Call and Potential Interview at CRE/Debt Fund
Long story short, I graduated last year and have been working for a construction services company. Very unhappy, company hasn’t followed through on their promises, and I’m making a move. Using a connection I have, I am scheduling a call next week with the MM capital group/debt fund and I was tipped off that they will make me do an excel exam. Did really well with this kind of stuff in college, but need tips. Not super familiar with this space and while I’m good with numbers and understand how tranches work/how GP contributes less, but gets high returns, etc… All these concepts aren’t hard for me to understand in terms of risk, contributions, who gets first distribution, I fear doing a full scale waterfall for example. Any and all help or tips would be appreciated.
Based on the most helpful WSO content, here are some tips to prepare for your call and potential Excel exam with the MM capital group/debt fund:
Brush Up on Excel Skills: Make sure you're comfortable with advanced Excel functions. This includes understanding financial modeling, using formulas like XNPV, XIRR, and PMT for debt-related calculations, and being able to set up and manipulate pivot tables and data filters.
Review Financial Modeling: Since you've done well with this in college, it would be beneficial to revisit financial statement modeling, DCF, and LBO models. WSO offers financial modeling templates that could be a great refresher.
Understand Waterfall Structures: Even though you're not familiar with doing a full-scale waterfall, it's crucial to understand the mechanics. Waterfall structures dictate the distribution of cash flows and can be complex. Review the basics and try to practice setting up a simple waterfall model.
Learn the Specifics of CRE/Debt Funds: Commercial Real Estate (CRE) and Debt Funds may have specific metrics and models. Familiarize yourself with terms like Loan-to-Value (LTV), Debt Service Coverage Ratio (DSCR), and Cap Rates.
Use Available Resources: WSO has a plethora of resources, including interview questions, guides on financial modeling best practices, and templates that can help you prepare.
Practice Under Pressure: The exam may be timed, so practice doing your models and calculations quickly and accurately.
Network and Seek Advice: Since you have a connection, try to learn as much as you can about the fund's approach and what they might expect in an Excel exam.
Remember, preparation is key, and utilizing the resources available to you, like the WSO financial modeling templates, can give you a solid foundation to perform well in your exam. Good luck!
Sources: How the hell do I get my grades up, How to improve your knowledge of markets?, Case study interview for MBB consulting - 24 of my best tips on how to get in, Best Methods for Maintaining Mental Sharpness?, Minimum Cash Balance Question
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