JP Morgan Restructuring
Does anyone have any info on JPM's Restructuring group? I believe it sits in Lev Fin. I am familiar with EB's having significant restructuring groups, but never really thought BB's would given potential conflicts of interest.
I'm just wondering what the group does, and who their clients typically are.
edit: Is it possible to exit to distressed funds/PE, or maybe lateral to restructuring at an EB from a BB restructuring role? Or would it make more sense to just start off in a Lev Fin Originations role?
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Gotcha, that makes a lot of sense. Would you know if its possible to exit to distressed funds/PE, or maybe lateral to restructuring at an EB from this role? Or would it make more sense to just start off in a Lev Fin Originations role?
BB restructuring groups are much more centered around the lending side of the Restructuring space rather than the advisory. As you stated, if a bank as any exposure to the company they cannot be their advisor like a PJT or Lazard would.
The focus of BB restructuring groups are DIP financings, Exit financings, Rescue financings, Exchanges, and any other "tougher" deals where a particular company can't access regular-way capital markets. There are cases where BB's have been an advisor to a company, but this is not as common just due to the size of the balance sheet. Yes you sit in LevFin in a BB restructuring group and you're doing HY bond and LL issuance, however your deals are just more complex than the regular-way stuff.
Would one recommend starting in this type of role or a more traditional levfin role for credit investing e.g. for direct lending, credit HF, senior loans etc - for example would it be easier or harder to exit/interview for direct lending than from traditional levfin?
All BB RX groups are essentially DIP financing groups (JPM, BARC, DB, GS have standalone RX groups that do this, other banks typically just run it out of LevFin).
Yes it would be quite easy to move to an EB RX role - story would be to get more exposure to the advisory side, not just financing
They are niche groups though, would suggest starting in LevFin unless you are dead certain on pursuing distressed
Note these RX groups are different from internal loan workout groups - the latter sits within credit risk, the former sits within LevFin origination. Both get exposure to the RX / bankruptcy process but pay will be different
I'm interested in credit investing with a preference for distressed (but I want to keep options open, within credit investing). Would JPM RX be a good fit? Out of the "pods" or whatever within JPM LevFin, would I be better off in a different pod in terms of optionality?
levfin teams are a natural feeder to debt funds and almost all the guys in the top funds come from there. If you want to do distressed debt investment, levfin would still place you well, and JPM Levfin team is top notch, but you may get one up if you go to the Houlihan Lokey, PJT, Lazard. Then again none of this is real until you have an offer in hand. Bottom line : if you have an offer from JPM levfin, take it. If it's from the loan work out / RX team, make sure you ask where it sits and whether it's a revenue generating function. See my earlier response, most likely it will sit with risk and you don't want to start there as very difficult to get out of it (and pay is crap)
How would loan workouts stack up in terms of experience and exits?
not sure that's true - RX as you said is an internal function for a bank and usually sits with its risk department (the case with Citi, BAML and GS) as, as you said, it's all about managing the bank's exposure. It does NOT sit with levfin.
There is no upside for these teams. If you did a stellar job, the bank will not lose money, but the path often leads to selling positions at a price which does indeed crystallise losses as the bank does not want to have high Non Performing Loans ratio and wants to minimise the Loan Loss Reserves. That means it's very difficult to quantify in $ terms how well did the team do, and you typically get crappy bonuses.
The job is not uninteresting but exit ops are few. I have seen some of these guys go to the RX advisory shops (PJTs of this world) but it's very different being a lender calling the shots and demanding all analyses and being an advisor actually driving the process and always anticipated next move in what is often quite a complex situation
Several BBs have a RX team (front office) that does offensive DIPs and sits within Leveraged Finance
Agree with your comments on the internal loan workouts group though - they get comped more in line with credit risk but is a good "lifer" kind of job with okay-ish pay and decent hours
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