Life as a CLO Analyst + Career Progression

Can anyone provide some information on the "day in the life" of a High Yield CLO Analyst, particularly for a more junior investment professional (2-5 years exp). Looking to learn more about the underwriting process, detail on credit memos (i.e., how detailed they are), hours and comp. Any insights into long term career trajectory / exit opps are much appreciated as well. Thanks!

Comments (5)

Mar 6, 2019

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Most Helpful
Mar 11, 2019

I am a research analyst at a CLO manager. For background, I came from DCM at a BB (3 years there, left as associate), and have been in my position here for 1.5 years. 50% of my time is focused on loans for CLOs, 50% for our direct lending business.

It depends on what you like, but I find the work to be interesting. Our credit memos are pretty detailed, laying out our thoughts on the business, industry, strengths, weakness, detailed bull/bear model, summary of relevant credit doc terms etc. We do however use helpful slides from the LPs the banks provide (which absolutely saves time and busy work).

I personally like working more on the riskier stuff / direct lending deals. High rated issuers offering L+175-250 paper is just not fun to work on IMO. But it is part of the territory.

Monitoring portfolio companies, pitching relative value ideas to the PMs and evaluating secondary opportunities are a big part of the job as well.

In terms of underwriting process, it isn't like banking where you pitch every issuer under the sun to win business. I'd say we probably decline 60% of deals before we even start committee memos based on red flags in a business. Then the remaining 40% are brought to committee with a hit rate of 70-80%. I can't stress enough how much time this saves compared to banking.

The work/life balance is one of the best parts of the job. 45-50 hours a week is typical here. In terms of comp, I came in at 260k for 2018, despite it being a "down year". Note I am the youngest person here (at 26yo). That scales up to 400-450k for analysts that are 30-34yo. The senior analysts here are probably making 500-700k (but that is a guess, I am not sure honestly).

Career wise, a few people have left here to go to other funds, but it isn't uncommon to stay. A few of the analysts have been here for 6+ years, in some cases 10+ years. You can't become a PM at this firm per say, but you probably can at others. But I personally think being a CLO PM is not nearly as interesting.

All in all, it's a great place to start an investing career, good comp, great hours, and interesting work.

    • 6
Mar 11, 2019

holy shit you make so much $$$

Mar 11, 2019

Thanks for sharing!
Can you see yourself there long-term? I came into a shop straight out of undergrad (1.5 years) and would love your insight on progression and compensation after leaving DCM. I focus primarily on loans and I don't do direct lending but I could be doing some more specialized work in the next year.

Mar 11, 2019