Event-driven / special sits interviewing

Question

Much has been written about interviewing for long/short equity funds and most of a successful interview seems to revolve around traditional stock pitches.  I haven't been able to find as much information about the process at special sits/event driven funds.  Will they expect you to have a pitch or two teed up (presumably related to their strategy, e.g. spinoff, post rx equity, activism, etc.) or will it be more about technical questions and case studies?  Assuming you're coming from banking/PE do they go into transaction experience in depth?

ffffml · Accepted Answer

Case studies weren’t also super hard as long as you could identify what tranche/security in the cap structure you want to invest in (if any) and when would you invest, if you would even considering investing in the company in the first place (are the assets crap/worth taking a look, etc.) Nothing in depth was expected as long as I could walk them through what tranche I thought would have the most recovery or what would be the value in certain cases. The main thing here was to lookout for any subordination b/w notes and how that could affect the waterfall.

ValueJedi · Answer

I suppose it depends on your level of experience, but my interview process at these funds for experienced / sr. analyst-type roles all involved discussing current and past investment ideas for the majority of the first round. I'd say its better safe than sorry and to have one or two pitches ready to go.

BankCredit993 · Answer

valuation. it all comes down the the valuation of the business and where that stands relative to the creation multiples of each tranche of the cap structure. you don’t want to Invest in a part of the cap stack that is underwater or likely to be impaired further unless you’re buying it at a big enough discount to that level.

ffffml · Answer

you lay out the cap structure and see if there's anything interesting in the tranches. You can quickly sort through by prices. Sometimes you find something cheap, sometimes you find something not cheap but interesting and want to wait for it to get cheap. eg. if company A has one senior secured loan and two senior unsecured loans. If the senior secured is trading at 90c, it's not particularly interesting because your upside is very small... and the risk/reward profile might not be worth it at the current price.

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Event-driven / special sits interviewing