Nov 30, 2024

Liquid Credit Internship Prep Advice

Happy Holidays! I'm a junior at a liberal arts school heading into a MF private/liquid credit role in summer '25 and was planning to use winter break to prep. Given my background most of my limited prior exp has been via internships/clubs/for fun and I'm feeling underprepared with my skillset--especially with modeling. Is there any prep/courses/advice you have for both the technical and qualitative aspects of (credit) investing?  

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Based on the most helpful WSO content, here are some recommendations for preparing for a liquid credit internship, focusing on both technical and qualitative aspects:

Technical Preparation:

  1. Modeling Courses:

    • WSO Elite Modeling Package: This includes six courses to master financial modeling, which is crucial for credit investing.
    • Financial Statement Modeling: Helps in mastering the three-statement model.
    • LBO Modeling Course: Essential for understanding leveraged buyouts, which are relevant in credit analysis.
    • Valuation Modeling Course: Covers trading and precedent comps, important for credit valuation.
  2. Books:

    • Leveraged Financial Markets: Provides a detailed overview of different credit markets.
    • Distressed Debt Analysis by Moyer: Valuable for understanding high-yield and distressed debt.
    • Bond Math: Offers a good breakdown of bond calculations and concepts.
    • Active Credit Portfolio Management in Practice by Bohn and Stein: Covers credit risk modeling foundations.
  3. White Papers/Industry Research:

    • Look for primers and write-ups from firms like Ares, Angelo Gordon, PennantPark, Antares, and PIMCO.
    • S&P GMI - LCD Loan Primer is also a solid resource.

Qualitative Preparation:

  1. Understanding Credit Agreements:

    • Familiarize yourself with credit agreements and covenants, as these are crucial in credit investing.
    • LSTA's Complete Credit Agreement Guide: An excellent reference for understanding credit agreements.
  2. Pitching Ideas:

    • Be ready to pitch credit investment ideas and explain why a particular credit is misunderstood.
    • Practice presenting your thought process and analysis clearly and concisely.
  3. Interview Preparation:

    • Private Equity Interview Course: Although focused on PE, it includes relevant LBO modeling tests and more.
    • IB Interview Course: Contains a vast number of questions across various investment banks, which can help in honing your technical skills.

Additional Tips:

  • Networking: Engage with professionals in the field to gain insights and advice.
  • Mock Interviews: Consider scheduling mock interviews to practice and receive feedback.
  • Case Studies: Work on private credit-specific case studies, focusing on debt comps to determine coupon rates and covenants.

By leveraging these resources and dedicating time to both technical and qualitative preparation, you can build a strong foundation for your upcoming internship in liquid credit. Happy Holidays and best of luck with your preparation!

Sources: Role of Quants in Credit Investing/ Trading: ABS, Structured Credit, Corporate Loans, https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1, Private Credit Resources and Prep, https://www.wallstreetoasis.com/forum/asset-management/what-are-the-best-books-on-credit-investing?customgpt=1, What are the different types of Credit?

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