is houlihan lokey restructuring as good as people say?

I know they work on a ton of high-profile transactions, but i also hear that they are very creditor-focused while the other top shops (BX, laz, Rothschild, Moelis, evr, Miller Buckfire) do much more of the big debtor deals as well

why dont we hear more about Rothschild? top practice, worked on chrysler debtor side...why dont people put them up with bx/laz?

Comments (27)

Apr 25, 2011

more of a low-end MM in my opinion definitely not as big as BX

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Apr 25, 2011

I think it gets viewed favorably because of its culture. I met an MD from their chicago office and he was a total badass/cool guy that I would chop a limb off to work for.

Apr 29, 2013

they might not be #1, but they are still VERY VERY respectable and if you are there FT, you should get interviews at TOP PE firms (some mega funds) and distressed funds/credit focused HFs as well. i knw analysts that had interviews at KKR, Carlyle and Ares last year. very good op if you get it. top in LA as well in terms of exit opps right after Moelis, GS and MS

Jan 23, 2015

When you think of rx the best shops are BX/Laz/HL - they are the GS/MS/JPM of restructuring if you want to put it like that.

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Jan 24, 2015
qwertyzxc:

When you think of rx the best shops are BX/Laz/HL - they are the GS/MS/JPM of restructuring if you want to put it like that.

You bumped an old thread to make a stupid post like that?

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Feb 1, 2015

You're right that was a pretty stupid comment. Bottom line all 3 are extremely strong in Rx and they are always ranked some order of 1 - 3 year after year in RX league tables.

Oct 31, 2015

This is probably one of the dumbest comments i've read on WSO.

Anyway, this is an old thread but I can definitely provide some insight as I'm a current BB M&A analyst making the move to a top RX boutique (Laz, PJT, Moelis, Evercore, Rothschild etc.) and have had interviews at some of these shops.

HLHZ RX is a highly regarded restructuring practice and an extremely prestigious name in the restructuring and turnaround industry. Look at any large bankruptcy or restructuring transaction and you will find that Houlihan is involved in some major capacity whether its debtor or creditor side. They generally always come in 1st in the league tables which is saying something since their strong suit is on creditor-side mandates which tend to have lower fees.

The misconception with HLHZ is that they only do creditor side deals. When I interviewed with them (unfortunately didn't get an offer) they mentioned that they are pretty evenly split doing debtor and creditor side deals and have gained a lot of ground for large debtor-side transactions in the past couple of years. There is also the perception that creditor side deals aren't as good as debtor side deals which is incorrect. The only difference is that generally you are helping to come up with the new plan for the company on the debtor side and on the creditor side you are voting on the plan. You will do the exact same kinds of quantitative and qualitative analysis on the both sides regardless and it becomes more about convincing a bankruptcy judge or the counterparty that your argument is valid or accurate.

HLHZ is without a doubt one of the place to be if interested in distressed opportunities - the analysts at HLHZ RX tend to go to some top distressed HFs or special situations PE funds which are not really not accessible to most M&A guys. The other enormous benefit that some people overlook are the relationships that any top creditor-side RX shop like HLHZ has. Since your clients are sometimes the top Distressed Debt HF / PE funds out there, you get the opportunity to work closely on deals with them. I'm sure that must come in very helpful in buy-side interviews.

Regarding Rothschild - nobody is saying they are not up there. Rothschild and others (Moelis, Evercore, Millstein, Miller Buckfire etc.) have extremely solid RX practices as well. The difference is that they are competing with Lazard and Blackstone for their share of debtor side transactions. However, in Europe Rothschild has one the of the best RX (and M&A as well) practices and very successfully competes and wins RX deals over Lazard and PJT.

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Oct 31, 2015

I really wish WSO blocked new posts after a while like Reddit does...This thread is FOUR YEARS OLD.

Oct 31, 2015
Sil:

I really wish WSO blocked new posts after a while like Reddit does...This thread is FOUR YEARS OLD.

New questions/requests for info continuing an older request is one thing. Adding "new" information (in a self-aggrandizing way) when no one was asking is a whole 'nother.

Oct 31, 2015

Hands down one of the best groups at HLHZ. If there's a downturn in M&A activity, expect to get some great experience.

