The Restructuring Option

Here's a question for corporate finance specialists: Once you've got your bonus, should you consider a move to restructuring?

At least one headhunter in London thinks so. Aidan Kennedy, of search firm Christian & Timbers, says that while M&A pipelines "currently look strong and most M&A units are running at capacity ... that's usually a good indicator that we are nearer to the down-slope than we think."

At the same time, the restructuring market looks increasingly, well, perky. The number of companies whose debt has fallen from investment to speculative grade is outpacing the number whose debt ratings are improving, says Standard & Poor's. Many firms seem to be positioning themselves for a downturn. Recently, Dealbook suggested the acquisition of restructuring advisor Kramer Capital Partners by Perella Weinberg, and creditor advisor Chanin Capital by Duff & Phelps, were signs demand will grow for bankruptcy and restructuring expertise. In London, Antonio Alvarez III, head of the restructuring advisory boutique Alvarez & Marshall, told the Financial Times the restructuring market is in the grips of a "war for talent."

Different Sector, Same Tools

It shouldn't be hard to for corporate financiers to make the jump into restructuring. "I have a corporate finance and M&A background and I don't see restructuring as being so different," says the head of restructuring at one bank. "It's about a change of control, valuation, assessing a business plan and calculating a financing strategy going forward. All those aspects are present in corporate finance deals."

However, many corporate financiers may lack debt capital markets experience. "You'll need strong balance sheet management from a financing perspective," says Kennedy.

Kennedy stops short of suggesting anyone move into restructuring simply to ride out a downturn. "Stepping in and out of restructuring when it suits you is not good career planning," he says. Restructuring "remains highly specialized and requires longer-term commitment in the same way that maintaining client relationships through downturns is the sign of a committed and forward-thinking corporate financier."