Modelling test mistake - am I screwed?
Hi guys.
So yesterday I had a REPE modelling test. The test was essentially a development and exit 12 months after lease up.
The test was fairly straightforward and I completed the model, though I (rather stupidly) screwed up on the debt.
It was a simple 4% fixed PIK loan. Annoyingly (because at my current shop we are working on an interest only development deal), I instinctively modelled the debt to be interest only. Therefore the monthly interest did not add on to the loan principal balance (so no calcs with opening balance, interest, closing balance etc. I simply got the monthly interest, multiplied by the number of months and paid at end of hold period with the principal).
Is this a major error that ruins my chances? I sent a text to the recruiter after explaining what I had done and he said he would communicate to the employer.
Thanks all
Hey there,
First off, don't beat yourself up too much. We all make mistakes, especially when we're under pressure. It's part of being human.
Now, onto your question. While it's true that the error you made isn't ideal, it's not necessarily a deal-breaker. It really depends on the employer and how they view such mistakes. Some might see it as a learning opportunity, while others might be more critical.
The fact that you recognized your mistake and took the initiative to communicate it to the recruiter shows a level of responsibility and integrity that many employers value. It shows that you're not just about getting things right, but also about doing the right thing.
At the end of the day, it's out of your hands now. All you can do is wait and see what happens. But regardless of the outcome, take this as a learning experience. It's all part of the journey.
Keep your chin up and keep pushing forward. You've got this!
Sources: Mistakes in pitches / models - who is responsible, Debt Fund Modeling in REPE?, Excel Model Creation Vs. Modeling Experience Importance in REPE, Mistakes on WSO PE Prep Pack Models?
None of us can tell you how the hiring manager approaches this. Maybe they're a sticker for model perfection and you're fucked. Maybe they appreciate that errors happen and like that you identified the error on your own and reached out about a correction. Maybe they simply have too many candidates and are looking for any little thing to cut it down. We can't tell you that.
You did what you did. They'll do what they do. Keep looking for other jobs and maybe this one works out.
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