WSO Podcast | E128: Credit Hedge Fund Analyst from VP in High Yield DCM
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In this episode, PragueHF shares her road from studying law and business in Prague to starting out in a commercial banking rotational program in Germany. We learn about why when she was transferred to London that she decided to stay even though it meant switching banks and how she approached her big jump to a buyside credit fund in the past year.
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WSO Podcast (Episode 128) Transcript:
Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me as I talk to some of the community's most successful and inspirational members to gain valuable insight into different career paths and life in general. Let's get to it. In this episode, Prague CF shares her road from studying law and business in Prague to starting out in a commercial banking rotational program in Germany. We learn about why when she transferred to London, that she decided to stay even though it meant switching banks and how she approached her big jump to a buy side credit fund in the past year. Also, just a quick apology to the listeners. And no, it's been a few weeks since I released an episode. She's been crazy busy with the launch of the new So Financial modeling courses, so that's kind of backed this up, but we plan to keep rolling these out. Goal is again still going twice a week every Sunday and Thursday. If we can't hit that, we'll definitely be releasing at least once a week going forward. So stay tuned. I Project Chef, thanks so much for joining the Wall Street Voices podcast. Thank you very much, Patrick. Great and great to be here. So to get started, it'd be great to just get a little short summary bio for everybody. Sure. So my sort of background is legal background. Actually, I studied law and then pretty much by chance, I got into banking and went into graduate program in one of the commercial banks and from there jumped from one country to another and ended up
PragueHF: [00:01:41] In leveraged finance, which I did for sort of six years. And from that, I joined then a hedge credit hedge fund a year ago.
Patrick (CEO of WSO): [00:01:49] Very cool. Fun times. Ok, so in terms of looking all the way back to undergrad, to university, you went to school in Prague, correct? Yes. Yes. And when you're when you're back at doing that degree, were you
PragueHF: [00:02:03] Thinking I'm going to be in
Patrick (CEO of WSO): [00:02:04] Finance or you were thinking then maybe law was law kind of on the horizon for sure? Or is it something you kind of fell into? No, I was pretty much law, actually, because I studied. I studied law and business, so it was more
PragueHF: [00:02:16] Like, but it was targeting, you know, being a business lawyer. Then from Prague, I went to Germany and so why?
Patrick (CEO of WSO): [00:02:22] Why are you thinking business law? What interested you in that? So I've to be honest, it was my friends. A lot of them studied law. And so we were sort of a group of
PragueHF: [00:02:33] Of guys who were quite interested in like, it's more like arguments and presentation because as well, they'd like debating where you sort of present arguments and say, I like that aspect of it. Yeah. And so that's why law was, you know, until pretty much before I started to search for a job, it was it was the way to go as I did all my internship in law firms. So it looks like you
Patrick (CEO of WSO): [00:02:58] Kind of overlap there as a degree, also with law and business at a different university. Yes, so, yeah, I sort of studied way too much. You did. Yeah, yeah. Yeah, that's the difference between continental Europe and sort of the Anglo-American system where
PragueHF: [00:03:16] Instead of if you are in Germany, Czech Republic or any France, you said if you need to have a master degree. Yeah. And plus you don't pay for the studies, right? So what many people do in order to differentiate themselves, they study two universities at the same time. Makes sense. That's why I did. I started actually studying international relations, then figured out I want to do law, did law and business. And then from Prague, I wanted to go to abroad. And so I went to Germany. I studied law and finance there, where I got a little bit of a glimpse to finance. And that's why at the end I ended up in finance because I didn't want to go back
Patrick (CEO of WSO): [00:03:50] To Czech Republic. So tell me about that decision where you where you are at? What about finance? That glimpse of finance made you think, Hey, I want to do this? Or is it just because of job prospects, you being able to stay in Germany? Yeah I was actually more of the latter. That's fine. You're saying, Hey, I can actually get a job and stay in Germany. I don't have to go back to Prague. Exactly. If you want to be a lawyer, you need to be in your country. It's really difficult in continental Europe, where each country has different jurisdiction and you know you need to be qualified lawyer. I study in that country for five six years in order to practice law. So that was not really an option. I already studied for six years, so I definitely didn't want to repeat that. So you had enough finance where you could actually get a job? Tell me about how that's the fun part, right? I would say in back in hindsight, no, I didn't. But because I mean, back then, I couldn't really even read balance sheet income statement. Like, I had no real idea about these things,
PragueHF: [00:04:51] But I went to an interview, you know, first interview in banking. I was for Commercial Bank, for their graduate program and to my, you know, I was lucky because the whole day was one, you know, Super Saturday. So it was all about soft skills, pretty much presentation. You read something, you present something, but it wasn't really much finance there. So even when I came to the last interview when it was about the job itself, they were more like telling me what I would be doing. They were not really asking me any technical questions or anything like that. So after that, they I got an offer. I was like, Oh, yeah, that's easy, right? So I fall. Let's, you know, let's try other interviews at investment banks, and then I realized how different that is.
