Have been interviewing at both a HF for their CLO arm and at a Tier 1 Private Credit fund (Oaktree, Ares etc). Which offer would people pick and why so?
Also interested in how comp scales for the 2 roles, would PC have a much higher comp ceiling? Thanks!
When deciding between a position at a Hedge Fund (HF) for their Collateralized Loan Obligation (CLO) arm and a Tier 1 Private Credit fund like Oaktree or Ares, there are several factors to consider based on the insights from the WSO dataset. Each path offers unique opportunities and challenges, and the best choice depends on your career goals, interests, and values. Here's a breakdown to help guide your decision:
Career Path and Growth
HF CLO Arm: Typically involves more specialized work focused on managing portfolios of leveraged loans structured as CLOs. The role may offer a deep dive into credit analysis and structured finance. Career growth can be significant within the structured products space, but it might be more niche compared to broader credit markets.
Tier 1 Private Credit Fund: Working at a top-tier private credit fund like Oaktree or Ares could provide exposure to a wide range of credit investments, including distressed debt, direct lending, and special situations. These firms are known for their rigorous investment processes and could offer broader career paths in credit investing.
Compensation
HF CLO Arm: Compensation in HFs, including CLO platforms, can be lucrative, especially with bonuses tied to the performance of the CLOs. However, the compensation trajectory might be more variable, depending on the fund's performance and the broader CLO market conditions.
Tier 1 Private Credit Fund: Private credit funds, especially at top-tier firms, are known for offering competitive salaries and bonuses. Given the size and reputation of firms like Oaktree and Ares, the compensation ceiling could be higher in the long term, with potential for significant growth as you move up the ranks.
Lifestyle and Work Environment
HF CLO Arm: HFs can sometimes demand long hours, especially during periods of market volatility or when structuring new CLO deals. The work environment can be intense but rewarding for those who thrive in fast-paced settings.
Tier 1 Private Credit Fund: While also demanding, top-tier private credit funds may offer a more structured environment compared to HFs. The work-life balance might be slightly better, but this can vary widely depending on the fund and specific team.
Impact and Decision-Making
HF CLO Arm: The role may offer the opportunity to have a direct impact on CLO performance and investment decisions, especially in smaller or more specialized teams.
Tier 1 Private Credit Fund: At a large private credit fund, your role might initially involve supporting senior investment professionals, but there is significant potential to take on more responsibility and make impactful investment decisions as you gain experience.
In conclusion, if you're drawn to specialized work in structured finance and enjoy a fast-paced environment, the HF CLO arm could be a great fit. On the other hand, if you're looking for broader exposure to credit markets, potential for higher long-term compensation, and possibly a more balanced lifestyle, a Tier 1 Private Credit fund like Oaktree or Ares might be more appealing. Ultimately, consider where you see yourself thriving and what aligns best with your career aspirations.
There is a thread on the credit forum that highlights private credit salaries across a few levels, you should check it out. No idea where CLO comp is like. But think about the fact that private credit still seems to be a growing asset class whereas CLOs I do not think are. Knowing what I know, I'd choose the private credit role if I were in your shoes.
I have not heard of anything about monster growth in CLOs. Maybe that's partially due to media bias and the hype PC has gotten.
And with your question, I don't mean this facetiously but what do you think? I think if you want to work in either of these asset classes you should have some rough idea of what the medium to long term outlook for them look like, even on a basic level. What attracts you to either of them in the first place?
My rough idea is that PC bonuses will come down as things begin to normalize, but that it should still be a solid space to make mid six figures and then high six figures by your early 30s.
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Feel free to reach out, different funds have different comp structures.. really depends on where.
CLO comp will generally be the lowest among buyside roles. If you're at the right private credit shop, you can get meaningful carry, which can give you more convex outcomes over time. Again, depends where... devil is in the details
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When deciding between a position at a Hedge Fund (HF) for their Collateralized Loan Obligation (CLO) arm and a Tier 1 Private Credit fund like Oaktree or Ares, there are several factors to consider based on the insights from the WSO dataset. Each path offers unique opportunities and challenges, and the best choice depends on your career goals, interests, and values. Here's a breakdown to help guide your decision:
Career Path and Growth
Compensation
Lifestyle and Work Environment
Impact and Decision-Making
In conclusion, if you're drawn to specialized work in structured finance and enjoy a fast-paced environment, the HF CLO arm could be a great fit. On the other hand, if you're looking for broader exposure to credit markets, potential for higher long-term compensation, and possibly a more balanced lifestyle, a Tier 1 Private Credit fund like Oaktree or Ares might be more appealing. Ultimately, consider where you see yourself thriving and what aligns best with your career aspirations.
Sources: Ares Capital Management - Culture, Status, Word on the Street, Credit Hedge Fund opportunities, Good credit funds?, Special Situations Investing (BX, Apollo, Ares), Credit funds
bump- any thoughts?
There is a thread on the credit forum that highlights private credit salaries across a few levels, you should check it out. No idea where CLO comp is like. But think about the fact that private credit still seems to be a growing asset class whereas CLOs I do not think are. Knowing what I know, I'd choose the private credit role if I were in your shoes.
Hey, thanks for replying. Noted on the recent PC growth but CLOs have experienced some monster growth right?
Do you have any thoughts on if PC funds can contiune to perform well and pay these levels of salaries once interest rates normalise?
I have not heard of anything about monster growth in CLOs. Maybe that's partially due to media bias and the hype PC has gotten.
And with your question, I don't mean this facetiously but what do you think? I think if you want to work in either of these asset classes you should have some rough idea of what the medium to long term outlook for them look like, even on a basic level. What attracts you to either of them in the first place?
My rough idea is that PC bonuses will come down as things begin to normalize, but that it should still be a solid space to make mid six figures and then high six figures by your early 30s.
I forgot we even had a credit forum!
Feel free to reach out, different funds have different comp structures.. really depends on where.
CLO comp will generally be the lowest among buyside roles. If you're at the right private credit shop, you can get meaningful carry, which can give you more convex outcomes over time. Again, depends where... devil is in the details
Atque aliquid commodi est consectetur optio. Accusantium consequuntur perferendis eum atque qui illum non rerum. Odit officia inventore molestias doloribus qui nam consectetur. Repellendus qui nihil et pariatur corrupti dolore quia. Velit esse aspernatur commodi.
Totam tenetur rerum et soluta eligendi. Quasi numquam est error ut possimus et.
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