Modeling Tests for Full Time Recruiting

When considering a lateral move from a top middle market firm like William Blair, Houlihan Lokey, or KeyBanc to a bulge bracket (BB) or elite boutique (EB) for full-time (FT) positions in 2025, it's essential to be prepared for the modeling tests that are part of the interview process. Based on the most helpful WSO content, here's what you need to know:

1. Modeling Tests: Yes, for entry-level roles at BBs and EBs, modeling tests are a common part of the interview process. These tests are designed to assess your technical skills and your ability to apply financial concepts in practical scenarios. The types of modeling tests you might encounter include:

   • Three-Statement Models: Testing your ability to interlink the income statement, balance sheet, and cash flow statement.
   • DCF (Discounted Cash Flow): Assessing your understanding of valuing a company based on its future cash flows.
   • Accretion/Dilution (Acc/Dil): Especially relevant for M&A scenarios, testing your ability to analyze the financial impact of a merger or acquisition.
   • LBO (Leveraged Buyout): Evaluating your skills in modeling a buyout using a significant amount of borrowed funds.

2. Differences Between SA (Summer Analyst) and FT Recruiting: While both SA and FT recruiting processes assess candidates' fit and technical skills, there are a few notable differences:

   • Timing and Availability: SA recruiting often happens earlier and has more structured timelines compared to FT recruiting. FT positions may depend more on firm needs and attrition rates.
   • Experience Expectations: For FT recruiting, especially when lateraling, there's an expectation that candidates have more practical experience or relevant internships that have honed their skills.
   • Networking Importance: While networking is crucial for both, it can be even more critical for FT recruiting as you're trying to demonstrate your value and fit for a full-time role directly.

Preparing for these modeling tests and understanding the nuances of FT recruiting compared to SA positions will be key in making a successful lateral move to a BB or EB. Focus on refining your modeling skills, leveraging resources like the WSO Modeling Series, and building a strong network within your target firms.

Sources: Q&A: Barclays IB to MM Private Equity, Modeling at work vs modeling tests, Which firms do lateral hires for entry-level positions now?, Are there any Entry Level Positions Opening Right Now?, EBs have more interesting work than BBs?