Citadel Second Rounds Modeling Exam

Alright, just got dinged so I don't mind sharing their trade secrets now...

Background: I did three rounds of interviews with Citadel/Surveyor. Did two one-hour phone calls (bus development and then the PM of the pod I was interviewing for), followed by a full day onsite interview featuring the modelling test, followed about a week later by another ~1.5hr phone interview with a separate bus dev person who manages the hiring process for the role I was interviewing for. Ultimately I did not get an offer, I think primarily because I would have had to ramp on an entirely new sector (pretty far removed from my current coverage), and I didn't have any credible geographic ties to this particular (non-HQ) office. I started out kind of indifferent to the opportunity (they found me and I wasn't actively recruiting), but as we went through the process I became really interested in working with that particular PM/coverage, so it was a bit of a let down. That said, I don't mind my 45-50hr long-only, California cruisin lifestyle one bit...

Thoughts on Modelling Test: It was difficult but I think it was adequately hard, not impossible. As advertised, I was given a company I was not familiar with. Two years of K's, a year of Q's (I think, i didn't even touch the Q's), a year of earnings press releases and conference call transcripts. There was no sell-side info of any kind, no "consensus" estimates, no information about where the stock trades other than the price that's printed on the earnings transcripts. The assignment was to build out a quarterly model projecting for two years, integrated 3-statement. Develop a target price, and write-up a very brief long/short thesis. The four hours went really fast! But I actually only think there was 20 or 30 minutes in there where I was really worried that I wasn't going to be able to finish (around the 3hr mark). In the end, got the model done, but only had time to do the valuation using multiples as opposed to a DCF, which I think was fine. They wanted to see scenarios, so be prepared to do some last minute re-jiggering of key assumptions. I'd just recommend that people make simplifying assumptions where it makes sense. I didn't have much time to just read, maybe 40 minutes cumulatively across the whole period, but I think that's part of the drill.

The model test was followed up by a one hour conversation with the PM and one/two others who telepresenced from HQ office. We spent probably 25-30 minutes talking about how I approached the model, thought about the business, what I would do if I had more time, questions for management, conviction level around my rec etc. Then the rest of the time (maybe another 45mins-1hr) was just organic Q&A about the firm, how the pods are structured, travel, earnings and this PM's investing style. The PM knew the business I had been asked to model extremely well, but I didn't get the sense that others knew it intimately. I think I was given a pass on a lot of 'knowledge gaps' given that I don't currently cover anything in this sector, and I think that is to be expected for a four hour test. As per usual in the investing world, when you don't know something, you should say "I don't know" instead of try to make up some b/s.

Overall I think my modelling/analysis of the case was fine. I advanced to the third round, so I guess I must have checked that box. They confirmed on the call that my process was strong and sounded like they were passing for geography/coverage/fit reasons. In total I think I was in process for around seven weeks, and it took them about a month after my last round to close the loop.

Happy to answer questions if others have them, although I'm sure there are other people on this site with more intimate knowledge than I have. I will say that I think Citadel is fairly aggressively hiring right now. During the process I got other calls from headhunters inquiring about other Citadel positions. Assets are up and I think they're building out several new pods. I think their numbers are going to be pretty damn strong this year, particularly relative to the other big name HF's that are getting blown up everywhere.

Good luck!