StepStone Private Debt Case Study

Based on the most helpful WSO content, here are some insights and preparation tips for a private debt FoF (Fund of Funds) case study:

Case Study Structure:

1. Overview of the Portfolio:

   • Geography
   • Sector
   • Weighted credit and financial metrics

2. Modeling:

   • Forecast quarterly interest income and expected payback.
   • Discount and sum the expected payback.

3. Evaluation Metrics:

   • Currency Sales and EBITDA
   • Leverage ratios (e.g., 5.0x, 6.0x)
   • Loan-to-Value (LTV) percentages
   • Fair Market Value (FMV) and Par Value of assets

4. Investment Decision:

   • Determine the required purchase price given a specific hurdle rate (e.g., 10%).
   • Calculate the discount this represents.
   • Assess whether it would be a good investment.

Preparation Tips:

1. Comparable Companies Analysis:

   • Create a list of 5-10 public comparable companies.
   • Spread each company's capital structure and calculate their leverage ratio based on Adjusted EBITDA.

2. Debt Capacity Analysis:

   • Build an LBO model to illustrate the debt capacity of the business.
   • Focus on backing up your assumptions with solid rationale.

3. Presentation:

   • Prepare to discuss the model and explain the rationale behind your forecasting and assumptions.
   • Be ready to present a brief overview of the business and industry, historical financials, valuation, risks, catalysts, and your recommendation.

4. Time Management:

   • Given the 2-hour time constraint, focus on covering the main points concisely.
   • Practice building and presenting models within a limited timeframe to improve efficiency.

Additional Resources:

• Specialty Lending Insights: Check out threads like https://www.wallstreetoasis.com/forums/specialty-lending-gstpg-any-insi</a>…">this one for more detailed insights on lending.
• Mock Interviews and Bootcamps: Consider participating in WSO's mock interviews and bootcamps to refine your skills.

By following these guidelines and utilizing the resources available on WSO, you can effectively prepare for your private debt FoF case study. Good luck!

Sources: Private Credit Resources and Prep, Private Credit Case Study, Private Credit Secondaries Case Study Insight, PE Case Study 48h, Distressed publicly traded credit - case study help needed!