Does anyone have insight into what work might be like at a structured credit hedge fund? Seems like they performed very well post-crisis and have continued to outperform since. Specifically, I’m wondering whether a seat at a structured credit hedge fund would be a compelling opportunity to pursue post banking when compared to other exits (PE, direct lending, etc.)
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Nah PE still wins - more exit ops (Corp dev, B-School, Strategy, Operations, etc.) multiplied by number of companies you can recruit with.
Structured credit is a very niche skillset that's not easily portable.
what kind of dumb response is that, Achilles. Sure it's a niche path but for the right person it's a great opportunity. Doesn't mean any idiot working on IPOs in a coverage banking group will pursue it.
Structured credit has performed very well post-crisis EXCEPT for this year where its still down 15-20%+ vs. all other asset classes having recovered significantly. A lot of allocators are putting money to work on the long-side of structured credit due to the recovery they see vs. distressed assets are down for a good reason (distressed funds are still down HSD due to heavy CCC exposure which itself is -15% YTD).
It can be a great seat for select few specialists like Hildene or One William Street or the specific product hedge funds sitting within the credit managers (ie Anchorage, Angelo, Brigade, Canyon, Marathon).
The issue with structured credit is it's typically a very top-heavy role dominated by old school credit traders so there's very few jr. seats to go around. To be honest, I'm not even sure what jrs. contribute in their role as they don't typically do corporate credit analysis so people who are well versed in coding/math-heavy side of investing (understanding relval in synthetic instruments, tranche investing, automating analyses of different instruments), tend to pursue it.
Is the strong performance that has been seen in structured credit sustainable? I'd love some information on what type of diligence they are performing and how they actually think about deploying capital. Is it becoming a data based profession, or is there deep fundamental analysis that goes into purchasing distressed structured products?
I'm at a small Direct Lending + Convertible Bond HF here. Happy to answer any specific questions, a lot of vaguery in the original post.
Can't really opine on large structured credit funds specifically, at my shop no one has that kind of background, not very portable from what I can tell.
Thanks for the response. I suppose I’m wondering what a junior person at a fund like Hildene would do day to day? It seems like these types of funds are doing very well and are operating in a part of the market that isn’t nearly as well known/populated (seems like there’d be a lot of opportunity here).
As to my original post, I was mainly wondering whether you’d be crazy to turn down an associate offer at a reputable PE shop in favor of a position at a fund like Hildene.
Pm me, see this thought process a lot among younger guys. Don’t think you’re thinking about it the right way
its beneficial to post in a forum so everyone can see and read and learn from this. OP is not the first one to ever wonder about this career path and certainly not the last
+1
How do you think about this decision and why is this train of thought unique to younger people who are just starting to build their careers? Would love to hear your insight.
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