Which PE firms have the hardest interview processes?
As title suggests, am generally interested in gaging which funds have the most rigorous recruiting processes and, if available, some examples of why. Are there some that have notoriously hard modeling tests, very many rounds?
Thank you very much for any input.
HIGs was annoying, had warrants and some convertible pref I didn't know what to do with, only got 2 hours or so
Vista, TPG Capital
why is this getting ms?
Vista does not have a difficult process. Very standard.
Centerbridge was toughest I had. Don’t know how they stack up against other PEs
Same here… myself and my friends from other top groups didn’t make it past the technical rounds. Still ended up at a top UMM shop so can’t complain!
Could you describe the nature of the technicals rounds and what made them more difficult? Is it something you could prepare for?
Looking back at on cycle, CB was definitely the most technical case for me
Apollo
Also are u asking abt on-cycle v. off-cycle
I guess that's a good point since off-cycle is always going to be longer and more drawn out. Off cycle for current purposes but interested in on-cycle for this upcoming year as well.
Side note, do you know if brain teasers are common and, if so, which firms tend to ask them?
Thank you for your help
What was difficult about it compared to other interviews?
The Warburg Pincus modelling test I thought was particularly hard, considering it had to be done in 45-60mins, and contained options at different strike prices, 2 tranches of debt, equity sweetener and full 3 financial statements.
The Warburg model wasn’t so bad. You just had to fix mistakes in the model..
Mine was an empty excel with a prompt (pdf)
Doing all that in 60 minutes sounds completely nuts
BX - Many Rounds
I thought vista was pretty hard just because it was so strange and asked what I would call odd introspective questions
Thought the Vista model test was decently hard. 1.5 hours and you had to build 3 statement LBO from scratch (including balance sheet). They basically only gave you historicals and told you what industry the B2B software business was in, as well as some basic ARR and bookings figures. You basically had to come up with your own assumptions for every line on the 3 statements for the projection period, as well as all your own debt/financing/entry/exit assumptions for the LBO based on what you thought was reasonable. They also had some options thrown in that made it more difficult. Then you had to go line by line with the interviewer in a debrief interview and defend all of your assumptions and explain your reasoning even though you had very little information to go off on the business.Basically they wanted to see if you understood the software space and the software business model well enough to come up with reasonable projections assumptions on your own, while bringing into the model the value creation levers they typically rely on, and build an LBO in 1.5hrs that matched their typical structure/returns profile.
Second this. Vista was particularly difficult
Have seen stuff like this. My confusion is how do you convert ARR/Bookings into income statement revenue? I've historically just used a "recognition" rate but not sure if this is the correct method. Anyone have any insight?
I thought the KPS modeling test was pretty difficult compared to other places interviewed. There was nothing tricky necessarily about the model, but it was a full 3 statement lbo in 1hr 15 minutes which means you really had to crank. Also the historical financials were in a shitty pdf format which always sucks to deal with.
Can you please PM me?
Has anyone heard anything else about the KPS modeling test? I'd love to hear more if someone would be open to speaking about it.
I thought Diversis had the toughest test by far (boutique in LA). 8 hour modeling test from scratch and have to basically build retention cohort from scratch to then build a full lbo operating model with revenue builds by product and expenses broken out, etc and then do a mini IC write up. Case debrief the next day.
Where do you learn how to build a retention cohort analysis? I haven’t heard of this term before.
Sorry I missed this. In IB - one of my first deals in tech.
Sorry to dig up this old post, but would you mind expanding a bit on what made the case study so difficult? I saw you mentioned the retention analysis and the sheer amount of work, but curious to hear if there was anything else unusual content or format-wise. Thanks in advance!
bump
Think my experience backs the general theme of the comments. Brand name SSG/distress type funds tend to be the hardest and most technical (ex. Centerbridge, KPS, etc. others I would mention would be ares, oak, BX tac opps, Bain ssg, silver point, etc.) This is because the job is technical and typically more complex. They also have small class sizes, so if you’re ass, that’s going to be a problem for them.
I’d say then it’s a fairly linear drop in difficulty as you move downmarket for regular PE with MFs and top UMMs being most difficult for obvious reasons.
Kinda WSO baity but unironically prestige is a good barometer for difficulty of the process - if it was easy then there’d be no clout in it.
What about Apollo?
Thought Accel-KKR was quite hard as well. Part 1 was a full 3-statement LBO model with PIK, options, cases, earnout, average/ending period interest calc switches. Part two was combined EV calculation for platform/add-on acquisitions with equity
What was the time constraint, just curious? Those all sound like pretty standard LBO features you should be capable of incorporating except earnouts (but even those are fairly straight forward with enough time)
Agreed, felt the sheer amount of stuff on there was the challenge for me. It was 3 hours, and you are required to send your model after that. Then you can send another model after another 2 hours if you'd like
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