Moving from Credit to Growth Investing

How common is it, or rather, how feasible is it to move from a credit investing role to a more growth equity-type investment role?

I understand that the mindset and some of the technical skills differ quite a lot. But is that difference enough to completely close the door for the possibility of a transition?

Really, I am about to begin my career and ideally would not like to 'pigeon hold' myself to a particular asset class.

Any insight would be great! Thanks

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Comments (6)

  • Analyst 1 in IB-M&A
Feb 15, 2021 - 6:01pm

The sooner you make the move the easier. It has been done before. But please also take into consideration which industry you like and also where you feel your skills are best matched up. You'll always be happy and afforded many opportunities if you're a top performer in the Credit world rather than an average Growth investor.

  • Prospect in IB-M&A
Feb 15, 2021 - 7:47pm

Thank you. When you talk about timing. How long would be too long?

Also, great point about the opportunities of being a great credit investor vs average growth. Puts things into perspective.

  • Analyst 1 in IB-M&A
Feb 15, 2021 - 8:34pm

A buddy from college made the switch after two years as a private credit analyst. I would say if you make the switch before you get promoted to an associate at a credit fund you will be fine. The biggest difference for him was transitioning to growth meant significantly less technical aspects of the job and an emphasis on sourcing and more of the soft skills needed to be a "great" growth investor. You most likely won't touch/run a model until you're an associate.  

If you're heading into Credit straight from college it means you're definitely smart and know a good bit about finance so I would not jump into Growth solely b/c it is specialized or doesn't pigeonhole you. Growth is a saturated space and it seems like everyone is trying to capitalize off that wave. Frankly, I believe credit will have enormous growth over the decade and you'll see some very interesting niches grow within the credit world.

  • Associate 3 in PE - LBOs
Feb 15, 2021 - 7:22pm

I did something similar - let me know if I can answer any questions. Short answer is that you won't get pigeonholed immediately, but it will be very hard to transition if you stay too long

Try and learn as much about legal documentation and structuring as you can - despite the different mindsets, growth and credit actually align pretty closely here. It also helps if you're in mezz, sub-debt, etc. and can articulate an equity-like thesis alongside the credit story

  • Prospect in IB-M&A
Feb 15, 2021 - 7:49pm

Associate 3 in PE - LBOs

I did something similar - let me know if I can answer any questions. Short answer is that you won't get pigeonholed immediately, but it will be very hard to transition if you stay too long

Try and learn as much about legal documentation and structuring as you can - despite the different mindsets, growth and credit actually align pretty closely here. It also helps if you're in mezz, sub-debt, etc. and can articulate an equity-like thesis alongside the credit story

The role I will be doing is more focused on leveraged loan investing rather than private credit,m. This, the DD required isn't the same, the legal elements are still very important but the group I'm in invests in the facilities rather than structuring them. Is that a deal breaker?

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