Going from Real Money to a credit opportunities/distressed fund
Hi,
so I have spend a few years on the sell-side as a desk analyst (High Yield) and transitioned to a buy-side credit analyst role some eight months ago. I have started to miss the 'elevated heartbeat' moments and just genuinely come to understand that I belong in an environment where investments are centred around more convulated/stressed credit situations (quiet a bit of my coverage is even IG for the time being). Obviously there isn't much happening in European distressed for now, but I'd like to move to a place which looks at more 'stressed' credit even if base assumption is centred on the position remaining performing. What advice can their be given?
I'm going through more of the literature on the distressed side (Whitman, papers from law firms on different workaround issues) and obviously I'm looking at cases (e.g. Agrokor) to grasp the space a bit better. How does one land a job at a distressed/credit opportunities shop these days?
I recently attended the Wharton Distressed conference, Much of the rhetoric was centered around how to structure your career in getting in. Aside from this event, I work as a distressed analyst for a law firm with a heavy presence in bankruptcies.
Most of the distressed community (a small one at that) came from IB, particularly rx ib. Next was people from all walks; credit analysts, lawyers, and even people from Reorg/debtwire research roles. Basically anyone exposed with enough grit and who has an understanding of 'the game'. Most distressed speculation/assumptions are heavily supported by the legal framework underpinning the situation. I'd read Moyer to get an understanding of the BK process and then look at HL's rx case study.
FYI: I've been on the research side for the greater part of a year now.
Hi Tony, your thoughts are much appreciated and have the HL's case study on my desk now as well. Enjoy your weekend!
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Hi Jack,
I don't want to sound too unappreciative, I'm covering an interesting sector and have a great deal of freedom as to how I dedicate my time. However, the coverage is large (80+ issuers) with most of them publicly listed and with that fairly well covered - it makes it difficult to really gain knowledge on the operational side of the business to an extend that it is an edge - meaning that I place my emphasis on valuation more than anything else. I have always enjoyed the depth you have when you look at more convulated stories.
Secondly, given that there is less competing capital available in non-performing credit (through the cycle), better returns should be available (or at least a possibility) - I'd like to spend my time working on meaningful things - entailing both producing meaningful returns but also gaining an edge/depth on companies/stories - neither is truly possible in my current role.
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I used to work in the distressed debt/credit opportunities arm of an event driven player in London. The best way to land a job in this space is to put together a case on a topical distressed debt name and send it out, along with your CV, to the head guys in those teams. Just keep it short and to the point: cap structure, org chart, basic cash flow model, recovery waterfall, brief overview of the docs, and what catalysts could lead to a repricing of the bonds in question. If you have a top notch CV you could also try specific recruiters who focus on this space. The firm Hinton & Rose comes to mind.
Hi Ovechkin, that's how I have been thinking of it as well! One ex-colleague of mine has a decent amount of distress exposure so I'd hope to run those by him. It's difficult to grasp a sense of the level of detail one would expect from the thinking behind the recovery waterfall for instance and thinking around some of the unique risks emerging in a restructuring scenario. Let me know if I should run my first piece by you as well - I'd appreciate any comments. Regarding Hinton & Rose - I've met one of their headhunters and he was kind enough to give me a reading list at the time (Whitman was among them) - glad to see you mention them here because I thought he was very professional at the time.
mind sharing what else was on the reading list? thanks
Can you post links to some of those law papers you mentioned in your original post?
Thanks.
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Do you happen to have working link to the Skadden one? Unfortunately not opening for me.
Thanks
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