CLO Structuring Day to Day / Interview Prep

Hi all, 

First post here so forgive me if I break any rules. I am really interested in working in structured products, and have an interview with a CLO structuring desk this week. It is a pretty niche area, so I am fuzzy on exactly what the day to day would look like. For an analyst, would the primary responsibility be optimizing portfolios and pricing new issue for CLO managers? As opposed to the client-facing side of trying to earn a client and bring a CLO to market? What types of skills are needed for this work? 

I worked as a trader's assistant for a small credit hedge fund (we had a sizeable mezz CLO book, but it was secondaries market, so I didn't have a lot of exposure to the origination side) for a couple of years right out of undergrad, and am finishing a master's degree in OR/Engineering currently, so my quant and programming skills are very strong. I feel kind of weak on the accounting side of things, though I have done a couple levels of the CFA while I was in school, but never any formal accounting in a job capacity.   

Any color on what to the day to day is like, and anything I should expect on the interview, would be extremely helpful. I am spending most of my time reading CLO primers to really nail the process down. 


Most Helpful

Don’t need to know any accounting so don’t worry. Analysts I expect them to scrub down portfolios/run the debt stack through RA models to optimize the debt stack and then be able finish up an equity pack/debt materials.

You get more market facing as you get more senior. Usually the associate/JR vp runs the model and helps w docs. Senior VPs/director run the doc and process and then you have syndicate building the book and managing the Salesforce.

Prob some good primers online. Know the drivers of equity IRR- biggest one is cost of your financing and purchase price of assets. Obv the CLO market is piggy backed off the loan market.

Def missing some things but this is a good start


Thanks for the helpful response! The delegation of duties is pretty in-line with what I was thinking. In terms of the portfolio optimization, how quantitative is that process, and what are the important points to consider? Most of these job descriptions emphasize VBA and Python (again, I am very fluent with the nuts and bolts of coding and comfortable with quantitative modeling), but I am not really sure how this optimization process is done. Just trying to wrap my head around things so I can interview intelligently. 

And yes, agreed, I am going to read primers all week and try to nail that down.


I am zero knowledge in VBA/python so idk what they're looking for there. Think prob just throw that in job descriptions because its a "structuring" role/quantitative. Rating agency models come from RAs themselves for us to use. Investor runs are done on Intex (software). It is very math heavy, but more so a function of "complex simple math". Leave portfolio optimization to the portfolio managers. We optimize the capital stack WITH the portfolio. We can tell the managers 'hey, your low diversity is crushing your leverage- can you increase it 5 points or so" but not like we're telling them "hey don't buy this name". 

Very excel heavy job (which i like). I spend maybe 3% of my time in powerpoint.


Got it, makes sense to me. Would you say the stack optimization is an area in which arrangers differentiate themselves? I.e., does a bank get more business because they create a better structure from the portfolio the manager provides?

And at what points in the CLO lifecycle does a bank's structuring team contribute? My guess is prior to the warehouse an agreement is made to arrange a potential new issue, during which you collaborate with the manager on optimizing the stack, and then end your duties when the CLO closes and you collect your fees. 


Interested too. Honestly, I just started working in the space a year ago and am not sure what you’d do besides CLO structuring for a manager instead. Or maybe cool off and go to like a ratings agency towards end of career when you need to slow down. Maybe you could do structured credit sales or trading as well, but you’d need to learn quite a few different tools probably more so for trading. Probably advisable to move around options before committing to this path.


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