'Special Ops' Funds Seek Candidates in U.S., London

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While hedge funds have been greedily scooping up all the help they can get lately, "special opportunity funds" are searching for talent across all positions in both the U.S. and in London.

Also called "special opportunity private equity/hedge fund hybrids," these funds originate, structure and execute transactions with mid-sized companies that require financing for restructuring, refinancing or expansion. They typically involve orphaned, undervalued or distressed companies or sectors. High-growth companies in need of cash flow also seek them out.

Investments are purely risk/reward and range from senior debt to mezzanine financing to control and non-control equity financing, says Mary O'Gorman, managing director at Snelling Search in New York. "There is a very intense demand (for SOF) right now," O'Gorman says. "I see it continuing for the long-term."

O'Gorman sees a need for analysts, associates, vice presidents, directors and managing directors in New York, San Francisco, Houston, Dallas, Washington, Atlanta and London. Typical qualifications include completion of investment banking analyst programs and buy-side experience at a private equity or hedge fund.

For the most junior positions, firms are considering recent graduates from top-tier schools with outstanding grades and achievements. No relevant experience is required, O'Gorman says.

For those working in SOFs, typical duties include sourcing deals, structuring, negotiating, modeling and valuation, monitoring and managing realizations. O'Gorman describes compensation packages as "highly attractive" and, at senior levels, includes carry on the investments.

As an example, someone finishing a two-year investment bank analyst program at the top of their class, a degree with excellent grades from a top school, a summer internship with an investment bank during college and exceptional analytical and communication skills are typically offered packages that include a $100,000 base, $125,000 in bonus and a sign-on bonus of $25,000 to $50,000.

Looking forward, the outlook for these funds is excellent, O'Gorman believes. "There is no reason to think demand is going to slack off anytime soon," she says. "Even if the market turns, this business is going to be better because there will be more distressed businesses if there is a downturn in the economy."

Are you working in an SOF, or have you heard what the workload is like? Share your thoughts by posting a comment below.