Patrick (CEO of WSO): [00:05:33] Hmm. So tell me about what was so different. So this was a commercial bank basically trying to bring you in.
PragueHF: [00:05:38] This was in the
Patrick (CEO of WSO): [00:05:40] In in Munich. I assume we're in Panama City. And so you were you're you were interviewing for this position is very much like fit, almost like you had the job already. Why do you? Was it because they just like
PragueHF: [00:05:51] Was a low salary? No, no. It was a good job, but I just wanted to see what are the other options and
Patrick (CEO of WSO): [00:05:58] How did you get those investment banking internships? Is this before you graduated, right? No, it was not. So it was all the position for the analyst program. So I never did an internship in banking, which obviously is a problem. In particular, if you are in Germany or England, right, because many of these jobs and other jobs are actually recruited from the interns. Yeah, what do you know what the what the percentage of like the of the analyst class are filled by the interns in
PragueHF: [00:06:22] London or Germany? I don't know, to be honest.
Patrick (CEO of WSO): [00:06:25] Ok. Yeah. In the U.S. it's like 80 plus percent usually.And I think it will be very similar this year. It's almost like one hundred percent
PragueHF: [00:06:32] Because I could. Yeah.
Patrick (CEO of WSO): [00:06:34] Yeah, because it's they're not hiring
PragueHF: [00:06:35] As much, I think given everything
Patrick (CEO of WSO): [00:06:37] That's going on.
PragueHF: [00:06:38] Yeah. So one of the investments I got to the last round where we were four people and three of them were interns, and I was the only one who was not intern and they chose. Still, the two people chose David. They were interns. Yeah. And they said that the reason why I was they knew the two people, like they said, will be really liked you. But at the end, we just were more comfortable hiring someone who we knew, which is fair enough. Yes.
Patrick (CEO of WSO): [00:07:02] But the world work. So tell me how you even got that
PragueHF: [00:07:05] Interview that that banking interview? And did they ask
Patrick (CEO of WSO): [00:07:07] You technicals, even though
PragueHF: [00:07:09] You did? Yes.So the investment bank so. So I had quite a few. And so at the beginning, I was clueless. I'll be honest, when I got through, it was it was. I think it was actually during my internship, which I still did in a law firm. And I sort of mentioned that I'm looking for going to banking. And so the partner, he used to work for one of the investment banks. So he arranged me an interview there. It was my first one at the investment bank and that went really bad because that was the first time and I realized, Okay, how much? I don't know so, but basic questions like just walk me through the LBO model, you know what LBO is. And you sit there and like, Oh, OK, but the good thing is like, you do one or two and realize, OK, this is what I need to learn. So I sort of subscribe to this lovely preparation courses online and started to really go through the basics to, you know, being able to model. And so they've learned it all on myself, and so when I got then one of the Super Saturday and one of the investment banks, then I could pretty much answer any technical questions you ask me.
Patrick (CEO of WSO): [00:08:14] I surprise you're asking yourself elbow questions. It sounds like more
PragueHF: [00:08:18] Private equity interviews, but k. Yeah, and this one was this one was sort of M&A leverage fund.
Patrick (CEO of WSO): [00:08:23] Yeah. Yeah, that makes sense. So you're
PragueHF: [00:08:27] You end up starting at a at a bank in
Patrick (CEO of WSO): [00:08:31] Germany, though, correct? Or. Yes. Yes, I did. Yeah. So tell me about that. And then how you transition to London. Yeah. So I joined it for a graduate program.
PragueHF: [00:08:41] So which was good that you sort of you had your target position, but you were sort of rotating in different departments. And I must say, when I joined, as I told you, I did not really know what I'm doing. So I sort of joined like trade finance, but I realized relatively quickly that that's not what I would like to do or what excites me.
Patrick (CEO of WSO): [00:08:58] So where is trade finance? Can you just find that, like, what were you doing day to day selling trades and stuff? Yeah, it's like supply chain finance, so you are helping companies finance their working capital needs.
