Special Sits (Oaktree SSG, GSO, KKR Special Sits, TPG Sixth Street Partner)

Anyone have any thoughts about the differences between the above mentioned groups (outside of AUM)? Obviously GSO has underperformed lately, but I haven't heard very much about Oaktree SSG nor KKR special sits. Also any tips on evaluating the strength of distressed players/groups when recruiting?

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Comments (34)

  • Prospect in Other
May 5, 2020 - 11:42am

From my limited knowledge in the distressed space, Elliott and Apollo are monsters in the distressed space. Oaktree, given it's sheer size, is involved in a lot of plays in the industry as well. KKR idk anything about. Finally GSO isn't doing anything in that space anymore given the risk attached to it and blackstone has turned it around more into a traditional private credit lending platform and that's about it.

May 5, 2020 - 11:50am

Don't think thats true GSO still has significant distressed capital. They shut down their distressed, l/s, hedge fund that put on the infamous HOV trade and moved that capital to locked up, drawdown vehicles. Definitely correct in that there's been a direct lending push.

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  • Analyst 1 in IB - Cov
May 5, 2020 - 12:41pm

Following. How do these larger special sits / MF credit arms compare with dedicated distressed shops as exit opps out of banking?

May 5, 2020 - 12:51pm

Depends what you're looking for. At a big platform / MF, job security / fund blow-up risk not as big. But less upside.

In my experience, the big MF guys also get involved with more of the less-liquid stuff than some of the HF's that purely play in secondary market stuff. But this is a generalization and can change group by group

  • Analyst 1 in IB - Cov
May 5, 2020 - 4:13pm

Less upside as in the funds haven't been doing as well, or the exit opportunities and quality of work would be lesser? I guess what I'm asking is which opportunity would position one bestright out of banking?

Most Helpful
May 5, 2020 - 7:55pm

It's also important to consider the strengths and weaknesses of your personality / work style. MF credit arms will behave more like banking/PE where you work in deal teams, iterative processes, and driving towards pushing out a collective work product. Personalities tend to be much more conformist, clean cut, vanilla professionals that are competent enough but nothing special.

Independent HFs have much less structure, although this is obviously a broad generalization. Much more likely that you will have people that are somewhat of misfits socially, weird, and have hard edges. These people are generally terrible managers, but MIGHT be good investors. But the whole point is to think differently from the crowd (or at least think u do) and come up with complex ideas (sometimes to the detriment of performance in favor of individual ego. good investments are often simple). You are likely to be given a Bloomberg, some subscriptions/research services and left alone to do your work and figure shit out. This can be isolating or liberating, depending on your personality.

Neither types of culture are superior - there are money makers and blow ups in both types, and exceptions to these archetypes. But getting stuck in a culture that doesn't fit your style will most likely make you miserable and unsuccessful and vice versa.

Ugh the FBI still quotes the Dow... -Matt Levine
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  • Analyst 1 in IB - Restr
May 5, 2020 - 8:49pm

Excellent points -- thanks! Speaking for myself, while I know that I do well in a banking/PE structure, tough to really know if the more independent HF life is for me (attractive as it seems currently). Seems like IB ---> MF Credit/Distressed/Special Sits. is a more stable route at the beginning, and allows you to return to that style if HF doesn't happen/work out. Thoughts?

  • Intern in Other
Jun 5, 2020 - 10:46pm

Do the latter personality traits you described resemble that of Martin Shkreli's?

Btw - great observations. Thanks for sharing.

May 6, 2020 - 3:06pm

That is the safer and risk-averse route.

Ugh the FBI still quotes the Dow... -Matt Levine
Apr 23, 2021 - 9:11am

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