What are Leveraged Finance Firms Looking for?

by Derek Loosvelt | March 10, 2009

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Like investment banking in general, leveraged finance groups are very specific in their search for junior talent. As each crop of new analysts/associates enters from undergraduate programs, top-tier MBA programs, or even as lateral hires, firms are making an investment in these resources and taking a risk that they may or may not work out. These questions are at the very core of the firms' thinking: How do we replace the top talent that left last year for business school, private equity, hedge funds and our competitors? Will this next crop of talent be as good as the last? How many future leaders of the firm are in this class?

Firms tend to have top junior resources conduct interviews and resume screenings to assess all-important questions such as, "Will I enjoy sitting next to this person for 100+ hours a week?" and "Do they have what it takes to be truly successful and 'get it'?" For the top-performing leveraged finance junior talent, these questions about incoming resources are pretty easy to answer. The top performers seem to fit a certain mold and gel with the existing team.

Each and every firm seems to have its own culture and nuances, which is why it is difficult to generalize about what type of personality will be successful at all firms. Where one firm might rather have a Wharton finance-educated student, another might prefer someone with a liberal arts background whom it can mold. Despite these cultural differences, a few aspects of the hiring process remain relatively consistent at the major leveraged finance shops.

Personality Type

A few personality traits are standard across leveraged finance platforms. These shops are interested in people who are trustworthy, intelligent, friendly, and detail-oriented team players with exceptional people skills. To land a position in leveraged finance, you must show these characteristics both on your resume and in your interview.

Why do these particular skills matter? The leveraged finance deal process is very hectic and very process-oriented. As a deal team works on multiple pieces of a process at any given time, all members of the team need to be able to count on you. An MD needs to be able to leave town for a week on a roadshow for another deal and not come back to a deal in shambles. And as the deals move through the market, you might be asked to send clients important information. The deal team needs to know that it can depend on you to think through the assignment and do it correctly. Furthermore, when explaining the analysis to the client, you need to be able to represent the firm in the most upstanding way possible, since the firm's reputation is always on the line.

As for the importance of friendliness and getting along with your colleagues, at most leveraged finance shops, the teams are arranged like the rest of debt capital markets--in a trading floor or similarly close-knit atmosphere. Even if you are in cubicles, you are not isolated or working by yourself. The deals are accomplished through the work of many on a wide variety of team projects. If you are the hiring manager, do you really want to spend 100+ hours a week sitting beside someone with no personality who is not friendly?

What types of personalities do not fit the mold? If you prefer to work alone, leveraged finance is not the place for you. If you like to problem-solve in an open-thought consulting-type atmosphere, working in leveraged finance may frustrate you because of its frenzied pace and focus on process. If you find yourself wanting a predictable lifestyle, leveraged finance is not an ideal fit. This is a get-your-hands-dirty business, where getting tasks accomplished is the main key to success. In some cases, VPs may bind their own presentations and MDs rework financial models at all hours of the night to get a deal through the markets.

One of the most common ways that junior professionals damage their careers is by being overconfident. Leveraged finance is a great fit for someone who strives for and graciously accepts compliments, but does not let them go to his or her head. The following scenario takes place more often than you might think: someone has been at a firm for six months and has been fortunate to have closed a couple of high-profile deals. Thinking he is now a "hitter," he shows up on Fridays in golf shirts, begins calling clients by their first names and starts trying to staff others under him. He criticizes a managing director, thinking the director is wasting his precious time with a boring refinancing, reworking pitch pages that do not matter and asking for all sorts of unnecessary work. A couple of negative comments to his peers about this MD and before you know it, he is the black sheep of the floor. Or worse, come bonus time, he is given a number so far below the range that he would have earned more at a minimum wage job, based on the hours he worked throughout the year.

Although one might not agree with the style or the way that the deals get done, the bottom line is that you earn your rank in the world of leveraged finance. Managing directors and vice presidents have worked hard to get where they are and more importantly, they control junior resources' bonus, lifestyle and upward mobility. This is probably the single most important lesson to keep in mind. Leveraged finance is a place where you earn your way to the top by putting in your time and investing hard work. The promotions do not come easily or quickly, but when they come, they are worth it. So, work hard, maintain a positive attitude and respect your elders--before you know it, you will be in their shoes.


For the most part, investment bank corporate finance programs generally do the hiring for the leveraged finance teams. At these banks, firms place analysts and associates into industry coverage groups, M&A or leveraged finance based on the needs of these teams and how the analyst/associate has prioritized his or her personal choices. However, some firms hire into these teams directly during the recruiting process. Whether a firm hires directly into the leveraged finance team or not is an important firm-by-firm distinction that you should research during the recruiting process.