Patrick (CEO of WSO): [00:09:09] Ok.
PragueHF: [00:09:11] Got it.
Patrick (CEO of WSO): [00:09:12] Ok, so you're doing like loans on like air and
yeah, sort of more. Yeah, yeah. Account receivables and stuff. So you're financing that and there is like reverse factoring and
PragueHF: [00:09:23] Funny stuff, but it's not investment banking exactly
Patrick (CEO of WSO): [00:09:26] Like in banking. Ok. It's finance, but it's not investment banking. Exactly. You knew that going in though, correct? You just. I knew that. But I obviously begged. Then I didn't know what it means. So it was more like, Oh, they are looking for someone with a legal background. So, you know. And so how is the bank coming out of school there? You now had your masters in law and finance. Right? The pay? Yeah. Well, it was, you know, remember around what that was.
PragueHF: [00:09:53] Yeah. Back then was 50k.
Patrick (CEO of WSO): [00:09:56] 50 euros, yes. Yep, and then it's not bad, actually, it's pretty good,
PragueHF: [00:10:03] Said, coming
Patrick (CEO of WSO): [00:10:04] Right out of school. So then you I mean, you have a master's, though, so it's not for a masters, it's a little bit for a job
PragueHF: [00:10:12] Right out of school. You're kind of your
Patrick (CEO of WSO): [00:10:13] First real job. It's not bad. So you're there for a little over a year. Yeah. And so I managed to sort of rotate to other team which was writing the advisory. And, you know, for some good reason, I sort of there I learned all the balance sheet and counselling and what you do actually and managed to persuade and they keep me there. So I managed to get to the investment banking part of the business, and then they sent me to London to leverage finance. So that company sent you. Yes. Ok, so that got you into the London market. Exactly. That's where, in hindsight, I shouldn't have done that. Yeah, they shouldn't have done that. They're going to lose you. Yeah. Because yeah, that's now you're now you have kind of the world is your oyster in London, right? It's such a big hub. Yeah, there you realize how big difference it is. Ok, so tell me how you started interviewing, how you started networking or what you did to kind of get started doing other interviews. Do you know you wanted to jump to another firm? Were you always looking for like more of the front office? No, I want you to stay in London. So after, you know, two months here, so I was OK, this is like, I'd like to stay here. I don't really want to go back.
PragueHF: [00:11:21] So obviously you first you start to see what the possibilities internally, but then you say, OK, well, if that doesn't work, then what
Patrick (CEO of WSO): [00:11:29] Is why did you like working so much over? No, I've frankly, if you know, at the beginning of the career, you just please. For me, it was the work was much more interesting. It was longer hours. But like you, you really do more interesting deals. The people who you work with are mostly ex investment
PragueHF: [00:11:48] Bankers, even if you work for a commercial bank. And just I thought that the environment is just much higher paced than it was in Europe,
Patrick (CEO of WSO): [00:11:56] And that was at the same company. Yes. So it wasn't necessarily a Munich versus London thing. It was just you wanted to stay in London
PragueHF: [00:12:02] Because of
Patrick (CEO of WSO): [00:12:04] Your move. There had kind of given you a higher level work that was more interesting. Ok, that makes sense
PragueHF: [00:12:10] So but then
Patrick (CEO of WSO): [00:12:11] They weren't kind of they weren't agreeing they were going to you were supposed to only do a rotation
PragueHF: [00:12:14] In London and then go. Yeah, exactly. They wanted to that. I come back and, you know, in the team where I was, I think the team sort of wanted to have me stay there. But then they didn't have a PhD, and it's like in a bank, it takes time. And then, you know, you may go back and then they promise it. Maybe you come back to London again at some point, but I was a little impatient, I guess.
Patrick (CEO of WSO): [00:12:37] Yeah, there's no yeah, there's no guarantee on the headcount being allocated there or whatnot. So tell me a little bit about how that interview process started when you were in in London. It's obviously I assume you started looking because when you started getting that news. Yeah, I started looking and I honestly just sort of the old fashioned. You put your CV on financial careers and I got a call from a headhunter and arranged me an interview and it went, you know, pretty much within two or three weeks I got the offer. So it was very, very quick and very smooth. Great. And so tell me a little bit about what you were doing at this. This is a larger bank, right in London.
PragueHF: [00:13:14] Yes. Yeah, it's another commercial bank. But when I joined them, so the area, the leverage finance, high yield, they were building up and growing the team. So it was the right time to sort of join them. And yeah, I was doing them. The similar thing, what I did in the previous.
