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Well known and respected. Minneapolis has a much larger finance/investment community than most realize-much of it Cargill related but also Thrivent, Ameriprise, HLHZ, former Norwest bank affiliates/spin-outs, etc. Sales people regularly visit and the big funds are well-known/respected in NYC.
At a more senior level, seems to be mostly a one-way street (large market to small) which isn't surprising-harder to uproot a family, people get used to lifestyle, etc. I would doubt that a junior level person at one of the legit funds would have a problem getting looks from larger-market funds.
Thanks Kenny. Good insight.
White Box, Pine River and Wayzata Investment are some other big ones in Minneapolis - St Paul.
http://www.hedgetracker.com/fund/Whitebox-Advisors
Don't forget Varde (largely ex-Cargill), TPG Credit (though decreasingly so), and a solid handful of mid-market mezz/PE shops as well.
Lazard MM and some of the RBC sellside team too on the sell-side.
Great info again Kenny and NY
What do you mean about TPG Credit? And which of these are the biggest players in the distressed space?
Wayzata, Varde, Carval are probably the biggest/best known in distressed.
As of now, TPG has actually ceased making new mezz commitments, per an email I received from TPG Credit.
Thanks for the info. I took a look at their websites and was surprised to see the size of these distressed funds - the ones you listed all seem to be in the 7-8 bn range in terms of aum, with TPG Credit close to 2 bn.
Why is it that this area has such a distressed investing presence? Is it all from Cargill? (which makes me wonder why an agri producer would have so much expertise in investing in distressed securities?) Also, what kind of people do they look to hire as junior investment professionals - traditional NYC ibd analysts, or from more non traditional backgrounds, but geographically focused? I noticed a lot of the senior guys are from the area and have quite different backgrounds than their counterparts at say, Oaktree, GSO, Centerbridge, Crescent, Silverpoint, etc.
Have never heard a great answer for "why" Minnesota has a big distressed community (and it extends beyond the big guys). Just sort of happened and stuck. Also it's worth noting that Minnesota has (or at least at one point had) the most F500 headquarters per capita of any state in the country and prior to the IB consolidation in the 80's/90's had a lot of independent investment banks.
In my experience there is a big midwest focus at these shops, whether it's on purpose or exogenous. Many of those places are certainly less pedigree-focused than most as well. About half of the people I know working at big funds in MN are from the area, worked at name-brand places elsewhere, and came back; the rest are from the area and stayed there for college and started at local firms after. Don't personally know anyone NOT from the area working there.
Generally speaking there are two types of Cargill connection: a) Trading related: Cargill is an ag congolmerate the same way Glencore is a natural resources conglomerate: commodity trading on both a risk management and prop basis is a huge part of their operation.
b) Cargill seeded funds: The Cargill-MacMillan family has a stupid amount of money and a lot of the Minnesota shops started with seed money from their family fortune.
Good thoughts Kenny. What is ironic to note is how conservative Upper Midwest companies tend to be, in terms of capital structure. In general, may are still fearful of the words "debt" and "leverage" up there. Far more than you'll find in Chicago or in the Northeast, for instance.
Appreciate the insight so far. Would you have any idea on the compensation at these funds? Comparable to other funds of similar size on the east coast and west coast (not counting any COL factors, just all-in)? Per the PE compensation thread, upper middle market size firms are paying ~200-250k for first year associates. I understand that for IB analysts at major firms, pay doesn't really differ whether you are in NYC, Chicago, or Charlotte, but I have no idea whether or not the same applies to these types of funds.
The reason I am curious is because I am very interested in entering the distressed investing space down the road, and will definitely be looking very closely at the firms discussed in this thread + recruiting for them, and it would be useful to have an idea of how much of a paycut I'd be taking relative to the big city firms.
I would expect it to be lower ceteris parabus. One acquaintance at a good-sized PE/mezz shop took a haircut to his NY large-cap fund mezz role. I know you said you don't want to hear about COL adjustments but the difference between Minneapolis and NYC is MASSIVE.
Yep. MPLS = Chicago, more or less. You can get some things for cheaper (real estate, rent, certain groceries). Think about this, no sales tax in Minnesota on clothing (though the dumb ass Gov. is planning on implementing a limit of $100 - hasn't passed yet).
[quote=distressedmergers]Appreciate the insight so far. Would you have any idea on the compensation at these funds? Comparable to other funds of similar size on the east coast and west coast (not counting any COL factors, just all-in)? Per the PE compensation thread, upper middle market size firms are paying ~200-250k for first year associates. I understand that for IB analysts at major firms, pay doesn't really differ whether you are in NYC, Chicago, or Charlotte, but I have no idea whether or not the same applies to these types of funds. /quote]
If you are good at what you do, compensation will be fine. Whether you are in Minny, Chi or NYC. I know plenty of people in the industry in Minny and Chi and they are doing quite well. Take Victory Park for instance.
Black River Asset Mgmt (Originally Posted: 10/15/2012)
Anybody here know anything about Black River Asset Management (Cargill, the big ag producer's, alternative asset management arm)? Can any one speak to how they compare to other funds or why they are tethered to a major agricultural goods producer?
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