Distressed Trading Desk @ GS
Incoming 2022 SA @GS in NYC this summer. Really interested in getting in with the distressed/HY credit. Any insight on (1) what they are looking for with respect to skillset and (2) what their desk culture is like relative to others?
Not familiar with GS specifically but HY is typically looking for you to know credit valuation inside and out on top of standard S&T qualifications. Would recommend reading up on special situations currently and historically as that seemed helpful in my networking with the HY desk at my firm.
I’m early in my career so this is just my experience and I’m sure there’s more.Hope this is at least somewhat helpful and you get more traction on this Topic soon!
That's helpful thanks. I interned at a distressed credit fund last summer so I'm hoping that'll get my foot in the door once I hit the floor. If you don't mind me asking, what is it about HY/distressed as an asset class that draws ppl to it specifically as opposed to other desks? Why do you enjoy it (assuming you do?)
I’m on an IG desk but trying to get more exposure to HY business. HY typically has wider spreads and more volatility so there can be more money to be made trading it (although no where near the Milken days - read Den of Thieves). Also would say HY is slightly better protected from electronification bc there is more credit analysis that needs to be done and a somewhat smaller market so your skill to move less liquid bonds is more important.
I work in FICC sales, mainly covering IG paper and a few other products (govs/rates). Looking to get more HY/leverage exposure, trying to break into a trading or sales role covering that market b/c I know this is where I want to be.
Any ideas on best resources to touch up on bond valuations and really acquiring the necessary skills to land a role in this area?
What would you recommend to look into for credit valuation and where would u find info on special situations?
This is super helpful, thanks. Mind if I PM you? I’m on the credit risk side at a bank covering the S&T business. I am trying to move into the distressed credit / special situations desk on the sales side and want to know what technicals to focus on if I’m able to land an interview. Thx!
Super helpful, thanks for posting. Mind if I PM you? I work in credit risk at a bank supporting the S&T business and want to move to the FO special situations / distressed credit sales. I just want to know what skills I should brush up on in case I’m able to land an interview. Thanks in advance!
Super helpful, thanks for posting. Mind if I PM you? I work in credit risk at a bank supporting the S&T business and want to move to the FO special situations / distressed credit sales. I just want to know what skills I should brush up on in case I’m able to land an interview. Thanks in advance!
Bump
Future of that desk is their strong portfolio trading product. Really stepped back from seeking PnL on risk-taking/overnight positions and are primarily focused on making sure they have high market share of the most liquid names. Big team culture with sales and research and bankers working pretty well together.
My view is you should be a desk analyst if you want to learn to model/read legal docs and move to a good buy-side distressed role. Traders don't really have the time to get too deep in the weeds and perform the analysis that hedge funds will want from their investment professionals.
Interesting, what's the rationale for that change in strategy? Do you think that sell-side distressed desks more generally are stepping back from taking the large directional bets that they used to? I always thought they were one of the last vestiges of semi-prop trading given the illiquidity and volatility of the product.
I think you're like 5 years too late. It was a very heavy shift to client focus/proper market-making. They fired everyone from that old guard after the distressed desk didn't make money for a few years. The new head of the desk does have some famously profitable bets that you'll probably hear about but they don't take that kind of risk regularly (juniors certainly won't). Utilizing the bank's balance sheet is just too expensive.
If you want to take prop risk, go to a prop shop or a hedge fund. Closest thing to prop risk at a bank is probably derivatives desks these days.
distressed is incredibly balance sheet-heavy + risky given nature. for amercian BBs like GS from a mgmt perspective if you're printing huge revenues from equity platform bizes (where they're dominant players) which are much lower-risk, there really isn't much of an incentive to push into more esoteric and risky asset classes e.g. distressed. as mentioned by HF anon above GS on the credit side focuses on portfolio trading as they see a fair bit of ETF flows.
wouldn't say sellside desks are stepping back. guys like DB/SC Lowy are still printing huge numbers - with guys like bofa/barx/cs ramping up their franchises as well. really just a matter of where mgmt wants to grow
Interned for this desk ... among the toughest cultures on the floor. Definitely old school trading floor vibes. Hella turnover lately, but some amazing people remaining particularly in Distressed, particularly the desk analysts.
They want a mix of quick-thinking analytical and confident... you'll see what I mean. Having a decent fundamental analysis skillset would really help you in this seat.
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