I've learned a ton from this forum over the years. I want to give back with this Q&A – no private messages. Background: European, STEM undergrad, analyst at a distressed PE, MBA, Ivy League alumnus. Current: associate at a distressed credit HF (20%+ per annum since inception). Secured, unsecured, sub, prefs, etc. Generalist. Two strategies: public and private markets (primary & secondary). We can do loan-to-own as we have locked up capital.
25 Jan 2021
Yes, it's another question about exit opps. For those who's interested in distressed credit/pe/special sits, GS TMT (or any other top groups in BB that are known to attract top talents for top exits to buyside) vs. non-PJT/Laz restructuring group (more relevant experience but less known for top exits). I was only thinking about RX groups but was also told that distressed/special sits shops are looking for top talents with less emphasis on level of exact relevance of background. What do you guys think?
06 Aug 2021
About I have been a longtime WSO reader (6-7 years) and some years down the track, I thought it would be helpful to do a quick Q&A I think this could be helpful in particular for (i) those looking to switch over from credit to equity investing, (ii) those interested in mezzanine / sub debt, and (iii) those interested in operationally focused / distressed PE Background - c2 years Bulge Bracket LevFin (ANL) - c2 years mezzanine / sub credit investing (ANL / ASO) - c2 years opportunistic / loan-to-own PE, mid-large cap, (ASO / VP)
18 Oct 2019
I've been sitting on this post for a while. I was waiting for it to turn into a success story; started-from-the-bottom-now-we're-here kind of story. But it's been so long I'm going to post it anyway. ###My Background: Finance degree from non-target, super involved on campus, extracurriculars, case comps etc. Worked my ass off to somehow maintain a 3.9 GPA. Managed to land a couple solid internships. I'm also well on my way through the CFA program. ###My Story: I've been on the job hunt for quite a while now. My school has no alumni in finance. My approach has been to apply to jobs
19 Jan 2020
Hello guys, I'm an Economics graduate from the University of Iceland. I thought I'd share with you some information that I believe has never been made public before, at least not in English. It's a story about some brilliant investments that made a select few hedge funds A LOT of money. This post will be very long but hopefully you will enjoy it. As for graphs, I don't quite get how to post pictures here and I'm not allowed to share links, so I uploaded the pictures as files/attachments with the article. You can scroll down to see them, I recommend starting by scrolling down and opening all
31 Dec 2017
Hi all, I'm currently a restructuring analyst at a boutique thinking about where to recruit on the buyside over the coming months. My thinking is that as of right now, I like the distressed space and will aim for distressed HF roles. However it's hard to say for sure whether at some point I'd want to make the switch to L/S equity and maybe even PE. Are there any considerations in strategy (private vs public, control vs more passive, etc)/brand which would make a potential switch down the road possible, or at this point will you basically become a "credit guy"? Thanks in advance!
25 Aug 2020
Hey guys, I've been interested in distressed / special situations investing for over a year now, did an RX banking internship this last summer and didn't get a return offer, decided to post-pone a year to recruit for summer internships again. Given the accelerated nature of summer recruiting, I wasn't able to secure a IB internship at a RX boutique/lots of stuff has already finished. I have a friend at a MM DL shop that helped me get a summer gig at his shop in their sponsors / levfin group. My ultimate long term goal is to work for a distressed / special sits fund. My main questions are: 1
21 Nov 2018
How are SPC's performance and culture/comp in recent years? And their investment mandate? I noticed they have several guys in Chicago for direct lending or MM PE, and they also hired some analysts with real estate debt background? Also, it's one of the few distressed funds hiring undergrad kids. From junior analyst level, how is Silverpoint's analyst experience comparing with other established distressed debt players like Oaktree, GSO, Bain Cap Credit, Centerbridge, Cerberus, York, Avenue, KKR SSG, TPG Sixth Street and Carlyle Strategic Partners?
