DCM vs Leveraged Finance

I'm pretty interested in the debt side of things and am looking to know the pros and cons of DCM and Leveraged finance. How do they compare in terms of hours, exits, interesting work, etc? The main exits I would be interested in are private debt funds like Ares / Golub or credit hedge funds. 

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Comments (3)

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Sep 25, 2020 - 9:32pm

Hours in DCM generally are less than lev fin. At a top lev fin shop hours can be similar to (though less than) m&a. Personally find lev fin interesting since you actually have to worry about the quality of the borrower and if they can afford to service the debt. That being said I don't know a ton about dcm. I have seen people from dcm go to direct lending shops, usually senior 1L shops. Not sure about other exits for dcm but Im sure there are others. Lev fin exits are much better. Direct lending, mezz funds, private equity, credit hedge funds, ect.

Sep 26, 2020 - 10:06am

If you set your eyes for private credit like Ares, leveraged finance is the way to go vs. DCM.

Key skills you need to develop in order to get into private credit are credit analysis, corporate/debt valuation and special sits/event-driven transactions, which you don't do much in DCM (primarily HG credits).

To be clear, in leveraged finance, you'd still get exposure to typical DCM work incl. bond structuring/terms and offering process.

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