Citi - Leveraged Portfolio Group
Hi all,
I was curious if anyone knew anything about the "Leveraged Portfolio Group" at Citi? There is only one mention of it on this site talking about the broad credit management teams and from what I've heard from a friend in a different part of the bank this team has changed recently. From what it seems it's a PM function for Citi's lending exposure to HY clients. That being said I heard they are within the C&IB bucket and sit with the capital markets teams, so I'd assume the experience is different than a risk function. I pasted the description below, as it seems like you might actually get some modeling exposure and are looped into the origination side. Just wanted to know what people think of this opportunity? What would the potential exits look like? I would assume you'd get similar things as LevFin but a step below considering you aren't the ones driving the origination, but I could be wrong. Thanks
Job Desc:
The newly formed Global Leveraged Portfolio Group Credit Team (“LPG”) within Institutional Credit Management (“ICM”) is seeking Analysts to join the team. The Analysts will work with the team’s Associates and Bankers to lead a best-in-class Leveraged Lending In-Business Credit organization with the primary goal of materially enhancing Citi’s end-to-end Leveraged Lending credit management process. This will be achieved through a strong partnership with Banking, Capital Markets and Risk.
LPG Analysts will be actively involved in Citi’s credit approval and origination process for leveraged finance transactions, assisting clients in raising funds in the capital markets, as well as providing ongoing credit monitoring support for Citi’s Leveraged Finance Portfolio of client relationships.
Our Bankers have a comprehensive understanding of the wide range of complex financial issues facing our clients and can provide Analysts the opportunity to develop a sound foundation of credit skills. Combined with an appreciation of the broad set of services offered by Citi, this understanding allows us to effectively deliver innovative solutions to our clients, as well as properly manage the credit exposure within global Citi’s Leveraged Lending Portfolio.
Analyst Role and Responsibilities:
• Provide analytical support to Bankers across LPG’s core functions: (1) Leveraged Finance transaction origination and credit approval; (2) periodic credit monitoring; (3) portfolio management and reporting, limits and early problem recognition; (4) global leveraged lending related projects and strategic initiatives
• Evaluate and gain a strong understanding of clients' business model, financial performance and key credit drivers across various industries, through both due diligence process as part of transactions and ongoing credit monitoring responsibilities
• Build and analyze models used for valuation and to forecast the client's operating and financial performance and be able to articulate assumptions and analysis to Bankers and Risk Managers
• Coordinate with Citi’s Risk Analytics Unit to perform periodic written reviews of the clients' financial and operating performance, covenant compliance, management/relationship strategy, and competitive position within its peer group
• Work in conjunction with Bankers to assess appropriateness of credit extension transactions (leveraged buyouts, incremental debt raise or refinancing), secure approval for and assist in executing transactions on behalf of clients
• Collaborate with our product partners in Capital Markets, Investment Banking, Corporate Banking and Risk, in addition to Legal counsel (both internal and external) to develop the ability to understand the deal structures and to ensure they are properly documented and approved as per the Citi Policy & Procedures
• Analyze underlying business rationale/strategy for deals that are conducted through creating both Business and portfolio reviews for Senior Management on the global risks for the portfolio as well as to highlight key trends in the market.
• Research and develop robust understanding of the fundamentals of the key industry trends and risk issues and develop the ability to succinctly convey his/her thoughts and opinions to the Risk Managers and Bankers
• Responsible for monitoring news and events pertaining to Citi’s leveraged lending clients as well as providing regular updates to Bankers.
My friend is in the group. He technically sits on the LPG team within the corporate bank. Not sure if that is same as what this posting is referring to. He said the group is more hybrid between the corporate and investment bank and they just underwrite a bunch of debt for clients. From what he tells me, seems like large scale corporate lending off of Citi’s balance sheet.
Thanks for the insight. I think that its the same team, managing the debt (through the corporate bank) for HY issuers. Any idea if they get looped in on the capital markets stuff as it related to bond/loan origination? Has he said anything about exits that he has seen from the group or is pursuing himself? The work seems interesting but not sure if it could translate to something in credit.
I am not sure on those but I can take a guess to the best of my knowledge. My understanding is they don’t work with capital markets folks much if at all. From what I comprehend from what he has told me, they mainly lend off the Citi B/S and it seems to be all loan origination. I think group is newer or restructured recently so the exit opps are unknown. Now he does only work about 60-70 hours a week, so work life balance is at least decent. If you want the best exit opps, I would assume the IB groups would be ahead of the LPG group but the LPG obviously gives a much better work life balance so it’s a trade off you have to assess.
did his team get included in the pay bumps for base at Citi?
