how good of a shop is Bain Capital Credit at the analyst level?

 

Depends what type of credit fund you’re looking at, funds that invest across the cap structure doing direct lending/mezz/ or more CLO managers? If it’s the former, yes several that recruit from undergrad such as Atalaya Capital Management, Bain Capital Credit, GSO Capital Partners, Maranon Capital, Silver Point Capital, KKR Credit. If it’s the latter, you have shops like Octagon Credit, Barings, Guggenheim, Jefferies Finance, and Oak Hill advisors. Both are great options, definitely research both if you are interested in the credit space. A lot of CLO managers also do direct lending as well so keep that in mind.

 
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Some credit shops hiring undergrads (with comments):

  • KKR Special Situations Group: Seems exclusive for Harvard. I heard that they don't invest in public distressed credit. More PE type sponsor deals and rescue financing.
  • Silver Point: Their "only-taking-the-best-Wharton-kid" hiring strategy certainly created a cult on WSO and several top target schools. SP in the past hired some high caliber Wharton Summa kids, but sometimes I wonder that the firm is over-valued. I've been through their process last year, and there were also several kids from Duke, Ross and Stern. The interview process was not very distressed credit/RX related.
  • BX-GSO: GSO doesn't frequently hire undergrads. The incoming analysts will be placed into CCS (Customized Credit Strategy) group, which invests mostly in lev loan, HY and equity tranche of CLO. You would have the opportunity to invest across cap structure, but exposure on deeply distressed situations seems uncommon under CCS' mandate.
  • Bain Cap Credit: Solid shop in Boston with an established summer program. Mostly hire from New England target schools, namely Harvard and Dartmouth. I heard all the 1st year analyst summered there, so it would be difficult for someone did Top BB SA or EB RX SA to join as a 1st year.
  • Oakhill: Hire from all kinds of target schools (at least they can get interviews). I heard analysts there are industry-focused instead of strategy-focused, which means they cover performing/opportunistic/distressed within one sector.
  • KKR Leveraged Credit: Based in SF and mostly hire SAs from west coast schools. Purely performing credit platform. The interview was relatively easy and focused more IB questions instead of credit-specific questions.
  • Aurelius Capital: Notorious but reputable shop. Sometimes they hire undergrad as research analysts. Knew someone joined there with BB Levfin SA experience. Senior people from other distressed credit shops recently told me that, because of Aurelius' litigation-heavy strategy, the junior analysts there focus more on credit doc/covenant stuff than modeling. It's indeed a very niche and sharp place to start an investment career. Probably getting a JD after?
  • Proprietary platforms under GS: Liberty Harbor/Credit Alternatives and SSG-PCI/SLG. Regarding Credit Alternatives, I feel that the platform is quite "secretive," so you probably need some alum connection to break in. I'm not sure there is a dedicated distressed credit team under PCI, but you could get exposure on distressed/event-driven stuff there. SLG definitely does mezzanine and direct lending.
  • Apollo: Various sophomore internships available across strategies (performing/distressed/real estate credit). But I don't know anyone in recent years join Apollo as 1st year analyst.
  • Ares: Hires SA and 1st year in LA office. I heard 1st year analysts rotate across special sits/direct lending/buyout groups. For FT analyst roles, they seem to prefer SAs from GS.
  • Others: I'm not much into structure credit (CLO/MBS/ABS), but I'm pretty sure there are quite a lot funds with sizable AUM and decent track record are willing to hire fresh grad. Just name a few: Guggenheim, Waterfall Asset Management and CIFC.
To believe is very dull. To doubt is intensely engrossing. To be on the alert is to live; to be lulled into security is to die. by Oscar Wilde
 

Thanks so much for your response. I am rising junior, so I am currently recruiting for SA 2020. Does it make sense to do RX for 2 years and then switch or to try to straight into the buyside? Is it going to be easier to recruit funds FT if i do RX for a summer and don't like it or would like to avoid the FT 2 year path than to recruit buyside SA. Thank you so much for your detailed comments-really helpful.

