Private Credit / Direct Lending Comp

I'm a 2nd year associate at one of the big DL firms (Ares/Golub/Owl Rock) and bonus season is around the corner. Seeing as most people on this site are always talking about PE/IB comp, I would love to hear any data points for people in the private credit space (DL/Mezz etc). To start - I'm hearing $130k/$85k for my year (associate 2). Any input appreciated.

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Comments (111)

  • VP in PE - LBOs
Jan 29, 2021 - 2:51pm

1st year VP - 360K total comp for CY 2020

Fund AUM - materially smaller than big guys like golub, ares, owl rock

Location - US but not in NY / CA

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  • Analyst 2 in IB - Cov
May 14, 2021 - 4:54pm

Congrats! That's awesome. Would you mind saying what firm and/or location? Bain?

My bro from Duke is starting at Barings soon and was wondering what comp is like compared to other firms. He thinks it's a little low.

  • Analyst 2 in IB - Cov
May 14, 2021 - 5:10pm

Congrats! That's awesome. Would you mind sharing what firm and/or what city? Bain?

My bro from Duke will be working at Barings and has heard they underpay a little compared to other firms.

  • Analyst 1 in IB - Cov
Feb 2, 2021 - 10:56pm

Don't mean to hijack the thread, but would a move from PubFin to private credit be possible? 

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  • Anonymous Monkey
  • Rank: Chimp
Feb 3, 2021 - 9:25am

I interned in PubFin and saw an analyst move to Neuberger Berman private credit from my team. I also went from PubFin SA -> private credit FT.

  • Analyst 1 in IB - Gen
Feb 2, 2021 - 11:22pm

Can anyone comment on the difference between the work in corporate/commercial banking and direct lending? I assume it primarily comes down to DL doing higher risk deals? 

Feb 2, 2021 - 11:32pm

Skillset is very similar (credit is credit). From another thread that summarizes it pretty well: "The primary difference is regulatory, driven by the different sources of capital. Banks hold deposits, so risk-taking is restricted in a number of ways in order to protect depositors. Direct lenders are raising funds from investors who want the lender to put that capital at risk in exchange for returns. Regulators take a much more hands off approach; they're not nearly as concerned with a fund blowing up as they are with a bank going under.

Banks still dominate the investment grade large corporate syndicated loan space because i) they're low-risk borrowers, so capital requirements aren't as onerous, ii) banks have balance sheets large enough to support the biggest borrowers, and iii) there's a lot of cross-sell opportunities with large corporations, so it's a worthwhile use of capital for big banks. As the borrower size goes down into the middle market and lower-middle market, banks have less cross sell to pursue and higher capital requirements for riskier borrowers. Direct lenders have taken share in this space because they can be as risky as they like, so long as they provide investor returns."

With the additional risk on the DL side, usually more intensive underwriting / analysis, and thus the good ones hire more from IB/LevFin backgrounds, and comp is far better than on commercial banking side. 

Corporate Banking is totally different. You are the point of contact for your client to the whole bank, much more client oriented. IMO you touch a lot of parts/products, but specialize in nothing. Comp is somewhere in between Commercial and Investment banking, but i think its a snooze.

  • Prospect in IB - Gen
Feb 3, 2021 - 12:47am

Bumping as I think this thread could be valuable. My 2c: I interned at a bank with a sizeable direct lending team and have heard that A1 all-in is $80k (tier 2 city but tier 1 for MM private debt). 

  • Analyst 1 in IB - Cov
Feb 3, 2021 - 1:53am

What backgrounds do top DL/Mezz/Credit funds hire from?? Assuming Lev Fin/DCM/Rx rank pretty highly, but are they open to coverage/other product groups?

  • Associate 2 in PE - Other
Feb 3, 2021 - 4:32pm

Yes - just like top PE funds. Plenty come through that way

  • Associate 3 in PE - LBOs
Feb 14, 2021 - 1:58am

My experience as a mid-level at a big name firm in the Direct Lending space (Nyc): 

2nd Yr Associate: $125k Base, $165k bonus

3rd Yr Associate: $145k Base, $195k bonus 

  • VP in PE - LBOs
Mar 30, 2021 - 6:16pm

  1st year VP (5-6 YOE) - $300K total comp for CY 2020

  AUM - $2-3bn AUM

  Location - US (Not in NYC)

Is this low for experience / size of shop? 

  • Analyst 2 in IB - Cov
May 14, 2021 - 5:02pm

Bumping. Curious on comp at various firms like Carlyle, Bain, Ares, Churchill, KKR, etc.

  • Associate 2 in PE - Other
May 28, 2021 - 9:04pm

Both of those i believe have a starting all in Associate 1 comp of ~170-200k. Def less than the bigger boys in Uni world. Think thats where most of the solid second tier shops fall for starting.

  • Associate 2 in PE - Other
May 28, 2021 - 9:06pm

Theyre known for having higher comp compared to the other senior lenders because they're one of the best. Won't be as much as GSO or other top mezz shops, but Golub plays with Ares / Owl Rock for these deals and pays in line with them.

  • Analyst 2 in IB - Cov
May 28, 2021 - 9:09pm

Thanks. SBed. Who are considered the top mezz shops? Would these include the usual suspects (Ares, GSO, Bain, Carlyle, KKR, Apollo, Oaktree, etc.)? Is it fair to say that in private credit, mezz usually pays the most?

  • Analyst 1 in S&T - Equities
Sep 16, 2021 - 7:23pm

Are private credit/DL firms open to MBA associates who have a few years of banking experience? I've started to become interested in the field, I'm a first year associate at a BB coverage group and if I leave banking I think I'd want to head into DL. I know PE won't happen, is DL more open to candidates like me?

Sep 22, 2021 - 12:58am

Personally - seeing a ton of WSO DM inquiries for Direct Lending interviews/case studies from ppl without the lev fin type background/skillset, from all types of groups honestly, and somewhat surprisingly. Not sure why/how they're getting the interviews, but they are getting opportunities. Also generally seeing these ppl going in blind to the intricacies of lev fin capital markets, syndicated loan market, direct lending vs. syndicated, etc. So I guess that evens the playing field.

Sep 17, 2021 - 7:38pm

Do you know how that compares to MF PE and other DLs? Is MF DL WLB similar to MF PE?

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  • Associate 1 in PE - Other
Sep 17, 2021 - 8:09pm

That would be shockingly low and not in line with what has been rumored elsewhere / prior years, i.e. pay being in line with PE.

  • Associate 1 in PE - Other
Sep 18, 2021 - 5:37am

That may be true for some but not for all. GSO actually paid more than BX's other strategies, so people took a cut when it was fully emerged into BX and became BXC last year.

Sep 22, 2021 - 1:31am

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