Questions about a long term career in RX

Recent college grad here, I joined one of the major RX consulting firms shortly after graduation. Have some questions about a long term career in restructuring and making the most of my experience in RX consulting; also happy to answer any questions from others about getting a foot in the door coming from a non-traditional  background etc. 

  1. I'm currently in a mostly research driven role on a pathway to transition to something more traditional/client facing; outside of continuing to develop modeling chops and going above and beyond my current responsibilities how can I make it crystal clear I'm ready for more responsibility?

  2. I understand the difference in the daily work between RX consulting and RX banking but assuming I do stay at an advisory firm for more than the typical 2-3 year stint, what are the pros and cons of either type of firm?

  3. In terms of "exit opportunities" is accurate to say former RX bankers are more likely to be at distressed, activist, loan to own and special sits funds while RX consultants will more likely be CRO/CFO or PE ops? 

  4. Intellectually I love the space, I'm learning from extremely bright and dynamic people, the comp is good, the work is high impact. I'm pretty much putting my head down, preparing to learn and experience as much as I can over the next 2 years and see where that gets me. But I would definitely appreciate hearing from some guys or gals who have managed long term restructuring careers. The hours and travel (consulting side) are significant and sacrifices have to be made in terms of relationships, how have you managed that?

 

Other general advice from those who have restructuring or distressed experiences is always valued. 

Comments (11)

 
  • Prospect in IB-M&A
Jan 3, 2021 - 1:28pm

Appreciate the opportunity to ask some questions. I'm a junior non-target looking to try and secure a junior year summer 2021 internship at an RX Consulting shop (obviously pushing for one of the big 3 but looking for anything):

1. How did you go about recruiting for the big 3? Networking e.t.c.?

2. Have you seen RX Consulting firms typically take junior year interns? 

3. What are your hours and comp looking like (general answer if you don't want to be specific)

4. How would you best set yourself up for junior and full-time recruiting in case junior SA 2021 doesn't pan out? I.e. would you recommend a big 4 brand internship, a boutique IB bank, or even maybe a smaller RX Consulting firm? 

Thank you for answering! Happy to shoot you a pm as well as I'm currently recruiting for big 3 anyways and would love the insight. 

 
Jan 3, 2021 - 3:33pm

1. Networking was huge for me personally. I think because RX is a relatively small world, being reasonably prepared and knowledgeable for a networking call can have an impact on your prospects. 

2. I have heard of firms taking junior year interns in very specific instances only, but that doesn't mean there's no hope. Undergraduate recruiting is pretty light as I'm sure you know. Given the urgent/high pressure nature of restructuring and bankruptcy work, some firms opt to have a more senior driven model to avoid the typical knock on MBB that it's recent ugrads and MBA's being babysat by an MD or partner. This is not to say those firms aren't fantastic places to start a career (they are) but it's just a different model. I'd by happy to discuss this more via PM. 

3. Hours can be long especially pre-covid with travel in the equation. Comp I can discuss in private as well.

4. Although a lot of people seem to come from big 4 to rx consulting the rx practices of the big 4 are pretty weak (in North America at least). If you are set on RX consulting, I think an experience at a smaller shop would set you up really well. Boutique IB (RX banking ideally) I think would be a valuable experience too. From my limited experience, having a solid modeling skillset and understanding of the bankruptcy process are two of the most important things to develop early in an RX career. Predicate finding experiences to build those two competencies and you'll be in great shape. Later on it's obviously a relationship driven business, but I think you can provide immediate value and have a better chance of breaking in early if you develop and then bring those aforementioned things to the table.

Hope this helps and again feel free to reach out directly. 

 
Jan 3, 2021 - 3:33pm

1. Networking was huge for me personally. I think because RX is a relatively small world, being reasonably prepared and knowledgeable for a networking call can have an impact on your prospects. 

2. I have heard of firms taking junior year interns in very specific instances only, but that doesn't mean there's no hope. Undergraduate recruiting is pretty light as I'm sure you know. Given the urgent/high pressure nature of restructuring and bankruptcy work, some firms opt to have a more senior driven model to avoid the typical knock on MBB that it's recent ugrads and MBA's being babysat by an MD or partner. This is not to say those firms aren't fantastic places to start a career (they are) but it's just a different model. I'd by happy to discuss this more via PM. 

3. Hours can be long especially pre-covid with travel in the equation. Comp I can discuss in private as well.

4. Although a lot of people seem to come from big 4 to rx consulting the rx practices of the big 4 are pretty weak (in North America at least). If you are set on RX consulting, I think an experience at a smaller shop would set you up really well. Boutique IB (RX banking ideally) I think would be a valuable experience too. From my limited experience, having a solid modeling skillset and understanding of the bankruptcy process are two of the most important things to develop early in an RX career. Predicate finding experiences to build those two competencies and you'll be in great shape. Later on it's obviously a relationship driven business, but I think you can provide immediate value and have a better chance of breaking in early if you develop and then bring those aforementioned things to the table.

Hope this helps and again feel free to reach out directly. 

 
Jan 4, 2021 - 4:44am

Can speak to the banking side a bit.

 

Being an RX banker will be different given your heavy involvement in the actual debt/financial restructuring (heavy modeling/credit doc review work). Also heavily depends on whether you're advising the creditors or issuers, something which varies largely by the firm you join (ie. Houlihan generally works creditor side while someone like Centerview or Lazard might usually work the debtor side). I'm not really sure what role you have given your focus on research but you can bet that RX banking will be much more quantitative and technically-driven.

 

In terms of exit opps, from what I've seen the RX bankers get the buyside investing roles in the distressed space while the RX consultants can get roles at PE funds with in-house consulting arms such as Cerberus' COAC group. 

 

Full disclosure: I was an M&A banker but have a ton of friends in RX banking. Also I went to a large distresed-focused PE fund so have a good perspective in terms of recruiting. 

 
Jan 4, 2021 - 7:28am

Thanks for the perspective - Generally speaking does it seem like friends in RX are looking to stay or just put their two years in and head to a distressed buy side role? On a related note any thoughts on joining Centerview/Lazard/PJT post MBA?

 
Jan 4, 2021 - 7:32am

Interestingly it's a pretty 50/50 mixed bag with my friends. A lot of them joined their groups and haven't expressed any interest in recruiting - so they're now associates. Others, as you said, made the jump to the buyside asap.

 

Not sure what thoughts I can offer here. The firms you mentioned are all top-notch. Can't really speak to recruiting post-MBA though in case you're asking about exit opps. My impression has been that MBA associates generally either stay in banking or move to industry given buyside is usually not an option.

 
Jan 4, 2021 - 10:53am

Curious since you're in distressed PE - do you not come across former RX consultants now in investing roles? Would a CFA + RX consulting background get someone in the door?

 

I know you cited RX consultants going to PE ops roles, which seems natural, but was curious about distressed investing roles. Is there a huge difference in comp for these type of roles at mid-senior+ levels? It seems like RX consulting is a field that a lot of people stay in for their careers. Has that been your experience as well? Edit: understand you're speaking from an IB background, but figured you work with RX consultants regularly since your in the distressed PE world so figured you have a unique lens.

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