They should have been, buddy of mine is in a similar group and said all of C&IB got the bump
They likely take care of underwritten leverage finance business. For example, during an LBO a sponsor wants a HY execution, but needs cash quickly to close. Rather than doing a firm commitment or bought deal on the bonds, it is structured as a loan that will be repaid with proceeds from a HY issuance. This is called a high yield bridge loan. These loans sometimes sit on the balance sheet, but are often sold (sold down) to HY investors looking to juice returns with some fees. Corporate banking is responsible for the credit side of this business and earns the net interest margin, while IB gets either the up front fees, or the fee skim when the loan is sold down. IB also gets the fees for the eventual HY issuance. In an underwritten TLB deal, corporate banking is again responsible for credit stuff and earns money on the interest margin.
Thanks for the insight, seems to be in-line with what I am expecting. Any insight on the exits here? I would imagine you could probably end up at a CLO/Loan AM if you grinded for it enough, but seems like you'd always be one step below the LevFin guys as they get some better modeling and transaction experience. But at a high level seems to me like this role would be relevant enough to give you the optionality for those roles.
Levfin is the golden goose of experience for CLO guys but top tier Corporate Banking is far from frowned upon. Any progress to the CFA would likely put you on similar footing (though probably half step behind)
Hey my friend is at this group at Citi - your understanding is largely correct. But note that they recently restructured and moved to ‘ICM - institutional credit management’ from BCMA CB. So keep that in mind.
Works with LevFin a lot and some IB coverage groups, but doesn’t do any originations and mainly internal execution work before the deal goes to credit committee @ Citi. (I.e. credit analysis, booking the loans in the system, calculating capital risk, etc.)
You could go to IB from this group or maybe some credit funds if you put in the work as a junior, but imo take IB over this role any day. My friend has told me they do a lot of admin & operational work which can be tedious at times.
Let me know if you have any questions.
Thanks for all the help. Seems like a decent opp but my main worry would be hamstringing my chances at staying in credit. I was told they are actively getting more involved on the origination side by my contact, which seems off if they are now not being classified under BCMA. Any more color on this reclassification and the impact?
That is probably true - they are trying to insert themselves earlier into the process and get more involved. I am unsure of the extent to which they have succeeded in doing that (since most of the work are within IB’s realm regardless what their approach is, and the deals are gonna happen whether or not LPG gets involved earlier) but it certainly has been an initiative of theirs. Try asking around the juniors when they get looped in on a deal vs. IB might be helpful.
Also, the ICM organization is so new so it really depends on how Citi positions this new division. It is possible that LPG will get phased out of the BCMA recruiting as a whole given the restructuring, which I think will have an impact on the quality of the group - but I’m not sure if that has been decided on yet. Looks like as of now they’re still recruiting within the CB family. This is obviously a good group to get into, depending on what your goal is. If you wanna do PE in the future, you would need to eventually lateral to IB first
They have re reorganised themselves.
Before it used to be under corporate banking completely doing portfolio work as I understand. Since late 2020 they separated from corporate banking and were going to move under bcma indeed, but as the person above points out now they sit under institutional credit management or sth like that. Ie you won't be part of the IB, and even before when they claimed it was part of bcma this didn't mean you'd be considered really part of the IB as ibd is refferes much more strictly to the m&a guys and coverage teams.
Now when you look at their work, indeed it looks like it's the team that would write the credit memos, process the dd, maybe even to the rating adjustments, for all corporate or sponsor driver hy and lev loan deals. They are not the risk team, but they are not the origination team neither. No origination work, not pitches, no marketing materials, no participation in syndication Structuring or other commercial matters. Beyond that they'd also monitor the portfolio.
Definitely an interesting team I'd you like credit and consider a career at a bank long term. Potentially good for credit funds and I'm sure there's upwards mobility if you prove yourself. But it's not lev fin origination.
how many hours does this group usually work?
Any further insight into this group? Seems like they are building the London team and appears quite interesting but also difficult to really understand what the team does / how it fits in with other teams.
Hey, did you ever end up interviewing / accepting the role? Definitely curious if you did and if so what the interview process was like?
accepting the role, pm me
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