Patrick (CEO of WSO): [00:13:32] So tell me a little bit about kind of what that job was. What was it like? And it sounds like you got promoted really fast, which was good. Yeah. So it was it was in leverage finance and doing sort of high in particular, high yield bonds, originations, structuring of of the deals.
PragueHF: [00:13:48] And obviously then you tried to sell it. Obviously yourself does it, but it was a lot. So at the beginning, it's a lot of obviously presentations, modelling and the usual sort of supporting the senior guys in the credit process and for pitches for clients to win.
Patrick (CEO of WSO): [00:14:07] What was the hardest transition coming out of that first bank into the second? So I don't know, it was actually pretty, pretty good, pretty smooth. Yeah, 'cause you're kind of doing the same thing. Yeah, I was doing exactly. I was doing the same thing as I did the last three months in the other firm. So comfortable, I felt pretty comfortable. There was no steep learning curve on the modeling. Maybe that was at the previous firm? Yeah, no, it was I. By then
PragueHF: [00:14:33] I already learned what I needed to learn.
Patrick (CEO of WSO): [00:14:36] What? What did you need to learn? What are you for the listeners that are interested in high yield or trying this? It's I guess traditionally they call it more like that's like almost like the in the sales and trading desk or.
PragueHF: [00:14:47] Yeah, yeah, that's the difference, right? So in investment banks, if you say high yield, then it will be the syndicate typically desk or yeah, sells. But in the end, the commercial banks, you have sort of leverage finance played sometimes between the loans and the bonds. But what you are doing, your originating high-yield transaction, so you go to a client pitch that they should do a bond or a loan and then you start
Patrick (CEO of WSO): [00:15:14] Exploding now because, yeah, right, because it's so cheap financing.
PragueHF: [00:15:20] Exactly. It's in Europe. You have a cheap for already quite a while.
Patrick (CEO of WSO): [00:15:23] That's true. That's true. So this is not a high yield.
PragueHF: [00:15:26] It's no yield, no yield.
Patrick (CEO of WSO): [00:15:30] Exactly. Exactly like all subordinated debt yielding like five percent or whatever or three percent, whatever. That's crazy.
PragueHF: [00:15:38] Ok. Yeah, people
Patrick (CEO of WSO): [00:15:38] Chasing yields
PragueHF: [00:15:39] Going down the risk curve. So tell me a little
Patrick (CEO of WSO): [00:15:41] Bit about
PragueHF: [00:15:42] Why you think you got
Patrick (CEO of WSO): [00:15:43] Promoted so fast is just the team was growing so fast. There's a new kind of group you got into the right time or was there something you were doing that that helped?So I think it definitely would help that that
PragueHF: [00:15:53] The team was growing and we were doing more deals. But I think I mean, the boss which I had, he was investment banker, and so he very much appreciated. I wanted to work hard at the beginning like it was. You come to London, you are full of energy after you studied, right? So you used to want to put it to use. And so I think that was something
PragueHF: [00:16:13] Which would have put me apart a little bit that I did not mind staying late.
Patrick (CEO of WSO): 00:16:19] And what was the hours?
PragueHF: [00:16:20] Be honest, when you say it wasn't, it wasn't as bad as you would have it, probably in many of the investment banks. But I would say every day I would be there till I mean, 10 o'clock would be normal, would be late. And I think the latest I never did an all nighter, so I was lucky. I think that the latest I left was like four a.m..
Patrick (CEO of WSO): [00:16:41] Yeah, but you were. So you would get in at like eight or nine a.m. instead of a 12 hour a day on average. Were you working weekends ever?Sometimes, yes, sometimes I would do.It sounds like 70 to 80 hours, 70 days,
PragueHF: [00:16:54] Something like that. Yeah. Ok. Well, not
Patrick (CEO of WSO): [00:16:56] Easy. Not easy, but not like horrific like I've heard, but it's worse.
PragueHF: [00:17:03] Could be
Patrick (CEO of WSO): [00:17:03] Worse. It could be better, too, right?
PragueHF: [00:17:06] Ok, so you're working hard.
