Distressed Fund Interviews? (i.e., Oaktree)

Hi, just wondering what the interview process at a distressed fund like Oaktree is like? I'm interested in associate interviews for distressed debt or HY. What type of case studies are given? Any helpful feedback would be appreciated. Thanks.

 

I know an MD at Oaktree and he said they interview 50+ people per position (didn't opine on how many applications they get), like ex law guys, highly rate Houlihan (restructuring) and GS (IBD), languages are a must in Europe. So basically impossible positions to get.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
Oreos:
I know an MD at Oaktree and he said they interview 50+ people per position (didn't opine on how many applications they get), like ex law guys, highly rate Houlihan (restructuring) and GS (IBD). So basically impossible positions to get.
Doubt that's true.

As for OP, I assume he already has an interview or he wouldn't be asking the question.

 
NewGuy:
Oreos:
I know an MD at Oaktree and he said they interview 50+ people per position (didn't opine on how many applications they get), like ex law guys, highly rate Houlihan (restructuring) and GS (IBD). So basically impossible positions to get.
Doubt that's true.

As for OP, I assume he already has an interview or he wouldn't be asking the question.

What, so I made up some random facts about Oaktree's hiring practices? Come on kid.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
chibd2012:
My background is two years BB investment banking in the Industrials Group and two years at a buyout firm, working mostly on LBOs.
Questions on your past deals, and a case study. There's a good old thread about an example case study. See if you can search for it.
 

If it's distressed investing the question is are you investing on the basis of cash flows (EBITDA) or against assets? In either case you will need to understand valuations both at the enterprise and asset level. Distressed valuations of companies is not the same as going concern companies for obvious reasons, so you would need to have a strong understanding of what you're valuing in from the perspective of distress. Similar for asset valuations, you will need to know market haircuts to make that you're loaning against the collateral. I'm also assuming you will work heavily on the negotiation of the loan documents, ICAs, gaurantees/indemnifications, etc as part of your associate gig so you should have a good understanding of the mechanisms of credit agreements and the familiarity with term sheets of distressed lenders.

 
distressedd:
just pm you

Would you mind sharing with the class?

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

Thanks guys - distressedd I just msg'd you back with contact info

The way it was explained to me is that a restructuring w/ impairment is just the reverse of an LBO - you delever instead of lever. As for the specific treatments of goodwill etc., that's where things get a bit fuzzy. My inclination would be to mark down the PP&E/land to fair market value (i.e. what's the implied value of said assets after taking into account the new enterprise value/debt/equity etc.). But I'm just guessing here.

if you like it then you shoulda put a banana on it
 

Was this ever followed through? Would still be keen to know more.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

be similar to most distressed/value fund interviews. If its on the spot with no time to prepare, they will likley make you break down a company, possibly a stressed/distressed company. Obviously being able to understand the typical credit metrics (priority of claims, leverage differentials between securities in cap structures, asset coverage), valuation techniques (how do you value company, FCF yields, EV/EBITDA, etc) and breakdown of business and whats causing its stress will be the most important. Detailing whats driving cash flow (or lack thereof) and if it's possible to fix (is it operational problems or balance sheet-overleverage problems) will be important and understanding downside risks to any kind of investment (whether long or short recommendation). Also, if company not in bancruptcy, might have to highlight what likely outcomes from a filing are. Are you sure its going to be a distressed interview, they do all of their public side HF investing through their two funds which are labeled distress (they take a lot of large activist positions), but they obviously do a lot of distress also (just saying case study might not focus on a distress company).

 

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