Interested in recruiting for KPS once I start full-time and have heard they give out a pretty difficult model test where you build a 3-statement LBO from scratch in 75min and have to manually enter the historical financials from a PDF CIM.
From those that have done it before, how was it? Were there any curveballs or special features that they tested?
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Based on the most helpful WSO content, here's what you need to know about 3-statement model tests and LBO modeling tests:
Time Constraints:
Manual Data Entry:
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By focusing on these areas, you can better prepare for the KPS 3-statement model test and increase your chances of success.
Sources: Citadel (Surveyor) Case Study/Modeling Test, Former MS M&A / KKR here to field questions, Guide to Lateraling in 2021, Ask me anything - MM PE Associate, 1 year in, Private Equity Recruiting Process (From Banking)
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Not that difficult, way harder model tests out there. Not sure why there’s gets so much attention
Second this, time crunch for sure but nothing overwhelming in terms of concepts
Any extra color here
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The, uh, commercially circulating KPS model test that's floating around there is very dated and not nearly as hard as the actual one. If you can do PF scratch in an hour you can probably knock out KPS at about the same clip, if not faster, and have time left over for pretty colors and formatting.
What is PF Scratch?
Doing a scratch LBO of Peak Frameworks. Honestly think hitting level 3 from scratch and knowing just the mechanics for levels 4 and 5 might be enough? Full-on modeling add-ons in a model test for a company is stupid IMO. Same with dividend recaps.
I did it a long time ago and didn’t know what they meant by plug equity to balance the opening balance sheet / goodwill / or something. I don’t remember exactly but it was wording I hadn’t seen and haven’t seen since
Been a long time since I did it but remember this line. Basically just saying that (I think) since you don't get a full B/S showing the pre-transaction book value of equity before you do the whole pro forma goodwill thing, you assume that it's the difference between the pre-transaction assets and liabilities, which you construct through I think some kind of NWC roll (that's done for you) on top of straight blue-cell typing for some rows?
In any case, the forums talked about how there'd be some super complicated liabilities during the transaction based on NWC usage and whatnot but that's just not the case anymore.
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