Has anyone interviewed at a merger arb shop and done a case study? Any insight into the case would be much appreciated, know that it will likely be analyzing announced deals… but specifically what would some of the analysis they want look like? Have L/S equity case studies I can share
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Based on the most helpful WSO content, here are some insights into what a merger arbitrage (merger arb) case study might involve:
Qualitative vs. Quantitative Analysis:
Valuation Techniques:
Work-Life Balance and Compensation:
Exit Opportunities:
Key Elements of Analysis:
Case Study Preparation:
For more detailed examples and specific case studies, you might want to refer to the WSO forums or reach out to professionals who have experience in merger arbitrage.
Sources: https://www.wallstreetoasis.com/forums/anyone-willing-to-share-a-pe-interview-case-study?customgpt=1, Merger Arb/Risk Arb?, Q&A: London L/S + event-driven analyst, Private Equity Interview Questions - 13 Topics to Know, 2 Hour Case Study?
I interviewed at a large merger arb (true merger arb focus, not a broader event-driven strategy) fund a few years ago, so this is dated. Mine were open-ended. In both, I was given a situation and asked where I would invest in the cap structure. One was an already-announced deal; the other was a potential deal that wasn't announced yet.
They look for merger rationale, whether the merger fundamentally makes sense, whether financially makes sense for the buyer or not (and whether the valuation is right for the target), and risks to the merger (you must understand all the angles of the deal breaking and what the target/buyer get in case of a break). I would also show PF financials, whether the merger is accretive/dilutive, and a PF BS. Focus on risks, though, and show how the merger makes sense or not (and tie financials into it).
I hope this helps a bit, although it's generic. Also, a disclaimer that I've only interviewed for one merger arb fund, so it's not a tried and tested method, but this is what I followed, and it got me far ahead into the only merger arb process I was in. Would appreciate you sharing any equity case studies for practice.
Thanks, Pm me
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