Private Credit Comp

Would anyone be able to comment on comp ranges at private credit funds ranging from associate through partner, including for different strategies (i.e. direct lending, mezz, distressed, etc.) and fund sizes (mega fund, MM) if possible? Would also be interested in how they compare to PE at firms that do both.

Comments (16)

 
Oct 28, 2020 - 5:11pm

Really dependent on locale. I have friends in decent sized cities(not NY but think Chicago/Boston/etc) at the associate level around 150-180k all in. I would assume it scales up from there at some of the bigger shops

 
  • Associate 2 in AM - Other
Oct 29, 2020 - 12:13pm

I'm at one of the large more credit-oriented managers (Ares/HPS/GSO etc) and got ~$230-240 all in my first associate year, i.e. bonus paid 3.5 years out of college. Would definitely be interested in other data points here since it feels like there's less out there than for PE/banking but I definitely think you're generally taking at least a slight discount to what pay would be in either of those roles.

 
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  • Associate 2 in AM - Other
Oct 29, 2020 - 12:46pm

Typical hours probably 9-9 Monday to Thursday and maybe 9-6 Friday so normally high 50s/low 60s per week. Normally very little if any weekend work but it does happen from time to time, and then if you're under a tight timeframe on a deal hours can definitely creep up to or over 70. Background-wise I came from a debt-focused capital markets/banking role at an IB. I wish I could be more helpful on chances of or advice on making the switch from CB. Anecdotally I've heard it definitely happens and that your chances are much better at senior-focused direct lenders but can't really give any thoughts based on personal experience.

 
  • Analyst 3+ in HF - RelVal
Oct 29, 2020 - 2:57pm

Small Direct Lending fund analyst. All in comps by year. Yr 1: 120k, Yr 2: 200k, Yr 3: 250k

I think if the firm is good and you perform there is comparable or even greater upside to those I know in PE

small team so pressure is high but hours and work life balance are great

 
  • Analyst 2 in IB - Gen
Oct 29, 2020 - 5:44pm

If I may ask, why the large jump in comp b/w Yr1 and Yr2? Promotion, stub or just the way it's structured?

 
  • Analyst 3+ in HF - RelVal
Oct 30, 2020 - 9:15am

I would say my pay has been more smooth than my immediate peers. It is an under $1B shop with less than 10 investment team members, so comp is bonus heavy and wildly volatile. My increases were a combination of my positions adding more PnL (hard to add PnL in first year with minimal investments sourced) and overall fund performance. It would not be unreasonable to get little to no bonus if we lost money in a year and didn't gather an incentive fee. Very volatile and risk/reward focused, which is what drew me to this firm.

 
Oct 29, 2020 - 4:58pm

The hours are like 8-11pm + weekends. at least thats what the PE and Private debt dorks were doing at my old shop.

 
  • Analyst 1 in IB - Gen
Oct 29, 2020 - 11:00pm

That sounds like a lot.. I always thought the hours in private debt were supposed to be better than PE. I don't work in Private debt tho so I could be totally wrong 

 
Oct 30, 2020 - 10:18am

I think this is broad misconception that has never made much sense to me - 

(1) Particularly in this interest rate environment, direct lenders are forced to turn over their book incredibly rapidly as loan duration is limited (i.e. loans generally NC-2 at best, and if you did a good deal you are getting refi'd out at Y2+1 day just about 100% of the time). This means more deals to invest the same amount of capital.

(2) Perhaps not at all shops, but many are doing something closer to PE-style diligence than I think most would guess - combined with (1), this means a lot of work to do. 

(3) Legal documentation is quite time consuming, and in a world where you are generally looking at a ~1.2x MoM in most of your deals (i.e. refi'd out per (1), you can't afford to have any leakage due to a loose doc) - this adds an incremental laborious workstream

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