RE Asset Management modelling test - should I ask the interviewer for advice?
Hi, I've been invited to the modeling test for an asset management role at a REPE fund. As this is not an acquisition role I am unsure what the modeling test will entail. Would it be appropriate to email my interviewers from my previous round asking if they can offer any insight as to whether it will be an LBO, DCF, waterfall/cash flow analysis, development project etc.. so I can prepare a little as they haven't told me anything about it other than it's a 3-hour modeling test.
I had a REPE AM modeling test over the summer and it was an acquisition test. I think it was 2 hours but can't really remember.
Had to build a dynamic monthly, multifamily acquisition model with operation, disposition, and financing (senior and mezz). They gave you the assumptions and you had to build the model obviously and also meet certain criteria. Like solve for IRR, whole dollar profit and multiple for the debt and equity positions, build sensitivities, etc.
PM if you want the prompt. I still have it.
Thank you for the insight and that would be great thank you! Will drop you a PM now
I wouldn’t email the team from the previous round for additional details as they likely want all candidates to be on a level playing field and they may not even know - in my experience the test was managed by HR.
I had a modeling test for a hybrid acquisitions/asset management role about a year ago and the day before the modeling test they emailed general info of what kind of model you will be building. Assuming you know how to model if given assumptions, I would research the firm’s investment thesis as this was not provided and I was asked to comment on how the investment fits into the firm’s asset class allocation, fund size, return requirements and risk profile.
Definitely agree with researching the firm's investment strategy and current portfolio.
I think its fair to assume it will be a model focused on the firms primary investment strategy, so brush up on their preferred asset class. Unless it is a ground-up development or value-add focused firm, I would assume its going to be a standard acquisition model (can't think of anything else they would give you for an entry-level AM role off-hand).
If it is retail/office, I would expect them to either give you a flat rent growth assumption, or a VERY simple rent roll and recovery assumptions.
Thank you, super helpful. Their strategy is value add / opportunistic and in terms or asset class it's a range i.e. they invest across the spectrum i.e. student property, hospitality, construction/development projects. They also acquire stakes in companies i.e. real estate investment firms and developers which i think plays the largest part of their portfolio, any views on this or what a value add model could entail? Thank you
Good idea thank you! Their strategy is value add / opportunitistic and they invest in both real assets as well as real estate companies / investment firms, any thoughts on how this might impact the model?
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