I have an upcoming interview with a start-up HY and distressed fund, with one PM and one associate. They split off from a larger fund and have initial capital and support for operations from a family trust. They're in the market now to raise another $100-150mm.
What sort of questions are appropriate to ask at the end of the interview? I was going to start with "what are you seeing in the markets, why split off from your old fund," but how can I gauge if capital raising is going well or if they will still be around at year end? Any insight would be very helpful, thanks in advance.
What makes his style of investing unique? How is it differentiated from the old fund? Depending on your experience / position, what are his expectations for you (new idea generation, modeling his ideas, etc)? With what team structure does he envision setting up the team - # analysts vs juniors - how is that progressing? Vision for the fund in 5+ years?
I think you should ask what the AUM goal is to have by launch and when everything is full go, how far along fundraising has gone - may work on phrasing.
How sticky is capital already under management.
Depending on your seniority, you may or may not be able to ask questions about the structure of the fund. Specifically, the most interesting questions concern the balance of risks/benefits of having a single large investor. Like do they intend to diversify their investor base, what sort of investors are they targeting, etc. You can also ask about the mkt and whether they see increasing risks to their strategies from the various shifts that have been occurring recently.
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