What do you like about PC
Other than the wlb and pay what are the reasons you enjoy working in private credit? I would like to hear your perspectives.
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Based on previous WSO threads, here are some reasons professionals enjoy working in private credit beyond work-life balance (WLB) and pay:
Scalability and Growth: Private credit is a scalable business that is growing significantly, especially as banks pull back from certain lending activities. This growth provides ample opportunities for career advancement and development.
Diverse Transactions: Working in private credit allows professionals to look at numerous companies and new transactions each year, which keeps the work dynamic and engaging.
Creative Structuring: The creative side and uniqueness of structuring around credit can be very appealing. It involves crafting solutions that meet the needs of both the lender and the borrower, which can be intellectually stimulating.
Stability and Predictability: Private credit often involves underwriting downside risk and structuring deals to protect against losses, which can provide a sense of stability and predictability in the work.
Complementary to Private Equity: Private credit and private equity are complementary fields. Understanding both can provide a well-rounded perspective on the financial markets and investment strategies.
These aspects contribute to a fulfilling career in private credit, making it an attractive field for many finance professionals.
Sources: Private Equity vs. Private Credit, Private Equity vs. Private Credit, Q&A : Credit (DL, SSG), Q&A : Credit (DL, SSG), Private Debt/Direct Lending/Private Credit - What are the differences? Best firms with WLB
Don’t want to be sarcastic but the pay is so and so .. so maybe one of the reasons NOT to be in private credit? vs PE/VC/HF/Tech.. we are still discussing within very good opportunities.
I have read of people working 45-50 hours but this is not the standard, I do 60 but very rarely I can afford less than 55 hours and on holidays it’s always annoying as I need to connect at least 2 out of three days even if for not long.
I think it might be quite technical, thus interesting! You can forecast much better what to expect, you can quantify most of the returns vs projections. Most of the people simply don’t get it and it’s always evolving unitranche debt, some convoluted junior structures, opco/holdco financing, synthetic PIKs, now nav lending at portfolio level.
It seems quite interesting to me vs the classic PE/M&A type of work, from a technical point of view, still you don’t need to be a quant at all.
Long term the pay I believe is lower than some
alternatives, or at least it has been lower.. at the same time maybe less risky as it’s going to be an AUM / management fees business where you want to build very diversified portfolios and not screw up. If you are the market with somehow less risk and less screw ups than peers it’s good enough. At the same time if things go south I believe the skills you have might be recycled in banks but also other capital markets roles.
The problem with private credit is the only way the product works (at least for standard direct lending) is with scale. Both in terms of competetive dynamics and economics only the players with massive funds really win, and these funds (BX/Ares/etc.) are absolute sweatshops for everyone VP and below. Some of my friends at Blue Owl (who doesn't even pay lol) would dream of putting in a 60 hour work week.
Any chance you’d be able to share some more specifics about usual hours at these places, e.g. Blue Owl?
Can you provide more info on Blue Owl? Very little out there but heard their pay is great.
I'm curious what do you mean by pay is so-so. I feel like every comp thread I see for PC has associates making $200k+ for all-in comp.
Yes this is correct, I have heard 175-225 all in, it’s good comp compared to normal jobs but it’s relatively low compared to PE/Infra/HF..
Some of these funds seems to amend loans on a weekly basis. I can’t imagine the headache that comes with that
Unfortunately very true, on the headache, particularly in the US.. in Europe we are getting there too if we continue in this direction
Its more interesting work than people tend to give it credit for. What I have always enjoyed about investing/finance as a career is learning about new areas/markets/companies, and in private credit you get to do that quite often as they very often have generalist team structures. Its also much less process driven - having worked in both PC and PE, the PE side has a lot more process bs involved that PC does.
As others have also alluded to I think its generally much safer than other investing styles. I think that is part of the perceived capping of upside, but it also means that you're less likely to be fired, have fund go bust, have a firm fail to continue fundraising, etc. And demand for credit will always be there. It would be a great sort of strategy to own at the right age, and a decent one to work in long-term.
Does anyone know where to find PC or DL interview prep materials? Any case studies or models would be helpful
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