why is HL RX considered top if it's all creditor side?
isn't creditor side the shameful, less prestigious, less involved side of bankruptcy? Wouldn't banks that do more debtor like PJT/EVR/Laz/MOE be better since they're doing the higher fee per transaction, more technical work? And working for the good guys instead of breaking legs for team evil?
From my convo with analysts, they are doing 50-50 creditor debtor now. It’s not all creditors now
Think there’s a few things wrong with your reasoning OP. About the creditor vs debtor side argument: creditors and creditor-side work in general have become much more sophisticated, especially in recent years (take a look at creditor-on-creditor violence in recent distressed processes: TriMark, Serta, etc. if you haven’t already), and this means that creditor mandates definitely require more involvement than they did in the past.
Also, most of the “technical work” you do on the creditor side is pretty similar to technical work on the debtor-side - sure, on some debtor mandates the debtor-side advisor might do more of the modeling that typically occurs in a sell-side M&A process, but overall the amount of technical work tends to be pretty similar on both sides.
About prestige, sure you might not be working with megafunds on the creditor-side but you get to work with some of the smartest public and private distressed players in the space (Aurelius, Centerbridge, Oaktree, Cerberus, etc.) - wouldn’t call this shameful by any means. You’re right that debtor mandates net higher fees than creditor mandates, but as a junior this won’t affect you or your exits at all.
About HL specifically, like the poster above me said, I believe they work on a pretty balanced mix of debtor and creditor mandates, especially in more recent years. No RX shop does 100% creditor or debtor side mandates - they just have relationships with certain sponsors and distressed investors, and this obviously leads to repetition in the types of mandates they work on.
Lastly, I wouldn’t necessarily say the debtor is always the good guy and the creditors are team evil - a bunch of debtor processes involve a PE-owned shitco that took on too much debt after an LBO, and you’re working with the sponsor to help them recover some of their equity check. Not as simple as good guys vs bad guys, and if morality is what you’re worried about, probably best to avoid the distressed space in general.
The biggest thing wrong with your logic is "higher fees" = more prestigious and "more technical work" = better exit ops.
Retail banking generates the predominant revenue for BAML. Doesn't make it more prestigious. Fee's / revenue does not equal experience.
2ndly, technical work = better exit opps. Again false. The former pipeline of analysts that have come from your group / firm into exit opps is what determines what looks you'll get. nothing more, nothing less. It's all self - selection mixed with risk adjusted returns for HH's to place kids which translates to them paying their bills.
following
This is one of the worst takes I've read
This is one of the biggest misconceptions that gets parroted. As most people who have worked in restructuring can attest, creditor side work is actually often preferable. Less admin/BS presentation work. No data rooms to manage or shitty mgmt budgets to piece together for your model. Creditor side, you’re working for the buyside / capital providers who (in the instance of fulcrum debt) are the de facto owners of the business, or plotting ways to capture value from other creditors in some fashion. As such, most complex restructurings these days are creditor driven, by sophisticated hedge funds who are often far more creative (and aggressive) than companies themselves. So I think it’s generally much more interesting than debtor work where you’re often just hand holding mgmt, or in the case of many sponsor owned companies, helping an out of the money and useless sponsor get some tiny recovery plus liability releases. Of course there are plenty of less desirable creditor mandates too (like way out of the money debt or minority creditor groups, UCC often as well) but the top restructuring firms are generally going to get the good creditor mandates (where those creditors are helping drive the case) while the mediocre firms will get the worse mandates (less relevant parties that get excluded from key negotiations)
Yes, debtor side fees are often far higher, in part given the higher work load required. But fees are your MDs issue, not yours.
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