Distressed Debt Final Round Interview Prep
Hi all, I have a final round for a sr. analyst position at a firm that invests in distressed debt and special situations. What questions should I prepare for and what kind of technicals can I expect? I will be meeting with several members of the team. Thanks in advance.
Hey there! It sounds like you've got an exciting opportunity ahead. Based on the most helpful WSO content, here are some areas you might want to focus on for your interview:
Understanding of Distressed Debt: Stephen Moyer's Distressed Debt Analysis is a great resource that provides an overview of the bankruptcy system and the mechanics of debt. It's geared towards the investing side of distress, but it's still very useful.
Case Studies: Houlihan Lokey's case study is another resource that will give you a good overview. It's often used in interview prep, so you might have come across it already.
Technical Skills: In terms of technical skills, the most basic analysis you'll need to do in restructuring is understanding the cap structure of a company and making cap tables.
Current Market Knowledge: The Distressed Debt Investing blog is a great read and will keep you up to date on the latest distressed companies out in the market. It gets a little more technical in terms of valuation/investing, but it's still very useful.
Credit Analysis: The most important aspect will be credit analysis and how to assess a company's debt capacity. You should also have knowledge of the yield curve.
Debt Structures: Know the basics of bonds, yield curves, pricing and interest drivers, and have an opinion on both the fixed income markets and equities markets. Know the characteristics and structure of debt (senior, junior, mezz, equity). They might ask you about debt schedules/ waterfalls so you might want to review that as well.
Remember, the ultimate goal of investing in distressed debt is to provide clients with an optimal capital structure to help the client achieve their goals in the best manner. Good luck with your interview! You're going to do great.
Sources: https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1, leveraged finance interview - what to prep
I work at a place like that and the questions are usually
1) tell me about yourself / walk thru resume
2) walk me through one of the deals on your resume, followed by a bunch of follow up questions to prove you really know the deal
3) why do you want to work at a place like this? Why are you leaving your current job?
4) tell me what you think you’ll do at this job / what are your long terms goals are for this job
5) what sectors / deal types do you like right now
I prob interviewed at a dozen REPE firms, and everyone followed this same format. Know your deals, be thoughtful about your career and you’ll be fine
Just curious
What are the distressed debt firms out there?
Are they finding any deals? I have only heard of lenders selling close to par in the multifamily space. Distressed office is out there but hard to price at the moment. It could take more than a decade for existing office space to fill back up.
Are they loan to own?
How much are they raising?
What type of assets are they going after?
Bump, would love to know more about who the big players in this space are
In random order: cerberus, apollo, oaktree, sculptor/och ziff, fortress, bain, sixth street, ares
I recently went through a process for a fund focused on real estate distressed debt. Apart from basic real estate stuff, I would suggest to study:
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