I remember being in your position. Not knowing how to prepare for my Private Equity Associate interviews because I did not know what to expect. Unfortunately for me, I learned the hard way – failing over and over again until I saw all possible PE interview combinations. It came down to 5 different types of interviews. My odds and preparation improved with each interview I failed, eventually, it worked out for me after a tiring and long process.
Just for background, I came from a non-traditional background (Strategy & M&A Consulting) and participated in off-cycle buy-side recruiting. The majority of Private Equity Associates come from a traditional 2-year Investment Banking Analyst program. I would estimate 95% of PE Associates come from Investment Banking, 4% from Consulting, and 1% from others.
Buyout/Growth-Equity interviews will follow one of the structures below.
The Classic Banker Interview
This is your classic Investment Banking interview. Expect what you would expect in a traditional IB interview. The below resources are all you need to master. A solid understanding of the below will help you answer any banker technical question thrown in your direction.
- Accounting Vault Guides
- How would you value a company?
- Brain Teasers
- The 400 Question Guide
The Modeling Test
Not all firms give modeling tests. These are the different types of LBO tests you can be given if you end up getting one.
- Computer, blank excel sheet, no assumptions, and a set time limit to build an LBO model from scratch
- Computer, LBO template with base figures inputted, assumptions, and a set time limit to complete the model
- Take home LBO model, which can be timed or un-timed depending on the firm
- Paper LBO model, which is usually given in person during an interview
The Case Study
Consultant friendly firms will usually give you at least 1 case study during your interview process. This case study will be like your traditional management consulting interviews, with the end goal being “should we invest or not invest?”. The thought process of getting to that answer is the same approach you would take to solving a traditional consulting case interview.
Some firms will embed the LBO model into the case study. This can either be in the office or take-home. The firm will provide you an information packet containing the case-study with key facts and questions. Your job will be to quickly read through the case study, pull out key pieces of information, build your model, and present your findings verbally or in PowerPoint.
The Behavioral Interview
Every interview will incorporate this component. You need to prepare for these questions. This piece is critical to your interview success.
- Why Private Equity?
- Walk me through your resume
- Why not Hedge-Fund?
- Out of your previous deals, what is a company you would have invested in?
- Is there a company we should look at and why?
- What is attractive about this firm?
- What do you plan to do in the next 5-10 years?
- Do you plan on going to business school?
- From what transaction did you learn most?
- What is your ideal work environment?
- Tell me something interesting about yourself?
- What is your outlook on the economy?
Combination
Some PE firms will give you multiple rounds with multiple components from above. My final process I went through was a combination of the above. It had a traditional consulting piece, technical accounting/valuation questions, an LBO model with a 15 slide PowerPoint presentation, and multiple behavioral rounds with different members of the firm over a 2 month period.
Things to Keep In Mind
- Private Equity investment teams are very lean
- You can kill your interview, but not get an offer
- Culture fit is huge in this industry since teams are very lean, and might be the most important factor
- You need to be able to work without direction/instruction
- PE is not corporate like banking unless you go to a megafund (KKR, Blackstone, Apollo, etc)
- It is a numbers game – get your reps up. Some people will get an offer on their first interview, and some will take 15 interviews to land an offer
- You need to put the work in
Know any other Private Equity Associate interviews style we should include? Let us know in the comments below and we will be sure to add it! Need help landing an interview in the first place? Use THIS proven process.
Good luck with the process! It is a rewarding and challenging career.
