Farallon interview 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?

A first-round check that you understand the core event-driven strategy before discussing a live deal.

What is merger arbitrage, and where does its return come from?

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?

A core diligence discussion for merger-arbitrage teams covering concentrated industries.

How would you assess antitrust risk in a proposed merger between two direct competitors?

The construction question that follows the cash-deal merger arb question.

Acquirer A is buying Target B in an all-stock deal at a 0.5x exchange ratio. A trades at $80, B at $38. Construct the trade, calculate the spread, and explain what you're exposed to.

A merger-arbitrage follow-up designed to test whether a candidate understands when an exchange-ratio hedge stops being static.

Target B will be acquired for a fixed $60 of Acquirer A stock, subject to a collar. If A trades between $80 and $100 during the pricing period, B receives 0.667 A shares. Below $80, B receives 0.75…

A senior event-driven interview question combining expected value with portfolio-level risk.

A cash deal offers 8% upside on close and 24% downside on break. You estimate 85% completion probability. How do you decide position size?

A merger-arbitrage interview on legal optionality after a low-premium acquisition announcement.

A cash merger trades below the announced price and an investor proposes buying shares to pursue appraisal rights. How would you assess whether the legal route improves the risk-adjusted return?

A special-situations case that tests whether an analyst can value a binary post-close claim rather than quote its headline payout.

A target will be acquired for $40 cash plus one non-tradeable CVR. The CVR pays $10 if the FDA approves its lead drug by December 31 next year and pays zero otherwise. The target trades at $43.20; the…

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…