Debt Fund/Direct Lending Recruiting

Hi all!

I was curious to learn more about the debt fund or direct lending recruitment process, if it's on the same timeline as PE, and what to expect in the process. Currently, I'm at a BB group that specializes in underwriting leveraged loans (mostly sponsor deals, acquisition financing, and recapitalizations), which includes a lot of work in exchanging and negotiating grids and credit documents with the client. It doesn't involve any modeling. Can anyone please shed some light on where I would stand or what the process looks like in general?

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Comments (11)

  • Associate 2 in CorpDev
Aug 27, 2019 - 1:44pm

OP sorry can't help with your question, but would you mind sharing more about your work? What type of analysis you do, etc. Is this something like Credit Suisse's financing group?

  • Associate 2 in CorpDev
Aug 28, 2019 - 2:53am

Here's a link to the client / product base in the group - OP, when you say underwriting loans, do you mean lending essentially? if you could elaborate on grids that would also be great

Aug 28, 2019 - 7:26am

The link didn't post - can you try again in another way or PM me it?
Underwriting = Lending essentially yes, but we go through the different terms and structures of the deal to get one that we think we'll be able to sell to the market. The grids are what you exchange with financial sponsors for them to understand the terms you're willing to give them on that particular company/structure.

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Feb 7, 2020 - 11:56am

A "grid" is basically a word .doc that gets passed back and forth between lender and PE firm/borrower (& their counsel).

In the word doc. is a table that essentially covers, row-by-row, different concepts/covenants of the credit agreement that are important to the sponsor/borrower and that are up for negotiation (e.g. incremental facilities, covenant levels, covenant triggers, restricted payments, baskets, etc.)

Most Helpful
Aug 27, 2019 - 2:39pm

Having gone through one credit fund interview, I will say my experience was as follows:
- HR phone screen: standard behavioral stuff surrounding why you want to be there etc
- Phone interview with Principal: Asked 60% behavioral (our conversation ran longer than expected so I suspect that is why) and 40% technical (types of private debt, digging into my credit mindset as an investor, 5 most important things when looking at a private debt issuer and why
- Superday: ~2.5 hours, 4 people. Surprisingly only one of technicals (though I suspect anymore than this and it's diminishing returns), other three were behaviorals, and an oral case study of an LBO debt financing ie. given a specific industry and a number of metrics, what could a potential deal structure look like, what kind of debt would I use etc etc
- Case study: Fairly simply debt paydown model with IC memo then presenting it (got dinged on this part)

  • 2
Aug 28, 2019 - 7:28am

Thank you! Can you mention your background and how you got the interview? Was it through a recruiter?
And what type of fund was this (size/strategy you interviewed for)

Aug 28, 2019 - 9:53am

Sure - was in an M&A product group, applied on linkedin (funny enough the only job interview I've gotten doing it this way), fund was the GS credit fund

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