Tactical Opportunities Blackstone First Round Interview

Hi all, I have a first round video interview with someone from the Tactical Opportunities group at Blackstone tomorrow for a summer 2021 internship. I don't really know any technicals. Does anyone know how technical these interviews will be? Thanks.

 
 
Controversial

If you don't know technicals you don't deserve the role. You're going to fail it. Go pay your dues in banking, learn some technicals and come back. Undergrad PE/buyside roles are not for people who decide to take a random stab at it. It is for people who are top of their class and have taken the time to work for it.

 

I don't get why everyone is upset? Telling a kid who has evidently not done any prep or doesn't have a genuine interest in finance that he does not have a shot at interview. It is a harsh reality

 

Not really.. He has just heard his buds talking about BX and then made an app and got an interview. If he is clueless about technicals then he obviously is not serious about the industry.

He had his interview Mar 5, no doubt failed as I said.

 

I am aware that tac opps interviews are some of the most in-depth across the street. What do you think one can do to best prepare going into it? Also when are superdays expected to be (non-diversity)?

 

Got the phone interview one year ago, for an off-cycle in the team (London) Made it to the second round but did not receive offer.

I remember having 4 or 5 exercises during each interview, during which they assess how much you understand finance (not so technical, more about reasoning)/the unusual instruments that can be used by Tac opps (Preferred Equity, etc)/how well you think.

It is quite similar to PE interviews though, and not that complicated.

Examples of a questions I can remember:

-You have a company. In the final year of the investment (year of sale), you have the choice between having a 1m release in Net Working Capital and +1m in EBITDA, what do you prefer? Then, what EV/EBITDA sale multiple is needed to be neutral between a 11m release in NWC and 1m incremental EBITDA?

-Is Tac Opps more or less risky than classic buyout?

-classic paper LBO

-You have two dice. What is the probability of having a 8?

 
Most Helpful

Sure!

  1. You have a company. In the final year of the investment (year of sale), you have the choice between having a 1m release in Net Working Capital and +1m in EBITDA, what do you prefer?
    a) +1m in NWC means +1m in FCF, so your PE fund will sell 1m more expensive (due to more treasury)
    b) +1m in incremental EBITDA means 600k in FCF (considering 60% cash conversion rate from EBITDA to FCF, because we almost only have taxes, given it is incremental EBITDA) But, if you sell at 10x EBITDA for instance, it means you can sell 10m more expensive. So, the PE makes a total of 10.6m if the EBITDA increases of 1m -> you choose the EBITDA increase of 1m

  2. What EV/EBITDA sale multiple is needed to be neutral between a 11m release in NWC and 1m incremental EBITDA?
    We write an equation: Gain from NWC increase = Gain from EBITDA increase
    Gain from NWC increase = 11m
    Gain from EBITDA increase = 600k + 1m x Sale Multiple
    11m = 600k + 1m x Sale Multiple
    -> If the sale multiple is 10.4x, the PE makes as much money if the NWC increases by 11m or EBITDA increases by 1m

Hope it is clear

 

Thanks mate how would you approach the last 3 questions?

 

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