I have an interview for a direct lending role - this is my 1st one and I haven't been able to dig up much information on what to expect in terms of interviews question. Hoping someone could shed some light. Thanks for any insight you are able to provide.
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Hey OP,
Not sure if you have had your interview yet but a few questions (I work in direct lending). How big is the firm that you are applying to? What kind of a role are you applying for? Are you actually going to be underwriting the loans/performing the credit analysis? Are you going to be managing a portfolio of loans?
Assuming the former, you should know all of the basics of credit, what their average customer looks like and any kind of sector/industry specifics particular for them.
First, what is your background? Anyway, the basics they will expect you to know cold will be credit risk analysis, leveraged finance and basics such as valuation, corporate finance and accounting. Familiarity with loan documentation (Credit Agreements, Intercreditor Agreements) will also be helpful. If your background is in leveraged finance (on the execution side, not DCM) you will be fine and you will most likely have the same job day to day aside from firm specific differences/nuances. The position will most likely be modeling intensive, but that can vary depending on the strategy and risk appetite of the firm. If you are mostly participating in other lender's deals and/or doing only sponsor backed deals, you will probably be piggy backing off of the lead lender/sponsor's due diligence which results in less heavy lifting on your end but if you are leading deals and doing family owned/entrepreneur deals, the level of due diligence will be much closer to PE. I can go into more depth if you'd like.
Can you go into more depth for investing in private credit for family owned/entrepreneur deals? I've interned in IB (healthcare) and PE (consumer/business services) and a FT IB analyst right now. Have done some shipping/tech/medtech M&A/Cap Raises and one note restructuring for a company in bankruptcy. I've always had more of a "equity" background but would love some insight into "credit"-like investing/DD.
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