Credit Hedge Fund Case Study
I am in final stages with a multi-stray SM mainly focused on credit. They want me to do a take home case study.
I have done a few in the past for L/S Equity, although any ideas what to expect for a more credit focused fund? Thanks!
Feel free to PM
They will most likely give you a ticker and ask you take a look and determine where in the capital structure you would invest or for trading views on each security in the stack; the former is more common
This will usually be a situation where they give you a name (credit) with senior secured, senior unsecured, and potentially other items in the capital structure and they ask you where you would invest. Occasionally they will give you loan prices but often times they expect you to find them. The company is usually stressed and you usually could have a few places to reasonably invest in the capital structure.
Good examples could be Aveanna, Multiplan, Commscope, IHeartMedia, Clear Channel Outdoor. There is a huge tail of TelCo names (Lumen, Dish, Altice, Uniti, Windstream, etc. ) that funds seem to be a bit hesitant to use though given specialization for some of them.
Appreciate it… just got it sent to me 5 mins ago. You were spot on, it’s for IHeart Radio.
IHURT
Interesting you mentioned Lumen. Actually think it’s an interesting credit name, markets are scared the business going forward may not be able to meet the payments (after divestitures etc.) but seems like management can turn things around now that legacy co.s are gone. Assuming they do go chapter.. this might be the best entry price. Thoughts?
OP good luck!
Don’t*
Deleted - long story short, dig in and ask yourself if this is a tech company like they say or if they are a shitco with 20B of debt, what will the biz look like if they file and should it exist post reorg
I echo what the previous poster mentioned. I currently work at a Credit HF. Our case studies typically revolve around giving an issuer that’s stressed / distressed with a big capital structure and you’re supposed to indicate which tranche would you invest in. You are expected to form a view on the credit, industry, and potential recovery value. You should also be able to understand docs to see what the art of the possible is to get primed or potential asset leakage. If it’s a regular way performing credit fund, you are probably expected to receive an LP and talk about the credit and if you would invest in and why.
PM me if you have Qs / want a review. Know the credit
Nulla modi cumque quis dolorum provident. Cumque vitae possimus porro qui deleniti. Id nihil dolor at soluta. Eum omnis voluptate quis in earum recusandae. Culpa culpa sit quibusdam et soluta voluptatem cumque. Molestias minima eum dolore dicta.
Eligendi dolores est enim necessitatibus voluptas aut sit. Maxime reiciendis ut aliquam et. Molestiae id dolores magni ipsa. Tempora provident quia est ut.
Dolores hic dicta omnis eveniet minus eum. Esse fuga tenetur qui omnis facere. In officia veniam vero animi. Ducimus aut fugit quis iusto illum fugit. Vel quod non sint facilis quas quo corporis. Commodi est eum fugit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...