Restructuring in M&A boutiques

Salam !

I’m a french student (sorry if my english is not perfect).

I discovered you forum recently and honestly that’s amazing. I’ve read your opinions on working in a BB.
My question is about restructuring ? A lot of M&A boutiques provide restructuring advices. Is it allowed or not ? I don’t really understand what is “Financial restructuring” ? Does it have something to do with debt ?

Thank You !

Assalaamu alaykum,

Financial restructuring is the reorganisation of a business’s assets and liabilities. The process is often associated with corporate restructuring, where an organisation’s overall structure and its processes are revamped. When a company is in crisis it may attempt to renegotiate with its secured and unsecured creditors to reduce or eliminate some of its debts. In some instances the creditors will often work to adjust the terms of the repayment, including lower interest rates and/or extending the repayment schedule. Debts may also be commuted in part, often in exchange for the creditor gaining some equity in return.

Advising and being directly involved in non-compliant restructuring is problematic from a Shariah perspective.

Allah knows best

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Thank you so much !

So it’s not allowed. Fine. I have an other question, if you work in one of those boutiques and you work only in the M&A section (i don’t know if it’s possible to just work in M&A and never touched restructuring) , everything is fine right ? (according to the article that I’ve seen on the web site and the video on YouTube on halal career).

  1. I’m also interested by strategy consulting (Strategy&; OW, MBB…), is it allowed or not ?

Sorry if I ask too much but honestly thank you a lot !

Jazakallah

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Salam aleykom !

Interesting topic ! I am still a student and I’m really interested by M&A but me too I’d like to know, if it’s possible to work only in M&A in a boutique such as Lazard, PJT and many others… and never touched to restructuring which seems to be a problem for us (just be focused on M&A Only).

Jazakallah !

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Salaam,

I know working in M&A only at a boutique is fine, but working on Rx only is problematic? (is it haraam or just grey?)

However, quite a few of the top Boutiques run a “Generalist” program where you work across both M&A and Restructuring deals at the same time

Would this be permissible to work in? The more I visit this website, the less firms there are to apply to haha

Boutique firms which I know that run a generalist program include (but not limited to):

  • PJT
  • Moelis
  • Greenhill
  • Gleacher Shacklock

Thanks in advance

Sohaib

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Wa alaykum salaam brother,

Whether it is a boutique firm, focusing only on RX or more generalist in services, it is the actual services we would consider of the firm generally as well as your particular role.

So it all depends on what the firm is doing in particular and what you are doing.

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Thanks for the response,

Sorry if I’m getting too specific now - I just think it’s important to clarify, as I understand only Boutique M&A Advisory is permissible in Investment Banking (and not any conventional banks) - but even that might be haraam now due to generalists programs a lot of them run!

Say your working in a Generalist program, lets assume you’re working:

  • 50% in M&A advisory (permissible?)
  • 50% in Rx (shaky)

I’m simplifying but lets say we can split up Rx work into :

  1. Distressed M&A (Same as M&A just for companies in distress)
  2. Equity Advisory (Advising on raising equity)
  3. Debt advisory (advising on raising more debt - getting DIP Financing etc)
  4. Restructuring (Negotiating debt/interest payment schedule and covenants w/creditors)

Boutique advisory’s would typically offer all these services and you will be working across all of these activities in your role.

your specific role in Rx (as an analyst) will be producing financial models and projecting on how the debt/equity/new payment schedule will help the firm turnaround based on your assumptions

Would this “Generalist” role be considered permissible - even if the largest majority (>80%?) is permissible but a subset of the debt advisory/restructuring of work is not?

Thanks in advance again

I’m tryna find out a definitive answer, as I’m only applying for Boutique firms and the only interviews which I have landed this recruitment season (coincidentally) are with those who run a generalist program

P.S I’m only putting in extra brackets with descriptions so others who might read this might benefit - I’m not trying to indicate you don’t know what the terms are

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Salam,
Anyone who can answer this question?

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Salam!

Your question/description is perfect, it is exactly the answer that we all need as students who want to work as investment bankers !

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