27 Apr 2018
So this actually hasn't been brought up in a while, but Im trying to compile a list of respectable distressed players. Preferably control PE funds, but anymore the HF/PE line can be blurred when it comes go distressed companies and their debt. Other than the obvious Oaktree, Apollo, Ares, and Cerberus who else is out there? There are so many funds out there its hard to keep track. I know there is Catalyst in Toronto and KPS. There is also Angelo Gordon and WL Ross/Invesco. Then the big credit arms like TPG, GSO, etc. Not really trying to make a "ranking" just trying to put together a list of respectable players in the space.
13 Jan 2015
David Tepper grew up in a middle class neighborhood in Pittsburgh, PA. He became interested in the stock market after observing his dad, an accountant, trade stocks during the day. Following high school, he enrolled in the University of Pittsburgh, where he excelled. After Tepper graduated with a degree in economics, he found a job with Equibank as a credit analyst. He quickly became bored with the role and enrolled in the MBA program at Carnegie Mellon's School of Business, now named after him. Tepper's experience at Carnegie Mellon helped him learn options theory at a time when there were no textbooks written on the subject. Kenn Dunn, the Dean of school of the school himself taught these option courses.
27 Dec 2010
I'm interested in learning about distressed corporate debt investing (like what Howard Marks does at Oaktree Capital). Can anybody direct me to any resources that go over the process in identifying, analyzing, purchasing and profiting from such investments?
01 Oct 2012
Which of the two best prepares you for a career in distressed debt investing at a hedge fund? I'm aware both backgrounds usually end up in DD HFs but if you had a choice between the two coming out of college, which would you prefer?
08 May 2020
Currently a 3rd year analyst in a coverage group at a middle-tier BB in NYC. I have been interviewing for an Analyst position at a distressed debt trading desk. I have a strong interest for distressed debt. Few questions for all you guys out there: -Can someone give me an idea of the day to day in this kind of role? -What kind of technical questions should I expect to get? Also, can someone please provide a link to Moyer's book?
25 Feb 2015
The title probably says it all. I was chatting with a buddy about S&T exit opportunities and we had a good debate about the possibility of moving from S&T ( credit sales and trading) to a distressed debt fund. So I thought I should throw the question here and hear what the experienced folks have to say about the possibility of such a move.
02 Dec 2019
Hi there, for those of you working at distressed & credit funds or have worked there, could you shed some light on what people do after (if) they leave their jobs? I know that most people just stay in the industry or even at their current firm, but I was wondering what other opportunities arise for someone with credit / distressed experience. Are there some roles at corporates or other investment type roles not at hedge funds? I am asking as at one point it might be nice to have a more "regular" job with more job security and less stress once one has a family / or other commitments. Many
30 Jun 2016
So Blackstone have raised over $6 billion for their latest REPE fund and are targeting $10 billion by the end of their fund-raising. It seems like Jon Gray and his guys are operating on a different scale to their competitors. Do you guys seen anyone giving them a run for their money? either from the other PE funds, Hedge Funds or maybe BB spin-offs? It doesn't look like they'll be screwing their associates out of their bonuses anytime soon...
29 Jan 2012
Hey Guys, Anyone have a pdf copy of distressed debt analysis by stephen moyer they'd be willing to send me? I am very interested in the distressed space and want to learn as much as I can. If any are willing, it'd be much appreciated.
29 Jan 2018
Here is a recent article on annualized returns of some of the biggest hedge funds in the world today. going through the list in detail, it dawned on me that for fundamental investors, the ones with annualized returns north of 18% per annum AND being around for at least 10 years are funds that have predominant flavor in distressed investing (mostly debt). In fact, other than Berkshire, I am not aware of any equity hedge funds that has been around for longer than 15 years and annualized greater than 20%. Yet there are such funds for macro, multi-strats and distressed debt shops. ... Just food
25 Dec 2015
Hey guys, quick question here: Could someone explain what kind of target is good for mezz debt investment in a LBO? Imagine some of the element will be similar (eg: steady cash flow). So guess the real question is, what are the different criteria that you will look at vs. a equity investment in an LBO? Also, what are the key things that you will look at for a distressed debt (special situation) investment? Obviously you need to get convinced by the turnaround story, but anything that is more specific? Thanks. Am having an interview coming up and the company invests in both mezz and distressed other than traditional sponsor equity. Feel free to PM me if you want share the comments privately. Thanks!!!
