I’m an associate on a capital markets team (debt, equity capital raising) at one of the big 4 brokerages. About to go to work for an equity fund and worried about the transition.
Is the underwriting / DD that different from the sellside? What are the biggest hurdles in the learning curve?
Everyone talks like it’s so different but I can’t imagine their underwriting is that much more thorough.
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You think more thoroughly about downside rather than how far can you push price. And then there’s the whole legal and structuring which is 90% of what’s important but the vast majority of juniors have no fucking clue how that works so you’re fine depending where you’re going.
If you're in capital markets raising debt/equity and already have experience doing a lot of capital stack structuring/analysis, then no it's not going to be a lot more complex from an underwriting/DD perspective. You'll just be doing more waterfalls.
Where the difference comes in is how you think about deals. You're going to be used to thinking about the upside and how to sell a deal, now you need to switch to thinking like an investor and understanding the downside - what are the major risks, are any unexpected costs likely to pop up, if it's a development deal are we carrying a large enough contingency, etc. etc.
You could go in just focused on modeling and process and it's basically the same job with slightly more detailed modeling, but what you need to be worried about is how to elevate your thought process to advance.
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