It's an unavoidable fact that there are "target" undergraduate and graduate programs for each bank. This does not necessarily mean that someone from a nontarget school cannot be hired into a program. Rather, these candidates will not have the on-campus interviews and dedicated information sessions that their peers' target schools have during the fall undergraduate recruiting season. The target programs vary from firm to firm and lists of them can often be found on each firm's web site. But they typically do include a common set of schools: Wharton, Harvard, Yale, Columbia, Princeton, NYU, Georgetown, Dartmouth, Brown, Williams, UVA, Northwestern, Michigan and Notre Dame for undergraduate recruiting, and Wharton, HBS, Stanford, Northwestern, Columbia, MIT, University of Chicago, Dartmouth, UCLA, Duke, Michigan, NYU, UVA, Cornell, University of Texas, Yale and Emory for MBA recruiting.

However, even outside of the schools, firms are still interested in hiring and retaining top talent. Most of them offer an online resume-drop, as well as encourage students at other schools to attend nearby recruiting events at target schools. Major investment banking programs are quite open to all applicants and will never miss a chance to recruit top talent.

Does an undergraduate need to major in finance to land a position in leveraged finance? No. Although it is helpful to understand the basics of finance before beginning your job, the general corporate finance training programs are designed to teach you these basics. It is more important to have the right personality fit, understand the nature of the business and be able to articulate why you want to work in corporate finance and/or leveraged finance. Quite often the people that are the most successful do not have a formal finance background, but have analytical skills and a desire to succeed.

For firms with a general recruiting process and a subgroup placement later, targeting a leveraged finance team during this process, as opposed to just targeting the firm, should not be a hindrance to getting hired. With a solid need for analysts/associates every year due to the size of the team, it is very possible for the interested student to make his way into leveraged finance by expressing interest in the group, meeting with VPs and MDs within the group, and even talking to the group's staffers. Furthermore, even if you're not originally placed into leveraged finance when you join the bank, you can often switch from an industry coverage team to the leveraged finance platform. Once you are at the firm, the rest is up to you.


The best way to get into leveraged finance is to land an internship with an investment bank--in any corporate finance area--before you graduate. Even if you are unable to secure a spot interning in the leveraged finance group at an investment bank or commercial bank, you still have a chance of eventually getting hired into the group if you take an internship elsewhere in the bank's corporate finance program.

The internship hiring process is very similar to the full-time hiring process. Firms hold information sessions on college campuses for interested students, allow for a period of online resume dropping, and invite students to interview for internships. Each of these steps represents an opportunity for a student to learn more about a firm and the industry. Firms will often sponsor investment banking teach-ins and many times will send top bankers to speak at their alma maters. If a firm does not specifically send someone from its leveraged finance group to speak at your university but does send representatives from other groups, you should definitely attend. Any chance to show your interest in a particular firm goes a long way.

Generally, firms seek to identify candidates who are smart, hardworking, and who have a basic understanding of what the job entails. Prior finance experience is not a must, but can be taken as an indicator of interest. Many times, a leadership position or two in an on-campus club or organization, as well as a high GPA, shows the dedication that a student has to learning and to earning the respect of his peers. Outside of class, the occasional reading of finance publications such as BusinessWeek and the The Wall Street Journal will also come in quite handy for conversation during interviews.

When trying to attain an internship, you should make a list of the firms in which you are interested and actively research their individual hiring processes, starting with their online sites. From here, it is important to get a grasp on what the firm is searching for in terms of people, personality, and values. If you are still interested in the firm, you should create a resume and cover letter to reflect your skills, fit into the organization, and knowledge of the industry. A well-crafted cover letter and resume can make or break a perfect candidate's chances for an internship.

Typically, you will submit your resume and cover letter through your university's online system, which will then be sent to the employers. If your undergraduate institution does not have a dedicated relationship with a leveraged finance firm, you might consider submitting your resume and cover letter to the firm's appropriate HR department, while following up with a brief e-mail or phone call to make sure it was received. However, this is usually not enough. In addition, you should contact your university's career office to find any other contacts that your school might have with the firm and use these contacts, if applicable. Also, a quick note to your school's alumni relations department might prove invaluable, as it may be able to connect you to alumni within the investment banking industry.

If you are unable to get an I-banking internship, you should spend your time trying to get another internship or other relevant experience that you can parlay into good finance-related conversation during the interview period. Working at another financial services firm outside of corporate finance shows your dedicated interest in the industry. Involving yourself with on campus organizations or charity organizations will demonstrate your values. Even studying finance abroad will show your interest in the global financial markets. These types of experiences help you stand out when you are being compared in a stack of resumes a mile deep.

Filed Under: Finance

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