What would be a PE firm's role in a Capital Markets transaction? Simply purchasing ABS as a source of capital for the firm, or are they in charge of securing loans for the company to initiate LBOs, or do they do the analysis for purchasing equity shares of a company?
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You need to clarify your question.
PE funds can run a book for a deal - KKR odes this often.
PE funds can offer primary debt to the market for one of their deal through levfin teams.
What would a (typically distressed) PE firm's role be in a capital markets transaction?
Wowowow you are mixing a lot of conecpts here. Careful - PE funds do have distressed arms - ie Carlyle/BX/KKR. Are you talking about distressed investing OR a Sponsor (PE) backed company that is going into bankruptcy (distressed)?
When they offer debt to the market do they do that in the form of company bonds backed by the firm/a portfolio company?
Bonds/loan but correct.
I read somewhere that the Capital markets analyst at a PE role will often negotiate with banks and try to bring value by getting financing at the best terms.
In terms of your comment about legal docs, your models are worthless if the language in the legal docs are weak.
Example: I generate 5 dollars worth of cash flow every month forever, and you decide to invest in my company.. But somewhere in my legal docs I have language stating that I can raise capital through senior bond offering and increase my leverage by 1,000, and that those senior bond holders they have a priority interest on my cash flows.
In my scenario, you as the equity investor are fucked, regardless of all of the modeling that you did.
Very oversimplified scenario but I hope it helps.
RBC can handle it all.
Just think of it as a regular capital markets team (ECM/DCM) on a smaller scale (which isn't a bad thing) and mostly servicing the firm's portfolio companies. PE capital markets offer a different batch of investor list than banks and have a differentiated angle as a broker whose interest is actually aligned. This group isn't really for a traditional IB coverage group-type training, and this probably isn't the experience that most college students are looking for in terms of buyside recruiting. Having said that, they get to work on some of the most interesting deals on a global scale. The team is usually pretty small, so you'd get a lot of responsibilities from a junior level.
Would comp be in line with the investment team?
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