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Welcome back! |
So it's been a big week in the HYH world. |
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Let's get into today's piece. |
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Lessons from my career: |
This might be my favorite newsletter yet. |
Why? Because all of these lessons were things told to me by successful senior investors that deeply impacted me. |
Let's get into it. |
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1) Focus on what you can control, control what you can control: |
There are always externalities that are frankly out of your control, but if you can focus on what you can control, then you're putting yourself in the best position you can. It still may not be enough, but hopefully you can pat yourself on the back and know you did your best. |
So what can you control? Quite simply, your work product. That's what you bring to the table every day. Do the best you can do on this front. You can try to change the perceptions some people may have about you, but that may be hard. When you make mistakes, present a poor work product, say something off-color, or do something that takes someone aback, this is bad for your personal brand. One of the perceptions you can control though involves when you arrive and leave work. Responsiveness is also another way to control perception. |
But ultimately, putting your best efforts (or at least 90%) into your work product is pivotal. |
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A message from Octus: |
Access 2024 Americas Advisor rankings: 2024 Octus Americas Restructuring Advisor Rankings reveal that 2024 hiring activity jumped 35% over 2023 |
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Octus, the leading provider of global credit intelligence and data, today announces the publication of its Americas Restructuring Rankings for the full 2024 year. The rankings data (also known as league tables) analyze and compare restructuring advisors across fees and engagements in both in- and out-of-court restructurings. To access the full report, including over 24 unique sets of rankings, on our website, follow this link. |
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2) "you're rambling": Yeah I know this "lesson" sounds confusing – but give me some rope. I was sitting down with a VP and we were discussing something. I may have been either poorly prepared, or just still young enough to not able to effectively communicate as consistently as I can now. I don't even remember what we were talking about, but I was clearly moving around topics as opposed to eloquently laying something out. |
The VP stopped me cold and said "you're rambling". I think the rest of the conversation reached a natural conclusion, but for some reason at that time, I was a little panicked and all over the place. I don't think I've ever had a professional conversation like that ever again. That was the last time I was rambling or speaking in a non-confident way. Every workplace conversation I've had since then has been much more measured. This was a really good lesson in learning to be impactful when speaking and not talking just to talk. It's also about, before you start speaking, knowing where you want your voice to go: what are the first words out of your mouth, what's the "body" you want to explain further, and what's the conclusion or the point to end at? Being a Michael Scott is the last thing you want: |
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3)"I already know that": I remember going up to an MD and saying something nonchalantly like "xyz filed for bankruptcy" and that was meant to be a conversation starter. I was hoping for a brief exchange, but I realized that in the setting and in my phrasing it wasn't being conveyed the right way. |
This led to a "I already know that" reaction, which stunned me a bit and ended the conversation. |
Maybe you can chalk it up to being grumpy/having a bad morning, and maybe you can argue that that's not how you talk to juniors making conversation, but I ultimately took it as needing to rephrase my communication and finding the right settings for small talk. |
This draws me to a 2nd point, phrasing is everything. The way you phrase something is crucial and sometimes informality in conversation can lead to confusion. |
At some point, though I stopped getting phased over someone having a bad day, someone screaming, or someone talking negatively towards me. I'm not sure what happened, but at this point I'm much more likely to start smirking or laughing when someone is saying something "mean" to me (and that's the urge I have to suppress as opposed to a sad urge). I remember a Director I was doing a deal with getting shaken up over an MD yelling, and I was kinda nonchalant tbh. Don't listen to me re: smirking or laughing (you definitely shouldn't do that, I just can't help myself) - but conditioning yourself to not be impacted by getting yelled at/getting a cold remark thrown your way is really important. |