07 Apr 2011
Hello all, I have posted on WSO a few months back and got extremely insightful responses. Hope you'll be able to help this time as well. I am a Credit Risk analyst at a bulge bracket investment bank. Given the length of my work experience, I have decided to apply to B-schools this or next year and just passed my GMAT. I always wanted to get an MBA from a top school (at this point it is non-debatable), and I recently thought that a clear path for me after a b-school would be the one in distressed debt. I was wondering if I could get your feedback on a few things: 1. Would getting an MBA be helpful for a DD hedge fund/ internal hedge fund (e.i. Goldman Special Situations)? Any associates you know got their jobs after an MBA?
30 Oct 2011
Anyone who's read Moyer's Distressed Debt Analysis might remember the example in the introduction where Oaktree scooped up a failed KKR buyout, then flipped it for a profit. I was amused to see this article today: "After courting collapse for months, Masonite International Inc. made a prenegotiated bankruptcy filing on Monday...The filing by Masonite, which New York private equity firm Kohlberg Kravis Roberts & Co. owns,was no surprise...The buyout shop acquired Masonite for roughly $2.7 billion in April 2005...The restructuring would essentially cede control to holders of Masonite's senior secured debt, with Centerbridge Partners LP and Oaktree Capital Management LP the largest such lenders...KKR sank $552 million of equity into the buyout."
17 Mar 2009
Now that the flood of distressed debt has slowed to a trickle, vulture capitalists are having to look far and wide for their next big score. They say necessity is the mother of invention, and that certainly appears to be the case with Ice Canyon's new investment strategy. Perhaps encouraged by Elliot Capital Management's audacious seizure of an Argentinian naval ship, Ice Canyon wants to go big on defaulted Cuban debt. Let me put this in perspective for a moment. Ice Canyon chief Nathan Sandler isn't talking about buying current Cuban debt. He's talking about buying ancient Cuban debt (call
18 Oct 2012
I have been offered a summer internship at probably the biggest distressed debt hedge fund in Asia and I could possibly get a SA position in the Alternative Investment Division of a BB although that's far from being certain at this point. Obviously if I don't get the BB I'd have no choice but in case I do, what do you guys think is better?
02 Apr 2009
Does someone have a PDF copy of Distressed Debt Analysis by Moyer? Saw other threads from a couple years ago about this book and copies were passed along via PM - hoping to get this going again.
12 Apr 2016
I am currently fresh into a new job as a commercial credit analyst at a bank with a 1.2bil in assets. I wanted to ask the members of WSO a few questions: 1.) Is it possible to move from commercial credit (analyst) to distressed credit/debt (analyst)? if so, 2.) what would be the best route? I was thinking leverage finance or restructuring then making the jump to distress. 3.) What skill set would I need to develop? I am looking at roles that would give me the skill set so long-term I can ultimately generating/researching ideas, modeling those ideas and then turn around and managing a portfolio
30 Jan 2016
I'm planning on joining the Credit team (looking at HY specifically) for a MF firm (GSO, Apollo, Ares, Bain Capital) as a first year analyst out of undergrad. I'm obviously aware of PE placement from these firms but are Credit analysts/associates looked at in the same manner? My goal is to eventually join a Distressed Debt HF. In that regard, does Bschool make sense?
06 Dec 2017
A while back, I wrote a lengthy piece about Argentina's blue market, their black market for dollars, which tended to be rather different from the official exchange rate. Why there was such a gulf between the two, at the time, was what I was trying to figure out. My findings pointed to outstanding debt held by distressed debt hedge funds (in particular, Elliot Management) as the culprit for why Argentina was doing what it was doing. Well, interestingly enough, the problems with their outstanding debt have reached the point where they asked the Supreme Court of the United States to weigh in and
23 Apr 2014
This guy is a total badass. He has bought distressed assets at the the bottom of nearly every major event over the past decade and sold it off at a killing. He also won millions of dollars against professional poker players, built rockets, and formed a conjecture for fermat's last theorem. My personal favorite: [quote=]It was 1981, and Beal, then a 29-year-old vulture investor, was scoping out two 16-story apartment buildings owned by the U.S. Department of Housing and Urban Development. The bricks were chipped and bulging off the exterior of the buildings. Tenants had pried open the elevator doors and thrown furniture down the shafts. Beal liked what he saw.
