Credit HF --> L/S equity??
How hard would it be to go from analyst seat in the distressed pe (even opportunistic credit) groups @ GSO/APO/Oaktree/Centerbridge/Fortress etc to a top L/S fund (tiger cub caliber)? I get that this isn't a common move (I assume?), but I'm in RX rn, and I figure I would have an easier time recruiting into a MF credit arm, and then trying to lateral into L/S. Would appreciate any advice/anecdotal stories anyone may have!!
interested
I exited from RX to credit - from what I've seen, a lot of people directly just hopped over to equity L/S from RX; helps if the strategy or pod has a short bias. If you really want to do the MF route first, probably will have to get an MBA or network (then again if you're on good terms with the headhunter should be fine either way).
The higher up in your career you go the less patience people will have to hire someone that needs training and/or can't hit the ground running e.g. won't pay a premium to hire an experienced hire if the expertise / insight is not desperately needed or if they can hire someone at a cheaper price that can do the same work. Also, fewer good seats in general.
Do you think you can exit from L/S into distressed? (other way around?)
I don't think it's impossible, but probably unlikely. At the junior level, it probably won't matter too much, but equity l/s is just a very different strategy than distressed. Loan-to-own private equity operates in private markets, and liquid credit is a very different product than equity. I don't think equity l/s would generally translate to either.
I feel like its more likely to see credit -> equity l/s than the other way around. Credit is incredibly nuanced and if you don't have the background in the product its difficult to see why you would be hired. This is obviously assuming that you don't have lev fin or RX experience prior to equity l/s. That's not to say credit -> equity l/s is an easy transition either. This transition is made easier if your credit HF has a more opportunistic mandate playing in equities (Eg: Canyon, Diameter, King Street etc) relative to a purely performing HY/lev loan seat. It's also probably easier to shift to a value/event driven equity l/s seat vs a tiger cub where the focus is growth tech/consumer equities. You see those analysts coming from PE more often than not.
Thanks! Reason why i was asking is because I'm in Sector M&A and can't seem to break into distressed / special sits (they look for people with debt / rx experience - which is understandable; I have a bit of debt experience on some deals - ran the RES RAS process) and thought you could go in after you get your foot into the buy side.
Back to drawing board for me
can you PM me?
What are your views on GSO’s distressed team?
Non existent
The short answer it depends on the distressed seat. Ultimately, the hedge fund community is pretty small and if you're a junior analyst at a fund with a great reputation, you won't have issues getting looks for other junior analyst seats at l/s funds because the quality of your resume branding will carry you. Analysts at silver point, york, monarch, centerbridge, elliott, etc. have all exited into good l/s funds in the past.
I would just recruit directly from RX to L/S equity. If you had to go through distressed, it's never easy but possible. It's also much easier the earlier you are in your career. Credit -> L/S equity happens more often than other way around because there are more nuances in credit, and usually people don't want to make that transition either.
Thoughts on best MF PE credit arms for this transition? Bx, Ares, KKR ...?
Also, would someone who landed one of the few MF PE credit arm analyst positions have a better shot at later moving to Equity L/S or is banking -> mf pe credit -> hf more likely?
It depends on what group. Blackstone is largely performing/sponsor backed private credit at this point and has shut down its distressed hedge fund so not sure that would be the best place to start. Ares has a special sits group that has more of a PE style mandate so that could be a good spot. Apollo has a l/s hedge fund that invests across the cap structure so that would also be a good profile. I'm not sure how many (if any) of these seats are available out of undergrad.
Would it be better to start in IB rather than Blackstone credit to end in L/S?
Also I believe Bx still has a distressed and opportunistic credit fund
Blackstone also has its BREDS Liquids group. They invest in high yield CMBS, RMBS, corporate debt, and even more general asset backed securities now. Lean team with a lot of deal flow. Could potentially be a path to SM L/S Equity
Yep I think that would definitely be a path as well. I think once you understand cash flows and the sensitivities around it becoming an income statement investor isn’t that far off. Many of these MF liquids group that focus on structured credit would definitely allow the opportunity to pivot to equity l/s if done after a couple years (4-5 max).
From another thread saw someone struggling to move from BX / Starwood REPE to L/S equity. Wouldn’t it be worse with BREDS?
Would’ve thought top IB group is better if you want to do L/S (PJT EVR historically placed directly to Tiger Cub albeit rare)
could you link post please? interested
what tiger cubs have PJT EVR placed directly into?
So for an analyst at top rx shop, the best way to go to L/S is to try to get MF PE and then L/S?
Probably all going to come down to your networking. I think the argument is that if you can’t find an equity l/s right away (assuming that’s what you want) then going to a MF PE group that does opportunistic credit would give you an interesting look for some l/s equity funds especially industrials/cyclicals that are not purely EPS and Terminal value margins investing
bump
Bump
Does anyone have examples of people they know or have seen on LinkedIn who have made that jump from Credit HF to Equity
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