4) Drinking from a firehose aka taking a bunch of things one and operating entrepreneurially |
This isn't a direct quote, I'm more so saying that you learn a lot when you're forced to wear a lot of hats, are thrown into something, and told to do something that feels "too senior". Getting a quick rundown of "Hey go do this, here's a little synopsis of what you need to do" and then throwing someone into something is the ultimate trial by fire event. Aka – test someone's abilities and make them grow by throwing them into a situation where they have to perform. |
This happens a lot in the Associate role IMO, where you get thrust into "quarterbacking" certain parts of processes. You need entrepreneurship and an understanding of what needs to be done without someone looking over your shoulder to tell you what to do. This starts from drinking from a firehose, and then getting a lot of reps. |
5) At some point, you're not an analyst and you're not being judged on potential: |
I think I was told this as a first-year. There's a point where potential doesn't matter as much and execution is much more important. Interns and First-Years are judged primarily based on potential and being nice guys or girls that are hard workers and people like spending time with. I generally give interns a very long leash. I made a lot of mistakes as an intern, a lot of interns deserve time and patience. |
From experience, that moment comes in a flash, so if you're younger make sure you recognize that and get ready for the moment you're not the bright-eyed intern anymore. |
6) Why people move from private equity to private credit |
An MD gave me a rundown on why he ended up moving down from PE to private credit. A lot of it came down to just wanting a reasonable quality of life and a distaste for the uglier parts of PE. He was a part of some uglier cultures where work was constant. Working on holidays, working brutal hours, etc. In addition to that, having to fire people was an ugly part of private equity. |
7) if you're in a faster-paced environment, you're getting in the office, working, going home, and then working again in the evening |
I've seen this before - and it's a big adjustment for a lot of people and may not align with you. But you'd see a lot of people go in for a 9-10 hour day (maybe 8.5 hours on the low end), do the typical work, take their hour, hour and a half ride back to the city, eat dinner, spend time with their family, and then do anywhere from an hour to 3 hours of wrap up work. This of course may accompanied by responding to emails while on the train as well. |
If you're in an industry where there's high upside (and you're being compensated for this) then I would highly recommend this. |
8) "Yeah sure, I'd start a business, but I never had 18 months where I could go and do that." |
Idk if this is good advice or not, but long story short I asked a co-worker if they've ever contemplated being an entrepreneur - if they ever had that window come up. They mentioned that by circumstance they've never really had that 18-month window to make zero dollars. |
This contrasts a bit with another co-worker I've had who was able to take some risk and work with a low upfront salary in order to capture favorable longer-term equity/carry interest economics. |
A lot of it comes down to how many kids you have, how much your wife makes, and whether you get the gaps to start looking for stuff on the side. |
I think a lot of folks used covid as a window to try out new things, but in many instances, people shuttered outside ventures and went back to being in the office 4-5 days a week. But whether you're buying some real estate on the side, or looking for a blue-collar business to buy, it generally makes sense to keep the W-2 job until you're fully ready to make the leap. When it comes down to your own pile of money, plus you have a high cost of living expenses, taking a leap where you're not making money for 18 months is a pretty hard leap for a lot of folks to justify. |
This is ultimately why I aggressively scaled HYH revenue in 2024. |
9) When you think about what you want to do, look at the lives of your bosses. |
This was a nice quote from an MD based in Manhattan who presumably seemed to have a lot of money. It's a good point – is your 45-year-old/50-year-old boss loaded and living life? What town does he live in? That's a big question to judge folks in the greater NYC area. Does he have a happy and successful marriage? That's probably a good answer towards seeing if you're on the right path. You can consider the same for your 30-something year old employees and whether they're still broke or not. |
It's a subtle way to see if you're on the right track from a compensation and livelihood standpoint. Of course, maybe their livelihood isn't what you want. What I didn't want was to limited autonomy in my life at an older age. I've regularly had quick commutes to the office and didn't want to fall into the 90-minute each-way commute path where I don't really have an evening. |
