Blackstone GSO Customized Credit Strategies Interview

chutdigadut's picture
Rank: Chimp | 3

Hi Guys -

I've been selected for a first round interview with Blackstone's credit strategies group within their (what i believe is) their in-house fund, GSO. All the information I have on them is from what I got via their website (seems like they invest across pretty broadly across the capital structure). The interview will be conducted over the phone, but I'm not sure what to expect. It will be only half an hour, so should I expect any technical questions? I'm not sure how in depth will expect an undergrad to know about leveraged loans or CLOs, etc...Or will it mostly be behavioral? If anyone could provide some insight I'd really appreciate it - also, if anyone could point me in the right direction for finding a little more info about the group, I'd sincerely appreciate it as well. Thanks!

Comments (9)

Sep 19, 2011

I'm interested in this as well, have an interview with them coming up too.

Sep 19, 2011

both of you wharton?

Sep 19, 2011

Nah, I'm NYU

Sep 19, 2011

same here

Sep 20, 2011

You've got a good picture of what GSO does, they manage CLOs, loan mutual funds, middle-market and mezzanine funds, distressed funds, etc.

I have not specifically heard of customized credit strategies within GSO, but based on the description it sounds like a managed-account business.

A lot of managed account businesses in the credit world take the form of total-return swap ("TRS") funds, which are a type of structure that uses leverage from a counter-party to increase returns to the equity like a CLO with the difference being that the collateral is marked to market and subject to margin calls. This is where the "structured vehicle" part from the website blurb comes in.

It's basically the same in concept as a margin account with a prime broker, but depending on the collateral you can get a lot more turns of leverage and it's sometimes cheaper. Collateral is often only senior secured loans but some TRS indentures allow for bonds, structured notes, etc (this is where the "We also invest in the debt and equity tranches of CLOs managed by selected third parties" comes in to play")

I would definitely study up on how CLOs and loans work, and if you can learn how a TRS works and how it's different from a CLO I think that would probably impress them. Note that there are two usages for TRS-one is in the sense of a single trade, where you take a levered position with a counterparty via a TRS, and one is in the sense of a fund that uses a series of TRS to lever the overall fund. Another thing to understand is what a BDC is/how it's taxed.

Feel free to PM me if you have specific questions.

Sep 20, 2011

How did it go?

Sep 21, 2011

Kenny_Powers_CFA, thanks a bunch for the info! That was way more insightful than expected. I really appreciate it - seems like its time for me to look up those TRSs...

Frandonk, the interview hasn't happened yet, but I'll post here when I've gone through it.

Sep 21, 2011
Here's some stuff on market value CDOs (another name for what I'm talking about above)

Sep 21, 2011