets me closer to the capital stack where I think I'd like to be.


Currently like my role, and I'm more in the camp that a recession is already in process but the mania hasn't 100% set in for the "normal" people, but I've always liked the allure of a LifeCo position and this would increase my scope of work and exposure.

Obvious thing I'm most worried about is with rising interest rates in a debt production role - if production slows then I'll be the most recent person on the team with the least debt experience, which is not a good spot to be in. Main counter point to that is we are in one of the stronger markets and their team has mentioned multiple times in the interview process about how they are continually broadening their scope of investments to bring in a lager AUM.

Half of me would also just use this as leverage for a pay and title bump at my current work space, since I'm the only analyst on our team and our team has had trouble finding new talent for our projected increase in production for nearly six months. Even if things turned south I'll still have solid job security.


Would enjoy any insight, thanks in advance for the commentary.

 
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I think being at a LifeCo is one of the safer places to be on the debt origination side during a period of market softening or even a serious downturn. They're often lending off their balance sheet or as a custodian for other Life Cos that need their deposits & pools of cash to be put to work. The certainty of execution that comes from balance sheet lending also puts them at a competitive advantage if the CMBS/CLO market continues to widen out.

The commercial lending industry will never grind to a halt in the way that the residential side can/will. Most commercial loans have balloon payments, so there is always going to be forced refinance activity that needs to get done. In times of uncertainty, a LifeCo execution is going to be one of the safest routes a qualified borrower can go.  

 

If the debt markets are slow, the development market will be even slower.

I’ve never regretted leaving a job for higher pay and/or broader deal experience. After a year or two at a LifeCo you could go to a pref/mezz fund and likely double your LifeCo pay

 

Definitely part of my pro column to make the switch. Luckily my current firm has a solid pipeline for projects under contract to start over the next year or two - we're in one of the hot markets, but if it looked like we had nothing on the books then I for sure would be more motivated to make a switch.

And agreed - strength of the name and type of work would set me up for better exit-ops if wanted.

 

What is the spot? AM or Originations?

And since you mentioned Giants tickets, I'm guessing it is MetLife. If so, the NE team is one of the largest and most prolific at MetLife. It isn't a team where they would hire and then downsize just because of a small hiccup in the market given that LifeCos are very long term investors.

If you are interested in debt, then it would be a great place to be and if you did decide to exit to something a bit higher yielding/opportunistic, you should have options.

 

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