Direct Lending at First Eagle / THL Credit
I am at a college in Boston and doing my summer in levfin group (CS/UBS/BarCap). I also spent my prior summer at this same bank. I am getting along well w the team and pretty confident ill get a return offer for a FT role in this group. I enjoy being on the credit side and see myself in private credit in the long term. I have also been in touch with lot of senior members at First Eagle (THL Credit) and wanted to see what folks here think if I skip the Analyst years at the bank and start my career directly on the buyside as a Direct Lending Analyst? In the long run I would like to be at a fund that invest across the debt stack (Senior/Uni/2L/Mezz).
-
What are your thoughts on First Eagle Direct Lending platform.. or similar first lien funds? (Assuming I get the offer at the fund)
-
What am I going to miss if I pass on the levfin desk doing broadly syndicated deals? (Edited for clarity)
-
Do these funds hold the entire piece on their books or are they syndicating it out as well? And how is this different than MF Credit arms?
-
How is their underwriting process different than the lB levfin groups?
All feedbacks and advice appreciated
Following
Bump
2.) being on the BSL side for buyside is not ideal. Returns are worse and terms are shittier. Would advise you to build your career on DL side far before ever wanting to be a BSL investor (CLO money is not fun to manage). Speaking from experience.
Can you elaborate? When I said BSL side, I meant on the levfin IB desk
From the sell side, BSL deals are still valuable experiences. From the buyside, BSL deals = lower spread and non-existent and/or useless covenants
Second this. I replied earlier. BSL on buyside is also very sweaty. A lot of handholding for annoying investors who get spoon fed information and will keep bothering for the smallest/insignificant information possible.
Ill give it a stab since I've worked with First Eagle / First Eagle Alternative Credit on a few deals (I am sell side)
1) Pretty strong platform with a lot of capital deployed. Household name in credit; their direct lending arm is more focused on middle market stuff, but they do play big in BSL transactions as well (tradeable credit). First Eagle also acquired Napier Park recently so they are getting pretty passive in credit.
2) As you know, there's a lot of overlap between sellside and buyside lev fin credit. I think one element is the financial modeling (LBO modeling acquired on the sell side) that you'll be missing going straight to DL. In DL/Credit, you are running deleveraging tests (which the sellside and/or sponsor will already give you one case and you just sensitize it). Plus being in sellside LF gives you more optionality if you want to do other buyside roles eg. PE/HF/VC/GE etc. You don't see that many exits from DL to buyouts PE.
3) It depends - I believe First Eagle holds it typically, but more and more DLs are actually giving a large commitment and syndicating it to others thereafter. A big factor is the sponsor's preference - especially when you have to get a majority vote to vote for stuff like amendments etc for a sub 75mm EBITDA business.
4) It depends honestly - at my bank, the U/W process is very stringent as we do a lot of event driven deals and there is a possibility of losing a lot of money given how aggressive we go. Negotiating grids and flex packages are getting more challenging these days given mkt backdrop. But i know other banks are very loose with their process and thats how they get hurt.
Nemo adipisci consequatur dicta et molestiae. Voluptates maiores repellat consequuntur dolor. Et optio dignissimos voluptatibus neque quisquam corrupti. Iure est ut repellendus inventore praesentium suscipit possimus. Sint cumque adipisci assumenda voluptas facilis.
Vero et quam qui suscipit et. Error in temporibus ducimus quasi. Fugit facilis necessitatibus laudantium aliquid incidunt a. Est fuga sed ab est. Aut rem consequatur alias quis natus.
Qui quidem aut libero repellendus aut. Voluptatem voluptas cumque quia aut temporibus est quaerat. Id incidunt quos ad soluta.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...