IB restructuring vs restructuring consulting?
What’s the difference between these two? Heard people from both sides of the industry talk about it and I can’t figure out what an analyst at Alvarez does that is any different than one at Houlihan.
RX IB is advisory as it relates to capital structure and transaction execution as part of the RX process. RX consulting is ops focused with advisory on cash flow savings
Depends where in the stack the consulting firm is. Most are a blend with a split. EOD most money comes from debtor mandates by a big margin. Also has mid-hours.
ib mainly running distressed sales processes and negotiating term sheets while doing debtor stuff. Success fee model. Can be very lucrative at good firms like Lazard.
debtor consulting shops do things like install CROs, liquidate companies and more generally c7 stuff. Success fee based and the most lucrative places to work. CROs can make 8 figures reasonably.
Syndicate/1L shops come next, these are more term sheet based and heavy on forensic accounting/fp&a + negotiation. Usually hourly, better shops can get a success fee as well.
Unsecured Creditor mandates. This is the one everyone calls “no judgement, but the work is not for me,” because the job is trying to poke holes in everything and causing a fuss for creditors with no claims. These generate the lowest fees and are used as filler work. The thing is, lately, there are so many distressed creditors that firms are making groups for this work. Very heavy accounting work and not really restructuring. Can still make a lot of money at sweat shops like m3, but the hours are pretty bad.
fulcrum securities and OC funds complicate all this, but that’s the gist.
Huge thanks so much
Do you have any examples of syndicate / 1L shops please? Thanks!
Definitely agree. FAs are a lot more operationaly focused, however the junior workstreams end up comparable so lateraling from FA->IB or vice versa is possible. UCC isn’t a bad place to be as a lawyer (akin gump rolling in those opioid claimant fees), but not the best as a banker/FA (unless ur the MD making bank by cracking the whip on your team across 10 UCC cases at once). I used to do committee work and they get cookie cutter like 9 months in.
Dealing with different portions of the balance sheet is a easy simplification that helped me: investment banking attempts to right-side the liabilities portion of the balance sheet, while consulting attempts to preserve/grow the assets portion. Please correct me if this is a bad simplification!
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