Patrick (CEO of WSO): [00:17:07] You had the energy your boss and I had the then after a year, I was actually very lucky that the boss started to work with me directly. So I didn't have any VP down between I am of back that happen to me. You work hard as an A-lister like us, all the people in the middle, I mean, just worked directly with her. Yeah, exactly. I basically asked, like, look, you know, could I do on something, you know, just work with you? And we started to work together and basically until I was VP, it
PragueHF: [00:17:31] Was then I then Had a junior. But since my off the first Year, I, I literally did Not work with any analyst or sorry, any VP or director, really. It was me and my boss. So I think that's an
Patrick (CEO of WSO): [00:17:44] Important lesson for everybody. If you can find that mentor, that's a little bit higher in that mid level that where you can cut out and not have all these layers
PragueHF: [00:17:51] In between you and gain the trust
Patrick (CEO of WSO): [00:17:53] And quickly get up, get up the learning curve. I think
PragueHF: [00:17:56] It can. It can really
Patrick (CEO of WSO): [00:17:57] Accelerate you because you're going to get a lot more exposure. You're getting a lot more like the associate work right away or within six months, right?
PragueHF: [00:18:03] Yeah.
Patrick (CEO of WSO): [00:18:04] Very cool. Ok, so you were doing great there? You did five, almost six years there. Yeah, I really I really like the team, I have to say.
Patrick (CEO of WSO): [00:18:13] So why leave? So tell me a little bit about, Yeah, so you went. Analysts associate all the way up to VP. Pretty fast.
PragueHF: [00:18:21] Very fast,
Patrick (CEO of WSO): [00:18:21] Actually. So tell me a little bit about, was there a thought? Was it because it was a commercial bank? Was I thought like, I'm going to be tapped out here? Or was the team kind of slowing down the growth?
PragueHF: [00:18:30] What happened, you feel like last year? Yeah. Well, it was a mix of things. I think one, in order to grow to to a director, I felt I need another experience. Like if you are in one field and in one bank, I think you are lacking a little bigger picture like you work on these transactions with other banks. But I think it's different
PragueHF: [00:18:52] If you know you just see it from different angle. So I felt like in order to be really sort of all around it, finance professional, I need to see more. I can't just stay in one bank. And if I because if I stay and do the same thing, you are sort of locked in. I think your opportunity, once you get the director, which would probably happen, then next year, I think then switching to somewhere else is extremely difficult. I think at the VP level, it's sort of the last call when you can go and do something else, but you.
Patrick (CEO of WSO): [00:19:21] You see MDS and partners switching banks all the time.
PragueHF: [00:19:24] Is that not the case? Yeah. But then in the same field, right? You didn't? Absolutely.
Patrick (CEO of WSO): [00:19:29] So if you're in high yield, you're in high yield for good. Exactly. Ok, totally agree. Ok, so because then is the is the jobs flipping from sv%, you're still
PragueHF: [00:19:39] Very much like running
Patrick (CEO of WSO): [00:19:41] The deal.
PragueHF: [00:19:41] You're running the team.
Patrick (CEO of WSO): [00:19:43] But you're and you're doing you're managing the presentation, you're managing. You're overseeing kind of everything.
PragueHF: [00:19:48] But at the director
Patrick (CEO of WSO): [00:19:49] Level, are you expected to go out and source a lot more? Or is that at the VP level as well? It's I had it already at the VP level, so I'd already had my clients where I would go and pitch. So it would it really do you like that part? Was that a hard transition from associate to VP for you? I loved it. I wouldn't say it's easy. Yeah, because it's very different if you go with your MD to a client and if you go
PragueHF: [00:20:11] On your own right and then everything on you.
Patrick (CEO of WSO): [00:20:13] So tell me about that first time you pitch to somebody by yourself. Were you nervous? Yeah, yeah, definitely. Yeah, no doubt I was. I was, and I was probably over prepared and over like analytical about it. So, you know, because I think the best pitch is actually, if you don't open the pitch, book, right, that's when you can sort of have a nice chat. And I think that at the beginning was lacking. I think it was
PragueHF: [00:20:37] Too much on Page three. Let's discuss this and on Page four, let's discuss that because you need to do a few of them in order to relax and have a bit more natural discussion. But by
Patrick (CEO of WSO): [00:20:48] Building rapport, building that trust with the clients you have like, you're just talking through conceptually
PragueHF: [00:20:53] What they're what they should do
Patrick (CEO of WSO): [00:20:55] Rather than being like, you're going to this is the yield and like, you have to get to this thing now or whatever. Yeah, OK, I get it. Sorry, you know, so but I love that part. Like some of my clients, I'm still in touch nowadays.
PragueHF: [00:21:09] It's, you know, if you if you sort of I work with one client for four years, right? And then even if you leave, then you still, I think that relationship dynamic I really enjoyed. It's great. Yeah, I think it's.
