I have an interview coming up for an internship position with a hedge fund focused on distressed debt. I have been through various banking interviews and have experience with the behavioral question but am unsure what type of technical question to expect from this interview. would someone who has interviewed with a credit fund be able to provide some idea of the questions I can expect for an internship position.
thanks!
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I'm assuming that this is an internship for current undergrads, so they wouldn't expect you to have professional restructuring or full-time banking experience.
Here are some (certainly not all) key concepts for distressed debt to know, besides typical valuation and finance items: Know the concept of a fulcrum security Know what debt covenants are and how they work Understand capital structure seniority Understand generally how bankruptcy and restructuring works (in court vs out of court, liquidation versus reorg, etc) Know how credit default swaps work If you have time, read (or at least browse) Stephen Moyer's Distressed Debt Investing
Thanks for the response, very helpful. The job was a posting through schools career site and it actually mentioned it would take current mba students or undergrads so i'm not sure what their expectations of my knowledge would be. I am comfortable with the standard banking valuation techniques (dcf, precedent transactions, and comps) but do you think there are any other debt valuation techniques I should be comfortable with?
Liquidation value (Basically what can the assets be sold for in a stress scenario)
Kenny powers had some great suggestions. I would also know a little bit about the CLO market as well.
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