10) Act with urgency |
This goes into my prior point on having to work at home after work sometimes. If something can't wait for the morning, you get it done. If someone hasn't replied to you in a timely manner, you push for the information (when appropriate). If there's something to communicate, you get up to speed and communicate it quickly. |
If you treat small items very urgently, it's crazy how quickly things can move along with a process. Even when it comes to signing an NDA, sending an email invite around, or doing some simple or small thing that can actually be a big needle mover. |
With how fast things move in the publicly traded credit markets, it's always crucial to communicate and get out an initial read. You can then follow up later on in more detail as more information comes out. This can apply to a big news event, or more likely, it's very applicable to when earnings come out. You convey the initial takeaway of earnings and then later on (After the earnings call or after more details come out) you communicate further and in more detail. |
Overall, execution is what matters and if you treat small things as stuff you "whack a mole" quickly then you get a lot done and operate on quicker timelines. Oftentimes, delaying things or sitting on things doesn't give you an advantage and might actually waste time. |
It overlaps a bit with Parkinson's Law, and a quote that Elon once said: |
 | High Yield Harry @HighyieldHarry |  |
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Not an Elon fan, but his "If you give yourself 30 days, it will take 30 days. If you give yourself 3 hours, it will take 3 hours" quote goes hard. | | | 4:45 PM • Aug 27, 2023 | | | | | | 967 Likes 39 Retweets | 30 Replies |
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11) Overcommunicate |
Every time you get a task, you should respond with a confirmatory remark. This is a key part of overcommunicating to provide confirmation that you got the message and the wheels are in motion. |
This was advice I got early on and why so much of finance culture is full of "will do" "sounds good" "got it" and "confirming receipt" type of responses. I was told to always be responding as opposed to receiving an email and not responding (even if I had already started working on the task). |
This is wired into most finance professional brains at this point, but it is always good to elaborate on why this is so commonplace. |
It's always good to overcommunicate as well when it comes to 1) timeline 2) expectations and 3) current progress. Along the way, communicating anything that can derail the process is important (you got staffed on something new). Overcommunicating also helps you and your deal team leader determine what takes priority and what needs to be delegated. |
12) We want to win. |
I was speaking to a guy at xyz big fund and he briefly talked about the identity of his firm saying something like "We want to win. Our culture is about winning." You get sports analogies to the workplace all the time but you could feel some real intensity and drive when he was saying this. If you wake up and go to work with an intensity about winning then I think that's really powerful and can help you beat out the competition. |
13) Someone leaving isn't a big deal – they're forgotten about after a month. |
We had someone pretty senior get shitcanned. Our direction going forward was more uncertain now. But our MD laid out that this wasn't a big deal. They cited a situation where "I was a young analyst and we had a big boss leave and we were wondering how we were going to survive! After a month it didn't matter and business was chugging along as usual". I've seen a lot of churn in my career. Finance is a high-churn industry. People leave constantly for greener pastures. Whether someone I worked with left, or got laid off, you pretty much forgot about them in a month and everything kept functioning. Even the people you really liked at work and even the people that were very senior. There's been a lot of stunning departures over the years and despite the surprise, it's shocking how quickly the enterprise keeps moving on without them. |
Even when an analyst you love leaves business still goes without them. It's really insane how machine keeps going on. Likewise, when you leave a job, even after doing a long stint there, you might totally forget about it pretty quickly. |
 | BowTiedBull - Read Pinned Tweet or NGMI @BowTiedBull | |
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Oh btw you know how they say you "miss" the office when you quit. Total lie, you forget all of them within a year or two and don't even remember 90% of their names. | | | 5:02 PM • Oct 21, 2024 | | | | | | 978 Likes 33 Retweets | 36 Replies |
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However, my only counter to this is that eventually, you experience brain drain: Let's say, you lose a bunch of very good analysts, and replace them with less intelligent analysts, then that's going to make a big difference over time. |