Patrick (CEO of WSO): [00:21:25] It's kind of interesting to
PragueHF: [00:21:26] See the people who can do
Patrick (CEO of WSO): [00:21:27] It, at least in banking. The transition from that analysts associate and how it how everything shifts from managing to selling are like the modeling, the technical
PragueHF: [00:21:37] Side and just the people management side to
Patrick (CEO of WSO): [00:21:41] Actually selling, it's a very different job. It is. It definitely is. And you can see that some people are much more comfortable, you know,
PragueHF: [00:21:47] Preparing materials and then rather presenting it. And that's why, like any time when I had my juniors then like giving them opportunity, at Least to present at credit committees in the bank or take them to the to the presentation, if you can think it's super important because if you don't do that and then suddenly you become VP, they don't really know what to do.
Patrick (CEO of WSO): [00:22:08] So you made some, you said once you reach director level,
PragueHF: [00:22:11] Switching gears a little bit here, once you reach
Patrick (CEO of WSO): [00:22:13] Director level, you felt like you would be stuck
PragueHF: [00:22:14] In high yield. Tell me a
Patrick (CEO of WSO): [00:22:16] Little bit about what made you think that?
PragueHF: [00:22:18] Did somebody tell you that? And then
Patrick (CEO of WSO): [00:22:19] Why did
PragueHF: [00:22:20] You start interviewing and what kind of
Patrick (CEO of WSO): [00:22:23] Opportunities
PragueHF: [00:22:23] Were you for? Tell me about that whole
Patrick (CEO of WSO): [00:22:25] Thought process and then kind of how about recruiting happen? Yeah, so I mean, not that someone told me that, but I think I saw it around in
PragueHF: [00:22:33] The bank that not many people switched really like would leave at the director. And not even speaking of mid level, it happened very, very rarely. And so that made me think, look, its probably not that easy, right? Right. If people are not doing it in the bank, I mean, there must be a reason why everybody is so super happy here or there are there are limited options, and I think it was a mix of it, probably. But there is definitely an element that it becomes harder then. Yeah. So that was the thinking behind. And then obviously the question was, you know, what is the next step? And I was thinking about, you know, staying at the sell Side or going to buy side, which, you know, many people by side is the holy grail, right? That's where everybody wants to go from south side because you have better working hours. And so I had options both on the sell side and then by side, and I decided for buy side, mainly because I thought, You know what? It is time to slow down
Patrick (CEO of WSO): [00:23:31] And tell me a little bit about the options that you had and how you how you came across those options. So this time, obviously at the retailer, you already know some people, so you try to through friends or for someone you know, to to get recommended somewhere else or get connections. So I was looking at restructuring. So for a friend of mine, got interviews with one of the restructuring boutiques. Then on the buy side, actually most of it came from from evercore or Rothschild,
PragueHF: [00:24:02] Or yes. Yeah. Ok.
Patrick (CEO of WSO): [00:24:05] Yeah. So yeah, some strong a strong presence. Ok, back in London. Ok, so you interviewed there, but that still sell side, right? Yeah, that's still still self-signed. Yeah. So what about the buy side, you thought? I'm not going to be working those 70, 60, 70 hour weeks that may actually be able to put in a 50 hour week.Exactly. Plus, I was lucky as volunteering at a hedge fund where I actually ended up where, you know, it felt definite and the truth.
PragueHF: [00:24:30] It's very sort of diverse. It's not only like Cielo, which many of the other interviews if you are, you know, with Loveridge backgrounds. So in credit on the trade side, a lot of options are on close, especially not one person.
Patrick (CEO of WSO): [00:24:42] So for the listeners that don't know what CLO is. Can you
PragueHF: [00:24:44] Explain like
Patrick (CEO of WSO): [00:24:45] You were coming from high yield? So you were saying you were a lot of a lot of the looks, a lot of the opportunities you're getting were for CLO desks or CLO funds if CLO funds. So can you explain to me what they're to the listeners what that is? Yeah. So CLO Fund invests in in leveraged loans, which nowadays leverage loan and high yield bonds. It's pretty much the same thing. So CLO is you. You typically you analyse leveraged loans, some high yield bonds. You typically will have one or two industry assigned to you and you will, you know, do a credit analysis on them and recommend investing in a particular loan. And so why did you shy away from that
PragueHF: [00:25:26] And end up at the
Patrick (CEO of WSO): [00:25:27] Credit fund that you ended up? Yeah. So I wouldn't say I shied away, but I was a little worried that if you are in CLO, it's long only so you only
PragueHF: [00:25:35] Can go
Patrick (CEO of WSO): [00:25:36] Online.