Oct 31, 2015

Thanks. These are currently the firms recruiting at my school: JPM, UBS, Citi, Bear, HLHZ, BoA, RBC... then we get smaller banks Duff&Phelps, Petrie Parkman, Stephens(who i know pay very well), Raymond James, etc. Not sure if MS is here this year. I go to school in Dallas so most of these are for Dallas/Houston offices, though some do go to NY. So most of these would be Energy divisions, i'm guessing. Which ones would you really recommend? I know the question is vague, but I would like to focus my efforts...

Oct 31, 2015

HLHZ restructuring worked on 9 or 10 of the largest restructurings during the last downturn in some capacity. Are we looking at a wave of restructurings around the corner? Perhaps. But it is some comfort to know that most of the time there is slightly less than a decade between major periods of resturcturing. We are around year 5 in this cycle. On the other hand, the last recession was fairly mild and some believe many of the excesses were never really cleared out the system. There was never really a serious financial crises. I think the closest event to a credit crunch lasted about two months in October of 2002, but was merely a hiccup.

On a more micro level, I am seeing a lot deals where the leverage is excessive. Often times this done in a leveraged recap environment, which makes me doubly nervous. To give an example, a deal was recently done where cash interest on floating rate debt was equal to about 80% of ebitda. The company was in high margin slow growth business. High margin slow growth businesses are excellent candidates to become lower margin slow growth businesses, for one, but tens of distict events could occur to push this company into default.

You should be aware that in jumping into restructuring you are making a bet that your services will be required. If we get into 2008 and markets continue to be benign, banks will cut their restructuring groups. A lot of banks are building up their capacity in restructuring. If markets stay benign, there could be a lot of excess capacity. You may say that banks would know better, but Morgan Stanley cut gold equity research in 2003 and Merrill Lynch exited the commodity business in 2002 or 2003. Not the most prescient moves.

Account Inactive

Oct 31, 2015

But HLHZ FRG in Chicago covering automotive has their hands full right and it probably won't let up anytime soon. Good group to be in.

Oct 31, 2015

True that. Not sure what the investment demand for the paper is like though. The core problem in autos is overcapacity throughout the supply chain, not leverage , operational mismanagement (strategic mistakes have been made, but on an operations level even Ford and GM are relatively well run) or a highly fragmented market.

I work at a fund that raises distressed money at times, and auto supplier paper isn't even on our radar. Or put another way, we don't see a good enough case in auto paper to raise a distressed structure.

EDIT: I thought you may al like to know the slang for HLHZ which is Hokey, Lokey and Pokey. :)

Account Inactive

Oct 31, 2015

Haha. That nickname is awesome. :)

Oct 31, 2015

Has anyone been through the interview process?

Oct 31, 2015

Depending on your experience, restructuring interviews are not much different than regular IBD interviews. Main things to know:

  1. Why Restructuring? (Not that it's going to be hot over the next few years)
  2. Trends in Restructuring (media, casinos etc.)
  3. General knowledge of Bankruptcy and Chapter 11 vs Chapter 7

Specifically for HLHZ check this case study out:

http://www.

Great way to explain why HLHZ and show that you were proactive in finding out about the firm and restructuring.

Oct 31, 2015

Went through the HLHZ Chi Restructuring interview for ft this past season. The interview was much like a investment banking interview, a lot was based on fit. For technicals, as with all HLHZ interviews, there is an hour long exam testing on basic accounting knowledge and tax implications of certain decisions, nothing too hard. The VP of the group also tests your knowledge of bankruptcies. What the capital structure has to do with anything, who gets what, were the customers sits, DIP, what the different chapters means as well as valuations based on equity and enterprise value and ratios you would use.

good luck.

Oct 31, 2015

Did you end up going to HLHZ?

Oct 31, 2015

HLHZ was the most technical of any of my investment banking interviews. I also find HLHZ bankers to typically be "less polite" than most. That was the second happiest I've ever been to be rejected for a job.

~~~~~~~~~~~
CompBanker

Oct 31, 2015

From what I gather, there really can't be any generalizations across the firm. Not all HLHZ res't interviews have a test, and not all are technical. It also is likely different from location and whether it is FT vs. SA recruiting.

Seeing how it seems to differ so much from experience to experience, your best bet would be to ask someone who has been through the process for the particular office you're interviewing at (alum?).

Oct 31, 2015

although true that you can't generalize across the board, I'd second what CompBanker said about the level of politeness of HLHZ bankers (and my experience was with the Chicago office). Still, it's a great place to be in restructuring these days. My interview was mostly technical and dry and somewhat rushed. It seemed like the guy was trying to get me to mess up more than to get to know me.

Oct 31, 2015
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Oct 31, 2015