What would be the pipeline to break into private credit?
So like the title suggests, I'm hoping to get into private credit one of these days. Unfortunately there hasn't been many forum posts about private credit here so my understanding of the industry is definitely lacking.
I just wanted to ask what a good plan would be to break in? I'm fully aware that careers are not linear and that investment banking is not the be all end all of graduate jobs, but in my head I'm imagining IB Rx -> private credit or Big 4 insolvency/restructuring -> special sits -> private credit.
I was wondering if you guys had any insight on what other career paths might lead me there, and maybe what types of resources I should be consuming today to understand more about the industry, whether it differs significantly to private equity etc.
Thanks for the time.
Swinging through the finance jungle, I've seen a few paths that can lead you to the lush canopies of private credit. Here's a vine of thought based on the most helpful WSO content:
Investment Banking (IB) Restructuring (Rx): Starting in IB, especially in a restructuring group, is a classic move. It gives you a solid foundation in financial analysis and understanding distressed situations, which is valuable in private credit.
Big 4 Insolvency/Restructuring: Another route is through the Big 4's insolvency or restructuring arms. This experience can be a stepping stone to special situations funds, which often deal with distressed debt and are closely related to private credit.
Credit Analyst Roles: Starting as a credit analyst can also be a direct path to private credit. It's a role where you can build a strong foundation in credit risk assessment and debt instruments.
Special Situations Funds: Working in special situations involves dealing with distressed assets and complex financial structures, which is highly relevant to private credit.
As for resources, you should be consuming:
Private credit does differ from private equity in that it focuses on debt instruments rather than equity stakes. The risk profiles, investment horizons, and analysis can be quite different. Understanding the nuances between the two will be key in making a successful transition.
Remember, the jungle is dense and the paths are many, but with the right preparation and connections, you'll find your way to the private credit treehouse. Keep swinging!
Sources: Career Path Starting as Credit Analyst, What replaces Private Equity? What's the next popular exit opportunity?, What are the different types of Credit?, Credit Analyst Salary/Career Path?, CRE Credit Analyst Career Path
No need to do all that. Can just do LevFin IB and lateral straight over after your analyst stint
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