8/13/12

Hi guys,

I'm a junior trying to narrow down my focus for the upcoming recruiting season. I currently intern as an analyst at a small long/short value fund. We are very fundamental oriented (Deep understanding of the business, barriers to entry, competitive advantages ect.) I do have some modeling skills as we use them for our analysis (although they are generally not really an integral part in the decision making). My goal is to work at a BB and move back to the hedge fund world. Until recently I was set on IBD but I am having second thoughts. I want to do something closer to what I am doing now. ER and distressed debt desks come to mind. With distressed debt there is focus on the fundamentals as well as debt/covenants and bankruptcy, you can really understand the whole picture when is comes to analysis of companies, and that can really come into play at a hedge fund later on. Can anyone that works/worked at a distress desk at a BB tell me what a summer is like there as well as if my reasoning is right, or if there is another position that fits my criteria? Thanks!

Comments (23)

Best Response
8/13/12

Distressed debt desks at BB banks tend not to hire at the undergrad level much. You'll see a very top-heavy structure, with MDs, EDs, VPs, and often an Associate as the youngest on the desk. That associate didn't start as an analyst, he/she probably came in after b-school with relevant work experience or was a lateral hire from another bank or a relevant desk internally within the firm.

Of the people I know or have seen intern on a distressed desk, none came back full-time; all either got a full-time placement on a different desk (typically HY or IG trading or research) or no offer at all.

My advice to you would be to pursue a role in restructuring. Among the BBs, I know that MS has a very small restructuring team (8-10 guys) within its powerhouse M&A unit. Other than that, there are three powerhouse restructuring franchises on the street. Blackstone, Lazard, and Houlihan Lokey. Blackstone takes very few analysts a year but every single one enjoys top-notch placement afterward among the blue-chip PE shops, hedge funds, and business schools. Lazard is strong as well, and Houlihan is known for its presence on the creditor side. Blackstone and Lazard have historically dominated the debtor side.

Beyond those big three, there are a handful of boutiques: Miller Buckfire is prominent, while Rothschild, Moelis, Greenhill, PWP, and Evercore also come to mind.

Hope you find this helpful, happy to answer more questions if I can.

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8/13/12

That was very helpful, I'll consider restructuring. Is it unheard of to intern at a distressed desk at a BB? Can it be done through networking? Are there MM banks that are known for their distressed desks that hire SA's?
Thanks!

8/13/12

While we're here , how common is it to get a job at a distressed fund without restructuring group experience? i.e is it something that you can go through the regular B school recruiting channels for?

8/14/12
<a href=//www.wallstreetoasis.com/company/goldman-sachs rel=nofollow>GS</a>:

While we're here , how common is it to get a job at a distressed fund without restructuring group experience? i.e is it something that you can go through the regular B school recruiting channels for?

RX experience isn't a prerequisite by any means for DD.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/14/12

Show some SB love.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

8/15/12
APAE:

Show some SB love.

done.

Investment Banking Interview Course

8/15/12

Goldman- SSG or their Distressed Investing desk
Morgan Stanley - Distressed debt / special situations group
Deutsche Bank - Distressed products group
BAML - Global Loans & Special Situations

Best training grounds outside of restructuring if you can break in. Goldman hire analysts but it's a very tough process. MS also hire on an ad hoc basis. DB's group is probably one of the largest undercover prop desks on the street, but I don't know how they hire. BAML are active in distressed as well but I don't know how they hire. Other banks have decent teams too but you may not get that much corporate investing experience there as they are either more flow driven, or focused on real estate and other stuff. Rest of the street (JPM, CS ...) are either very small, or pulled away from distressed entirely.

8/15/12
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/15/12
Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

Seeing who actually participates in situations > what some dude on a desk says. CS dismantled their team in 2009 and rebuilt it in recent years.

8/15/12
NewGuy:
Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

Seeing who actually participates in situations > what some dude on a desk says. CS dismantled their team in 2009 and rebuilt it in recent years.

They've been actively buying in DD auctions in the past few days. I'm not claiming they're ML or GS, just saying they are there and are willing to buy for their own balance sheet, not just for third parties.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/15/12
Oreos:
NewGuy:
Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

Seeing who actually participates in situations > what some dude on a desk says. CS dismantled their team in 2009 and rebuilt it in recent years.

They've been actively buying in DD auctions in the past few days. I'm not claiming they're ML or GS, just saying they are there and are willing to buy for their own balance sheet, not just for third parties.

1) How do you know they were buying for themselves and not for a client (i.e. a preftigious fund like mine)?
2) How much do they have invested in distressed?

