Fund Finance interview

Great, so I’d say you need to have a general understanding of the different facilities e.g., cap calls, NAV-based, hybrids, etc. and know the benefits/drawbacks for each along with a general understanding of how each facility is collateralized. For example, cap call facilities are backed by the commitments of LPs, so assessing their creditworthiness is extremely important when determining how much the firm is willing to lend to the fund (and you have to defend your assumptions at IC/risk). NAV facilities are backed by the underlying cash flows of the various PortCos of the fund, so there may be some cash flow technicals you could get asked about that facility. I’d also look into the different trends that are going on in the industry and how the volatile macro backdrop has affected the adoption of certain credit facilities along with their associated spreads (on top of SOFR of course). Source: Close friend works in a top fund finance group on the lender side and has talked to me about making a switch