Lateral to Another Fund – Interview Process & Expectations?

When lateraling from a middle-market PE firm to a larger platform, here’s what you can expect based on the most helpful WSO content:

Timeline

• The process is typically group-dependent but often runs efficiently. Many lateral processes are completed within ~3 weeks from start to offer.
• Expect multiple rounds of interviews, often involving associates, VPs, directors, and partners. For example:
  • Evercore M&A: 3 rounds, including a phone screen, case study, and technical interviews.
  • JPM Coverage: 1st round phone screen followed by a Superday with directors, VPs, and MDs.

Interview Expectations

• Technical Depth: Lateral interviews often have a mix of behavioral and technical questions. The technical depth can vary by firm and fund size:
  • Megafunds: Expect rigorous technicals, including detailed LBO modeling tests and investment judgment questions.
  • Middle-Market Firms: May lean more on behavioral questions and deal experience but still include technicals like paper LBOs or quick case studies.
• Compared to on-cycle interviews, lateral processes may focus more on deal experience and investment judgment rather than just raw technical skills.

Modeling Tests

• Commonality: Modeling tests are very common in lateral processes. These can include:
  • Paper LBOs: Quick, conceptual tests.
  • 1-hour or 3-hour LBO tests: More detailed and timed.
  • Take-home case studies: Some firms provide a CIM and ask for a basic LBO model and investment memo.
• Complexity: The level of complexity depends on the fund:
  • Megafunds: Expect to build a full model quickly and accurately.
  • Lower-Middle Market (LMM)/Middle Market (MM): A paper LBO or simpler modeling exercise may suffice.

Most Common Questions

• Deal Experience: Be prepared to discuss your deals in detail, including:
  • Valuation, competitive strengths, transaction structure, and risk assessment.
  • Your responsibilities and how they shaped your perspective on the deal.
• Investment Judgment: Questions like "What makes a good LBO candidate?" or "What’s an industry you currently find attractive?" are common.
• Behavioral Questions: Expect questions like "Why private equity?" and "Why this fund?" as well as broader fit questions.
• Technical Questions: LBO theory, accounting fundamentals, and financial modeling concepts are often tested.

Discretion

• Recruiters and firms are generally tight-lipped during the process, but it’s wise to be cautious. Avoid sharing too much with colleagues or anyone who might inadvertently let word slip back to your current shop.

Preparation Tips

• Modeling: Perfect your LBO modeling skills under timed conditions. Practice paper LBOs, 1-hour tests, and 3-hour tests.
• Deal Knowledge: Be ready to speak intelligently about your deals, including numbers, rationale, and outcomes.
• Behavioral Prep: Have clear, concise answers for fit and motivation questions.
• Ask Questions: Show interest by asking about fund strategy, recent performance, and industry outlook.

For more detailed insights, check out these WSO threads: - https://www.wallstreetoasis.com/forum/private-equity/private-equity-rec…</a">Private Equity Recruiting Walkthrough - https://www.wallstreetoasis.com/forum/private-equity/a-non-targets-pers…</a">A Non-Target's Perspective - My MM PE Recruiting Process

Good luck with your lateral move!

Sources: Private Equity Interview Questions - 13 Topics to Know, Lateral Hires - What were your interviews like?, Private Equity Recruiting Walkthrough – My Experience, A Non-Target's Perspective - My MM PE Recruiting Process, A Non-Target's Perspective - My MM PE Recruiting Process