Hybrid PE / HF funds?
Anyone have any experience working with or at PE / HF fund hybrids that have locked up capital, but take HF like approaches to investing - ex. Centerbridge, Fortress, Victory Park, Atalaya, Benefit Street, etc.?
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So, locked up capital but invests in public companies? Is this different than concentrated bet L/S public investors?
A few years ago I worked at a fund like that. We raised PE-style drawdown funds to invest primarily in public equities. It was a great set up because we just didn't even think about or worry about mark to market losses. DM me if you have specific questions.
Definitely interested in this type of strategy. Couple of questions:
1. What was your typical level of concentration? How long did you research names before investing?
2. How did you think about recycling capital?
3. Were you mostly passive or activist?
4. Did you ever do private market opportunities (structured pref/mezz, rescue financing, etc.)?
5. How was the team structured (pure generalist, single industry specialized, or some mix)?
Thanks in advance
Worked at one of the funds above - happy to answer any questions
How does it work, broadly? Why would you invest this way in public equities? Do you influence the companies? How is this different than activist investing?
For a current PE candidate, how would you sound smart (have a recruiter screen for one of these Thursday)? How complex is your model building?
Thanks so much - appreciate the offer to answer questions.
Thanks so much, few questions on your experience:
1. What was the day to day work like? Were you silo'd across one asset class ex. financial assets or were you opportunistically investing across asset classes? How long was the ramp-up to think like an opportunistic / special sits investor?
2. Understand that hours fluctuate, but was a normal week for you and what was a busy week?
3. How much of a voice did you have in your IC? Were you the one leading the presentations or was that left to the Senior Associate / VP on the deal team?
4. How many iterations of IC did you need to complete in order to get a deal approved? What were the typical stages and deliverables required for each stage
5. Generally, how did comp scale up within your firm?
6. Did your fund opportunistically invest in the equity or debt of a business (or both)? Meaning did you have a broad mandate to find where in the capital structure you saw the best risk adjusted yield?
7. How contentious do the different stakeholders in a distressed buyout or restructuring get and how often are you on the phone with counsel?
8. What are the types of backgrounds your firm hired for Associate level positions?
Thanks again!
1. 6-12 month learning curve typically. We sat primarily on either the PE side or credit HF side, but could easily raise your hand to work on opportunities across both sides of the house (particularly if it was in a sector you covered)
2. Start at 8am, finished up around 10-midnight most days (except Friday) with a few hours over the weekend. Obviously different when in a deal sprint (primarily more on the PE side but the HF side would look at illiquid private deals also)
3. We had lean teams so only 3-4 on a deal team (PE); HF side could be 1-2 people covering a name. Principal or partner would typically lead but as an associate you’d present model and certain other parts of memos
4. Could be as quick as one sit-down with PMs on the HF side or 2-3 IC meetings on the PE side
5. We were comped similarly to UMM PE and received carry on top across each of the PE funds/HF/credit drawdown funds
6. Both — broad mandate across the capital structure, in both liquid and illiquid securities
7. Varies significantly by process and complexity of capital structurE
8. Our firm did on-cycle so all the typical groups you’d expect: PJT RX/M&A, other boutique RX groups, Moelis, GS etc. We also occasionally took some laterals on HF side from other distressed credit shops or distressed debt desks (from banks)
Appreciate the very descriptive response - this is helpful, thanks! Seems like comprehensive experience on both the PE and credit side that ultimately make you a better investor.
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