King Street Capital - Any insight?
Dear WSO community,
I have been looking but couldn’t find anything on King Street Capital Management on this forum, although they are one of the biggest hedge funds in the world with ~$20B AUM.
I understand they are a special situations / event-driven hedge fund and can invest across the capital structure. Also they have been recently involved in an activist fight with Toshiba but that’s about all I know and can find about them.
Does anyone have an insight in their culture, comp and work on a day-to-day basis? Also, how are they regarded vs other top-tier HFs?
They're distressed focused.
Solid shop.
They are good.
DELETED
"stellar distressed shop"
A friend of mine works in the London office. From what I understand you cover a sector and look at all opportunities across the capital structure (so both equities and credit) within that sector. Seems like a good shop with fairly stable AUM and a good track record.
Would you be disadvantaged in any way by joining this shop on the CLO side? Like, would you be siloed off from the rest of the group?
bump, interesting question (although old
Ended up getting some good insights, as I worked for a CLO manager over the summer. We invested in KingSt CLOs among others. They're a great distressed shop that built up a decent CLO platform. The professionals that invest in DD also look at higher grade, BBB/BB/B loans as well. So, the CLO platform is just an extension of their current skillset. All their professionals have been there for 3 or 4 years plus, and many have prior FI experience. I might have their pitchbook lying around, ask any more q's if needed
That is an incredibly generic description that could apply to literally any distressed fund trying to branch out into the CLO business, and sounds like you just saw it from their marketing materials. No idea how the CLO is performing but the truth is that KS’s hedge fund product has underperformed and is facing significant investor redemptions.
Ridiculous that people who have no idea what they’re talking about comment on this thread.
They built a CLO platform a few years ago and it’s a completely separate team from their core flagship strategies. Performance at KS recently has sucked like many other funds, they are replacing the high fee money with either renegotiated LP contracts or moving LPs into locked up, hurdle-rate drawdown funds of which they’ve raised upwards of 5-6 funds so far.
If you are joining the CLO platform don’t expect your experience to be in anyway comparable to a typical distressed HF experience.
Returns below (offshore flagship): 1997 12.2 1998 7.1 1999 14.7 2000 12.8 2001 15.1 2002 4.0 2003 22.5 2004 9.7 2005 9.6 2006 16.4 2007 16.5 2008 3.7 2009 19.7 2010 5.4 2011 -1.6 2012 12.5 2013 11.6 2014 4.6 2015 -2.2 2016 5.5 2017 5.8 2018 -0.7 2019 1.6
SBed, ppl like you are why i still come on this site
Thanks for the reply. Are you talking about their US CLO team or European (London based) CLO team? And also, what do you mean by "If you are joining the CLO platform don't expect your experience to be in anyway comparable to a typical distressed HF experience"? Do you mean it in a good or bad way and for what perspective?
He means you will not get distressed experience if you join the CLO team at KS - it is a separate team. Not sure how it works over there, but some shops with similar setups even have the distressed team handle the workouts on the CLO side with the original analyst only providing research to get them up to speed.
I'm challenging the statement that the CLO team is completely siloed-off from the distressed team. I know its probably verbatim, but I just dug up their pitchbook from 1/2019. While rockford tower (CLO platform) is a separate entity, both platforms use the same analyst bench. 51 researchers, 24 traders, and 12 cap markets guys. The deck goes on to say that all staff/services are provided by KS. They're marketing that they use their senior analysts on both platforms, don't think its fair to say that those analysts would barely interact (and considering there's a decent amount of distressed loans out there sitting in their CLOs anyways (mallinkrodt, pier1, commercial barge, unity)
this is consistent with what I've heard and somewhat of a trend as legacy distressed shops (Anchorage also a good example) raise CLOs and other lower fee products to balance the volatility of returns in the distressed realm
I agree, same case with York Capital/Canyon
Again - you have literally no idea what you're talking about. If my pitchbook told you I promise to protect your downside but then I also owned the pier 1 loan, would your response be "oh they must have an angle it's super distressed I'm sure it will go back to par which must be their thesis"?
There's certainly many many firms out there that utilize a single research team across all strategies including par credit which their pitchbooks emphasize. King Street is not one of them.
pay attention to this guy. look at the backgrounds of the people that are posting. this guy knows his shit. I personally know 3 people at King Street on the distressed/Hf/non-CLO side. it is NOT a single research team. I don’t know how else to prove it except posting a video testimonial with a reddit style verification of Fran stating such. it’s just not true. pitchbook or no pitchbook.
this guy should not be getting monkey shit you young ass kids. listen to people who are in the literal fucking industry lol.
Bumping to see if anyone has thoughts on a trader position at KS on the CLO side
trader at a HF is a pretty niche job, usually reserved for (a) long-time partners who started with a firm and who are making bank by fact of being there from the beginning or (b) relationship guys from the sellside who are coming in with a rolodex and execution experience. I don't really understand why/how someone eventually lands into a jr. trading role at a HF other than they got pushed into S&T after college and want to work at a HF instead of a bank.
In my experience, young guys joining a trading desk are just there to support all the soft skill stuff. To be frank, i sometimes have no idea what differentiates some of our ops people from the jr. traders given our ops people also come from ivy league institutions/"bright kids" but maybe someone can care to give me that color on what the young guys actually do.
Anyways, the apt comparison is - what are you moving from in your prior role and what are you looking to achieve? If you are asking the difference between a trader at KS and trader at DK, it probably comes down to just literally what they pay you and are the people someone you think could sit next to 10 hrs in a day.
If I had to guess; I imagine a junior CLO trader is doing things like checking bid asks and gathering data on new issue calendars and so forth.
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