05 Jul 2011
Hi Chaps, I'm currently staring down the barrel of an opportunity to switch to the buy-side from a sell side HY / DD desk, but it's to a fund which definitely isn't a top pick for distressed and is much more HY focused (distressed is where i want to focus). Is there an argument to just get on the buyside, then make a move from there to a shop with a better fit, or to wait it out on the sell-side? Will it become increasingly more difficult to make the move to the buyside if i pass it up? As in i'll be a VP with no distressed buyside experience, seems like a hard sell vs. generic buyside VP or
02 May 2015
Anybody have a view on Unit Corp? In the last few months it's attempted to exchange $650mm of subordinated notes for 73 cents on the dollar of 2nd lien debt with a 10% coupon or 100 cents on the dollar of 3rd lien debt with a 7% coupon in an attempt to term out its maturities to 2024 from 2021 or it will trigger a default under its revolver. The only 1st lien debt on the balance sheet is a bit over a $100mm in revolver draws with annualized EBITDA (including impairments) of $251mm from the last 10Q that puts 1st lien leverage at about .53x EBITDA. The bonds are trading at about 43 cents on the
27 Jan 2020
Does anyone know anything about this firm? Deal flow, culture, comp, exit ops, etc? I have been looking online and can't find much. Seems to be RX focused with a decent amount of deals done recently.
29 Nov 2020
Hi - does anyone have a good source on sample writeups of distressed debt investment ideas? I am in a unique situation but I'd like to try to teach myself how to do distressed investment analysis (I work in a legal capacity right now on the periphery and I deal with distressed funds on a regular basis but focus on legal docs). I would ultimately like to move to an analyst role, or at least a role where I am generating and evaluating trade ideas, and am looking for a place to start. I've read the Moyer book, but probably need to read up on that again - any resources would be greatly appreciated
20 Jan 2017
Hey guys, I was posed a really interesting question recently, and I had no clue how to answer it so I wanted to throw it out to you. A friend of mine works for a top distressed debt shop (Monarch, Sankaty, Oaktree) that she got into directly out of college a few years back. However, she wants to move to more control-type investing like that of an LBO shop. However, she didn't do investment banking. Is there enough of an overlap between distressed debt and LBO investing to make the switch seamlessly without prior banking experience, or would there be a problem? Additionally, would it be possible to land a top LBO firm (KKR, BX, TPG)? I'd appreciate any advice any of you might have on this.
22 Jan 2010
Hi guys, I have a year's of IBD background from BB and I am about to make a move to a sell side high yield/ DD analyst role at well respected name in the credit industry (sell side). My long term goal is to make a move to the buy side and I was wondering hoe feasible this is, since most funds prefer just bankers with a couple of years of experience. Is there anyone who knows or have heard of cases where DD analysts moved from the sell side to a fund on the buy side?
01 Jun 2013
Out of curiosity, which would provide better preparation for a future role in distressed debt investing on the buy-side - being a distressed debt desk analyst (in Sales and Trading at GS/MS/DB/BAML) or working in an industry group in IBD (at a BB)?
