Private Credit Workouts Role
There's not much discussion on here regarding the workouts group at a private credit shop. I understand what the role is, but does anyone have a view on how easy it is to transfer into an investment seat from this position?
The role I'm considering isn't purely a passive situation in that you wait for distress to occur with a portfolio company. It's being sold to me that there's opportunity actively identify areas to generate alpha/deploy capital in those portco's as well. My fear is that these roles are view more so as a risk management position and I become stuck and unable to move to an investment seat.
I recently left RX consulting to a role like you’re describing. Bottom line in my view is your taking a bit of risk here on what the groups actual mandate is vs. how it is represented.
One thing that gave me confidence in making my decision was understanding my group head’s relationships with the IC and other key decision makers. If the powers that be at your prospective fund believe in your group head (and group’s) ability to create value it will skew toward more strategic investing in distress, follow-on M&A, value creation efforts, etc.
A track record goes in tandem with this: has the group successfully turned what would have been losses or bad loans into positive IRR outcomes? If so you’re likely in good shape for having the ability to get the investing and modeling experience you’re after.
Finally I would add it’s important to understand if there is also a separate portfolio management or similar group at the fund. If yes, again, it’s more likely your have the opportunity to focus on being more tactical vs. general portfolio management/risk responsibilities.
Very helpful commentary here. I am currently in an RX consulting role myself, have around 2 years of experience. How much time did you spend doing RX work before interviewing/taking a position like the one described?
Thanks for the reply, very helpful. A few questions for you.
During your interview process, how were you able to sus out whether the group head actually had the confidence of the IC/key players when it came to investment decisions? (vs being sold on something that's not necessarily true).
In your role now, how much time do you spend between monitoring credits/managing risk vs idea generation/strategic efforts?
Are you looking to use this experience to ultimately jump into a investment seat?
Sit non non libero labore et. Non qui rerum sed quis accusamus. Sint et doloribus quisquam vero. Expedita veniam aliquam delectus aliquid. Vel aut rem tenetur qui harum aliquid dolorum et.
Consequatur debitis consequuntur aut. Aut accusamus iure vel.
Itaque est architecto perspiciatis aspernatur quisquam at et. Mollitia a sunt consequatur dolores dolorum. Nostrum ipsum inventore enim aspernatur. Ducimus accusamus sint sit qui.
Commodi vel dolorum quo vero non. Sed cum id incidunt explicabo.
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...