Private Debt vs High Yield Credit Fund for PE Transition

Alright, so I know neither of the above is ideal, or likely... but given the choice between the two, which would better position you for attempting to move into private equity without an IB background?

I went straight into a hedge fund out of school and have been there for just over a year now. We mostly look at ordinary high yield credits, but occasionally foray into stressed and distressed opportunities as well. I recently received an offer to join a private debt shop, but eventually I'd really like the chance to do more longer-term operational investing at a PE shop.

My initial thought would be that private debt is marginally closer to PE and may have better opportunities for networking with funds you lend to when compared to a fund that invests in the public markets, but I can also see how getting into more distressed situations if and when the market turns could be better experience

If it matters, I went to a large midwestern state school and am currently in NY. For purposes of the discussion, let's assume that the three are around the same "ranking" with similar AUM (i.e. comparable MM HF vs MM debt fund vs MM buyout fund, or three LMM funds, three MFs etc.)

Comments (4)

Jan 23, 2019 - 12:31am

Hey BobbyDoucher, sorry about the delay, but are any of these useful:

  • Equity vs. High Yield Research places well into credit funds. ... there and you only hear about equity research. Do you all think that ER is a bit saturated, or at least ... more saturated than HY? Also, I take it the exit opps are a bit different- I'd imagine that HY ...
  • High Yield Research- Questions), specifically High Yield (HY). It's at a BB, and all analysts are ranked very highly in II (don't know ... example,Sr. Analyst is buddies with a PM at a prominent HY fund, and I do the bitchwork for him (aka send the ... from my internship and recently accepted a FT offer for Fixed Income Research (as opposed to Equity ...
  • RE High-Yield Debt Modeling I'll be interning at a middle-market high-yield debt fund this summer. The fund focuses on ... originating fixed-rate RE bridge-loans with 12-18 month maturities and first-dollar capital stack position ... pref-equity) but does do some one-off corporate deals and deals collateralized by other real assets. My ...
  • High yield bonds vs syndicated loans their strongest are (bonds/loans) and which gives the best exit ops especially for PE. lev fin ... I have a FT analyst offer for BAML in lev fin and I have to make a decision between high yield ... bonds and syndicated loans. I know BAML is top on the street in lev fin, but which of these two areas is ...
  • UBS High Yield and Loan Capital Markets Program High Yield and Loan Capital Markets works with non-investment grade companies on a variety of debt ... markets job. Here's the job description: Description High Yield and Loan Capital Markets Description ... trends. High Yield and Loan Capital Markets originates any combination of fixed rate, floating rate, first ...
  • AMA- High Yield/Distressed Debt Sell Side Analyst considering the credit capital markets are significantly larger than equities. Ask away... High Yield to ... and retail. We publish mostly on high yield/distressed debt situations but also some special situation ... Many students aren't exposed to the debt markets while in school which I believe is a shame ...
  • Books To Learn On High-Yield Bonds & Loans Any recommendations on which books I could pick up for the same? Thanks high yield bonds Debt Capital ... to learn more about Covenants, Structuring, Pricing and the like- especially in the high yield space. ... Hello all, I work as a ratings advisor in the debt capital markets team of a Bank. However, wanted ...
  • More suggestions...

Fingers crossed that one of those helps you.

Jan 26, 2019 - 11:19am

Depends how large the private debt shops is. Do they do majority sponsor-backed deals? Do they have a track record in sending associates to M7 MBA schools? Reason I ask is that I've seen people go from debt shops to PE shops post-MBA. If it's a well known debt shop the possibility is definitely there albeit you'd be getting looks probably from LMM/MM PE firms rather UMM/MF.

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