The Credit Investor’s Handbook

SHARING DECADES OF WORKING with top investors, author and Gabelli School Adjunct Professor Michael Gatto inspires the next generation of credit analysts and finance professionals.
Portrait close-up headshot photo view of Michael Gatto smiling in a black business suit and light sky blue button-up dress shirt underneath with a dark navy blue hexagon-shaped pattern tie; Beneath to the far left of his headshot is a smaller floating front book cover image titled The Credit Investor’s Handbook: Leveraged Loans, High Yield Bonds, and Distressed Debt
Michael Gatto became interested in the credit markets decades ago, and is a highly respected credit expert. He has worked alongside some of the world’s most successful credit investors, previously at Goldman Sachs’ Special Situations Desk where he focused on distressed credit, and currently as partner and head of Private Side Businesses at Silver Point Capital (a $20 billion credit-focused fund). He also shares his knowledge and enthusiasm for the credit markets with his students at the Gabelli School of Business.

His passion for teaching began when he was a credit analyst and head of Global New Entry Training at Citibank. At the time, Citibank was just breaking into investment banking, and Gatto was tasked with revamping its training program in the fundamentals of credit analysis for new hires. He later taught credit analysis for other financial institutions around the world as an independent consultant. He filled a knowledge gap in organizations whose employees had not had such training at the undergraduate or graduate level.

“Historically, no universities taught credit analysis,” Gatto noted. “Because there weren’t any textbooks available, no one taught you how to analyze making a credit investment versus equity or real estate. Instead, all the banks offered their own intense credit training programs.” Since then, a lot has changed in what is required of new graduates entering the workforce. “Banks have changed their training programs and now they expect you to already have this knowledge when you are hired,” he explained. Also, banks are no longer the main institutions hiring many of these professionals. Private credit firms are now more prominent in the market and they expect to hire trained credit professionals. This shift is one of the reasons he teaches, and it also inspired his book, The Credit Investor’s Handbook: Leveraged Loans, High Yield Bonds, and Distressed Debt, Wiley Finance, 2023.

“I wrote this as a textbook that I can assign for my courses and recommend to my colleagues in both the investing and academic realms,” Gatto asserted. “I have included as close to everything I know about credit analysis in these pages.” The book helps to guide finance majors pursuing investing careers, arms credit analysts with the knowledge they need to enhance their skills, and is a resource for seasoned professionals who seek to expand their expertise.

The growing demand for well-trained credit analysts also was the genesis for establishing the O’Shea Center for Credit Analysis and Investment. It was founded in 2020, with a naming gift from Robert O’Shea, GABELLI ’87, a long-time friend and colleague of Gatto’s, who is the founder of Silver Point Capital and former partner at Goldman Sachs, his wife Michele O’Shea, FCRH ’88, and a very generous gift from Gatto, who serves as its director. Since its launch, a secondary concentration in credit that helps students compete for top-tier jobs has been established, a series of networking and professional learning opportunities has been introduced, and initiatives to give back to underserved communities in the Bronx have been instituted.

When asked what advice he gives to his students about how to be successful in today’s rapidly evolving world of business, Gatto reflected on what helped him when he was first starting out. “Learn the technical skills the market cares about and get the best job you can. Then work hard and develop a reputation for being a hard worker who is reliable,” he counseled. He also stressed the importance of finding a mentor for support and guidance.

“I discovered I have a passion for not only the technical aspects of being a credit investor, but also for the human element of teaching the students and guiding them in their careers,” he explained. This is apparent from the firsthand war stories, reflections from industry professionals, and humor infused throughout The Credit Investor’s Handbook.

—Paola Curcio-Kleinman and Michelle Miller