Incoming Credit HF Intern that needs your help
Hello all,
I will be starting at a credit HF in about 2 months. I've done 2 years at a BB doing M&A.
Unfortunately, I don't have the largest previous exposure to credit, and whenever I try to get hands on training material from the firm I'm going to they say "You'll learn on the job."
The fund is pretty large and focuses on direct credit to special sits across all industries. I would say the focus is on direct credit.
Does anyone have any resources that helped them pick up the skills needed for direct credit? They have a lot of deal flow, so they don't have time to build 3 statement models for each investment, mostly do a lot of work with comps.
Any advice would be useful. Thanks!
Do you have any more details:
Public or private companies?
Enterprise value of companies?
Sector?
Geography of investments?
All of this impacts evaluation/underwriting. If it's private companies expect deep diligence (forensic accounting, collateral analysis, heavy and detailed documentation). I'm not sure there is a lot of prep that can be done besides looking at 8k's of other debt deals to think about how the fund and it's competitors structure their investments.
Thank you for responding! To answer your questions...
If there's any further advice you can provide that would be awesome. Whether it be modeling resources, cases, or prep materials, I am down for whatever. Thank you.
Sixth Street?
nah but pretty similar
happy to help w/ prep & get you up to speed
Thank you! I'm getting on some more analyst calls this week which should have some good technical advice/prep that needs to be done. I'll re-respond to your message on Tuesday/Wednesday with more specifics I have!
Depends what your goal is. I view the "jumping on a call" type stuff as more "passive listening" vs "active learning" rolling up your sleeves in an exercise with a clear goal in mind - makes for better learning IMO. I'm literally mentoring/teaching 2 seniors from my high school who want to use their summer to learn the Lev fin space (later graduating to Direct lending) so I have resources readily available that may help. Anyways lemme know how the calls go and whatnot
Alright per the calls I need to polish up on these things...
1a.) Per my employer, the most important thing for me to learn in the next few weeks is gaining familiarity and understanding differences between different layers of the capital structure such as the differences between a bond and preferred loan, mezzanine, term loan, revolver, etc.
1b.) Additionally, being able to understand the basic terms in credit agreement is something I should try to polish up on as much as possible.
I know the order of a typical capital structure on the credit side from revolver to mezzanine; however, I would like to polish up on more granular details and terms I will see in credit agreements.
3.)I should also be able to think through projecting cash flows whether that be Operating Cash Flow or FCFC, and be able to explain what has to go wrong in the business for my firm’s position to be impaired. This is something I am pretty polished in, but I am happy to get more reps in here.
If you have any resources or cases you can plug/send me please let me know and I can PM you my email/whatever is needed.
Have you read any of distressed debt analysis yet? Think it is a relatively good primer on special sits an distressed credit investing but it helped me get a better grasp on credit in general.
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