16 Aug 2015
What are people's thoughts on the recovery path for the HY and LL markets (2021-2023). Are there still pockets of value? Keeping the question broad but would love to hear from those in the opportunistic credit space
04 Apr 2021
Hey all, Have come across a role as an analyst/associate with the RE group of a very large Distressed HF. Fund has a broad mandate for public and private markets, mainly various debt and structured instruments, but potential for PE type lending as well. Was wondering if anyone could shed any light on the nature of a role like this (is the work more similar to PE than my current HF role? Or neither, very RE specific? culture, etc.) and maybe any info on if exit opps down the road would be pretty RE limited or if it'd be reasonable to go into broader distressed/special sits teams. Thanks, any
17 Jul 2018
So coming up to end of my first year in M&A and looking to jump ship. Ultimately I want to do VC, but that only seems accessible after 3/4 years of experience. Am currently considering a few junior positions at distressed debt hedge funds and just wondering how it would impact my chances of getting into VC later down the line? I was thinking I could go from distressed HF to distressed PE and then to VC, or would distressed HF to VC be possible?
23 May 2014
Trying to improve my trade/investment generating ideas by learning different asset classes & reading macroeconomic books. But obviously, this process is long, tedious and I am not very sure the right one for that matter. Any suggestions for books/tutorials/videos/ on how people in S&T generate "Money spinning ideas". In general, if someone in S&T could even explain their process or experience that would great too. Trying to really figure out how to think about things, If I read a newspaper article or any kind of news for that matter, I want to figure out how to convert that news into a trade
02 Dec 2020
Not a JD/MBA, but I'm starting year 4/6 of an accelerated dual program where I'll graduate with an undergrad business degree and a JD. The important part is that I'm not graduating until 2023, which makes it impossible for me to accept a full-time offer at the end of 2021 summer. My business program places very well in IB & consulting in Canada (and even NYC to a lesser extent), my law school is relatively unremarkable. Long-term, my dream is to work in M&A advisory in a senior management position whether that be at a law firm (most likely) or IB. My question: What can I do to get some finance
28 Aug 2020
Say a company has debt with book value 100. It goes into distress and buys back all of it for 50 cents on the dollar. Cash goes down by 50, correspondingly debt goes down by 50. But that leaves 50 in debt whereas the whole debt was bought back, Where/how do I account for the missing 50 (basically the loss of debt value due to distress)?
22 Oct 2014
Want to piggy bank of the conversation Billy Mays started here: http://www.wallstreetoasis.com/forums/credit-distressed-fund-technicals Hoping the same group of experienced group can lend a few cents of advice.
31 May 2014
Anyone have any info on this team? Interested to learn where on the risk/reward spectrum they invest (or plan to), what investments (if any) they've made so far, how large the group is, how JPM in general is regarded in the alternatives space, and any other info you have. Also, what do the exit opps look like and how would they compare to a top group in IBD (M&A/HC) or special sits at other places like GS? I've only been able to come up with the following It sits within the Asset Management arm. Closed the Lynstone Special Situations Fund back in October with $1.06 billion in capital and
13 Apr 2020
Would anyone be able to provide a distressed note acquisition model that includes scenario analysis? I currently work in acquisitions and asset management at a value-add multifamily shop but am interested in how opportunities like these would be valued.
12 Jun 2021
Hi all, Looking to move in the space and I'm trying to map out a comprehensive landscape for distressed debt funds (both HF & PE) in Europe and while there are discussions on that for the US, I can't seem to find updated info for Europe. From what I can gather the topical/top/most active names include Davidson Kempner, SVP, Brigade, Anchorage but what are the others? What are the really active ones in Europe? What are the top performing ones? Some similar discussion on WSO looked at Reorg mentions to estimate how active a fund is, can this be replicated for Europe? Would also be interested in
20 Feb 2020
Hi all, I was wondering, do distressed trading desks at BBs deal only with corporates or also with sovereigns (ex. Argentina, Peru, Greece). Also, what portion of their business deals with debt from developed markets vs in EM? I'm looking to rotate on the distressed debt trading desk at the shop I'm at for this summer, and though I'm interested in learning about restructuring, valuation/fundamental analysis, I've also always really loved studying macro events - just trying to see if there's a potential of a happy medium here. Thanks!
18 May 2017
How can I as an individual investor buy distressed debt? Interested in buying $10k worth of senior secured and unsecured debt. Is this amount too low? If not, how do I go about placing the order with minimal fees? Thank you.
31 May 2020