Hello Guys! I have an upcoming interview for a Private Credit Associate position. Any advice on what questions to expect? I was told that there will be technical questions and a case study/modeling. What are some good resources to help prepare for it? Many thanks!
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It’ll be similar to a PE case interview so knowing the basics aka building an LBO model from scratch centered around FCCR, total leverage, and debt service coverage ratio rather than MOIC vs IRR. Most likely they’ll give you a CIM and ask where you would invest in the capital structure senior, unitranche, mezz, etc. and having a strong credit thesis to back up your answer. Obviously your principal is capped in a debt investment because it’s a fixed income instrument so you’re looking for stable, recession resistant businesses with a sticky customer-base and strong value proposition rather than high-tech, explosive growth business with a 40% CAGR, but with regulatory issues around it. Biggest thing to understand that the credit story is much different than the equity story. Read up on a debt primer if you need help with debt lingo.
That's very helpful! Is there any website/ guides as to templates on answering these type of questions? I always find it easier and most efficient to prep when I can see how the questions are answered generally. Also, should I spend time on those regular IB tech questions (e.g.how changes in depreciation affect the 3-statement) type of questions？Thanks a bunch!
See if you can get your hands on the M&I LBO guide, here’s another resource from Vault, not sure how dated it is, but a lot of the questions still apply. Also know why private credit vs private equity, ex. Want to have the opportunity to work at a high volume shop closing 30 deals a year instead of 3, enjoy looking at the downside story, etc.
https://collaborate.uchicago.edu/depts/bcs/finance/Finance%20Resources/…
Thank you very much!
Why is the deal volume higher in private debt
You’re working alongside multiple sponsors for the same deal and the level of due dilgence is not nearly as high as in PE especially if it’s syndicate or club deals vs agented deals.
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