Is Restructuring Dead Right Now?

As the title says, is restructuring dead right now? Who is gobbling up the market shares? I am joining an RX group next summer, and should I be worried about FT offers?

Comments (62)

  • Investment Analyst in PE - Other
Nov 25, 2021 - 8:39pm

Yes, you have zero chance of getting a return offer. Might as well not even go through with the internship.

  • Analyst 2 in IB - Restr
Nov 25, 2021 - 8:44pm

It's very slow right now in terms of new business given the extremely limited set of distressed companies out there currently 

However, at the analyst / associate level you should not worry about FT spots. There is always a need for juniors to grind out profiles / marketing decks even in slow times.
also as we've seen over the past 18 months, the market can change quickly if there's some sort of catalyst

  • Analyst 2 in IB - Restr
Nov 25, 2021 - 9:15pm

It's LTL management, a subsidiary recently created specifically for j&j's talc claims (the case is ongoing)

  • Intern in IB - Cov
Nov 25, 2021 - 9:28pm

Lol a 18 months ago, people here were begging to get into RX groups. 

  • Intern in IB - Gen
Nov 26, 2021 - 12:00am

Pray that JPow goes Volcker style (unlikely) and you'll have rx deals up the wazoo as we get a far worse financial crisis.

  • Associate 2 in Consulting
Nov 27, 2021 - 10:09am

I've never been keen on PMs as I find it means people who come across the topic few months / years later don't benefit. 

I can almost guarantee you're not joining my office / group so any questions I should be able (to try and) answer can be asked in public imo so feel free to post and I'll do my best. 

Nov 27, 2021 - 3:27pm

You are one year out of college and I legit said I'm joining an RX consulting group next summer but regardless I've just had people ask me to PM them when I've had questions in the past. Doesn't make a difference to me.  But any insights anyone has would be appreciated. 

What are your favorite and least favorite aspects of the job? I know some of your primary functions are 13 week cf models and operating models but what else is typically during any given week? And what would you say is the best way to prepare for a full time role without prior consulting experience? 


Most Helpful
  • Associate 2 in Consulting
Nov 27, 2021 - 4:16pm

my favourite aspect probably the modelling - something i've always liked. creating a nice model that can be easily updated, provides lots of insightful output analysis that feeds into a presentation and looks complicated enough that once built you can let it run and easily update it but people still think it takes ages, allowing you to chill ;-)

as a first year graduate out of college your tasks will most likely revolve around supporting various sections of either 13wk cf or BP. highly unlikely that you will be allowed to run with the whole thing but it depends on size of client i guess. maybe theyll let you handle a business unit or something but you will have someone to oversee and guide you for sure. you might be asked to support some high level analysis around various tasks that the senior managers / directors are doing. for example helping forecast the different cash costs of different types of financing options. again will depend on project. 

i asked that question myself and was told to just relax and prepare for a tough time! but i still read some various books on operational / financial turnaround i brought from amazon. i didnt buy it myself but the fella Jeff Sands i believe has some interesting materials. Other than that try brush up on general modelling / excel / ppt work. Being quick would bevery helpful. Knowing your 3 statements would be very helpful too. you could start reading up on whatever codes are pertinent to your country (chapter 11 if youre in USA) but it wont make or break things - theyll explain it / have training sessions / wont be testing it. just for your own understanding if youre a keano. 

Nov 26, 2021 - 10:41am

No, it's not dead by any means.  Rx is definitely at a very low point in terms of deal flow, but if you're talking about going into a good group they are going to have nonconventional stuff coming in in addition to "normal" deal flow channels.

Rx groups are also treated differently from a staffing perspective than typical M&A groups.  You aren't going to see big swings in staff levels with a decline in Rx deal flow like you might in M&A groups (i.e. less layoffs, headcount reductions, etc.) because banks that have Rx groups know that it's a counterweight to their M&A side and know that Rx volume can markedly increase at the drop of a hat, and they need to be prepared for it.  Plus, these groups always need Analysts coming in to keep the group composition properly structured, and Analysts are incredibly cheap and integral to maintaining the group structure.  If they downsize it'll be at the senior VP level first probably.

And from a macro perspective, Rx makes most money in sudden bursts of activity with a few years having huge spikes in fees.  Banks know that and are willing to fund those groups more to be prepared for those years.  And given how crazy M&A markets are right now with extremely aggressive lending due to the pent up need to invest capital coming out of the pandemic, that always can give you confidence that a lot of those deals will come back to benefit Rx.

I wouldn't worry about it at all.  If you're focused on making a career in Rx / distressed investing, you'll be fine.

  • Intern in IB-M&A
Nov 27, 2021 - 12:34pm

It's important to bring up while there may not be that many full on chapter 11s nowadays, there is still plenty of out of court transactions and liability management

Nov 28, 2021 - 3:55am

Not dead and your offer won't be impacted contingent on your performance but yes, it's less busy now. Have a lot of RX banker buddies who have great lives at the moment.

  • Analyst 1 in IB-M&A
Dec 15, 2021 - 12:02am

Is there expected to be any uptick in RX business in 22? I read that there is a lot of dry powder expected to be deployed over the course of next two years due to pent up demand that the focus will likely continue to be on M&A and growth instead. 

Is anyone anticipating a slowdown?

  • Associate 1 in IB - Restr
Dec 15, 2021 - 2:33pm

Don't know when it'll happen, but there have been so many shitty deals done over the LTM that there is going to be a pick up in RX volume w/in a couple of years.  Capital had to sit out for over 6 months while rates got schwacked, COVID lockdowns and markets open back up, direct lenders chasing yield by putting new money into companies that were dogs pre-COVID while their business fundamentals haven't changed.  When I see par refinancings of liquidity constrained companies w/ negative Adj. EBITDA and significant cash burn, in industries that have had sustained headwinds w/ no sign of let up, w/ the kicker that some of these direct lenders are even throwing pref dollars at these trainwrecks to further chase yield (and create an absurd cash interest burden that the company will never be able to service for any extended period of time), I am not optimistic that things are going to hum along smoothly for the foreseeable future.  

  • Analyst 1 in IB-M&A
Dec 16, 2021 - 9:48pm

Anyone know how the JEF RX team (the new PJT / EVR hires) are doing and if they have a good pipeline?

  • Analyst 1 in Consulting
Dec 17, 2021 - 12:39pm

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  • Analyst 1 in IB-M&A
Dec 17, 2021 - 1:51pm

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