Hey Monkeys
I'm currently interviewing for private credit roles and am looking for ways to get faster at LBO modeling. Any tips?
For context, I learned how to do an LBO model with a full 3-statement forecast on WSP, but only practiced it 1x before doing my first technical exam. Completed everything correctly but wasn't able to do it all in the 3-hr time limit. How do I get faster at doing these things? I come from commercial lending, so understand the concepts & fundamentals of these things, but don't necessarily have the speed in excel that an IB associate might have. Any advice is appreciated
Practice, practice, practice
Practice and then practice some more. If you're a current or former athlete, musician, or chess player, treat it like training for that activity. Practice the modeling equivalent of basketball jump shots/Hanon for piano/endgames.
I did this by putting in reps. Get your hands on some CIMs or public company financials, Ctrl+N, start a timer, and build out a 3 statement + LBO. Practice the same company a few times and then change to a different company. Begin with simple financials and assumptions, but do things correctly the first time, including formatting, outputs, etc. Progress to companies with more complex financials or those that require different capabilities. Time yourself with each rep, and your times will eventually come down.
I would recommend checking out the Multiple Expansion website (link) as well. The guy who wrote it is ex-Warburg and does an excellent job breaking down simple, paper, and complex LBOs step by step, with templates, for free.
Seriously, do NOT touch your mouse. It might sound trite, but it's true. Barring a dedicated shortcut, the Alt key can get you access to almost everything you need in Excel. Also, figure out how to correctly utilize the Quick Access Toolbar (Alt+1, Alt+2, etc.). When mapped correctly, it can save a lot of time.
Finally, remember, practice makes p̶e̶r̶f̶e̶c̶t̶ permanent. Being fast--but wrong--is worse than being slow and right. Make sure you are practicing good modeling hygiene.
Really appreciate this post and the links - seriouly so helpful. Thank you, man
To get faster at LBO modeling, here are some actionable tips based on the most helpful WSO content:
Practice Simpler Models First: Start with short-form LBO models or paper LBOs. These are quicker to build and help you internalize the mechanics. Once you can do these in your sleep, move on to more complex 3-statement models.
Repetition is Key: Recreate models from scratch multiple times. Use templates from your network or older analysts, as suggested in WSO threads. The more you practice, the more intuitive the process becomes.
Focus on Core Components: Avoid overcomplicating your models. Skip unnecessary items like OID, asset step-ups, or NOLs unless explicitly required. Stick to the essentials: Sources & Uses, debt schedules, and basic sensitivities.
Leverage Timed Practice: Simulate real interview conditions by timing yourself. Start with a 3-hour limit and gradually reduce it as you improve. This will help you manage time better during actual tests.
Excel Shortcuts: Master Excel shortcuts to save time. For example, use Alt + E + S + V for paste special values or Ctrl + Shift + L to toggle filters. Speed in Excel is a game-changer.
Mock Tests with Peers: Reach out to PE associates or friends in your network for mock tests. They can provide feedback and help you identify areas to improve.
Use Pre-Built Templates: Familiarize yourself with intuitive templates. Many WSO users recommend practicing with templates from your banking group or resources like the WSO Elite Package.
Mental Math for Paper LBOs: Practice mental math for quick IRR calculations and other metrics. This will help you breeze through simpler tests and save time for more complex tasks.
Learn from Mistakes: After each practice session, review what slowed you down. Was it a specific formula, a lack of familiarity with a section, or Excel inefficiency? Address these gaps systematically.
Ask for Feedback: If you have access to mentors or colleagues, ask them to review your models. They might spot inefficiencies or suggest better approaches.
By combining these strategies, you'll not only get faster but also more confident in your modeling abilities. Good luck with your private credit interviews!
Sources: 7 Practical Buyside Recruiting Tips for IBD Analysts, Q&A: I’ve held Pre-MBA MM LBO, Growth Equity and Venture Capital investment roles for funds with $500M+ AUM to $5B+ AUM, DONT DO ON-CYCLE...If you’re not prepared, Private Equity Recruiting Process (From Banking), Q&A: Associate at MM Private Equity fund
mosaic.pe
Like everyone else said, literally just reps. I found doing PF levels 2-4 over and over again from scratch made me very quick by the 5-6th rep. If you have past tests, just do as many as possible from scratch.
Work on getting a minimally viable model before adding bells and whistles. At any point in time after hour like 2, you should have something fully functional, then you can surgically add detail as-needed. That was you never actually run out of time, you're just judicious with where you invest your time at each step. For example, start with the most basic revenue build, then deepen it later as you have more time, rather than running out the clock on some fancy P&L build at the outset.
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