Private Credit to PE
Have any of you personally made or know someone who made the transition from private credit to PE at the senior associate or VP level? Curious to hear your thoughts on how best to position your candidacy and things you said or did to make it happen.
bump
I did this at the associate level. I emphasized the areas where my work overlapped with their underwriting. Also I think that coming up with a framing of valuation between asset value (or runoff scenario), going concern value (ie what cash flows you get if you just steady state the business) and value from growth (incremental value you get from growth possible based on sales or Capex efficiency of the business and TAM) helps in communication regarding how you think about valuation of companies. As a creditor you disregard the growth component, but if you can talk through the driver's of that component, it will be obvious you are thoughtful at least. However I think that lateralling at the VP level is going to be difficult. You're probably going to be too expensive to firms looking for someone who can hit the ground running on day 1 and even bringing in business. Sorry if that's not what you wanted to hear - I'm just trying to give an accurately honest perspective.
Appreciate your input!
Thank you! What kind of PC firm were you at and what type of PE firm did you end up at? ALso did you do IB?
bump, interested to hear how possible this transition would be
Had a co-worker do this. FDD background > MM DL > lower MM PE. He was a 3rd year VP in credit before he left so pretty seasoned. A lot of networking but possible. I would add though, and he agrees, very little chance he can lateral upwards to MM/UMM PE and no chance we gets to MF PE. Also, would likely be limited from leaving due to carry.
Also depends on how opportunistic your private credit platform is.
The private credit / opportunities associates at sixth street and HPS are likely going to have very divergent outcomes if they wanted to move than the associates at say Pennant Park, Antares, and Monroe.
Going down the performing food chain, if you do distressed / special sits, its actually pretty common to move to distressed PE / loan to own type players as the lines are extremely blurred.
How difficult is it to go from a Monroe / Antares / Madison type to a Ares / HPS / Bain type?
Interested in both unitranche & opportunistic / junior debt and equity as the pay is better and deals seem more interesting.
Going to be difficult -> Ares / HPS / Bain junior capital teams all recruit people who would be competitive for PE with IBD / distressed backgrounds. If you want to do junior debt / equity I know for a fact the super opportunistic teams at Ares / Bain are separate from their DL & BDC teams (Special Opportunities at Ares / Distressed and Special Situations at Bain). HPS has a separate distressed team as well, but their performing credit platform is on the hairier end.
I would target slightly easier to get into firms with opportunistic teams (Ie; Golub is recruiting for a senior associate in opportunistic credit seat right now) or less namebrand PC places that do junior capital. Moving to the workouts team if you are at one of those three may also be a good move depending on which of the firms you are at (I don't think Antares actually does anything in workout situations, justs bends over and spreads themselves for their relationship sponsors).
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