14) You get a quarter to figure out the name you inherited and then it's your responsibility: |
Credit analysts leave all the time, and that shifts around and opens up coverage responsibilities. This may mean you take on some of their coverage, including the dicey names. This means they have some total crap on their plate and you need to figure out quickly where you stand on the name. You should look at their old thesis and old notes on the name, but you'll have to formulate your own idea sooner rather than later. |
You probably have a quarter to blame the guy who owned it before, but then after that, the decision of what you do next is on you. |
Unfortunately, sometimes you inherit a position you can't sell. The prior analyst may have had a bad underwrite and now the loan or bonds trade in the 80s (or worse) and you can't really sell because you'd take a large hit from selling. You'll have to assess fairly quickly where you stand on recovery, but more importantly, you'll have to figure out how far away an LME is. Given special situations aren't an orderly walk to a filing, you'll need to get your sizing right in anticipation of a potential LME. |
Presumably, this is the same type of situation as equity analysts who take on new coverage. |
15) All my friends in PE are worth $10mm once their carry vests: |
I was chatting with a mentor in Credit a while back, I think he's 7-9 years ahead of me, and he was talking about how things look for a finance professional in their late 30s. For guys in private equity, it's quite lucrative. The carry they started receiving in their late 20s/early 30s is starting to materialize. It was floated to me that "Yeah all my friends in PE have $10mm in carry now". These folks have been working their butts off for 15 years and now presumably are now set for life. It's the type of realization that a lot of folks don't get to. |
However, my colleague was obviously frustrated by the different outcomes in Credit vs. PE. I don't have a good barometer of how much a Credit investor should be worth by their late 30s. I asked people online and ran the math myself and it generally seemed like if you started your career on Wall Street you should be hitting a $1mm net worth by 30-32. But then from there, the next million should obviously be a lot faster due to higher compensation and due to the benefit of investing in the stock market heavily and early. Compound interest is your friend if you let it be. |
This was a notable conversation for me because I obviously knew I wasn't going to get to $10mm by 40 by being in Credit. The path for that type of return (or higher) is to be on the ground floor of, or start, a new credit fund you have material ownership of, but we can't really turn back time and start a private credit fund in 2012. |
So I realized my best shot at this outcome was going to be through entrepreneurship. I have generally high conviction that I can replicate the standard, cost-of-living-adjusted, compensation in credit via entrepreneurship, but creating enterprise value was my best shot at creating an upside outcome. Ideally, I would love to keep the W2 job + HYH stuff going another 3-5 years, but it's become clearer I needed to exit sooner than that. |
Other self-explanatory notes (advice I got as an intern YEARS ago): |
1) always have something to write with when you're interacting with someone who might staff you/give you work |
2) Be long-term greedy (don't know why some guy told an intern this) |
3) Executive Assistants are important, always treat them with respect |
4) 2/10 people are actually competing. 8 are content or don't understand. |
5) You own your models. You need to answer every single "what's this number in your model" |
6) Less than 5% of clients read the research reports written. (lol) |
7) See the reason why a number is different (or looks off) before anyone else does and be able to explain why. |
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That's all for this edition - but I've got some more info for you guys below 👇️ |
Get Your Free LBO Model: Sign up for Buyside Hub to free access to our LBO Model Template and Job Board. |
Speaking of jobs…. |
Buyside Hub Job Board: The Buyside Hub job board is regularly updated, here's some of the jobs on our site thus far. |
Goldman is hiring a Leveraged Finance Associate Adams Street is hiring a Primary Investments Associate Antares is hiring a Credit Underwriting Associate
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Buyside Hub Recruiting: Want more targeted reach across High Yield Harry brands? Reach to Contact@Buysidehub.com and we'll help you find talent across our Job Board, Newsletters, and Social Media. |
Boston City Guide: Earlier this week, we posted a giant list of Buyside firms in Boston for our HYH Premium readers! Given this is a large area for finance jobs, you're going to want to check this one out. |
Upgrade to HYH Premium today for our Credit Recruiting and City Guides |
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