Choosing post-banking career path & how you made that decision (PE, Distressed, L/S, etc.)

above_and_beyond's picture
Rank: King Kong | 1,312

Fellow monkeys,

I'm a banking analyst here in London and I am trying to make up my mind on which route I want to go down post-banking. Unlike many others I haven't really hated my time in banking as I have learned a ton and worked with great people and even W/L wasn't too bad (of course still far from a normal schedule).

Anyway, I want to leave the sellside and be on the decision side and actually (help) decide on investments.However, I'm having trouble on deciding which route to go down. Let's just assume a perfect (but unlikely) world where it is possible to get offers from all desired exit paths that I am considering.

When it comes down to pure interest, I feel like the distressed debt space is where I want to be for the midterm future (at least). The space is incredibly interesting and I thoroughly enjoyed working with companies in distress. What is troubling me is the question of "what after?". Let's say for one reason or another I wanted to leave the distressed space after some years, what options are still open? I feel like once you are in the distressed debt space, you are pretty much pigeonholed and you will have a hard time moving over to f.e. Corporate Development or buyout PE. Do you agree?

This is basically the only reason why I am also thinking about PE (i.e. buyout funds) for the next few years. I could see myself enjoying that work as well, although I'm definitely more interested in distressed investing. Choosing PE would provide me with more "optionality" I guess, cause I could move over to Corp. Dev. and might still be able to make the jump to Distressed Investing. Am I right with this assumption?

TL;DR: How to choose between PE and Distressed Investing? Will going into Distressed pigeonhole me in this space?

Lastly, for those who have been in a similar situation, how did you end up making a decision for where you wanted to end up?

Cheers!

Comments (10)

Feb 24, 2015

What if you win the lottery? All comes down to your preference man. Think about the now and not the future, because who knows what will happen in 5 or 10 years. If you're good at anything you'll be able to go anywhere.

Feb 24, 2015

I agree with @"Random Name" with some respect. Pick the route that you enjoy most. You will be better at it and enjoy your life more. Thinking out 5-10 years in this business is a crap-shoot, b/c there are so many things out of your control.

On the other hand, I agree that you have to be mindful of the risks. What if you suck at distressed or make a dumb pitch to your PM and get a bad rep in the business? You'd be shit out of luck. Conversely, its a lot harder to flat out suck as a PE analysts- with much more exit op's.

That being said, even if you suck at distressed, your credit abilities would still be valued at any value shop. Or you could easily return to banking in a Leveraged finance role. In short, a career in distressed certainly has its risks, but not nearly as drastic as you're making them appear. But IMO, both are going to be very grueling roles- might as well pick the one that is most interesting.

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Feb 24, 2015

I did BB M&A in London, figured out I wanted to leave and do buyside when I was in my second year. Faced the same situation: PE (because that's where everyone at my shop went to), distressed (because it was a hot space at the time), and L/S (because I thought it sounded cool even though I didn't actually know anyone who exited there).

My thought process was: having worked on a lot of PE deals, I thought PE as an associate was way too similar to banking - too process driven, no work-life balance, no decision-making input. Canned distressed pretty quickly because I didn't think I had any edge vs. guys from rx / LevFin (i.e. I'd end up at a mediocre shop), plus my friends at distressed shops said they weren't able to move anywhere other than other distressed shops. So by process of elimination I ended up with L/S and after researching it more, realised that I would actually really enjoy it (partially for the same reasons I disliked the others).

TL;DR: Just think about what your real objective is. If you don't have huge conviction on any single choice, you can either take the one that provides most optionality down the line (which is probably PE). Or you can try to research the choices harder and figure out if there is one that you'd be happy to do for the rest of your career.

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Feb 25, 2015

@"thewaterpiper" How do you like L/S? I am also thinking about it, instead of PE. The most interesting part of banking has been doing research and from what I can gather, you get to do a lot of that in L/S.

Feb 25, 2015

@"thewaterpiper" How do you like L/S? I am also thinking about it, instead of PE. The most interesting part of banking has been doing research and from what I can gather, you get to do a lot of that in L/S.

Feb 25, 2015

@"thewaterpiper" How do you like L/S? I am also thinking about it, instead of PE. The most interesting part of banking has been doing research and from what I can gather, you get to do a lot of that in L/S.

Feb 25, 2015

do you want to be a capital structure guy or a business model guy? one will always be what you focus on slightly more

Feb 25, 2015

do you want to be a capital structure guy or a business model guy? one will always be what you focus on slightly more

Feb 27, 2015

Thanks for the responses guys, I appreciate every single one.

@"thewaterpiper": May I ask where your friends at the distressed shops ended up? You mentioned at that time they didn't have any other option than going to other distressed shops. Did they stay there or did some "break out" of the space?

Btw, one thing that I forget to mention is that I really enjoy following the equity & fixed income markets (also in my free time) which is why I don't see PE as the perfect fit for me. I'm more interested in dealing with securities and the capital structure of distressed companies or look for highly discounted firms than with buying a firm with leverage and streamlining their operations.

For now, I probably start looking around for distressed roles and see what I can get and how it turns out..

Feb 28, 2015
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