As far as scale goes for PC arms of banks, it looks like GS is bigger and maybe more prevalent in the space but MS is growing pretty quick and i’ve seen them popping up in more upmarket deals. North of $10B now in AUM and thats institutional capital / not tied to the MS balance sheet. Any thoughts on this group? Talent, culture, pay, strategy etc. Thanks.
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Based on the most helpful WSO content, discussions about the private credit arms of major banks like Morgan Stanley (MS) and Goldman Sachs (GS) often highlight several key aspects, including scale, growth, talent, culture, pay, and strategy. While the context provided doesn't specifically mention Morgan Stanley's Private Credit group, we can infer some general insights based on the broader discussions around private credit and the characteristics of top firms in the space.
Scale and Growth: It's noted that GS has a larger presence in the private credit market, but MS is recognized for its rapid growth, especially with over $10B in AUM. This indicates a strong commitment to expanding its private credit operations and competing more aggressively in upmarket deals. The fact that this capital is institutional and not tied to the MS balance sheet suggests a strategic approach to leveraging external funds for growth.
Talent: Firms like MS attract top talent, especially in growing and competitive areas like private credit. The talent pool likely includes individuals with diverse backgrounds in investment banking, credit analysis, and other relevant fields, contributing to a rich environment for learning and development.
Culture: While specific details about the culture within MS's Private Credit group aren't provided, top-tier firms generally foster a culture of excellence, collaboration, and continuous improvement. The competitive nature of the private credit space also suggests a dynamic and fast-paced work environment.
Pay: Compensation in private credit, especially at prestigious firms like MS, is typically competitive with other high-finance roles. Pay structures often include a base salary with performance-based bonuses, reflecting the individual's contribution and the overall success of the group.
Strategy: MS's strategy in private credit appears to focus on growth and capturing more upmarket deals. The emphasis on institutional capital not tied to the balance sheet suggests a cautious yet aggressive approach to scaling their operations and diversifying their investment portfolio.
In summary, Morgan Stanley's Private Credit group is characterized by its rapid growth, competitive positioning in the market, and strategic approach to leveraging institutional capital. While specific details about culture and pay are not provided, it's reasonable to infer that MS offers a dynamic work environment and competitive compensation, attracting top talent to its ranks.
Sources: Private Credit is Paradise, Private Credit out of undergraduate?, MF Liquid Credit vs Private Credit at the analyst level, Insight on Bain’s Private Credit team, https://www.wallstreetoasis.com/forum/private-equity/qa-non-target-top-bucket-ssg-private-creditdirect-lending?customgpt=1
Seems to be somewhat of a unicorn in terms of having a great brand name (vs. the tons of Private Credit upstarts), tremendous growth, + not much “entanglement” with broader MS (i.e., no Balance Sheet capital, as you’ve mentioned). I’ve worked with them on a few deals, and have certainly noticed their hold sizes have grown by a factor of 5-6x; AUM is now in the $20Bn+ range if I had to guess. Can’t comment on culture, but the folks I’ve dealt with have been great. They seem to source most of their junior team in-house at MS (which is not surprising); that may drive culture going forward.
I know they were offering crazy comp packages to poach from other shops when they built a team in Europe a couple years ago
Bump
Goldman Sachs is, of course, a giant in investment banking, and its scale and reputation in this area are well known. They have a wide range of products and services and serve the largest companies and financial clients around the world. On the other hand, Morgan Stanley is also considered one of the leaders in investment banking and their growth and presence in the market is truly significant.
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