26 questions reported in Elliott Management interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
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Hard
Model builds
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Recovery analysis, capital structure relative value and covenant leakage. 12 questions
Asked to ensure candidates do not quote yield without thinking about price and recovery.
A distressed bond trades at 60 and yields 18%. Why might the yield be misleading?
A first-round credit hedge fund question before moving into a specific pitch.
What makes a good credit investment thesis different from a good equity thesis?
Funds ask this after a company-level credit view to test instrument selection.
You like a company's credit. How do you decide whether to buy the loan, bond, CDS, or equity?
Credit hedge fund interviews use this to test whether a candidate recognises that creditor downside depends on documents as well as EBITDA.
A borrower has stable EBITDA and adequate liquidity, but its bond indenture permits large dividends to the sponsor. Why should a credit investor care, and what would you review before buying the bond?
Asked because cheap credit can remain cheap for years without a catalyst.
A bond looks cheap at 700bp spread. What catalysts could make the spread tighten?
A fallen-angel scenario that tests technicals and fundamentals together.
An investment-grade issuer is downgraded to high yield. How do you analyse the trade?
A quantitative recovery question for credit hedge fund interviews.
A company has $200m secured debt and $300m senior unsecured notes. Reorganisation value is $350m before fees. Estimate unsecured recovery.
Credit hedge fund interviews test whether you can think across the whole structure.
A company's bonds trade at 70 cents while the equity still has a $2bn market cap. Is there a trade? Walk me through the analysis.
An offer-ready relative-value case for a credit hedge fund analyst seat.
A company has a 2027 secured note at 88 with a 10% coupon and a 2030 secured note at 82 with an 8% coupon. You expect the company to refinance its 2027 maturity within six months, but you are…
Credit funds test whether you can compare instruments rather than just analyse a company.
A company's secured bonds yield 8% and its unsecured bonds yield 14%. Is the unsecured cheap? Walk me through the analysis.
A harder relative-value question linking credit, equity and catalysts.
A company's secured bonds trade at 85 while the equity still implies meaningful value. How could a credit fund think about capital structure arbitrage?
A modern credit question on why documentation can dominate enterprise value.
What is liability management risk and how does it affect a credit hedge fund investment?
Deal break risk, spread maths, regulatory timelines and downside to unaffected. 7 questions
Funds expect analysts to turn a merger agreement into a concise risk checklist.
Which provisions in a merger agreement would you read first, and why?
Event-driven funds use stub trades to test relative-value construction and corporate-action mechanics.
A holding company owns a listed subsidiary worth $900m, has $200m of net debt and no other material assets, but its own equity trades at $500m. Is this automatically a stub trade?
A judgement question for funds that trade hostile bids and activist situations.
A target adopts a poison pill after an unsolicited bid. Does that mean the bid will fail?
Event-driven funds ask this because spin-offs are a recurring, structural inefficiency.
A large-cap company announces it will spin off a division. How would you analyse the opportunity, and where does the inefficiency come from?
Event-driven funds either run campaigns or trade alongside them.
An activist takes a 6% stake in a company and demands a break-up. How do you assess whether to invest alongside them?
A classic structural inefficiency that event-driven funds return to repeatedly.
A company emerges from Chapter 11 and its new equity begins trading. Why is this often mispriced, and what do you analyse?
A senior event-driven credit discussion testing whether you can analyse a liability-management transaction from both tendering and holdout perspectives.
An issuer offers unsecured bondholders $70 of new secured notes for every $100 principal tendered. If at least 90% tender, non-tendering bonds will be structurally subordinated and you estimate their…
Merger models, accretion/dilution, purchase accounting and deal judgement. 3 questions
A curveball used to see whether you reason from first principles.
Can enterprise value be negative? What would that imply, and would you buy such a company?
The dominant execution risk in large deals, and the first question a merger arb asks.
Two competitors announce a merger. Walk me through the antitrust process and what determines whether it clears.
Essential for conglomerates and any company an activist is targeting.
A conglomerate has three divisions in unrelated industries. How would you value it, and why might the sum exceed the market price?
Policy reaction functions, positioning, carry and expressing a view cleanly. 1 question
A harder EM macro question that links flows, reserves and policy.
How does a balance of payments crisis develop, and what market signals would you watch?
Market impact, liquidity provision, borrow and event flow. 1 question
Event-driven and multi-strategy fund interviews.
Company A agrees to acquire Company B for $50/share in cash. B trades at $47. The deal is expected to close in 6 months. Construct the trade, calculate the return, and explain what determines whether…
Spread decomposition, liquidity, index arbitrage and dealer inventory. 1 question
Essential for credit trading and credit hedge fund interviews.
Explain a credit default swap. If a 5-year CDS trades at 300bp and you think the company will default, what do you do. And what determines your payoff?
LBO modelling, leverage capacity, value creation plans and exit paths. 1 question
Core to restructuring, special situations and distressed credit interviews.
What is the fulcrum security? Walk me through how you'd identify it, and explain the loan-to-own strategy.
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Company tags reflect where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with Elliott Management.