3 hour lbo test
hi, i have an lbo test interview (PE asso role) scheduled and they said to expect a case study, 3 hours, where i build out a 3 statement model and lbo from a template and debrief about the investment.
was just wondering if this would typically be done live in front of someone where i explain what I’m doing or they watch, or if it would be emailed to me and then i need to send it back within 3 hours?
i asked the HH but haven’t heard back and was just hoping to get some insight from wso to leverage as i practice over the long weekend since i assume they won’t reply before tuesday.
and if anyone has advice on how to best prep for this kind of interview, i would be grateful. i’m downloading some practice templates and working on them but not sure if there are tips that have worked for others in the past. tyvm
bump
They will not sit and watch over your shoulder as you model lol. It will be emailed to you and you’ll have 3 hours to build a model and do a short write up / organize your thoughts. Then, you’ll sit down for 30 minutes with one or two people and they will grill you on your assumptions, why you chose a certain approach, your thoughts on the business, where you would want to dive in deeper, what the true levers of the business are, etc.
thank you
This but in some cases they do have you come into the office and let you sit in a room alone for the time period , with occasional time checks kinda like a college exam. Same difference but I would be comfortable ripping this from your simple laptop as comfortably as you can with a 2 screen set up at home JUST in case
i got sat in a room alone with a laptop and some additional materials CIM/investor pres - and then had a chat with interviewer re: model, assumptions and my general thoughts
It is becoming more common to have someone sit on zoom and have you share screen while you do these given the prevalence of Claude. Even in that scenario you're not having to explain your thought process as you build it and they won't be watching super detailed, just having it up on a side screen.
Outside of that though these are typically just emailed to you with a separate 30-min debrief scheduled for another day if you didn't bomb it.
My firm administers the test in person because it’s quite easy to cheat or have candidates copy and paste blocks of formulas from a template. We also provide a scrubbed CIM so folks could easily plug this into Claude or Gemini to generate a preliminary thesis / risks etc., which defeats part of the exercise. If the candidate is not based locally we will not fly them out to complete the test, but someone from HR will sit on a zoom with you for the duration of the test while you screen share / camera on. FWIW we do provide a 24” monitor and a keyboard for in person. If you’re asking candidates to rip one of these on a 13” laptop take a look at yourself in the mirror and then go touch grass.
Edit: a lot of people stress out about the case study but it’s not as hard as everyone makes it out to be. Look up “SkiMaskBro” on YT - he has a three part series on “2024 PE Leveraged Buyout…” which shows you how to build a model from scratch and the template copies almost an identical format to PeakFrameworks. If you already have a strong understanding of accounting you can save yourself the $500 or whatever it costs and complete his file from scratch 2-3 times, you’re probably 75% of the way there. Everyone on here is trading past tests so you can pick up the nuances that come up less frequently (rollovers, add-ons, refi’s etc.). No one expects a perfect model so if you can get the basics down to muscle memory you can realistically free up 2 hours to address any model quirks and focus on the CIM.
thanks
I took and passed 3 modeling exams, 2 proctored online and 1 non-proctored. The non-proctored one had about 40 assumptions and took every second of the allotted time (2.5 hours). In the proctored ones, they record the entire session, ask you scan your computer around the room (to look for notes and such) and explain your not allowed to leave to check your phone/go to the bathroom for obvious reasons. The other two were 3 hours and 4 hours and were open ended (no assumptions and they gave me a CIM) and asked me to build a returns analysis. Each one had a debrief in the next round where I discussed my assumptions and my returns.
I bought the Wall Street Oasis PE Prep Guide and they have LBO videos that you can watch. I passed every modeling exam that I encountered... worth the investment in my opinion.
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