PragueHF: [00:25:36] It's long on that. You can only buy the leverage loan, you can't short it. And plus it's very sort of patient money. I would say close where there is not as much trading going on.
Patrick (CEO of WSO): [00:25:49] So the longer hold periods along only a little bit more like a mutual fund versus a true hedge fund.
PragueHF: [00:25:55] Yes. Yeah, yeah, that was fair. Ok, whereas hedge fund, we do see a low as well, so we have our CLO fund as well, but we also have hedge fund where you can do anything and everything. I mean, on the credit side, not equity, but on the credit side. So you will do distressed, you will do a leveraged loans, you will do how bonds, you can do CDs, you can do long, you can do short. So it's much diverse.
Patrick (CEO of WSO): [00:26:19] So you have a lot more
PragueHF: [00:26:20] Room to learn even and learn
Patrick (CEO of WSO): [00:26:22] About new products and whatnot. So, OK, so
PragueHF: [00:26:24] You made this
Patrick (CEO of WSO): [00:26:25] Jump now buy sell side
PragueHF: [00:26:26] To buy side. Tell me what was the
Patrick (CEO of WSO): [00:26:28] Hardest about this transition? And yet you mind sharing a little bit about your pay trajectory, too as you went through? And did you take a pay cut jumping or was it a big? Was it a big race? Yeah. So I mean, this definitely. The transition was harder than the previous one, that's for sure,
PragueHF: [00:26:45] Because it is different, right? And I know people around me, some people love it. Some people struggle with it. I think I'm somewhere in between. So I had to definitely adjust to a few things. I think the biggest change is, you know, if you are part of a big bank, so you always every deal, you are a project you are working on, you're working with quite a lot of people, different teams, you are putting it together. There is a lot of cooperation. Then you come to sell side to smaller firm and suddenly it's you. You mean by side by side.
Patrick (CEO of WSO): [00:27:16] Yeah, when you jump to the buy side small firm, it's just like, you're alone. Yeah, you are alone, right?
PragueHF: [00:27:20] And you you figure it out. I mean, literally my first day, I would sit down at my desk and M.D. Would come to me the PM, and she would say, Okay, this is your first credit to analyse. That's it. And then figure it out what information sources you have, whether there is a template, model or template for a model or anything, right? So it just you need to figure out on your own. So that's very different to to banking. But I would say there is much more like if someone comes, you know, you get all the induction and everybody takes care of you. So here you need to be much more proactive and be, I would say. Self self sufficient or self independent. You have
Patrick (CEO of WSO): [00:27:59] To be ready to go after it and do the work in self motivated,right? So yeah, no, absolutely. Is that a struggle for you? It was kind of a struggle for me when I jumped a bicycle with the hands off the hands off because like I was used to associate, I'd be like, Do this, do that or a VP to this? Do this, do this and you go to somewhere and it's like nothing. Yeah. For me. Was it like that for you? I mean, you were. Yeah, for me, it definitely was.
PragueHF: [00:28:22] One was so that I felt sometimes I feel alone, right? Like it's you don't have that dynamic around you. And plus, sometimes I miss my juniors like to give some work to, yeah, it's like, Oh, you do it, and there's nobody else who will do it for you. Yeah.
Patrick (CEO of WSO): [00:28:38] And so how about the pay, but the pay going through the pay? I actually was pretty much the same as I had at the AFL side.So was that around one hundred euros by that point or a little over? Yeah, yeah, a little over a hundred years. So one hundred and one hundred and twenty something like that. I mean, is that the bit was the bass the same? Or was it mostly bonus weighted on the credit fund? Or is it still pretty heavily bass? Uh, it's now it's still I would say,
PragueHF: [00:29:05] Yeah, 80 percent
[00:29:07] Pace, 70 percent pace, something like that. No, I would say 50, 50.Oh, OK. So it's still
Patrick (CEO of WSO): [00:29:14] Heavily weighted towards performance. Yeah. Yeah, and is that is that like? Is that like fun performance or like how you do on your on your credits? Well, I haven't been there dead long, right? So I had just one liners, but I would say in our case, it's more your merit, not necessarily
PragueHF: [00:29:39] Like the fun performance. There will be an element of it, but there will be also quite a bit of element how you did and how they are happy with you. But it's not like if you do, you recommend something and it didn't go the right direction. That means you will not have a bonus that I don't think you need to
Patrick (CEO of WSO): [00:29:55] Know. If you're getting around is so is the base around one hundred thousand euros and then so the bonuses are around the same.
