Recruiting to Private Credit from Public Credit

Is this something that can be done at the analyst level, say after two years in public credit? Would appreciate any input people have on if it’s possible to make this switch as a junior. Also, if any has any info on what the timeline is like, whether it is through headhunters or not etc. Cheers

 
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What do you mean by public credit? Distressed, L/S credit hedge fund? Or CLO? Or HY mutual fund?

This is generally not done and if so the transition is usually the other way around. If you’ve never had any experience with real “deal” and “process” then it’s tough to give much value add to a private credit deal team. I’m sure if you’re young enough that you could make the switch.

Distressed would be the easiest way to go to the private credit side, but not sure why you’d want to do that

 

What do you mean by public credit? Distressed, L/S credit hedge fund? Or CLO? Or HY mutual fund?

This is generally not done and if so the transition is usually the other way around. If you’ve never had any experience with real “deal” and “process” then it’s tough to give much value add to a private credit deal team. I’m sure if you’re young enough that you could make the switch.

Distressed would be the easiest way to go to the private credit side, but not sure why you’d want to do that

 

At a Leveraged loan/ CLO type fund. In terms of the transition , is this something you have to be very proactive about as these private credit funds typically lock in hires years before you actually start?

Also interested in your distressed comment. Why would it not be great to go down the distressed route? Thanks for the response btw.

 

I transitioned from long / short credit into private credit on a spec sits / distressed team. There isn't anyone else here with my background and it was difficult to make the switch. As others have said, understanding and managing the deal process is a key part of private credit and you don't pick that up in the public market. Firms like to hire banking analysts or guys from PE for this reason. At my former role I traded event-driven and distressed credit and was involved in committees, new money plans, etc and spun that angle in the interview process which worked. I already had a handle on how to underwrite and formulate an investment thesis, being able to think creatively about how to boost credit returns and enhance security helped a lot. After about two full deal processes I was cut loose to manage things on my own. 

If you are trading public credit from a mutual fund, CLO or other type of performing-focused seat I think its going to be tricky for you make a switch. I can't say with 100% confidence, but you may want to focus on the bigger BDC and private credit names like Owl Rock, ARCC, Golub, maybe HPS, etc who may bring you on with 2 years of public credit experience as you'll at least have the basics of credit analysis.

 

Despite a strong distressed expertise at my prior firm it wasn’t a strategy we were growing and I really enjoyed the experience working with companies directly on new money deals, so I wanted to find a role that would let me grow more in that direction. I really like having flexibility across the capital structure (we will also buy assets outright) and the deal process has made me a more well rounded investor, I think. I can still invest in publics when compelling opportunities arise, but it is not the focus 

 

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