Top Credit Funds?
Who are the top buy-side credit funds and what does the life of a private credit associate look like? Info around hours / intensity / comp would be helpful.
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Often described as “PE lite” - you’re typically underwriting LBO transactions, just investing in a different part of the capital structure. During the week, hours on average are M-R: 8 AM to 7 or 8 PM, can usually be done by 5 pm on Fridays, a couple hours of work on the weekend. This can easily flex up to 80+ hours with ruined weekends if a process heats up quickly or you’re on multiple live deals. Definitely some slower weeks in the mix too, usually at the beginning of the year after the holidays or in the mid-summer around July 4th when Sponsors seem to take a breather. Honestly, comp has a huge range and is hard to pin down what market is - depends on city, if the firm is vanilla senior only or can do uni or mezz too, if they are the credit arm of an established PE fund, if they primarily recruit from IB backgrounds, etc. Lastly, well known players in the MM to LMM space (in no order and off the top of my head - I’m sure I’m missing some) include Golub, THL, Antares, BMO, Churchill, Twinbrook, Varagon, LBC, Madison Capital, Hancock, Audax, Maranon, Monroe, NXT, Northleaf, etc.
Missing the number one direct lending shop - Ares Management. Other notable firms include HPS, First Eagle (legacy THL and Newstar), Comvest, HIG Whitehorse, Blackrock, PennantPark, Medley Management, Prospect Capital, Fortress, Crestline, etc. I will note depending on the private credit firm, they may have very different risk tolerances and minimum yield requirements. The vast majority of the firms I mentioned tend to look at hairier credit that command higher yields and thus usually a higher mgmt. fee meaning investment professionals are compensated accordingly (also contingent on scale).
Found the Ares guy... jk and good call, only forgot to mention them because my firm skews LMM so I honestly never interact with them (we wouldn’t even be able to compete).
What would all-in expected 1st Yr Associate comp look like at one of these places? 250k?
Definitely interested in learning about Blackrock's credit team. There's not much out there on them on here unless I'm just searching for the wrong thing.
Any thoughts on Kayne Anderson's MM credit platform? They seem to either compete with or club up on transactions with a lot of the other names you mentioned. Curious about their reputation amongst other lenders, performance and compensation/lifestyle
They do more UMM deals and have a pretty large hold size. Tend to look at the more hairier, stressed businesses as well. Good reputation in the market and smart investors.
More interested in learning about uni / mezz focused funds and those that primarily recruit from IB background. What would comp look like at a place Golub / Audax / Varagon...
Golub Associate 1 is ~200k (125/75). Know thats on the upper range of senior only shops. Places like Varagon/HIG pay less
Edited to reply
Have been pretty impressed with Crescent (know of some BAML Lev Fin guys who went there). Pretty sharp senior guys.
Why is it that every time someone here mentions Private Credit, most ppl only talk about or refers to only Direct Lending? Not criticizing, just curious. The private credit world is huge and comes in many flavors. Im at a MM credit fund and we do all kinds of stuff in Credit.. from DIP and Asset Finance all the way to Special Sits, RE Debt, Lender Finance, Structured Credit, CMBS, Claims, Distressed Debt, Whole Loans, Orphaned Assets. Returns range all the way from 8-9% to 20%+ IRR
I am at a similar shop to you and also not sure why vanilla, sponsor backed lending is the default around here. I suspect its because there are more seats, and also its easier for someone without an RX / spec sits background to break into. Personally, I'd rather go back to public markets than work on heavily marketed deals.
Such a broad mandate sounds interesting - could you possibly list some funds similar to yours?
Valid question. Probably for the same reason that when you think of private equity, the first thing that comes to mind is plain vanilla buyout funds/LBOs. Private credit is a fragmented space but direct lending seems to be one of the “most” common strategy.
What are the top funds in the non-Sponsor private credit world?
I think these are typically invested out of different funds, at least at the large cap shops. A real estate debt fund can do all the mentioned, covering liquid, illiquid and structured. A typical large cap pc fund you’d be looking mostly at sponsor stuff, whether it be senior secured/unsecured or unitranches with some equity coinvest. The more junior stuff (and potentially sponsorless opportunities) will be evaluated by different teams/funds with different mandates/appetites/etc. Places like HPS and Sixth Street have a more “generalist” approach but the Ares/Apollo/KKR/Oaktree type places this is not the case.
Hi I’m interviewing at a fund where soon they’ll launch a special situations practice, can someone shed a light on it in terms of day to day activities/interesting of work etc.?
thanks
Who are some of the big players doing unitranche / mezzanine investing?
Special Sits hours can be pretty like IB hours at the Mega Funds. This was my personal experience interning but analysts and associates I worked with did the same hours
Does anyone know anything about Cliffwaters private debt fund? I got approached by them and cannot find much info online.
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