Why move from distressed HF to RX?

Anchorage partner recently moved to join PJT; it seems there's a handful of buyside distressed guys in my network moving back into the sellside.

Is this a result of lack of distressed opportunities vs decent deal flow? Better fee margins / pay structure? Internal politics at these funds? Better monetizing one's personal network? Any insights would be appreciated!

 
Most Helpful

Don't know anyone who made the move so can't give any first hand accounts but would imagine from a risk adjusted EV of comp perspective it makes sense to go back to RX. At the partner or even senior analyst level in a HF you'd probably be getting paid out largely on the basis of returns which have been pretty well documented on this forum to be pretty poor for distressed post GFC. Conversely, in RX you'd be getting fees solely on advising on the mandate and even though RX activity is down, there are still situations around. Also I'd imagine the firm can set up a reasonable floor for comp even if Rx activity decreases further given the level of m&a activity generating massive fees for banks as a whole (maybe there is a similar analogy on the credit HF side with setting up CLO arms and the like but plenty of ~1-4bn distressed HFs that just don't do that and basically have no path to growing AUM significantly). You also have pretty much zero risk of a boutique like PJT or EVR that does RX just no longer existing or massively downsizing vs a fund like York essentially dissolving its HF or Anchorage losing ~50% of its higher fee HF money. So I feel like unless you genuinely couldn't see yourself doing anything other than investing it seems like a rational choice for those that just want a high paying and interesting/engaging job. Would imagine major trade off for those that are indifferent to investing vs advising is just harsher lifestyle so if that's not a dealbreaker I could understand why people would jump. 

 

Reiciendis labore dolorem facere corporis doloremque deserunt. Dolor nisi distinctio facilis veniam ipsum expedita. Quae suscipit sed natus totam adipisci et. Aut facere doloribus qui iure. Consequuntur deserunt dolorem enim voluptatem nulla.

Enim dolor odio qui est. Temporibus ullam quo aut reiciendis deleniti. Cupiditate perferendis voluptatem dolore. Ut aut omnis explicabo rerum perferendis qui.

Qui cupiditate rem soluta illo ea. Nulla ut ipsam reiciendis iusto vel a quae dolores. Iure voluptatibus fuga et ipsam inventore debitis. Dolor itaque cumque aut architecto aut. Illum sed minima illum voluptatem quo similique. Vel quasi quasi quia.

Aut repellat dicta omnis veritatis provident. Ut modi doloribus repellendus voluptatem aut ratione placeat. Vel non adipisci magni. Facere voluptas eos inventore.

Career Advancement Opportunities

March 2024 Hedge Fund

  • Point72 98.9%
  • D.E. Shaw 97.9%
  • Magnetar Capital 96.8%
  • Citadel Investment Group 95.8%
  • AQR Capital Management 94.7%

Overall Employee Satisfaction

March 2024 Hedge Fund

  • Magnetar Capital 98.9%
  • D.E. Shaw 97.8%
  • Blackstone Group 96.8%
  • Two Sigma Investments 95.7%
  • Citadel Investment Group 94.6%

Professional Growth Opportunities

March 2024 Hedge Fund

  • AQR Capital Management 99.0%
  • Point72 97.9%
  • D.E. Shaw 96.9%
  • Citadel Investment Group 95.8%
  • Magnetar Capital 94.8%

Total Avg Compensation

March 2024 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (23) $474
  • Director/MD (12) $423
  • NA (6) $322
  • 3rd+ Year Associate (24) $287
  • Manager (4) $282
  • Engineer/Quant (71) $274
  • 2nd Year Associate (30) $251
  • 1st Year Associate (73) $190
  • Analysts (225) $179
  • Intern/Summer Associate (22) $131
  • Junior Trader (5) $102
  • Intern/Summer Analyst (249) $85
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”