How to lateral from Credit Risk to IB

XFD1048576's picture
Rank: Orangutan | 263

Hello all! I don't post much here but usually lurk around but I was wondering what advice the community could give me trying to lateral from Credit Risk to eventually Investment Banking. I know that it is usually very difficult to go into the buy side if you're not from a typical IB background with IB experience (modeling, deals, etc.) so the goal is definitely still to go into buy-side like most people in IB.

I just started out this summer as a 1st year FT analyst in the Credit Risk division in an IBAB (in-between-a-banks) recently graduating from a semi-target school. What are some things I should do or look out for when trying to switch to IB from Credit Risk?

Any tips, advice, suggestions, comments are all very much appreciated!

Comments (13)

Sep 8, 2018

I'm no expert but I would imagine a fundamental understanding of credit could be applicable to a role in leveraged finance or other forms of lending across the various IB lines.

    • 1
Sep 9, 2018

From what I have seen, people in credit risk have easiest shot of getting into front office IB via leveraged finance. Takes work but can be done and is likely the most strategic in terms of fit.

Cheers

Sep 10, 2018

wtf is an IBAB

Sep 10, 2018

Wells Fargo type banks

Sep 10, 2018

so mid-tier MM banks

Sep 10, 2018

What if OP wants to spin his experience in credit for a non-lev fin IBD role? (M&A or coverage). What are some points/skillsets he can/should emphasize in his interviews?

Sep 10, 2018

BUMP

Most Helpful
Sep 10, 2018

The credit risk -> lev fin jump is fairly common. You'll move back one year.

Credit risk allows you to get a strong foundation of financial modeling / analysis, SUCAP, and understanding of risk / mitigants that are important to a lev fin desk.

Moving to an industry / M&A group is harder - but if you show some passion / knowledge in the industry, have all the fundamentals down, and understand an M&A process it can be done. Typically move back 1-2 years.

    • 3
Sep 10, 2018

Thanks for the insight. I have been reading a lot about the "easier" transition from Credit Risk to IB LevFin due to the experience and background you accumulate and that JPM and BAML have been the leading BBs that are strongest in that area. Ultimately, buy-side is still the goal, specifically Private Equity.

Apr 4, 2020

At what level do you think a move from Risk to front office LevFin is feasible? Have you ever seen / heard of someone in Credit Risk at the AVP / VP level hustling their way into front office LevFin? thx in advance.

Apr 4, 2020

It's typically at the analyst level... maybe floating into the junior associate ranks. While the fundamental analysis is the same, the job functions are very different. Lev Fin is about origination, structuring, and selling debt to other investors and banks. Credit Risk is about evaluating a credit to see if it fits your banks' risk threshold. At the analyst / junior associate level, there isn't much difference in work product / personality, but as you move up the jobs require different skill sets (I.e., sales, relationships).

If you had 6-7 years of credit risk experience and were a 3rd year associate or junior VP, you would likely start as a 1st year associate in lev fin. Alternatively, if you have 2 years of credit risk experience, you would likely start as a 2nd year analyst in Lev Fin. So the earlier you make the move, the less of a "step back" you'll have to take.

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Feb 17, 2020

Hey guys, had a similar question. I am currently a sophomore doing a Credit Risk part time internship at JP Morgan during my college semester. My goal is to land an IB summer analyst position for next year. Am I on the right track, coming from credit risk? Do I have good chances? Any feedback would be nice. Thanks!

Apr 4, 2020
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