CD&R Off-Cycle Modeling Test

Based on the most helpful WSO content, for an off-cycle modeling test like the one at CD&R in London, you can expect a focus on a "basic" LBO model. Here's what you should prepare for:

1. Structure of the Test:

   • Likely to involve building a straightforward LBO model from scratch.
   • You may need to create a Sources & Uses table, build out assumptions, and construct a debt schedule.
   • Sensitivity analysis (e.g., IRR or MOIC based on different exit multiples or leverage levels) might also be included.

2. Complexity:

   • While labeled as "basic," the test will still require a solid understanding of LBO mechanics. Ensure you can handle tasks like calculating returns, balancing the balance sheet, and integrating debt schedules.

3. Time Constraints:

   • These tests are often time-pressured, so practice building models efficiently without relying on templates.

4. Additional Tips:

   • Review key LBO concepts, such as leverage, equity contribution, and cash flow generation.
   • Be prepared for potential qualitative questions, like explaining the rationale behind your assumptions or identifying key investment risks.

For more in-depth preparation, consider resources like the WSO Private Equity Interview Course, which includes detailed LBO modeling tests and case studies.

Sources: 20 Most Frequently Asked Questions - London Edition, Opinions on BB IBD Off-Cycle internships London, Ask me anything - MM PE Associate, 1 year in, 7 Practical Buyside Recruiting Tips for IBD Analysts, Guide to Lateraling in 2021