 

If you are not from Wharton/Harvard, 2yrs EB RX and then move to distressed credit fund would be the most possible path. I did a summer at EB RX then join a distressed credit HF (not listed above but a well-known one) after graduation. This path would not be easy because 1) some credit shops I listed above prefer to convert their SAs for FT instead of hiring from EB RX and 2) you have to be very outstanding in your EB RX class. I remember most of my peers in my SA class would like to join HFs (even the relatively unknown ones) instead of staying there for 2~3 yrs.

To believe is very dull. To doubt is intensely engrossing. To be on the alert is to live; to be lulled into security is to die. by Oscar Wilde
 

I think part of the benefit of doing RX IB first is that you get a better understanding of the different styles/types of credit funds. Not just public vs. private or IG vs. HY vs. distressed credit but a lot of the funds have very different (and sometimes niche) investing styles. It helps to spend some time working with these guys so you can make a more informed decision before potentially committing to something. You'll probably also have access to more/better opportunities after an IB stint and having some experience. Also it's very possible to move to the buyside after 12-18 months instead of finishing the 2 years if you hate it.  

 

Fantastic post, wish i could give another SB. Adding to what you've mentioned i find that GS SSG is really not what most people on this site think it is. Don't get me wrong, it's a fantastic group, but it is more so Special Situations PE rather than pure play distressed investing. There are 6 or 7 sub groups under SSG that do everything from Hard Assets (Real Estate and collateralized securities) to renewable energy to growth equity and specialty lending/Mezz. the Multi Strategy Investing group does some event driven/distressed work. Overall, It is a very diverse group that gets involved in a lot of situations. GS Credit Alternatives/Liberty Harbor on the other hand is split between public high-yield and stressed investing and private credit direct lending/mezz. Also GS Merchant Banking has a great private credit group. You are spot on about the other firms!

 

On GS Credit Alternatives, it was one of two interviews I've ever gotten got via applying on Linkedin lol. Was a good group of guys and interview was 50/50 IB-type technicals and behaviorals. Got to the superday and got dinged on the case (case was pretty simply debt paydown analysis based on provided CIM).

This was while I was in banking btw so not out of undergrad but worth imparting regardless.

 
[Comment removed by mod team]
 

Can you or someone else expand on this:

Is KKR SSG still good? Why isn't Silver Point as good as its reputation? Is Aurelius actually viewed as a good credit shop - or is it more a litigation firm?

 

For your second question, Credit fund v.s. Special Sits under BB. I think the only Special Sits under BB still hire 1st year analyst in the US is GS SSG. The problem is that there are several sub-groups under GS SSG, and some of them (alternative energy or lender financing) is a little bit boring than the opportunities I listed above. Dodd-Frank fundamentally changed the way BB running their proprietary investing platforms. Due to regulatory scrutinizing and concerns on reputational risk, there are so many exotic strategies and hairy situations which BB Special Sits couldn't get involved in credit space.
I worked with GS ASSG and GS ESSG on a white-knight situation and an in-court restructuring, respectively. One thing I would like to point out is that these two groups are very opportunistic on their mandates. Analysts would have exposures on various strategies like event-driven and fundamental L/S, NPL, cap structure arb, vanilla HY, distressed credit, direct lending, and growth equity, etc. The good thing about flexible mandates is that you would learn a lot on different strategies. But meanwhile, you would not be an expert on any of these strategies.

So I guess the bottom line is, if you are dedicated to be a "credit guy," Bain Cap Credit/Silverpoint/GSO/Apollo would give you better exposure and training than GS SSG-SLG/PCI.

To believe is very dull. To doubt is intensely engrossing. To be on the alert is to live; to be lulled into security is to die. by Oscar Wilde
 

Most of those aren't worth pursuing. Better to do IB or PE then transition, unless you get DK or SP

 

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