PragueHF: [00:30:03] Is that the? Yeah, yeah. Ok, so
Patrick (CEO of WSO): [00:30:04] It's pretty good. You know, a couple hundred thousand euros and no joke.
PragueHF: [00:30:08] Or is it
Patrick (CEO of WSO): [00:30:09] In pounds now because you're in London, I guess. That's that's a. That's a good amount of pay, right,
PragueHF: [00:30:17] For two years out of school.
Patrick (CEO of WSO): [00:30:19] Well, I guess you're closer to my age that a lot of people on this call are listening, but great anything else? So I think to me, what strikes me is like, you made that jump, you made that leap.
PragueHF: [00:30:33] It hasn't been easy, but it's been something
Patrick (CEO of WSO): [00:30:35] You've been able to do successfully. Do you feel pressure like more pressure day to day that
PragueHF: [00:30:39] You're that your
Patrick (CEO of WSO): [00:30:41] Analysis is like? You know, on online now or how are you dealing with that stress? No, actually, not really. And what I feel still stressful because I'm given as a small team, so I need to do as well the training. So if we want to buy ourselves something, then many times I have to do it. So then I find so stressful. Yeah, like, you don't want to mess it up.
PragueHF: [00:31:05] The analysis? No, not really. Because you always have the credit committee and so got it. You have some view, you try to defend it. But the guys who are the credit committee, they will make the decision at the end of the day. So it's not just up to you to say, Oh, yeah, let's buy this.
Patrick (CEO of WSO): [00:31:23] So what's next? What's next for you?
Well, if you are if your credit analyst, I think the next is being a portfolio manager, that's the next step. Do you feel like that's typically is that done internally? Or there's sometimes you have to jump to do that
PragueHF: [00:31:42] Or from people you've seen
Patrick (CEO of WSO): [00:31:44] It in the industry?
PragueHF: [00:31:44] Is that typical? Typically, actually internally, it's on the buy side. At least the credit funds are not that many people jumping around. It's very different to sell side where you switch banks relatively frequently and it's normal thing of the buy side. It's not very common that people jump for one,
Patrick (CEO of WSO): [00:32:01] And this credit fund is a typical LPGA structure where there's outside and.
PragueHF: [00:32:08] A limited partners, you know, you
Patrick (CEO of WSO): [00:32:10] Guys are raising outside funds. Yeah, yeah. Yeah, sir. But. Well, the firm is owned by the partners.
PragueHF: [00:32:17] But the capital is coming from outside investors. Ok.
Patrick (CEO of WSO): [00:32:22] So I guess any other words of wisdom before we call the podcast. Given your long and winding path from law, to
PragueHF: [00:32:31] Credit to
Patrick (CEO of WSO): [00:32:32] Credit bank and the risk side to
PragueHF: [00:32:34] All the way to high yield
Patrick (CEO of WSO): [00:32:35] To now credit hedge fund No. I would say, you
PragueHF: [00:32:39] Know, to every sort of young listener here at the beginning of the career, try as much as you can see different jobs within the bank if you can do the different rotations to find what you really like. And if you want to switch, you know, never is too late. I would say it's I have many friends who think that VP, you can really move. You can, and it's just
Patrick (CEO of WSO): [00:33:00] Not a director. I just don't wait till dawn. No, no. I would say don't wait to director. I would still stick with that. But, you know, explore. I think that's my that would be. And don't be worried. Don't worry about change. Yeah, the way I see your career is, I feel like you could always go back
PragueHF: [00:33:17] To large banks and get the job you had
Patrick (CEO of WSO): [00:33:20] And continue that and potentially go up the ladder. Whereas what you're doing now is you're kind of giving yourself just a lot more optionality to your career. Having now been on the buy side,
PragueHF: [00:33:29] You can now, especially at a
Patrick (CEO of WSO): [00:33:31] Place where you're getting a lot of exposure to different types of trades in different types of assets, right? Yeah, no, definitely that's why I say like it's and it's great to see
PragueHF: [00:33:39] Something else, I mean, I'm very happy that I've made the move.
Patrick (CEO of WSO): [00:33:44] Very cool. Very cool. Well, I want to say thank you so much for sharing your story. And yeah, I hope to see you around
PragueHF: [00:33:50] The forums and
Patrick (CEO of WSO): [00:33:52] We'll stay in touch. Thanks, Patrick, and thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.
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