My guess would be 1) You don't, and 2) Very little

8/15/12
NewGuy:
Oreos:
NewGuy:
Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

Seeing who actually participates in situations > what some dude on a desk says. CS dismantled their team in 2009 and rebuilt it in recent years.

They've been actively buying in DD auctions in the past few days. I'm not claiming they're ML or GS, just saying they are there and are willing to buy for their own balance sheet, not just for third parties.

1) How do you know they were buying for themselves and not for a client (i.e. a preftigious fund like mine)?
2) How much do they have invested in distressed?

My guess would be 1) You don't, and 2) Very little

you really hate being wrong don't you, can't let anything go. I know the funds that are buying in at this point in this restructuring (about 3 or 4), we're talking to them, we know who they go to, CS isn't one of them (obviously there are more variables / strats).

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/15/12
Oreos:
NewGuy:
Oreos:
NewGuy:
Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

Seeing who actually participates in situations > what some dude on a desk says. CS dismantled their team in 2009 and rebuilt it in recent years.

They've been actively buying in DD auctions in the past few days. I'm not claiming they're ML or GS, just saying they are there and are willing to buy for their own balance sheet, not just for third parties.

1) How do you know they were buying for themselves and not for a client (i.e. a preftigious fund like mine)?
2) How much do they have invested in distressed?

My guess would be 1) You don't, and 2) Very little

you really hate being wrong don't you, can't let anything go. I know the funds that are buying in at this point in this restructuring (about 3 or 4), we're talking to them, we know who they go to, CS isn't one of them (obviously there are more variables / strats).

I'm definitely not wrong in this case. The large event driven / special sits funds definitely know who the other large players are as we come across (and work with/against) each other frequently. CS isn't one. Sorry to crap on your unpreftigious CS distressed exit dreams bro.

8/16/12
NewGuy:

I'm definitely not wrong in this case. The large event driven / special sits funds definitely know who the other large players are as we come across (and work with/against) each other frequently. CS isn't one. Sorry to crap on your unpreftigious CS distressed exit dreams bro.

You've got me, I work for CS and bleed green. I come on here to boost my firm's e-ego.

you should, however, ask your preftigious fund to pay for some comprehension lessons, i never said that they were a big player, or in the league of ML, GS, DB. I just stated that they haven't pulled out and are still punching.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/16/12
Oreos:
NewGuy:

I'm definitely not wrong in this case. The large event driven / special sits funds definitely know who the other large players are as we come across (and work with/against) each other frequently. CS isn't one. Sorry to crap on your unpreftigious CS distressed exit dreams bro.

You've got me, I work for CS and bleed green. I come on here to boost my firm's e-ego.

you should, however, ask your preftigious fund to pay for some comprehension lessons, i never said that they were a big player, or in the league of ML, GS, DB. I just stated that they haven't pulled out and are still punching.

Ah, but it is you who lacks reading comprehension, brother. In fact, the part of my great wall of text that you quoted specifically stated (see highlight below)

Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

8/16/12
NewGuy:

Ah, but it is you who lacks reading comprehension, brother. In fact, the part of my great wall of text that you quoted specifically stated (see highlight below)

Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

I'm confused, you use the word "or" but dont seem to know what it means....anyway i'm out, it's a sunny day in the city, have a good day.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

8/16/12
Oreos:
NewGuy:

Ah, but it is you who lacks reading comprehension, brother. In fact, the part of my great wall of text that you quoted specifically stated (see highlight below)

Oreos:
NewGuy:

CS ...) are either very small, or pulled away from distressed entirely.

gunna have to disagree on CS. spoke to a distressed guy there yesterday, their DD arm seems to be far less "affected" than other areas.

I'm confused, you use the word "or" but dont seem to know what it means....anyway i'm out, it's a sunny day in the city, have a good day.

You seem to lack an understanding of the phrase 'Either / or'

Good luck in your verbal GMAT. You are either extremely dumb or a very good troll.

8/16/12

dont go to research.

try join the sponsor groups in BBs or the boutiques who have restructuring practices, or any good industry groups that deal a lot with debt (industrial, FIG sometimes, telecom, etc).

8/16/12

depends. both are good options and both have the potential to get you there. if i had to choose i'd say IB, just because I know a number of HFs that only recruit IB guys/won't even consider a trader. But I'm sure there are also HFs that are the opposite. FIgure out where you want to end up and see what they prefer. Sriously though, you cant go wrong either way.

8/16/12

Investment banking. Trading usually has no place in value HFs. Most HH's told me they don't look at anyone but IBD for those kind of HFs.

8/16/12

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

8/16/12
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