Views On BB Leveraged Finance (Analyst Program) In The Era Of Direct Lending / Private Credit?
Hey everyone,
Was looking for advice — I'm currently doing FT placement at a BB and was wondering if it would be wise to return to the levfin group I interned at (vs. moving to coverage) given that most sponsor-backed deals seem to use direct lenders? For context, the coverage groups that I could move to are relatively weak, and I would prefer to work in levfin due to exposure to multiple industries and (hopefully) more closed deals. At the end of the analyst stint, would like to exit to UMM / MM PE.
Thanks in advance and would appreciate any input.
edit: this was also posted on the IB forum, hope that's okay
Hey there!
Based on the most helpful WSO content, it seems like you're in a bit of a pickle. But don't worry, I've got your back!
Firstly, it's important to note that the landscape of leveraged finance has indeed been changing over the past few years. Direct lending funds have grown significantly, particularly in Europe, and they've been attracting a large number of leveraged finance professionals. These funds are now able to write bigger tickets, often competing with leveraged loan or high yield alternatives.
However, this doesn't necessarily mean that a role in leveraged finance at a BB is less valuable. In fact, it could offer a broader exposure to the market and a more diverse range of experiences. Plus, the skills you gain in credit analysis in leveraged finance could be highly transferable to a direct lending role in the future, if you choose to go down that path.
As for your exit opportunities, it's been suggested that direct lending funds are a natural exit opportunity for lev fin analysts/associates. But this doesn't mean that other buy-side roles are off the table. It really depends on your personal career goals and the specific opportunities that come your way.
In conclusion, if you enjoy the work in levfin and feel that it aligns with your career goals, then it could be a wise choice to stick with it. Just remember to keep an eye on the market trends and be ready to adapt if necessary.
Hope this helps! And remember, every monkey has to find their own branch to swing from. Good luck!
Sources: Leveraged Finance – 2017 Update, Direct Lending --> Distressed/Special Situations Investing, Direct Lending vs LevFin at a BB
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