Thoughts on Credit Funds? (Solar Capital in Particular)
Hi All,
I currently have an upcoming interview at a BDC named Solar Capital. Started by one of the founders of Apollo's BDC business. Was wondering if anyone had any insights into the firm's culture and interview process / what to expect?
Additionally, I've been using the WSO PE guide to prepare for the interview. I was wondering if anyone had any insight in how to tailor my preparation for a credit fund in particular? Any resources / guides would in this area would be incredibly helpful as well as any typical questions that one might expect in such an interview.
Thanks in advance for all your help!
Bump, any insights here would be really helpful
Inherently, as you may well know credit funds have a disposition to find what is wrong with an asset and are looking at downside risk. Consequently, most likely you will be given a case study on an investment the firm has looked at previously and will be asked to determine whether you would invest and what part of the capital structure you would invest (senior, mezz, or equity). Thinking about downside protection is imperative and when modeling, focus less on IRR and MOIC and focus more on total net leverage, FCCR, LTV, etc.The interviews themselves will likely not be too difficult and will focus on your previous deals from a credit point of view so be able to discuss the pro / cons of the transaction. Analogy I like to give people is that a solid Company that has large market share in a stagnant industry with little to no growth is a great debt investment, but a poor equity investment.
Very helpful, thanks so much!
Any specific white papers or case study links/websites/resources you can share? Thanks in advance
See below; this is an excellent primer for leveraged finance:
https://www.lcdcomps.com/d/pdf/LCD%20Loan%20Primer.pdf
Thanks for this. In assessing an opportunity though, how would you determine which part of the capital structure is 'optimal' to invest in? could you walk through an example please? That would help a ton
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