Direct Lending Analyst Interview Prep Advice
Have an upcoming analyst interview for a direct lending interview within the asset management arm of an investment management company.
Anybody know what I should be specifically studying for technical questions.
What concepts should one know to succeed in these interviews and what kind of modeling should I be practicing ahead of the interview?
Any resources or material anyone can reference? Really appreciate any insights!
Based on the most helpful WSO content, here are some key areas you should focus on for a direct lending analyst interview within the asset management arm of an investment management company:
Understanding of Basic Financial Concepts: Make sure you are comfortable with the basics such as DSCR (Debt Service Coverage Ratio), LTV (Loan-to-Value), and Debt Yield. These are crucial for assessing the viability of loans.
Loan Sizing and Structuring: Learn how to size a loan based on the financials provided. This involves understanding cash flows and how they will cover debt obligations. Familiarize yourself with different types of loan structures, although in-depth knowledge of complex structures might not be necessary at the analyst level.
Financial Modeling: Since you have a background in equity modeling, you should adapt those skills to debt instruments. Practice building models that focus on the cash flow projections and repayment structures typical in direct lending scenarios.
Credit Analysis Skills: Be prepared to discuss how you would perform a credit analysis on a potential borrower. This includes analyzing financial statements, understanding the borrower's industry, and assessing financial health.
Regulatory Environment: Have a basic understanding of the regulatory environment related to direct lending and asset management. This might not be deeply technical but knowing the landscape can be helpful.
Resources for Preparation:
Remember, the key to success in these interviews is not only technical knowledge but also your ability to communicate your analysis clearly and effectively. Practice articulating your thought process and decision-making criteria. Good luck with your interview preparation!
Sources: Analyst Interview - Common Questions, Analyst Interview - Common Questions, How to Prepare for Restructuring Technical Questions, https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1, Notes for Technical Interview Questions
Based on my experience with MM funds, I've actually never been asked a purely technical question. Interviewers have grilled me on my deals, but mostly focus on risks/mitigants, company profile, financing terms (high level, not in depth covs), my investment recommendation, then maybe how I did the model. I've also been asked high level questions about my thoughts on the economy, the consumer (I was on a C&R team), and the PE/PC market.
Good luck!
This is very helpful, thanks!
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