Citadel Second Rounds Modeling Exam

Could someone please tell me exactly what to expect for Citadel's second rounds for Global Equities in New York? I am trying to prepare for a healthcare analyst interview, it will be a 3-statement standalone and debt schedule, but what else do I need? Is there a template? How much time am I given? Does anyone have suggestions?

I need some help.

Second Round Citadel Interview Questions

Getting an interview with Citadel is quite an achievement. If you make it past the initial phone interviews, you'll likely be invited for a full day onsite interview which includes a modelling test. After going through the process, Certified Asset Management Professional @jankynoname shared his insights on the modelling portion of the interview:

  • Time: 4 hours to complete
  • Company: Given a company I was not familiar with
  • Information Provided:
    • 2 years of Ks
    • 1 year of Qs
    • 1 year of earnings press releases and conference call transcripts
  • Not Provided:
    • Sell-side info
    • Consensus estimates
    • Information about where the stock trades

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.

Tips:

  • They wanted to see scenarios, so be prepared to do some last minute re-jiggering of key assumptions
  • Make simplifying assumptions where it makes sense
  • Be prepared to talk about how you approached the model, thought about the business, what you would do if you had more time, questions for management, conviction level around my rec etc.

Recommended Reading

Want to improve your financial modeling skills?

Check out WSO's side-by-side comparison of financial modeling courses and get a WSO discount.

Financial Modeling Course

Comments (15)

Mar 18, 2014

Any ideas from anyone?

Mar 19, 2014

Sounds like nobody has experience with the process. To be safe, I'd just feel very comfortable creating a 3 statement model (w/ debt schedule) in a timely fashion. I may be wrong, but I imagine the model wouldn't be terribly complex if its only going to be for a short time.

Mar 21, 2014

No idea about process, but I'd imagine you get some historicals and you build it out. If you can get your hands on old PE lbo case study models, doing those a couple times to get fast would probably be enough as they're usually simple 3 statement models.

May 25, 2015

EmpiricalTruth, I am going to interview for the same role in a different location for a different industry coverage team. Would you mind sharing some insights? Thanks, appreciated!

Sep 19, 2015

I'm headed for this test next week as well. Sounds like 4 hours to digest two years of K's, Q's, transcripts and maybe some industry crap. I've only faced a modelling test at one other firm (4 years ago) and I failed miserably, so we'll see how this goes. Anyone have recent experience they'd be willing to share at Citadel/Surveyor?

Learn More

814 questions across 165 hedge funds. 10+ Sample Pitches (Short and Long) with Template Files. The WSO Hedge Fund Interview Prep Course has everything you'll ever need to land the most coveted jobs on the buyside. Learn more.

  • Anonymous Monkey
  •  Sep 20, 2015

Janky- Any feedback from this process? Doing the same this week

Sep 21, 2015

I'll be doing it next week, so it sounds like you'll see the case before me. Its funny because i normally think i'm a pretty decent modeller, but never have any real time pressure, so it could end up being a sheet of chickenscratch. Good luck!

Sep 22, 2015

I know someone who went through the process. You get financial statements, transcripts and have to build out a quarterly model (1-2 years historical and forward forecasting) and write up a recommendation on the name and be ready to discuss it afterwards - why long/short/neutral, upside/downside, etc? It may be a company you don't know well so the level of discussion could vary. Use the call, especially Q&A to figure out where sales/margin trends are going.

I don't think you need to model every single line in full detail because of time constraints, but know your B/S and CF statement drivers (e.g. DSO for A/R, debt int rate for int expense, etc). So you don't need to model out APIC and other equity items, you can probably throw everything into Shareholders Equity single line. Good luck!

    • 1
Sep 24, 2015

Excellent, this is helpful. Thanks! I am a little worried about the time constraints because I think it'll take me almost three hours just to flush out the model, which doesn't leave a ton of time for reading / crafting a thesis. We'll see how this goes...

Sep 28, 2015

Keep us posted!

Oct 1, 2015

4 hours to do all of the above and have an actually reasonable opinion seems a bit ridiculous to me but I guess that's their process.

Oct 1, 2015

... wrote a bunch of stuff... decided I should hold off as I am in-process. I will repost my thoughts on this in the coming days/weeks.

Best Response
Nov 6, 2015

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!

    • 12
Nov 7, 2015

Can you elaborate on how simplified assumptions should be? Specifically regarding revenue build & debt schedule...

Nov 7, 2015
Comment