What am I missing about RX?
So I am a freshman at a top target and I am trying to decide if I want to recruit RX next year. Tbh, I got interested because some of the best people in my school seem to love RX, but after speaking with them I am still kinda confused, and hoping to get some help from the WSO community.
Is the job actually more interesting, do you add more value than in M&A?
Will I get depressed by working just with bad companies?
What was the factor that made you say: I want to do RX?
I heard groups are small, do you get more responsibility/work more?
If you are interested in restructuring- 2 things you can do to better figure it out- 1. Read Moyer's distressed debt. 2. Talk with people in the industry
Started to read Moyer - no person wants to speak to a freshman and I don't want to reach out now when I will need to do it again in a year
Then you are just being lazy. So what if you will have to reach out again in a year. Networking is about cultivating and building strong relationships for future opportunities. You should be networking with people when you don't need a job/referral. Then when you do ask down the line they are more than happy to lend a hand.
The other anonymous post mentioned Moyer's book and network. I'd recommend the same thing and read Houlihan Lokey's - The Troubled Company, 400q's has some RX questions. Most importantly, network more! Lazy fuck!
Dude relax ahahah. I am a freshman and I have been trying to speak with upperclassmen, sorry if RX bankers have been slammed over the last year and now with recruiting class above me so I did not want to bother.
You are extrapolating something for professionals that does not apply to students. Lots of people at your PJT, HL, and EVRs of the world cold emailed 1 person right before recruiting started, got on the phone, and got their first rounds a week later.
Is it more interesting: depends what you find interesting - do you like intense negociations where you are defending your piece of the pie?
Do you add more value than M&A: Possibly - you are saving some jobs - now some people will also get fired through the new ownership plan; in M&A you are often trying to negociate to make the pie a bigger one
Will you get depressed: Maybe? But not everyone is a fan of SaaS tech cos valued at stupid multiples - you will see a wide range of business models across industries - soem because their industry is structurally challenged, others because they were simply overlevered
RX appeared to be more technical than M&A - M&A folks only focus on the equity part of the capstack and often view debt as a way to get the deals done rather than a key stakeholder (afterall why do you care about lenders as long as things go well...); in RX you have to understand both equity and debt technicalities both on the financial side but there is also a very large legal component. Anyone that says that M&A has legal stuff too is a bit of a clown - SPAs are standardized and like sure you have regulatory approvals/takeover regulations but these are quite straight forward.
Generally RX groups work hard on live deals as the company is in bankruptcy or close to get there and thus you want to spend the least amount of time in such situation and therefore want to find a solution as soon as possible. More responsiblity - I guess it depends on you - are you a reliable analyst that takes ownership of your work?
Why should you do? read and keep your mind open about finance in general - don't be that first year (sorry I am UK based) that only wants to do RX that would be flat out wrong, but do consider the pros and cons of each jobs.
On things to read - there is more than enough on the interweb - google around (Moyer, HL case study, interviews from distressed guys like Oaktree).
Thanks a lot for your answer. Exactly, I am trying to figure out if I want to do myself rather than following what strong upperclassmen have done before me.
Appreciate the write up, SB deserved!
I’m assuming you’re at W since idk many other schools with such a focus on RX. If so, there are a couple people on-campus off the top of my head that are still there that would be great resources. If anyone tells you that RX is explicitly better than M&A, that’s just BS. It’s a combination of the work you do, the typical exits into distressed, and the people even. Lifestyle isn’t necessarily better - it’s just different. I even know people that are in RX that want to do VC - for them, it’s just a gold star on their resume to show that you’re smart. As you said, the people you probably look up to all typically go down the rx route so pick their brains - they’ll tell you if they don’t think it’s for you or doesn’t align with your interests.
Thanks a lot for your reply. can you elaborate on "the people even" , based on your experience who is a great fit for RX?
I've been very interested in both RX and M&A and ultimately ended up doing M&A and here is how I'd break it down:
M&A is not as interesting as it seems. You may work with better companies but more of the work is very much process-oriented and boring. M&A modeling at the end of the day is pretty boring, operating models can be fun, but at the end of the day, you don't really need to think critically. I worked on a few ridiculous sell-sides where due to COVID / Zoom dynamics, I've spent countless hours literally just screen sharing management presentations in vanilla sell-side processes or keeping track of buyer logs etc. The bigger the companies the less thinking you do because most large corporates have their shit together, so the whole large-cap buy-side where you think critically about an industry is kind of a myth, your job at the end of the day is processing work. M&A culture varies greatly firm-to-firm but seems to attract some of the biggest hardos in the world, where people are taught to not admit mistakes, not admit when they don't know something, and intellectual humility is largely non-existent.
For whatever reason, I think you find more people in RX that really enjoy it. It may be that the size of the RX market is generally much smaller than M&A and the content is more niche in some sense, so to differentiate yourself you need to really understand bankruptcy law, case precedents, and be creative and on your feet. There is still the usual banker non-sense in RX, however, many RX groups (PJT / HL / etc.) seem to have a pretty good culture when it's not wartime (people leaving the office earlier, not a ton of time wasted on bs, etc.). There may be counterexamples to this, but I've never heard of a serious M&A group that's equivalent to the aforementioned RX groups that have that much downtime. In M&A, if you aren't doing deals, you are probably doing client service.
I'm ultimately happy with my decision to go the M&A route as my exit is where I ultimately wanted to be (I didn't get a top RX job, didn't make the cut at PJT / HL, but luckily landed a strong M&A group). However, RX seems to attract a different class of banker in terms of intellectual horsepower that you simply don't need to move up the ranks in M&A. This is not to say there aren't smart people in M&A groups, but frankly, you can get pretty far by being a brown-noser in M&A that gets weeded out in RX which requires way more on-your-feet thinking.
From a pure work perspective, RX personalities (not the bankers but the investors, debtors, other creditors) are pretty nasty. If you like combativeness and you like the name-calling, hearing the 25y/o distressed analyst cuss out senior banking professionals, and generally enjoy that type of environment, you may like RX and the distressed job opportunities that come after it. Not every deal/firm is like that, but this is more common than you'd expect. Think Sujeet Indap wrote a book on Caesar's recently which has some of this color commentary.
Thanks a lot for your answer, I am out of SB but really appreciate it, I have learned something new! thanks for recommending Sujeet Indap's book, I have heard of it and I read it over the summer
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