Working Capital Financing Insight
Recently received an analyst offer to work in a group at a subsidiary of a major PE firm that primarily engages in working capital financing especially within the structured trade finance space (inventory financing, supply chain products, etc.). Im wondering if anybody has any insight into this field. Are there viable exit opps - is this something you can leverage to pivot to private credit or would you be stuck?
Based on the most helpful WSO content, working capital financing, particularly within the structured trade finance space, is a niche yet intriguing area of finance that focuses on providing short-term financing solutions. This includes inventory financing, supply chain finance products, and more. It's a field that requires a deep understanding of both the operational and financial aspects of businesses across various industries. Here's how this experience could potentially shape your career trajectory and exit opportunities:
Private Credit Pivot: Transitioning to private credit from a background in working capital and structured trade finance is plausible. The skills you develop in analyzing financial statements, understanding the operational needs of businesses, and structuring short-term financing solutions are valuable in private credit roles. Private credit involves lending to companies outside of traditional bank loans, often with more complex structures, which your experience can directly contribute to.
Skillset Development: Working in working capital financing, you'll likely gain a robust set of skills including risk assessment, financial modeling, and an understanding of various industries' supply chains. These skills are transferable to many areas in finance, including private credit, where detailed analysis of a company's financial health and operational efficiency is crucial.
Networking and Exposure: Being part of a subsidiary of a major PE firm, you'll have the opportunity to network with professionals across different departments. This exposure can open doors to various roles within the PE firm, including those in private credit, given the right networking and internal opportunities.
Specialized Funds: There are funds and financial institutions that specialize in trade finance and related areas. With your specific experience, you could be a valuable asset to these specialized entities, potentially leading to opportunities that are closely aligned with your background.
Broad Finance Roles: The analytical and financial skills developed in this role can also make you a candidate for broader finance roles, including corporate finance, investment analysis, and even roles within financial consulting firms that require a deep understanding of working capital management.
In conclusion, while working in working capital financing, especially within structured trade finance, might seem niche, it equips you with a unique set of skills and experiences that can be leveraged for a variety of exit opportunities, including pivoting to private credit. The key is to focus on the transferable skills, seek opportunities for exposure to different finance areas within your current firm, and network effectively.
Sources: Leveraged Finance Exit Opportunities, LevFin WLB-focused Exits and Other Questions, Leveraged Finance – 2017 Update, Venture Debt/Lending Industry and Career Opportunities, Debt and Structured Finance Brokerage Exit Opps
Sounds like one of the Apollo origination vehicles...probably stuck to that nichey area of PC. Not impossible to break out but if you're going in wondering how to break out, don't go in
Thanks for your response. You’re right in that it’s an Apollo subsidiary. If I was on a similar team but at a international balance sheet bank would you consider switching a step up?
yes, doing any job at Apollo vs a Japanese bank is a step up. But if your goal is a step out, you should consider whether better to wait for a gig that aligns more closely with your LT pivot interests.
Thanks again for your response. Would you have any insight into what the hours/comp would look like at one of these Apollo origination platforms?
No, sorry. I met with one of the newer ones and I got the sense that they worked a fair bit but don't have any concrete visibility on hours/comp.
Best of luck in your process!
Thanks for your insight. I really appreciate it. Would you happen to know anybody who is more familiar with these platforms that I could reach out to?
Well the guy who interviewed me knows more but tough to make that intro lol. Apollo had a big presentation/transcript in fall'23 going through its origination vehicles for athene - won't tell you about culture/comp but will give you an idea of how everything fits together.
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